This past week there was a lot of news regarding the protesters outside McDonald’s Headquarters in Chicago. The “Fight for 15” demonstration is calling for a pay of at least $15 an hour and a union. About one hundred of the protesters were arrested for trespassing, not for the protest, but for blocking two streets around the campus a day before the company’s shareholder meeting.
This campaign has been going on since late 2012. The company has stated that they will increase their minimum wage to $1 over the local minimum wage, but this is not close to the $15 protesters want, and it only applies to the stores that the company owns (only about 10% of all the stores in the United States).
A victory for the protest is Wal-Mart’s recent announcement of raising the minimum wage of their employees to $9 an hour. The theory behind Wal-Mart’s isn’t so much as helping their employees as it is dealing with bad press. When news got out that Wal-Mart stores were holding food drives for their own employees, the implication that Wal-Mart can’t pay their employees enough to feed themselves was a public relations nightmare. This victory proves to the public that the government doesn’t have to set the rules for minimum wage, businesses themselves have the power.
But how does the government determine what the minimum wage should be? Is there a fancy calculation that uses inflation and a national cost-of-living index to determine what a livable minimum wage is? Unfortunately there is no set formula that I have found. It seems that the very first minimum wage signed into law by President Franklin Roosevelt in 1938 has only been adjusted for inflation over the years.
In order for the federal minimum wage to increase, Congress must initiate the process by passing a bill. The President must sign the bill into law in order for the minimum wage to go up. President Obama has stated that he would like to see the minimum wage to go up to $10.10 an hour, but if Congress won’t begin with the bill, it won’t happen. He did however, sign an Executive Order in order to raise it for those working on new federal service contracts.
In recent history, Congress tends to only raise the minimum wage in times of economic wealth and low unemployment rates. Although the economy is improving, unemployment rates are still too high compared to what they have been in the past when Congress raised minimum wage.
There are several states that are increasing their state minimum wage to President Obama’s $10.10 request. Hawaii and Maryland have plans to be there in 2018 with gradual increases over the next few years. Massachusetts has upped the bar and will see an $11 minimum wage come January 2017. Washington D.C. will be at $10.50 in July of this year, and at $11.50 in July 2016. Vermont will see $10.50 an hour in 2018, and then will be adjusted based on a cost-of-living index. Arizona, Colorado, Florida, Missouri, Montana, Nevada, Ohio, Oregon, Vermont, and Washington have all adopted a form of index in order to adjust their minimum wage yearly.