Inquirer Editorial: Decent pay makes sense

Demonstrators in 100 cities hit the streets outside fast-food restaurants Thursday to protest the miserly wages some service workers are paid. Too many are trying to support families on the federal minimum wage of $7.25 an hour, and they can't do it. Nor should they have to.

Adjusted for inflation, retail workers' wages have fallen 30 percent since 1973. Today's minimum wage would have to be raised to $10.60 an hour to equal the 1968 rate in real dollars. Even the pay of many workers who are lucky enough to earn more than the current minimum falls below the federal poverty line of $19,530 for a household of three.

Contrary to the mythology that's tossed about so often, only 12 percent of low-wage workers are teenagers. More and more adults work for low wages because they can't find better-paying jobs. About 25 percent are parents trying to support their children, according to the U.S. Department of Labor.

It's no wonder that so many of these workers rely on public assistance. A recent study by researchers at the University of California, Berkeley, and the University of Illinois at Urbana-Champaign found that between 2007 and 2011, low-wage workers consumed $7 billion a year in Medicaid, food stamps, and other aid.

That amounts to a huge government subsidy for for-profit companies. McDonald's even has a "McResources" phone line that tells employees how to apply for food stamps and other assistance. The company may have been embarrassed by news reports about the help line, but not enough to raise workers' pay.

Embarrassment also failed to spur changes at Walmart when a Canton, Ohio, outlet inadvertently brought attention to pitiful wages by asking customers to chip in for employees' Thanksgiving dinners.

These successful companies build taxpayer subsidies into their business models, which are based on low labor costs. It's worked out well for them. McDonald's rang up a $5.5 billion profit last year, while Walmart raked in $17 billion. Yet they refuse to increase wages.

The argument that raising the minimum wage will send jobs overseas doesn't compute when it comes to restaurant workers and store clerks - unless you're going to China to get a burger or buy a blouse.

Some states have voted to fill the gap left by a federal minimum wage that hasn't budged since 2009. New Jersey recently raised its minimum wage to $8.25 and linked future increases to inflation. Delaware is considering a similar move. But there appears to be little hope for Pennsylvania workers without a federal adjustment.

Senate Majority Leader Harry Reid (D., Nev.) says he will post a bill this month that would raise the federal minimum wage to $10.10 an hour. President Obama says he would support it. But House Republicans are unlikely to go along, even though polls show their constituents, Republicans and Democrats, want the wage raised.

Congress could show both wisdom and compassion by raising the minimum wage and boosting the economy from the bottom up. People who make more spend more and depend less on government services. Isn't that the goal?