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The cost of living continues to rise. In the 1960's a new house cost $16,500; a gallon of milk .49 cents; and a gallon of gas .31 cents (www.1960'sflashback.com). Today, a new house costs over a quarter of a million dollars and milk costs $2.99 on a good day. While prices continue to increase, one thing that can't seem to catch up is income. The current federal minimum wage is $7.25 an hour, and the last time it increased was 2009. If you were to work full time at this wage, you would only be making $15,080 a year.
Minimum wage hasn't increased in the last three years, but prices have. According to an article by Margot Dorfman, the CEO, of the U.S. Women's Chamber of Commerce, raising the minimum wage would help small businesses. Many people argue that raising the minimum wage would cause small businesses to make layoffs, but studies show that raising wages has little effect on jobs.
Other states have mandates for higher minimum wages, but Wisconsin sticks with the federal mandate of $7.25. If you look at inflation rates, minimum wage should technically be at $10.55. It's currently $3.30 below what it should be.
For this reason, and to help the economy, California representatives are proposing a plan to increase minimum wage up to $9.80 in three steps by 2014 (Dorfman). It doesn't make sense to have minimum wage be so low. If businesses want to make money they need their customers to have money in their pockets to spend.
According to www.cnpp.usda.gov, the moderate monthly cost of groceries for a family of four is $771.10. Even the low cost version for a family of four is still $628.50. If you made minimum wage, you would be bringing home less than $1000 a month after taxes. If you need to spend over $600 of your earnings to feed your family, you don't have a whole lot left. Is $400 really going to pay a mortgage or rent, bills, and all the other family expenses? No.
Sure if you're married you have a little more to spend, but what if they have a minimum wage job as well? Or what if you're a single parent? Many families are struggling to make ends meet. As of July this year the Huffington Post reported that two in five households are living paycheck to paycheck. The facts are that many Americans have to work minimum wage jobs and minimum wage is not keeping pace with inflation.
If you have to sink all your money into food and gas, how can you be expected to pay for health insurance or save for retirement? You're not going to; and many Americans are not. CBS news reported that half of American's don't have enough money in their emergency fund (which is supposed to contain enough money to last you at least six months) and a quarter of Americans have no savings at all.
How can people be expected to save money or dish out money for insurance if they don't even make enough to cover their day to day expenses? Plenty of people get upset over the number of people who need to rely on the government. If the government was willing to mandate a higher minimum wage there would a lot less people relying on government aid. More money equals more spending, which should equal a better economy.