Trump’s visit to McDonald’s reveals a serious problem for workers

New York CNN —

The last time Congress voted to raise the federal minimum wage, Lehman Brothers and Bear Stearns still existed, Patrick Mahomes was just 11 years old, and Kamala Harris was San Francisco’s district attorney.

The July 2007 minimum wage increase raised the US minimum wage from $5.15 to $5.85 and allowed two more increases to $7.25 in July 2009.

The federal minimum wage has remained unchanged since then.

Former President Donald Trump’s visit Sunday to a McDonald’s in Pennsylvania marks the longest period without a national increase in the federal minimum wage since it was established in 1938.

After a brief visit to a McDonald’s restaurant, Trump answered a reporter’s question about whether he supported raising the minimum wage.

“Well, I think this: I think these people work hard, they are great, and I just saw something, a process. It’s beautiful. It’s a beautiful sight,” Trump said. “These are great franchises and they create a lot of jobs.”

Vice President Kamala Harris on Monday criticized Trump for his lack of response and repeated her calls for raising the minimum wage, without specifying what exactly the new federal minimum wage should be.

Harris told reporters before a campaign stop in Birmingham, Michigan, that she believes “we need to raise the minimum wage.”

“My opponent, Donald Trump, doesn’t think we should raise the minimum wage. And I think everyone knows that the current federal minimum wage is $7.25 an hour, which means that a person working full time and full week would earn $15,000 a year, which is essentially a starvation wage.” , said Harris.

Harris’ campaign did not respond to CNN’s request for comment on how strongly she favors raising the minimum wage.

Opponents of raising the minimum wage often argue that too aggressive measures will lead to job losses.

Michael Reich, chairman of the Center for Wage and Employment Dynamics at the University of California, Berkeley, told CNN that it is entirely possible to raise the minimum wage without destroying jobs.

“The reason is political. This is not the economy,” Reich said of the record stretch of time without an increase in the federal minimum wage. “It’s part of political polarization.”

Efforts by congressional Democrats to raise the minimum wage have repeatedly failed in recent years.

When asked whether Trump supports raising the federal minimum wage, the Trump campaign shared a statement from Republican National Committee spokeswoman Anna Kelly accusing Harris of “lowering real wages and raising prices through reckless spending.”

“President Trump will not only restore the prosperous economic climate of his first term, but he will eliminate tip and overtime taxes and fight communist China’s efforts to harm American workers,” Kelly said. “Working families overwhelmingly support President Trump because only he will make America rich, strong and great again.”

Although the federal minimum wage has not changed since 2009, consumer prices have continued to rise, especially over the past three years.

This means that the purchasing power of the federal minimum wage has decreased significantly.

Reich, who testified before Congress on the minimum wage, said there is no question that the federal minimum wage is not a livable wage.

Researchers at MIT have developed a calculator that estimates a living wage, defined as “how much one full-time worker must earn per hour to cover the minimum basic needs of their family where they live while remaining self-sufficient.” .

Consider that even in Alabama, a cheaper state that does not have a state minimum wage, the MIT calculator estimates that the cost of living for a single adult without children is $20.15 per hour—or nearly three times the federal minimum wages.

Due to the high cost of child care, the cost of living rises to $33.36 per hour for one adult with one child in Alabama. In other words, a single mother with one child making the federal minimum wage of $7.25 earns less than a quarter of what it takes to live in Alabama.

The federal minimum wage for tipped workers is just $2.13 per hour. However, these workers must earn at least the federal minimum hourly wage of $7.25 or their employers are required to make up the difference.

Although the federal minimum wage has not changed, many states have changed their minimum wage.

That’s why only 1.1 percent of hourly workers earned the prevailing federal minimum wage or less in 2023, down from 1.3 percent in 2022 and 13.4 percent in 1979, according to the Bureau of Labor Statistics.

According to the Department of Labor, 30 states currently have minimum wages higher than the federal minimum wage of $7.25. This 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 require just $7.25 an hour, including Texas and the battleground states of Wisconsin, North Carolina and Pennsylvania, where Trump spoke on Sunday.

“McDonald’s workers don’t need photo ops; they need a living wage,” Nina Turner, a former Ohio state senator and founder of We Are Somebody, a pro-worker organization that supports organizing efforts by low-wage workers, said in a statement Sunday. “We all need to come together and fight back against the system that keeps them in poverty while corporate executives make billions.”

McDonald’s says it will increase wages by 8 percent in 2022 for hourly workers at more than 90 percent of its company-owned restaurants. This is on top of a salary increase of about 10 percent in 2021.

However, the wage increase only affected 5 percent of corporate-owned McDonald’s restaurants. The remaining 95 percent is owned and operated by franchisees, who can make their own compensation decisions.

As of April 1, McDonald’s workers in California are earning at least $20 an hour due to a new state law that raised the minimum wage for all fast food restaurant employees.

The wage increase in California will affect about half a million fast food workers in the state and will apply to restaurant chains with more than 60 locations across the country. The law also created a fast-food board made up of restaurant and worker representatives that could raise wages annually through the end of the decade.

Reich, a Berkeley professor, is the author of a recent study that found that raising the minimum wage for fast-food workers in California led to a “surprisingly large” increase in workers’ wages without killing jobs or causing alarming price hikes.

Reich told CNN he believes the federal minimum wage can increase to $17 an hour without job losses.

“People will stop going to McDonald’s for $50 an hour. But I don’t see that kind of negative impact at $17,” he said. “This will have minimal impact on jobs, small price increases and many benefits.”