Skip to Content, Navigation, or Footer.
The Daily Cardinal Est. 1892
Sunday, April 21, 2024
Courtesy of Philip Taylor PT / Creative Commons

Maximizing the Minimum: Why America’s federal minimum wage needs a change

The American workforce has seen its great share of highs and lows in the last decade. With the economy being extremely volatile, manically increasing and drastically decreasing rather quickly — a change to the federal minimum wage has gone silent. 

Over the past decade, the federal minimum wage has been stagnant at $7.25 an hour, 54% lower than the minimum wage in 1968 adjusted for inflation. Even as inflation and worker productivity have risen, the minimum wage is $14.25 less per hour than what it should be to remain in conjunction with these economic measures. 

For far too long we have sat back and let this stagnation of wages lead to an increase in poverty and income inequality. American politicians allowed the purchasing power of those making the federal minimum wage to diminish, which has declined 18% as of 2021. In other words, those making the federal minimum wage have less of an ability to make the same purchases they would have made years ago. 

This is absolutely terrible for the middle and lower classes, and needs to change. If citizens who make minimum wage are barely able to afford basic necessities, they will need to further rely on the government for assistance. Instead of a $7.25 an hour minimum wage, the federal government needs to raise this standard to $15 an hour, further working in conjunction with worker productivity levels and inflationary measures. 

Even in today’s politically divisive climate, the federal government has the ability to make this change, and has shown promise to do so in the past.

From 1938 to 1968, Congress was able to change the minimum wage to reflect increasing worker productivity at the time. At its highest point, the minimum wage was $12 per hour, adjusted for inflation. Had Congress continued to increase the minimum wage in relation to worker productivity, the 2022 minimum wage would be around $21.50 per hour, a figure that would give minimum wage workers almost triple their current salaries.

Although, an increase to $15 an hour would absolutely suffice. According to the Economic Policy Institute, raising the federal minimum wage to $15 by 2025 will increase the incomes of around 32 million workers by an average of $3,300 annually.   

A small business day-dream or nightmare?

One of the main arguments against raising the minimum wage is the idea that small businesses will have to shell out more money to their workers without an increase in their cash flow. However, the economics surrounding an increase in the minimum wage could be beneficial for both parties: the small business and worker. 

This comes from the idea that if these 32 million workers were able to make more money, they would have more disposable income to spend at small businesses, therefore generating more income for the business overall. With this disposable income, the Economic Policy Institute estimated that for every $1 paid to a low-income worker, $1.21 is added back into the gross domestic product (GDP). 

While completely theoretical, evidence has shown that small businesses could absolutely benefit from this wage increase, creating lasting, positive effects on businesses across the nation. 

Data released in 2014 by the Department of Labor showed 13 states that had raised their minimum wages added jobs at a faster pace than those that did not. This makes sense, as higher wages likely incentivize workers to seek jobs, therefore decreasing unemployment and poverty subsequently along with also decreasing reliance on government assistance. 

Enjoy what you're reading? Get content from The Daily Cardinal delivered to your inbox

The federal government needs to act fast to raise the minimum wage. The cost of living has been increasing dramatically, but low-income workers are already suffering and will continue to suffer in the years to come. 

The Economic Policy Institute projected that in 2025, a single adult with no children would need to work full time and make $18.50 per hour to stay above the poverty line in rural areas of Alabama and Mississippi.

For large metropolitan areas like Chicago, that number reaches closer to $30 per hour. This means that if the minimum wage is not raised by 2025, there will realistically not be an area in our country in which a full-time worker could functionally survive off the federal minimum wage salary. 

So, America, it is time we act like the country we like to think we are. Ask yourself, “How can we call ourselves the greatest country on Earth when our nation’s GDP is four times greater than it was back in 70 years ago, yet we are paying our workers less per hour now than in the past?” 

These minimum wage workers are the absolute backbone of our country, and if the pain is not alleviated to support them, our American backbone will cease to exist. 

Owen Puckett is a sophomore studying Political Science at the University of Wisconsin-Madison. Do you agree the federal minimum wage should be increased to better reflect the current economic climate? Send all comments to

Support your local paper
Donate Today
The Daily Cardinal has been covering the University and Madison community since 1892. Please consider giving today.

Powered by SNworks Solutions by The State News
All Content © 2024 The Daily Cardinal