As proponents and opponents line up on either side of the fight to raise minimum wage, the idea of an income gap has been tossed about- albeit with a slightly more elusive feel.
The ever widening gap between CEO pay and the average worker is usually the best supporting research for claims that the gap is widening at an appalling level. Recent reports have shed light on a new indicator of the income gap.
Earlier this month a report came out that the top 25 hedge fund managers made more ($12.94 billion) than all the kindergarten teachers in America ($8.6 billion according to the Bureau of Labor Statistics). As a stand alone study, this fact is hard enough to stomach.
But wait. Kindergarten teachers make an average of 3 times what low wage worker makes. At the current minimum wage rate of $7.25 per hour, a full time low wage worker who takes no time off will make about $15,080 before taxes.
So what does that mean?
- Although the profits range, let’s say that each of those 25 hedge fund managers made the same amount in 2015
- $13 billion / 25 managers = $520 million
- $520 million / $15,080 = 34,483→ So, in theory, 1 person makes 34,483 times what the average low wage worker makes (there were approximately 895,000 low wage workers in 2015)
When 25 full time workers are making 34,483 times more than what 895,000 full time workers are making, that is reason enough to pause. 895,000 people are not afforded the basic dignities of a living wage while 25 people are making exorbitant amounts of money hard for the average person to comprehend.
So just how wide is too wide? When does the elusive term have a number put to it that is too high to be accepted? If this is not it, then what is? Elite Americans can continue to push the envelop on earnings and paychecks. We can commend the ingenuity that it takes to get to these levels of earnings. But while applauding the successes of a few, we are institutionalizing an inequality by refusing to take action on legislation that grants a living wage to the many.
Merely raising the minimum wage once will not be enough – the minimum wage also needs to be indexed. Otherwise, wages will stagnate and workers will once again fall behind. America must learn to stabilize economic opportunity to prevent the future expansion of the inequality gap.
Enough is enough, the gap is too wide. Time to take note, America.