Powerful report says a fair minimum wage
is good for workers and for business

Washington, April 7, 2006—The minimum wage has become a poverty wage instead of an anti-poverty wage, with damaging ripple effects throughout our economy, according to A Just Minimum Wage: Good for Workers, Business and Our Future, a new report by Holly Sklar and Rev. Dr. Paul Sherry that was released in support of the Let Justice Roll Living Wage Campaign. The minimum wage has been stuck at $5.15 an hour since 1997 and buys less today than it did when Sam Walton opened his first Walton’s 5 and 10 in 1951.  

“It would take more than $9 to match the buying power of the minimum wage of 1968 and poverty rates are higher now than in the 1970s,” said Holly Sklar. “The United States is becoming a downwardly mobile society instead of an upwardly mobile society.” 

A Just Minimum Wage counters all the arguments against raising the minimum wage and offers vital new insight into why the minimum wage is so important. The report shows that raising the minimum wage is an economic imperative for the enduring strength of our workforce, businesses, communities and economy, as well as a moral imperative for the very soul of our nation. 

Some of the major insights found in this important report include:
 

• A low minimum wage is a green light for miserly employers to pay poverty wages to a growing share of the workforce—not just workers at the minimum, but above it. The minimum wage sets the wage floor. As the floor has dropped below poverty levels, millions of workers at and above the minimum wage—just $10,712 a year—can’t make ends meet.
• Workers have not been getting their fair share of the benefits of rising worker productivity. The share of national income going to wages and salaries is at the lowest level since 1929—the year that kicked off the Great Depression. The share going to after-tax corporate profits is at the highest level since 1929.
• Between 1968 (when the inflation-adjusted value of the minimum wage was highest) and 2004, domestic corporate profits climbed 85% while the minimum wage fell 41% and the average hourly wage fell 4%, adjusting for inflation. In the retail sector, which employs large numbers of workers at or near minimum wage, profits rose 159% in the same period.
• Contrary to myth, the United States is not becoming more competitive by taking the low road. We are in growing debt to other countries, have a huge trade deficit, hollowed-out manufacturing base and deteriorating research and development. Households have propped themselves up in the face of falling real wages by maxing out work hours, credit cards and home equity loans. This is not a sustainable course. The low road is like a “shortcut” that leads to a cliff.
• The high road is not only the better road; it is the only road for progress in the future. An America that doesn’t work for working people is not an America that works. We will not prosper economically or ethically in the global economy relying on low wages, outsourcing and debt in place of innovation and opportunity. We will not prosper in the global economy relying on disinvestment in place of reinvestment. We can’t succeed that way any more than farmers can “compete” by eating their seed corn.
• As Business Week put it in a special issue on China and India, “China’s competitive edge is shifting from low-cost workers to state-of-the-art manufacturing. India is creating world-class innovation hubs, and its companies are far better performers than China’s.” The United States will not succeed by shifting increasingly from state-of-the art manufacturing and world-class innovation hubs to low-cost workers.

To date, 18 states have raised their state minimum wages above the federal level. States with higher minimums have had better employment trends, including for retail and small businesses than those that have not. Successful businesses, large and small, have shown that good wages are good business because they lower turnover and increase morale, productivity, quality, customer satisfaction and consumer purchasing power.

“Paying your employees well is not only the right thing to do but it makes for good business,” Costco CEO James Sinegal told Business Week. “Fair wages are good for business,” says Joel Marks, national director of the American Small Business Alliance.

In addition to the economic and business reasons for raising the minimum wage, A Just Minimum Wage also emphasizes the moral and ethical reasons for doing so. According to the report, the Golden Rule is the most universal moral value: Do to others what you would have them do to you.  

Rev. Dr. Paul Sherry said, “Violating the Golden Rule, CEO pay has increased astronomically, while a growing number of workers can’t make ends meet. Violating the Golden Rule, Congress has taken eight pay raises since 1997, while giving none to minimum wage workers,” he said. “As people of faith, we are committed to justice and justice means raising the minimum wage to a living wage.” 

A Just Minimum Wage makes clear: “Wages are a bedrock moral issue. The minimum wage is where society draws the line: This low and no lower. Our bottom line is this: A job should keep you out of poverty, not keep you in it.” 

The Let Justice Roll Living Wage Campaign is composed of more than 60 faith and community organizations who have joined together to raise the minimum wage at the federal level and in states such as Arizona, Arkansas, Colorado, Michigan, New Hampshire, North Carolina, Ohio, Pennsylvania and West Virginia. A Just Minimum Wage was produced by the American Friends Service Committee and the National Council of Churches USA in support of the Let Justice Roll Living Wage Campaign. 

ABOUT THE AUTHORS: Holly Sklar is a widely published op-ed columnist and analyst whose books include Raise The Floor: Wages and Policies That Work For All Of Us and Streets of Hope: The Fall and Rise of an Urban Neighborhood. The Rev. Dr. Paul H. Sherry is the coordinator of the Let Justice Roll Living Wage Campaign and the former president of the United Church of Christ.

ABOUT THE FOREWORD AUTHOR: The Rev. Dr. James A. Forbes Jr., senior minister of The Riverside Church in New York City, was recognized by Newsweek as one of the 12 “most effective preachers” in the English-speaking world.

Additional Campaign information is online at www.letjusticeroll.org, where you can download a .pdf file of A Just Minimum Wage. To arrange interviews with the authors and request press or review copies, please contact Rev. Leslie Tune, 202/544-2350 or via email at ltune@ncccusa.org.

FOR IMMEDIATE RELEASE 
CONTACT:
Leslie Tune, 202-544-2350 x 204; Daniel Webster, 212-870-2252