Economists Join the Fight For $15!

Economists Join the Fight For $15!


JARED BALL: What’s up world, and welcome back
to the Real News Network. I’m Jared Ball here in Baltimore. Though it at times feel as though there is
an insufficient awareness of it, the fact remains that currently there is indeed a struggle
among working people around the country to increase the minimum wage. Called at times
the Fight for 15, or the fight for a $15 an hour minimum wage, this movement is attempting
to only partially adjust upwards the pay working people should receive based on years of inflation
and wildly increased worker productivity. Our next guest is a co-author of a new petition,
Economists in Support of a $15 U.S. Minimum Wage As Of 2020, and argues in part that while
$15 an hour would be an improvement it would hardly cover what a properly adjusted wage
should be. Bob Pollin joins us now from UMass Amherst, where he is an economist and researcher
with PERI, the Political Economy Research Institute. Welcome back, Bob Pollin, to the
Real News. BOB POLLIN: Thanks very much for having me
on. BALL: So could we start there with the minimum–what
the minimum wage should be, based on as I said in the introduction, inflation and worker
productivity. POLLIN: Well Jared, if you start with the
highest level of a minimum wage after adjusting for inflation in the United States, surprisingly
that was in 1968. That’s almost 50 years ago, now. That adjustment for inflation, the minimum
wage in 1968 was $10.85 an hour. The federal minimum wage, everywhere in the country. So
if you were a 16-year-old starting a new job at McDonald’s somewhere in the middle of Texas
or Nebraska, you had to get $10.85 an hour if the company was obeying the law. That was
in 1968. Now, if we said that from 1968 to the present
that the federal minimum wage went up every year just with inflation and with average
productivity, so that if the worker produces on average 10 percent more, then the wage
goes up 10 percent. If the worker on average produces 1 percent more, wage goes up 1 percent
more. So if you make that adjustment, today the
minimum wage should be $26 an hour. BALL: Wow. No, I mean, I think that’s shocking.
And it reminds me of Malcolm X’s statement some years ago that if a man plunges a knife
nine inches in your back and offers to pull it out six he shouldn’t be thanked. But that
is in fact what we’re asking, or many of us in support of this move are asking by just
requiring or requesting a $15 minimum wage. So as you said in this, in your petition,
there are some states who already pay above the minimum wage, making the case for this
it would seem a little it easier to make, no? POLLIN: As it is, 29 states and Washington,
DC all have minimum wage rates above the federal minimum. The federal minimum, today, is $7.25
an hour. Twenty-nine states plus the District of Columbia have wage rates minimum between
$7.50 and $9.50 an hour. Now, if you look at the, what’s happened in
those states, you don’t see higher rates of unemployment. You don’t see mass layoffs.
You don’t see overall conditions for workers having worsened. In fact, of course they are
better because they have a higher wage rate. So we do have evidence from those states that
show that having the higher minimum wage is completely compatible with maintaining job
opportunities. BALL: Right. Because the right wing opposition
to this argues that if corporations or businesses are forced to pay a higher minimum wage they’ll
lay people off and it will work against the working population. Well, first of all, in addition to what you’ve
just said, what would your specific response to that critique be? POLLIN: There is a lot of evidence, it’s been
studied now for generations, intensively I’d say at least for 20 years, that shows that
when you raise the minimum wage let’s say incrementally, you don’t see any negative
employment effects. You don’t see unemployment going up. In fact, the biggest factor affecting
unemployment in the country is what we would call macroeconomic conditions. Whether the
country’s in a recession, or whether the economy’s growing. So that in 1968 when we were at our
peak of the minimum wage at $10.85, the unemployment rate was 3.7 percent. When we had the 1982
severe recession, the unemployment rate was 10.8 percent. The minimum wage had fallen
in real dollars to about $8 an hour, from $10.85. So the main factor causing the unemployment
rate going up or down is not the minimum wage, it’s whether the economy’s growing or in a
recession [inaud.]. BALL: And is it an oversimplification to suggest
also that if working people are paid better wages they will also turn around and spend
more, improving the general economy? Or is that too much of an oversimplification? POLLIN: That’s true. I don’t think in and
of itself the raise in the minimum wage I don’t think has a major effect on expanding
the economy’s markets. It does have a positive effect, but it has–along with other things
it would reduce inequality in the economy. It does have a major positive–or let’s say
can have a major positive impact in two ways. Number one, as you said, by expanding demand
in the economy, making markets more buoyant, creating more opportunities for business.
The second is by having a more equal economy less money is flowing to the top, tippy top,
you know, one-tenth of one percent that is going to be speculating on Wall Street, and
so that you have less inducement for these kind of destabilizing bubbles that are coming
out of financial markets. BALL: Very quickly as we wrap up here, could
you remind–I believe I saw in your petition that there are steps along the way to $15
an hour that you are in support of as increments along the way here. And then please also let
our audience know where they can find this petition and hopefully add their names to
it. POLLIN: Okay. The petition calls for an increase
by next year to $10.50 an hour from the current $7.25. And then by 2020 it calls for a raise
up to $15 minimum wage, federal. Now, the petition was organized really at
the request of people in Congress. We now have over 200 economists. It’s really a petition
for economists to sign. So over 200 economists, and the petition is going to be formally introduced
tomorrow. I’m speaking on Tuesday, it’s going to be introduced Wednesday by Senator Sanders
and other members of Congress. So that’s really where the petition is going to be coming out
of Congress. I think basically the progressive caucus in Congress. BALL: So I have to ask this very quickly,
is there hope that Congress will sign off on this? Or is, are you suggesting, then,
that there is this hope? That this is likely to happen? POLLIN: I don’t think realistically it’s going
to pass. But look, you know, what’s happened a few years ago when the workers started a
movement on behalf of the $15 minimum wage it was considered a joke. Nobody paid the
slightest bit of attention to it. Since they started we have had $15 minimum wages pass.
In Seattle, Los Angeles, New York, Chicago went to $13. So this is part of a broader movement. It’s
a step. It will push the ball forward, and it’s an important step in that direction whether
or not it passes in Congress [this year]. BALL: Well, all right. Bob Pollin, thank you
very much again for joining us here at the Real News. POLLIN: Thanks very much for having me on,
Jared. BALL: And thank you for joining us here at
the Real News Network. And for all involved, I’m Jared Ball. And as always, as Fred Hampton
used to say, to you we say peace if you’re willing to fight for it. So peace, everybody.
We’ll catch you in the whirlwind.

10 thoughts on “Economists Join the Fight For $15!

  1. What difference is is really going to make, people will have more money for a bit, the market will adjust their prices and everything will remain the same. I don't understand why people can't see the pointless repetition of economy. I wonder when governments will start giving their people cold hard cash for the economy doing good or give them a cut of the profits of the raw material that's being sucked out of their country for big business.

  2. The fact that the minimum-wage would be $15 over SIX years, is approximately a pitiful $1 an hour raise each year, emphasis on pitiful…

  3. The economics of socialism. Instead of going after the money printing and the real $$$ inflation problems… Just pay everyone $15/hr ?… Enjoy unemployment.

  4. In regards to the question of job loss; Does anyone have any thoughts as to how this could affect small business specifically? I've talked with an owner of a small craft shop who mentioned that a raise in the minimum wage would mean that she would have to fire half of her staff. I would assume that many small business that are barely afloat might be affected in a similar way. I'm not entirely convinced of this, but she expressed concerned that minimum wage raise might have a monopolizing affect.

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