Increase of Minimum Wage is Long Overdue

Tia Belau Editorial, February 7, 2013 —-

Will congress finally raise the minimum wage this year? It would be the least that lawmakers could do.

Since the minimum wage increase to $2.50 per hour in 1999, Palau’s hourly rate has stuck on the same level for more than thirteen years.

This $2.50 per hour is out of date.

The minimum wage has lost 41 percent of its value since 2002, a figure that was disclosed at the public hearing for the minimum wage bill last Wednesday evening. This inflationary factor doesn’t even account the years prior to 2002, when the minimum wage was set to its current rate of $2.50.

A minimum wage set at $3.50 is what makes up for the loss of purchasing power in the past 10 years in relation to the present hourly rate.

Workers earning at or near the minimum wage are seeing the real value of their paychecks diminish steadily over time, as the cost of living increases while their wages remain stagnant.

Evidently, the lowest-paid workers have been hit the hardest. Whatever small raise gained in hourly-rate has not been able to keep up with the skyrocketing cost of living.

A higher minimum wage will be a “tool” as mentioned at the hearing to be an obvious way to counter the trend toward low wage work by dis-incentivizing hiring foreign workers in favor of more opportunity for locals for gainful employment.

And higher minimum wage creates jobs by bolstering consumer spending.

On the other hand, we are wondering how much profits have been raked in by the businesses in recent years. It is reported that since fiscal year 2009, government revenues have increased from $35 million to a new record high of $45 million in last fiscal year. That is an undeniably a good number.

From that account, there might be huge disparity between profits raked in by businesses, especially those employing minimum wage employees, and workers salaries. It would be good to check just to confirm.

Let’s make this year mark a turning point to many struggling families out there of the much needed relief.  Let’s pass the $3.50 minimum wage.

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