U.S. Senate’s Decision on Minimum Wage Affects the Jan/San Industry

There are more than 5 million hotel maids, dishwashers, janitorial, fast food and other minimum wage workers who were disappointed earlier this month when the U.S. Senate blocked a proposed bill that would have increased the federal minimum wage. The bill would have been the first federal increase in nine years, raising minimum wage for some of the nations lowest-paid workers from $5.15 to $7.25 in three phases.

Although most states set their own minimum wage, more than half follow those outlined by the federal government. Many cleaning managers then outline employee compensation by using these federal standards as a stepping-stone. And, even though the economy continues to add jobs, economists claim — in a New York Times article — that global trade, immigration, layoffs and technology have reduced workers’ bargaining power when it comes to wage or benefit increases. That said, after adjusting for inflation, workers across the country now earn 2 percent less than just two years ago, while employee productivity has reportedly risen steadily over the same period of time. Little has been reported as to why employees are more productive, but workers across the country blame corporate America, not the federal government, for stagnant wages.

With reduced bargaining power, weakening trade unions and the high cost of employee benefits, companies have been the beneficiaries of a growing economy, not workers’ paychecks. According to the New York Times article, in the first quarter of 2006, wages and salaries represented 45 percent of gross domestic product, down from almost 50 percent in 2001 and a record 53.6 percent in 1970. In fact, over the last year, the value of employee benefits has risen only 3.4 percent, while inflation has exceeded 4 percent, according to the Labor Department.

Democrats claim that they will continue fighting to reduce the cost of health care and increase minimum wage, while Republicans argue that without their proposed tax cuts, the economy will suffer, and so will wages. Politics aside, even though the polls show overwhelming support for raising the minimum wage, workers in the jan/san industry will have to wait for the federal pay hike, a pattern that they have become accustom to. Adjusted for inflation, the current minimum wage is the lowest it’s been in 50 years.