|

Anti-Poverty Advocates Cheer Minimum Wage Increase


July 31st, 2007

Caitlin G. Johnson – OneWorld US

NEW YORK, May 31 (OneWorld) – U.S. President George W. Bush signed into law Congress’ plan for continued war funding last Friday — and with it, an attached proposal to raise the federal minimum wage from its current level of $5.15 to $7.25 per hour in 2009.

“This is a huge event, decades in the making, that’s gotten lost in the coverage of the bill it was attached to,” says Kevin Whelan, communications director for the Association of Community Organizations for Reform Now (ACORN), a grassroots coalition of low- and moderate-income families across the United States. ACORN is a member of the Let Justice Roll coalition that pushed for the wage increase. “They sort of passed it at night and forgot to tell anyone,” Whelan adds.

About 13 million U.S. workers — 10 percent of the overall workforce — are expected to benefit, as will 6.4 million children whose parents earn minimum wage, according to the Economic Policy Institute (EPI), a nonpartisan research organization.

Of these workers, 5.6 million will see a direct increase in their paychecks; more than 7 million others who earn close to the new level are also likely to see a modest increase in pay — averaging about 40 cents per hour, according to EPI. There is also likely to be a slight spillover effect as businesses adjust other workers’ pay rates to maintain wage structures.

Some proponents of the increase are criticizing its link to the war funding bill, even as they praise its passage. “This victory is bittersweet because Congress chose to raise the minimum wage through a bill to fund war. Both the Iraq war and the minimum wage are moral issues, and should have been considered on their own merits,” says Roberta Spivek, coordinator of the national economic justice program at the American Friends Service Committee (AFSC), another member of the Let Justice Roll Campaign.

But the economic impact of the new law is not lost on Spivek. “One in eight women workers…will benefit from this increase,” she says, citing EPI data. “One third of the workers benefiting will be African American or Hispanic. A majority of the benefits will go to families with working adults in the bottom 40 percent of the income pyramid.”

Getting By on the Minimum

Julie Smith knows first-hand what it’s like to try to make a living earning the minimum. In 1983, she dropped out of college to give birth to her daughter, and took a job as a cashier at a discount department store.

Then, Smith says she earned $4.25 per hour and made ends meet with child care vouchers, food stamps, and help from her family.

“That’s twenty-four years ago and I was making 90 cents less than the minimum was until now. And everything’s gone up since then: gas, food, rent. I paid $165 for an apartment that would be $550 or $600 now,” she says. “If I were in the same position today, now, I wouldn’t be able to go to school because I’d have to work two jobs.”

Smith finished trade school, then college, and is now spokesperson for ACORN’s minimum wage campaign in Ohio. In November, the state raised its minimum wage to $6.85 per hour.

Smith says the federal increase is long overdue. “With $200 more a month, maybe you can drop that second job, or go to school. It’ll pay a bill or two, buy groceries. It’s not enough, but it’s a big help.”

Taking it to the States

With a federal victory under their belt, advocates continue to focus on grassroots efforts to boost state minimum wages and “living wage” campaigns that take into account the actual costs of living in an area.

To date, at least 32 states and the District of Columbia have set their state minimum wages above the federal level, according to the Economic Policy Institute.

Earlier this month, the Kansas Action Network kicked off its Raise the Wage campaign to tie the state’s minimum wage to the new federal level, up from its current rate of $2.65 per hour. Kansas is the only state with a minimum wage below the federal level; Kansas’ minimum wage applies to workers who are in certain categories exempted from the federal minimum by the Fair Labor Standards Act of 1938.

Five other states — Alabama, Louisiana, Mississippi, South Carolina, and Tennessee — set no minimum wage guarantee for these workers.

“People think that workers in these categories [not subject to the federal minimum wage] are kids or serving people who get tips, but in fact it’s people who work for small businesses of certain types, farm workers, some in the entertainment industry, and those who do companion or caregiver work for very young children or the elderly, for example,” says David Smith, a board member of the Kansas Action Network.

Using data from the U.S. Bureau of Labor Statistics, Smith estimates that 240,000 of Kansas’ 1.4 million workers will get a raise thanks to this new bill — but some 19,000 workers not eligible for the federal minimum will not see a change.

“The bottom line is that the federal minimum wage passage is good news for a large number of workers nationally and in Kansas, and we think it should be good news for the others as well,” says Smith.

A Chance at Common Ground?

Despite strong public support for a minimum wage hike — ranging from 80 to 83 percent in recent polls by the Associated Press-AOL News and the Pew Research Center — and expressions of support from President Bush, some conservative organizations like the Heritage Foundation oppose the increase.

“This is a well-intentioned piece of legislation that’s not going to do what its supporters want it to do,” says James Sherk, Bradley Fellow in Labor Policy at the Heritage Foundation’s Center for Data Analysis. “There’s little evidence to suggest that raising the minimum wage will reduce poverty.”

Instead, Sherk says, the bill may induce businesses to raise prices and eliminate entry-level or unskilled positions in the long run. “Some people will get a raise, and some will lose their jobs. While there may be more winners than losers, the losers will lose more than winners win.”

A better approach, according to Sherk, is to carefully increase the Earned Income Tax Credit that refunds some of the taxes that low-wage earners owe.

It is here that conservatives and progressives may find common ground. AFSC’s Roberta Spivek agrees that the Earned Income Tax Credit is an important tool in the fight to reduce poverty. “If we want to reduce U.S. poverty, we need both a higher minimum wage and an Earned Income and Child Tax Credits that cover more workers,” she argues.

A 2006 update from the Fiscal Policy Institute — a nonpartisan New York think thank — found no negative impact on small businesses in states that raised their minimum wages above the federal level. EPI’s economic models indicate that raising the minimum wage can bring payoffs through reduced recruiting and training costs and absenteeism, and increased worker morale.

“It eats into the fabric of our society that minimum wage workers aren’t valued,” says Julie Smith. “They provide the goods and services that the prices are going up on — they make, sell, market, and service them. It’s about time they had a raise.”

This entry was posted in Living Wages. Bookmark the permalink.


We will All Become Pilgrims: 2022 Newsletter Summary

December 19th, 2022

By Paul Engler Whenever I write my newsletter, I am afraid a subtle or not-so-subtle repetition will be noticed—I fear I write the same thing over and over again! Generally the theme has something to do with change, uncertainty, and … Continue reading

Liminality is a Recipe for Navigating Winter: Becoming a Pilgrim on the Camino de Santiago

December 19th, 2022

Whether you’re in a midlife, quarter life, or general life crisis, the proverbial crap hits the wall. You break up with your girlfriend, your community starts falling apart, your movement dies, your organization goes bankrupt, you lose the political campaign. … Continue reading

2022 House Journal

December 19th, 2022

I’m happy to report that our community has stabilized at the Center for the Working Poor house. We haven’t had one person leave in the past year! A welcome contrast to 2021, when we had so many people come and … Continue reading

2021 CWP Newsletter Summary

December 15th, 2021

There is a big debate among economists about a curious phenomenon unfolding right now called “The Great Resignation”. We have an immense labor shortage because people are not returning to work as the experts expected (common after a recession). There … Continue reading

2021 Center Update: Ring the Bell of Hope… Again, and Again

December 15th, 2021

This fall, in one of my first trips to visit my coworkers from the Ayni Institute in Boston, I stopped by New York City to visit one of my closest friends, Eric Stoner. And I was sitting on his couch, … Continue reading

2021 House Journal

December 15th, 2021

The Center for the Working Poor was founded in 2006, but we didn’t move into our large Victorian house until 2007. Therefore, we have been in the house for 14 years now; and throughout this time, only Paul Engler has … Continue reading

The Story of Community Counseling

December 15th, 2021

Over the last year, we have started beta groups for a new model of mutual aid counseling, called Community Counseling that has engaged dozens in weekly small group counseling practice and training. In November, I went to Boston to lead … Continue reading

2020 Center Update: Surrender and Become Attentive

December 17th, 2020

“To everything there is a season, A time for every purpose under heaven: A time to be born, And a time to die …” — Ecclesiastes 3:1 “Surrender to what is dying, and become attentive to what is emerging.”  — … Continue reading