Many economists believe the biggest threat to the American economy is the constantly growing gap between the rich and the poor.
In fact, according to an article earlier this week in the international Christian Post, wealth inequality in the United States is much worse than most people think. There's now a thinner line than ever between lower-middle class and the poor.
For the first time since the Great Depression, the U.S. Census Bureau reports that middle-class family incomes have lost ground for more than a decade. All the wage gains over the past 15 years have gone to the wealthiest 10 percent, the Economic Policy Institute reported recently. And 95 percent of the income gains during the three years after the Great Recession officially ended in 2009 went to the richest 1 percent of the population.
This isn't good news. If people in the lower-middle class are working for wages that don't provide enough income, consumer spending drops and the economy lags. It's essentially what we've seen happen in the country these past few years.
That's why there's a new push to raise the nation's minimum wage, which has been at $7.25 an hour since 2009. Richard Trumka, president of the AFL-CIO, points out that if the country's minimum wage had been adjusted for inflation since 1968, it would now be at $10.77 an hour. He also notes that had it kept pace with the wage increases enjoyed by the top 1 percent, it would be $28 per hour today.
Just getting to $10 an hour will be a big challenge in this Congress. U.S. Sen. Harkin, D-Iowa, and Rep. George Miller, D-Calif., have introduced legislation that would raise the wage to $10.10 an hour over the next two years. But it's already being attacked as too expensive for small companies and, of course, the old canard that it will cost jobs has been tossed into the debate.
Most economists say this lost jobs argument is nonsense. There has been little, if any, impact on jobs numbers when states have raised their minimum wages.
And the argument that a higher wage will be too onerous on small businesses ignores the fact that the vast majority of minimum wage jobs are held by workers in the fast-food industry, which is owned by multinational corporations that routinely report multimillion-dollar profits. That disparity has been pointed out by one-day strikes by fast-food workers across the country this year, including yesterday's walkout at several of Madison restaurants to highlight the low pay those workers receive.
Raising the minimum wage will at the very least help millions of America's working poor. It will also have the effect of pushing wages, which have been stagnant for too long now, to higher levels throughout the economy.
It will represent a small step in attacking the shocking wealth gap in America, and at the same time help kick the economy up a notch.