Ahead of fast food strikes planned in 100 cities today, President Barack Obama Wednesday described the widening income gap between rich and poor as "the defining challenge of our time,” and called for a hike in the federal minimum wage to $10.10 per hour.
The federal minimum wage has stood at $7.25 per hour since 2009. That would add up to $15,080 per year for a worker putting in eight hours per day, five days per week, every week of the year with no vacations.
In other words, minimum wage is not enough to keep a single parent with one child above the poverty line. For that matter, the same applies to any household of two people with one income-earner, such as a person caring for a disabled parent or spouse.
The federal poverty level for a two-person household within the 48 contiguous states in 2013 is set at $15,510.
Workers in the low-paid fast food industry have been protesting since last year, calling for a rise in their average wages to $15 per hour from the current average of about $9. By 6:30 am today, protests were already underway in New York City, with marchers echoing Obama’s call for an increase in the minimum wage.
The point of minimum wage was never to keep people in poverty, but to get them out of it. And at one time, that’s exactly what it accomplished.
Converting for inflation into current dollars, the federal poverty level in 1968 was about the same as it is today — but one person earning minimum wage in that year would earn the equivalent of $19,245, according to a study conducted earlier this year by researchers at the Economic Policy Institute.
That same study showed that the average wage earned by an American worker is today much larger in comparison to minimum wage than it was in 1968 when a full-time minimum wage worker earned slightly better than half (53%) what the average American worker received.
Today, a minimum wage worker gets just over one-third (37%) of the average American wage. The disparity would be at least partly the result of the minimum wage remaining stagnant while incomes at the high end of the scale grow ever higher, throwing off the average.
“It’s well past the time to raise a minimum wage that, in real terms right now, is below where it was when Harry Truman was in office,” Obama said in his speech, delivered in Washington D.C.’s Anacostia neighborhood, one of the most economically deprived sections of the U.S. capital.
"I’m going to keep pushing until we get a higher minimum wage for hardworking Americans across the entire country," Obama said. "It will be good for our economy. It will be good for our families."