About 1.6 million adult Americans earn the federal minimum wage of $7.25 an hour--and 2 million earn less than the federal minimum. Ralph Nader, the consumer-rights crusader, argues that Congress should boost the federal minimum to at least $10.50 an hour. If adjusted for inflation, the hourly wage should actually be $10.67, Nader says.
In an interview with The Daily Ticker, Nader says the biggest employers of low-wage workers -- Walmart (WMT), Burger King (BKW), Target (TGT) and McDonald's (MCD) -- would see their bottom lines increase, not decrease, if workers had more disposable income to spend. Walmart, the country's largest single private sector employer, warned in January that sales could be soft to flat in coming quarters because of cuts to the Supplemental Nutrition Food program, better known as food stamps. Costco (COST), the big box wholesale club, has been lauded for its treatment of workers; the retailer pays $11.50 an hour plus benefits for new employees. Nader has written letters to the CEOs of Family Dollar (FDO), Dollar Tree (DLTR) and Dollar General (DG), urging them to support an increase in the federal minimum wage and calling their treatment of low-wage workers "shameful."
"The U.S. has the lowest minimum wage in the Western world," Nader says in the video above. Raising the minimum wage is akin to "a stimulus bill...more sales, more jobs, more purchasing power for workers."
Nader says Walmart can afford to pay its U.S. employees more -- it already does in Ontario, Canada, where the minimum wage is $10.25 an hour. Moreover, the District of Columbia recently decided to raise its minimum hourly rate to $11.50 an hour, a city where Walmart has been anxiously trying to build its presence. The first DC-based Walmart opened for business at the end of January.
Some business leaders say raising the minimum wage would curtail hiring, especially at low-margin restaurants and retail outlets that can't easily digest an increase in labor costs. And there's some economic research showing that low-income workers--whom a minimum-wage hike would be designed to help--could actually be harmed instead, by having their hours cut back or their jobs eliminated.
Others, however, feel a hike would modestly help workers while causing a minimal disruption at most businesses. Besides, says Nader, after adjusting for inflation, "workers are paid the same wages from 46 years ago. It's time to restore the minimum wage."
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