At one time, the conventional wisdom was that capitalism was a means to an end, the end being a better standard of living. Now it appears that capitalism has become the end itself, and to sustain a healthy capitalism workers will have to make sacrifices. Case in point: the minimum wage.
On January 1st, the minimum wage increased in Arizona, Colorado, Florida, Montana, Ohio, Oregon, Vermont and Washington. These eight states all have laws which require them to automatically increase their respective minimum wages by the rate of inflation (called “indexing”). Nevada also indexes its minimum wage but its increase takes place in July.
The state of Washington has the highest state minimum hourly wage at $9.04. Oregon has the second highest at $8.80.
Eighteen states plus the District of Columbia have minimum wages above the federal minimum wage which remains at $7.25 per hour. A full-time worker making the federal minimum wage earns just $15,000 a year.
There are those who argue against state laws requiring an inflation adjustment to the minimum wage. Their most common argument is that such government mandated increases are a threat to business profitability and the health of our capitalist, free-market economy. Putting capitalism first, as I suggest in my opening line, actually means that those arguing against increasing the minimum wage are really arguing for the necessity of a declining real wage. The minimum wage has not kept up with inflation and increases are needed just to keep workers from falling further behind. For example, Oregon’s January 2012 increase to $8.80 from $8.50 still leaves the real inflation-adjusted Oregon minimum wage below what it was in 1976. In 2011 dollars, Oregon’s 1976 minimum wage was $9.09.
via The Minimum Wage and Capitalism » Sociological Images.