Nine years, 10 months, three weeks, and three days. That’s exactly how long, as of June 16, it’s been since the federal minimum wage last budged. It’s a new record for the amount of time the minimum wage has been stagnant, edging out the last dry spell, which lasted from September 1997 to July 2007.
When the federal minimum wage was last raised in 2009, it went up to its current threshold of $7.25 an hour (adjusted for inflation, it’s now worth less than it was in 1950). In contrast, 29 states have now enacted minimum wages higher than the federal mandate: These moves range from New Mexico, whose $7.50 minimum wage is just a mere 25 cents higher than the federal, to California, which is phasing in a $15 wage floor.
Many companies too, most notably Amazon, have also enacted a $15 minimum for workers. More than 700 businesses across the country, from small locally owned shops to regional and national chains, have signed onto Business for a Fair Wage’s statement supporting a federal wage hike to $15 per hour by 2024, which is what the proposed congressional Raise the Wage Act would do.
Even though Holly Sklar, CEO of the organization Business for a Fair Minimum Wage, applauds businesses that have enacted a higher wage floor independently of a change in the federal minimum wage, she says it’s not enough: “You really need a decent federal floor, so the floor is something higher to build on.” It goes back, she says, to the whole reason for why the minimum wage was enacted to begin with in 1938. In response to the Great Depression, the government recognized that it had an obligation not only to help people struggling with poverty for their own sake, but to support purchasing power in the country. “There was not enough purchasing power to buy the products that would create good jobs,” Sklar says.
Today, wage stagnation is creating a similar problem. Even enormously successful and wealthy business owners in the U.S. are now recognizing that wage inequality and low earnings are leading to a hollowing out of the economy, which could threaten their own livelihoods. As this situation persists, the economy runs the risk of grinding to a halt. It’s no wonder that hundreds of business owners feel a personal stake in this issue. “The minimum wage has always been tied into this notion of good for workers and good for business,” Sklar says.