Part of why we are having these huge discussions around minimum wage is that there is no accountability to keep the minimum wage up to a certain level. If we look at the history of the minimum wage it is often raised in spurts and then nothing happens again for 10 or so years. We are over 10 years now from the last minimum wage increase, and yet inflation has not stopped. Ruth would like to see action to index minimum wage to inflation so that as cost of living increases workers can be guaranteed livable wages. This will also ensure that years in the future, in our children's generation, a livable wage is something our citizens can still expect to have. If we look at where wages should be based on inflation we are close to that $15 an hour wage that many have suggested.
However, if wage is connected to productivity, we would be looking at an even higher wage at around $24 an hour. This means that most workers are not paid on par with their productivity. Companies are profiting from this productivity, but workers are not seeing the level of compensation fitting to the effort they put in.
While indexing minimum wage to inflation does not solve all issues, it does two main things. First, it ensures that minimum wage is constantly following inflation so that even our children can be guaranteed a livable wage. Second, this type of increase will make it easier on businesses. Currently I know that many businesses are worried about a wage increase to $15 because that is more than double the minimum wage and will push up all their costs. However, every year due to inflation businesses are already paying more for products they purchase. Now labor would become one item they can account for as also going up with inflation, but this way it would be smaller increments and easier for businesses to adjust to.
Minimum wage in Kentucky today is $7.25. This means that working a minimum wage job would provide a salary of less than $15,000 take home pay a year. The poverty line for a family of 2 is a salary of $17,420 a year. While minimum wage jobs are often entry level jobs not all are, and many people working minimum wage jobs still have families to provide for. This puts the American dream out of reach for so many Kentuckians.
For those working minimum wage, or low wage, jobs this reality makes it difficult to create a better life for themselves and their families. Many are working 2 or 3 jobs to make ends meet. This means they have less time to spend with their families. If they did want to pursue further education to improve their quality of life they would have to figure out where the time comes from as well as how to afford education which so often is so expensive.
The following chart dives into how the minimum wage compares to living costs and how it is impossible to work a minimum wage job and make ends meet. This chart covers bare necessities and does not include other needs such as clothing. Most of these numbers are estimates using the resources found in the resource section.