Trumka: Raising wages will restore the ‘virtuous cycle’

white-house_minimum-wage_031814

Bare minimum is not enough

AFL-CIO President Rich Trumka wrote an op-ed published by USA Today this week in which he says that raising the minimum wage is a critical and long-overdue first step – but only the first step in addressing the heart of the matter with our economy:

Falling real wages is at the heart of what is wrong with America today — economically, politically and morally. We have arrived at a moment when raising wages must be more than a one-time policy prescription. Raising wages must be a framework through which to build a new economic model that is centered on the value of work.

“Global leaders from President Obama to Pope Francis recently have decried the dangerous and growing inequality that is defining day-to-day life in America. They are right to sound this alarm, but the shocking inequality in our country is an effect, not a cause. The cause is an economic structure that has disassociated wages from productivity and, in doing so, has broken the basic American social contract — that if you work hard, you can get ahead and enjoy a comfortable life.

“America without opportunity is … not America. And the solution is not saying that inequality is somehow inevitable, or that America cannot afford opportunity. The solution is a swift, comprehensive and multifaceted transition to make raising wages the cornerstone of national economic policy and practice.” — Rich Trumka, 3/27/2014

Raising the federal minimum wage is long overdue, especially for tipped workers, whose wages have been stuck at $2.13 an hour for over 20 years.

Raising the federal minimum from $7.25 to $10.10 an hour would directly benefit 16.5 million workers who now earn less and would likely lead to a bump in pay for another 8 million workers who earn right at $10.10 an hour now, says Trumka.

According to census data, more than one million North Carolina workers would benefit from a higher minimum wage, but many more will benefit when we restore the “basic bargain“.

As former labor secretary and star of the documentary film Inequality for All,  Robert Reich, describes it, the basic bargain is one in which American workers who work hard will get paid enough money to buy the goods and services American employers sell, creating a virtuous cycle of rising wages and rising profits.

We’ve got to get back to that virtuous cycle, says Trumka:

“We must understand that falling wages is not something confined to the working poor. It is a reality for the majority of America’s workers, for young college graduates and older high school graduates. And falling wages and the concentration of wealth are strangling our economy. We have broken the virtuous cycle in which rising wages drive increased demand, which induces business investment and funds public investment, which leads to increased productivity, which in turn supports rising wages.”

Read Richard Trumka’s op-ed in USA Today, and share it within your networks.