Minimum Wage America
by Elizabeth Schulte
www.dissidentvoice.org
December 22, 2004
First Published in Socialist Worker



 

It couldn't be more obvious -- no human being should be forced to live on $5.15 an hour. In December, even New York state legislators had to agree.

Under pressure from a public campaign around the issue, lawmakers voted to raise the state minimum wage for the first time in five years, from $5.15 an hour -- the current federal minimum--to $7.15 by 2007.

The vote reflects the recognition--even among Republicans, who control New York’s state Senate and whose votes helped override a veto by Gov. George Pataki -- that the $5.15-an-hour minimum is nowhere near enough to live on.

Since 1999, 14 other states and the District of Columbia have voted to raise their minimum wages above the federal level. In Florida this past November, a referendum increasing the minimum wage to $6.15 an hour passed by a wide margin. Despite well-funded opposition to the state measure by Gov. Jeb Bush and his buddies in local business, more than 71 percent of Floridians voted for the increase. In Nevada, 68 percent of voters supported an increase.

In addition, there are 123 cities and counties with living-wage laws requiring higher minimum wages in jobs dependent on public funds--including work on government contracts or at companies benefiting from corporate welfare.

Two dollars an hour may not seem like a lot of money, but unfortunately for Ann Marie Grey, it is.

Grey works at a McDonalds in Binghamton, N.Y., where she currently makes $6 an hour. Ann told a New York television station that with her college degree, she “expected to go out and find a job for $8, $10 an hour,” she said. Instead, it’s been minimum wage all the way. “My daughter's going to have a baby,” she says. “I'm going to be a grandma and I can't afford to buy her things. My son understands our financial condition, but he just wants a zip-up hoody, and I can't afford to buy him one.”

Women like Grey are all too familiar in minimum-wage America. They are food service workers, retail workers, janitors, clerical workers.

The retail industry has a disproportionate number of workers who earn at or below the minimum wage. According to the Bureau of Labor Statistics, in 2003, retail workers made up only 22 percent of the workforce, but 62 percent of those at or below the minimum wage.

Contrary to the myth spun by Corporate America, the majority of minimum-wage workers aren’t teenagers making a little extra money after school. They are men and women trying to support families. According to a 2004 briefing by the Economic Policy Institute (EPI) titled No Longer Getting By: An Increase in the Minimum Wage Is Long Overdue, if the minimum wage were to be increased to a modest $7 an hour, 72 percent of those who would be directly affected are over the age of 20.

Forty-four percent work full-time (working at least 35 hours a week), and 36 percent of families with workers who would benefit from an increase rely exclusively on that person’s wages.

“The minimum wage hasn’t been raised in seven years now, the second longest period in the history of the minimum wage that the Congress has failed to act while workers’ wages fall further and further behind,” Jen Kern, director of the Living Wage Resource Center for the Association of Community Organizations for Reform Now (ACORN) told Socialist Worker.

In 1938, Congress passed the Fair Labor Standards Act, which established the minimum wage, as well as the 40-hour workweek and a ban on child labor in interstate commerce. The law was supposed to stave off some of the worst employer abuses during the Great Depression.

The last increase in the minimum wage was in 1997, when it was raised from $4.75 to $5.15 over two years. Because it’s not tied to inflation, the value of the minimum wage has been eaten away over time.

Over the last few decades, the gap between the minimum wage and the average hourly earnings for workers has grown into a yawning chasm. In the 1950s and '60s, the federal minimum wage averaged 50 percent the average hourly earnings. In the 1970s, it was 44 percent; and, in the 1980s and '90s, 39 percent. Today, the figure is 33 percent.

“It hasn’t been that low since 1949,” Amy Chasanov, deputy director of policy at the Economic Policy Institute (EPI) told Socialist Worker. “Since 1997, there have been significant increases in the cost of living--gas prices, milk prices and all sorts of essentials for getting by. “The price for people just meeting their most basic needs has gone up a whole lot, and meanwhile, folks who are earning minimum wage are still stuck at the same amount.”

A full-time worker who works year-round for the minimum wage makes about $10,700 a year. That’s $4,958 below the U.S. government’s official poverty line for a family of three, and $8,138 below the poverty line for a family of four.

A worker trying to support a family of four would have to make $9.06 an hour to rise above the poverty line.

Take into account the fact that the poverty line is based on an antiquated formula from the 1960s that doesn’t take into account the added expenses for families today, such as rising health care and child care costs, and you have a disaster in the making. “The minimum wage is nowhere even close to the poverty level, which is nowhere close to what it takes to live,” ACORN’s Kern said. “There’s huge gap in what our country considers a sustainable wage floor and what it takes to sustain humans.”

So it is no surprise that many minimum-wage workers turn up at food pantries and homeless shelters.

Ellen Christmas, manager of the Food Shelf program in Grand Rapids, Minn., says that the percentage of people who rely on her food pantry to feed their families has increased by about 25 percent every year for the last four years. Forty percent of those families have at least one person working, she told the Grand Rapids Herald-Review. “It’s sad because we have people coming in here in their work uniforms,” said Christmas. “If you’re a single mother and making minimum wage, you can’t make it on your own.”

According to a report by America’s Second Harvest, in 2001, four out of 10 households who received emergency food assistance from soup kitchens, food pantries and shelters had at least one employed adult in the family. Of the adults in these households, 17 percent worked full-time.

According to a 2001 report by the National Low Income Housing Coalition, the national median housing wage--which is based on each county’s housing wage for a two-bedroom unit at the fair market rent--is $13.87 an hour. That’s almost three times the federal minimum wage.

Women and minorities are most impacted by the low minimum wage. “Earlier this year, we looked into who would be affected if the federal government raised the minimum wage to $7,” said Chasanov. “We estimated that 7.4 million workers would be helped -- and 61 percent would be women.”

And while African American workers are only 11 percent of the total workforce, they would be about 15 percent of the people helped by an increased minimum wage. Hispanics are 13 percent of the workforce, yet they’d be 19 percent of those who would get some relief from an increase.

Politicians like California’s Gov. Arnold Schwarzenegger, who vetoed a minimum-wage increase earlier this year, claim that they oppose such bills because they are “job killers.” Their logic is that a raised wage will force companies to lay off workers.

But studies show that this isn’t the case. A 1998 EPI study looked at the impact of the most recent 1996-97 minimum-wage increase, and instead found that the low-wage labor market performed better than it had in decades. A recent study by the Fiscal Policy Institute of state minimum wages found no evidence of negative employment effects on small businesses.

This year, the EPI set out to pull together the names of economists who would sign onto a statement on their Web site supporting a minimum-wage increase. They were astounded to find that, almost immediately, 562 economists wanted to add their names to the list.

The truth is that the likes of Schwarzenegger and his friends in the White House want to squeeze every penny out of workers--whether it’s bashing overtime protections or forcing them to eke out an existence on poverty wages. It’s as clear as ever--workers can’t survive on $5.15, and they shouldn’t have to.

Abandoned by the Democrats

While states like New York are taking matters into their own hands and raising the minimum wage, the White House has other plans.

Instead of an increase, the Bush administration is actually talking about a proposal to allow states greater “flexibility” in the minimum wage. If a state that already has a $5.15 minimum wage wants to opt out of adhering to future federal increases, the Bush administration would like to give them their blessing.

And plenty of states would jump at the chance. Already, there are seven states with no state minimum wage, and two that have minimum wages that are lower that the federal minimum.

Earlier this year, Sen. Edward Kennedy (D-Mass.) proposed legislation to increase the federal minimum wage. Kennedy’s Fair Minimum Wage Act of 2004 proposes a modest increase to $7 an hour by 2007.

The legislation got the backing of both John Kerry and John Edwards. But you wouldn’t have known it from their presidential campaign. On the campaign trail, they rarely, if ever, talked about raising minimum-wage workers out of poverty.

According to a recent Pew Research Center poll, 77 percent of Americans supported an increase in the minimum wage. Similarly, the success of minimum-wage ballot measures in Florida and Nevada showed the potential for rallying support around raising the living standards of poor and working-class Americans.

Yet the Democrats never made this part of their campaign to beat Bush. Kerry was too busy touting his plan to save the economy with corporate tax breaks -- and promising big business that he wasn’t a “redistribution Democrat.”

It shows just out of touch the Democrats are with the U.S. public -- and how in touch they are with Corporate America. It will take grassroots activism to make a living wage a reality for minimum-wage America.

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