According to our American values, people who work hard and play by the rules should not have to live and retire in poverty.
The current generation of workers face a looming retirement security crisis, which is not helped by the fact that many who work full time still make a poverty wage. Raising the minimum wage would not only benefit these low-wage earners, but it would also benefit senior citizens — now and in the future. That is why the organization I lead, the PA Alliance for Retired Americans, endorses an increase in the minimum wage.
Current projections about the future of the Social Security trust fund are made with certain assumptions in mind, such as economic growth, job growth and wage growth (or lack thereof). If we increase wages for millions of low-wage workers making less than $10 an hour, that will mean more revenue for the Social Security system, and likely a rosier financial picture for its future. Yes, it also will mean higher future payments to those workers. But we have seen that economic booms and downturns always affect Social Security's solvency. More jobs and more revenue will certainly help shore up the system, just as higher than expected economic growth in the past has added years to Social Security's solvency.
Of course, a minimum-wage increase will have the greatest impact on the next generation of retirees — today's workers. Under the current minimum wage, a lifetime minimum- wage worker who retires early at the age of 62 will receive $686 per month. (A likely scenario, because minimum wage jobs tend to be too demanding for workers in their 60s, meaning that they will be more likely to retire before age 67 and incur the penalty for doing so.)
How can we expect someone to pay their mortgage, utility bills, out-of-pocket health care costs and other expenses with this low monthly payment? One day, when these low-wage workers retire, they will not be able to collect enough from Social Security to live outside of poverty. It will be up to their children, a debt-ridden government and a stretched nonprofit sector to bear the burden of this new generation of elderly poverty. Even today, 48 percent of the elderly population in the United States is economically vulnerable and 15 percent lives in poverty. These numbers are projected to increase in the future if wages continue to lag far behind inflation and gains in productivity. The minimum wage today is lower in terms of constant dollars than it was in 1968.
We hear from many business groups that raising the minimum wage will hurt bottom lines. It seems to me that our economy only works when employers take a certain amount of responsibility for their workers. During my working life, this meant providing health care and a secure retirement. So many workers in the private sector now lack those benefits. The least companies can do is provide a living wage. It is a violation of the social contract on which our capitalist system rests to pay workers so little that even after working a 40-hour week they still can't make ends meet.
When a worker qualifies for food stamps and Medicaid, which many on minimum wage do, his or her employer is basically using taxpayer-funded programs to fulfill what ought to be their responsibility. A minimum wage that is a living wage will even reduce the deficit as it increases tax revenue while reducing reliance on these programs.
It's time for America to do right by its workers. And if the federal government won't act, we can at least make things right here in Pennsylvania by joining with the 21 other states with a higher minimum wage than the federal rate. For workers, for retirees and for our economy, we must raise the minimum wage now.
Wayne Burton is a retired professor of political science at West Chester University. He has been president of the PA Alliance for Retired Americans since 2013, previously serving as president of APSCURF, the retiree association for state university professors. The PA Alliance, a state affiliate of the national Alliance for Retired Americans, has over 300,000 members and 140 affiliates across the commonwealth.