The reality of income disparity and imbalance between the very wealthy and the 98 percent of the rest of the country has reached an all-time high. On average, CEO's at S&P 500 Index companies made 380 times more than their typical workers in 2011 while 46.2 Americans live below the poverty line. However, Senator Elizabeth Warren's proposal to combat corporate greed and wage inequality makes perfect sense.
Warren, a Massachusetts Democrat, made a case for increasing the minimum wage to $22 an hour last week during a Senate Committee on Health, Education, Labor and Pensions hearing. To back her argument, the senator cited a study that suggested that the federal minimum wage would have stood at nearly $22 an hour today if it had kept up with increased rates in worker productivity since 1960.
"If we started in 1960 and we said that as productivity goes up, that is as workers are producing more, then the minimum wage is going to go up the same. And if that were the case then the minimum wage today would be about $22 an hour," said Warren. She then posed a question to Dr. Arindrajit Dube, a University of Massachusetts Amherst professor and economic expert who was at the hearing. "So my question is Mr. Dube, with a minimum wage of $7.25 an hour, what happened to the other $14.75? It sure didn't go to the worker."
Nope, that $14.75 was funneled to top corporate and executive earners, said Dube who went on to explain that if minimum wage incomes had grown over that period at the same rate as it did for the highest percent of income earners, then the minimum wage would actually be around $33 an hour.
"It is quite remarkable that had the minimum wage kept up with overall productivity, it would have been $22 per hour in 2011," Dr. Dube said. "Had it kept up with the growth in income going to the top 1 percent, it would have been even higher, at $24 per hour; and the wage would have exceeded $33 per hour at its peak in 2007."
Of course Warren wasn't arguing that the government should implement a $22 an hour minimum wage, which would wreak havoc on small business owners who employ a number of low wage workers. Instead, she was highlighting the results of the study that show how pay for top earners has skyrocketed in the past 40 years while the minimum wage has damn near been stagnant.
She also made a case as to why the federal government can and should incrementally raise minimum wage to over $10 an hour over the next two years.
Watch footage of Sen. Warren at the hearing below.
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