The state of low-wage America

This column is part of “The State of America,” an msnbc.com series leading up to President Barack Obama’s 2015 State of the Union Address on Tuesday, Jan. 20. This is the state of the issues you care about, as told by organizations promoting social change and other policy experts.

Perhaps the most important development for struggling American families over the past two years has been the emergence of stagnant wages as a major issue – redefining our political debate and spurring direct intervention to raise pay at the state and local level. While it was Occupy Wall Street that initially focused attention on our nation’s dramatic and worsening inequality, it has been the demand for $15 by courageous fast food and retail workers taking to the streets that has crystallized a movement and created the conditions for real change – particularly with respect to the minimum wage. 

Source: Economic Policy Institute

Without doubt, President Obama and his administration have played an important role on the minimum wage. First raising the issue in the 2013 State of the Union, and then joining the call for $10.10 in last year’s address, the president has been an unquestioned leader on this issue. By barnstorming the country for a higher wage and aggressively calling for state and local action in the face of congressional dithering, the president has helped motivated states across the country to raise wages on their own, benefiting millions of workers. The president has also taken direct action by issuing an executive order that will guarantee all federally contracted and subcontracted workers a wage of at least $10.10.

But the terrain is rapidly shifting. Over the past two years, more than 30 states, cities and counties have passed minimum wage increases via legislation or ballot. As a result, by 2017 13 states and DC – representing nearly one-third of the U.S. workforce – will have minimum wages of $9 or more, and seven states and DC will be above the $10 level. At the local level, Seattle and San Francisco have passed laws that will phase in a $15 minimum wage, and Chicago’s minimum wage is rising to $13. 

Notwithstanding the well-funded and dogged opposition of groups like the U.S. Chamber of the Commerce and the National Restaurant Association, many businesses are also pushing the envelope when it comes to pay. Insurance giant Aetna recently announced a company-wide minimum wage of $16 an hour to improve retention and employee satisfaction. Small businesses – long used by big business lobbyists to make their opposition to higher pay more palatable – are in fact leading the way: 61% of small business owners support raising the minimum wage, including restaurants like Detroit’s Moo Cluck Moo, which pays its workers $15 an hour. Even capitalism’s strongest guardians – Wall Street investment houses like Merrill Lynch and international financial institutions like the IMF – have publicly argued that higher wages are essential for faster economic growth.

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Most importantly, Americans’ attitudes and expectations are shifting as well. While raising the minimum wage has always been overwhelmingly popular, this support tended to drop off at higher proposed rates. No longer: According to a recent poll by Hart Research Associates, 75% of Americans support raising the federal minimum wage to $12.50 over five years. A phased-in increase to $15 – which just two years ago would have been considered outlandish – received 63% support. Americans also recognize the fundamental inequity of paying tipped workers – who are overwhelmingly women – a sub-minimum wage: 71% now favor paying tipped workers equally.

As we approach his penultimate State of the Union address, where does this leave the president? His recently announced proposal around sick leave and parental leave – which would address one of the most pervasive indignities of low wage work in America, the inability to take time off to care for one’s family – shows an inclination to go bold. The president should double down on workplace fairness issues by pairing his paid leave initiative with an aggressive new proposal around the minimum wage. Indeed, that’s exactly what the National Employment Law Project and a dozen other progressive groups – including the Economic Policy Institute, the National Council of La Raza, the National Women’s Law Center, and the Leadership Conference on Civil and Human Rights – have called for: a bill phasing in a $12.50 minimum wage for all workers, tipped or otherwise, with automatic adjustments to keep pace with the overall rise in wages over time.

Related: Beyond the minimum: What’s next for raising wages?

In many ways, an increase in the minimum wage to $12.50 is not dramatic at all: by key economic measures, it simply restores the federal minimum to where it was in 1968, when national unemployment was below 4%. It hardly begins to approach the $18 minimum wage we would enjoy had pay kept up with workers’ increased productivity. But let’s stipulate that what passes for bold inside the beltway – where reports of a $9 minimum wage effort recently made headlines – is not the same as almost anywhere else.

Mr. President, Congress may try to block your every move, but as you know well, a bold vision can have a transformative effect over time. This is not the time for small thinking. On wages, go big: the American people have your back.