Trump’s McDonald’s visit highlights a significant problem for workers
New York (CNN) — The last time Congress voted to increase the federal minimum wage, Lehman Brothers and Bear Stearns both still existed, Patrick Mahomes was just 11 years old and Kamala Harris was San Francisco’s district attorney.
That minimum wage hike in July 2007 lifted the pay floor in the United States from $5.15 to $5.85 and allowed for two more increases to $7.25 in July 2009.
The federal minimum wage hasn’t budged since then.
Former President Donald Trump’s visit on Sunday to a McDonald’s in Pennsylvania highlights the longest period without a national increase in the federal minimum wage since it was established in 1938.
After briefly manning a McDonald’s fry station, Trump punted when asked by a reporter if he’s in favor of lifting the minimum wage.
“Well, I think this: I think these people work hard, they’re great, and I just saw something, the process. It’s beautiful. It’s a beautiful thing to see,” Trump said. “These are great franchises, they produce a lot of jobs.”
Vice President Kamala Harris on Monday attacked Trump for that non-answer and reiterated her calls for a higher minimum wage without specifying what exactly the new federal minimum wage should be.
Harris told reporters ahead of a campaign stop in Birmingham, Michigan that she believes “we must raise minimum wage.”
“My opponent Donald Trump does not believe we should raise minimum wage. And I think everyone knows that the current federal minimum wage is $7.25 an hour, which means that the person who is working a full day and working full weeks will make $15,000 a year, which is essentially poverty wages,” Harris said.
The Harris campaign did not respond to CNN’s request for comment on how high she favors raising the minimum wage.
Opponents of raising the minimum wage often argue that moving too aggressively will kill jobs.
Michael Reich, chair of the Center on Wage and Employment Dynamics at the University of California at Berkeley, told CNN it’s very possible to boost the minimum wage without killing jobs.
“The reason is political. It’s not economics,” Reich said of the record-long period of time without a federal minimum wage increase. “It’s part of the political polarization.”
Efforts by Democrats in Congress to boost the minimum wage in recent years have repeatedly failed.
Asked whether Trump supports a federal minimum wage increase, the Trump campaign shared a statement from Republican National Committee spokesperson Anna Kelly blaming Harris for “lowering real wages and raising prices via reckless spending.”
“Not only will President Trump restore the booming economic climate of his first term, but he will eliminate taxes on tips and overtime pay and stand up to Communist China’s efforts to hurt American workers,” Kelly said. “Working families overwhelmingly support President Trump because only he will Make America Wealthy, Strong, and Great Again.”
Living wages are much higher
While the federal minimum wage has not budged since 2009, consumer prices have continued to increase — especially over the past three years.
That means the purchasing power of the federal minimum wage has eroded significantly.
Reich, who has testified before Congress on the minimum wage, said there’s no question the federal minimum wage is not a livable wage.
Researchers at MIT developed a calculator that estimates a living wage — defined as “what one full-time worker must earn on an hourly basis to help cover the cost of their family’s minimum basic needs where they live while still being self-sufficient.”
Consider that even in Alabama, a lower-cost state that has not adopted a state minimum wage, MIT’s calculator estimates that the living wage for one adult with no children is $20.15 an hour — or nearly triple the federal minimum wage.
Due to the high cost of child care, that estimated living wage spikes to $33.36 an hour for one adult with one child in Alabama. In other words, a single mom with one child making the federal minimum wage of $7.25 is making less than one-quarter of what’s required to get by in Alabama.
The federal minimum wage for tipped workers is just $2.13 an hour. However, those workers must make at least the federal hourly minimum wage of $7.25 or their employers are required to cover the difference.
States hike minimum wages
Although the federal minimum wage hasn’t budged, many state minimum wages have.
That’s why only 1.1% of hourly workers earned the prevailing federal minimum wage or less in 2023, down from 1.3% in 2022 and 13.4% in 1979, according to the Bureau of Labor Statistics.
According to the Labor Department, 30 states currently have a higher minimum wage than the $7.25 federal minimum. That includes left-leaning states like California, where the minimum wage is $16 an hour; and New York ($15); as well as reliably Republican states like Florida ($12); Arkansas ($11) and West Virginia ($8.75).
That leaves 20 states that only require $7.25 an hour, including Texas and battleground states Wisconsin, North Carolina and Pennsylvania, where Trump was speaking on Sunday.
“McDonald’s workers don’t need photo-ops; they need living wages,” Nina Turner, former state senator in Ohio and founder of We Are Somebody, a worker-centered organization that supports low-wage workers’ efforts to organize, said in a statement Sunday. “We all need to come together and push back against a system that keeps them in poverty while corporate executives make billions.”
McDonald’s says it raised wages by 8% for hourly workers at more than 90% of its corporate-owned restaurants in 2022. That’s on top of a pay hike of about 10% in 2021.
However, the wage increases only applied to the 5% of McDonald’s locations that are corporate-owned. The remaining 95% are owned and operated by franchisees, who can make their own decisions on worker pay.
As of April 1, McDonald’s workers in California make at least $20 an hour because of a new state law that boosted the minimum wage for all fast food restaurant employees.
The California pay hike covers about half a million fast food workers in the state, applying to restaurant chains with more than 60 nationwide locations. The law also created a fast food council, comprised of representatives from restaurants and workers, that can increase wages annually for the rest of the decade.
Reich, the Berkeley professor, authored a recent study that found that California’s minimum wage hike for fast food workers caused a “remarkably large” increase in worker pay without killing jobs or causing alarming price spikes.
Reich told CNN he thinks the federal minimum wage could increase to $17 an hour without causing job loss.
“People would stop going to McDonald’s at $50 an hour. But I don’t see those adverse effects at $17,” he said. “It would have a minimal effect on jobs, a small increase on prices and a lot of benefits.”
The-CNN-Wire
™ & © 2024 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.
