Raise the minimum wage

Marketplace Staff Jun 20, 2006

KAI RYSSDAL: The federal minimum wage in this country has been stuck at $5.15 an hour for 10 years. There has been some murmuring in Congress about bumping it up a bit. A House committee voted last week to raise it to $7.25 an hour. The Senate could begin debate tomorrow. An increase is on the November ballot in half a dozen states. But commentator Beth Shulman wonders what’s been taking so long.

BETH SHULMAN: No doubt corporations face market pressures and have to fight to stay competitive. But they’ve also got a choice about how they respond to that pressure.

Instead of paying low wages and few benefits, companies can raise productivity and lower turnover by investing in training and paying their workers decently.

Some do. By looking after their workers and their communities, industry leaders like Costco, Cingular and Harley Davidson are profitable.

But most corporations choose the low road. They rationalize their behavior by insisting that they have to cutwages, shrink benefits and lay off workers because the law makes them do it.

After all, they say, companies can only act in their shareholders’ interest. Except, actually, it isn’t true.

A close look at American law shows that managers have the discretion to act in their overall company’s interest, even if that doesn’t lead to immediate shareholder gains.

There are no laws on the books that say managers must act exclusively in the interests of shareholders.

In the last quarter-century, more than half the states in our country have enacted statutes that specifically authorize managers to attend to the interests of stakeholders. Read: workers, customers, and creditors, not just shareholders.

The shareholder-interests-above-all myth shields managers as they shred the social contract that once bound companies to their employees and communities.

Don’t be fooled. We all work hard. We deserve to sit at the table to help set the terms that ensure work provides the basics of a decent life.

Over 80 percent of Americans support raising the minimum wage. At today’s $5.15 an hour, it takes working 11 hours just to fill a car’s tank with gas.

I say we can do better than that and jump-start the economy while we’re at it. We can raise the minimum wage at the state and federal level and index it to inflation. It’s the right thing to do.

RYSSDAL: Beth Shulman is author of “The Betrayal of Work.”

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.