Minimum wage should keep up with the cost of living

One of the most compelling reasons why there is so much momentum to increase the minimum wage is that it hasn’t been keeping up with the cost of living.

At both the state and federal levels, the minimum wage has lost much of its buying power, even as the cost of basic necessities like food, rent and gas have grown. If the federal minimum wage had the same buying power as in 1968, it would be substantially higher today – estimates range between $9.55 and $10.75 an hour, depending on how inflation is calculated.

Minnesota should join the 11 states that ensure that their minimum wages keep up with the cost of living by allowing them to increase each year with inflation – what’s known as ‘indexing.’

Increasing the minimum wage to $9.50 would increase the wages of an estimated 357,000 Minnesotans by $472 million. Indexing the minimum wage to inflation would ensure that these hardworking Minnesotans can make ends meet.

Indexing also provides predictability for employers and workers. The indexing proposal currently under debate would limit the annual increase to no more than 2.5 percent per year.

Those who work hard should be able to support their families and make ends meet. Increasing the minimum wage for large employers to $9.50 is a good step. But without indexing, low-wage workers will soon see their wages erode.

-Caitlin Biegler

About Clark Biegler

Clark Biegler is the Minnesota Budget Project’s policy analyst. She researches and writes about state tax and budget issues. Clark holds a Master of Public Policy degree from George Washington University in Washington, DC; and a Bachelor of Science degree in Public Health from Tulane University in New Orleans, LA. She interned at the DC Fiscal Policy Institute in Washington, DC, Third Way in Washington, DC, Lutheran Social Services, and the Alabama State Office of Primary Care and Rural Health.
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