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Tag: living wage
To Save Americans From Starving, Congress Must Raise The Minimum Wage

To Save Americans From Starving, Congress Must Raise The Minimum Wage

Reprinted with permission from DC Report

Imagine Washington announcing today that for the next three decades your pay will increase each January. You'll get a boost to cover inflation plus 10-cents more an hour. That means your real pay next year, before taxes, will be $4 more per week.

Ask yourself, would you even notice an extra $4 a week in gross pay? Would you feel like playing by the rules and being a good worker was worth it?

Well, that's what has happened to the typical American worker since 1990, but no one announced it back then. And it's happened as unions have been pretty much destroyed, representing only about one in 15 private-sector workers.

As a middle-aged widow who lost her job and took minimum-wage work at a major national retailer to feed herself and her son, who live together in a town with low-cost housing, told me:

"You can't make ends meet on the minimum wage no matter how much you try. It is just not possible."

That's the prime reason Congress and President Biden must raise the minimum wage.

As private-sector unions have faded away, wages have fallen in tandem. The numbers and the pain of people like the widow show that Congress must step in, acting as a proxy union for the lowest-paid workers by raising the floor on wages in America. If lawmakers fail then taxpayers should expect rising costs for welfare to cope with social pathologies. We should all expect popular support for our tattered democracy will wither even more, putting our liberties in danger.

Inflation Toll

The story I pulled from the official data shows things are much worse than just the awful fact that the minimum wage has been stuck since 2009 at $7.25 an hour, its value being eroded by inflation even as America grows ever richer.

Each year, I do detailed analyses of W-2 wage and salary reports that employers send to the Social Security Administration. Its computers add up every filing and then a report shows how many people make how much in broad pay categories whether they had one employer or many.

What the wage data show is disturbing. America is becoming two nations separate and unequal, one with a minority of workers who are prospering, some making each year enough for a hundred families for a lifetime. Across the income divide more than 130 million workers struggle.

Republicans and some Senate Democrats claim that raising the minimum wage will kill jobs and force small businesses to close. That's not what past actual experience shows, at least not on this planet.

Faulty Argument

That argument is actually silly because it assumes that prices never increase so if wages go up businesses must fail. Nonsense. But should you find a dealer advertising new cars today at 1990 prices please let me know.

What the facts show that since 1990 our national wage pie, adjusted for inflation, has grown much bigger. Adjusted for inflation it was $8.8 trillion in 2019, up from $5 trillion in 1990.

But the way the wage pie was cut into slices changed significantly.

Let's look first at workers who always earn only the minimum wage. Such people exist, though they are not common.

In 1990 the minimum wage was $3.80. Adjusted for inflation it would have to have risen to $7.48 in 2019 just to stay even. But the minimum wage was only $7.25, the same as today. In absolute terms these workers are worse off, their meager slice of income pie shrinking.

In 2019 half of America's 169 million workers made less than $35,000; a third made less than $20,000. Only one in three workers earn more than $1,000 per week.

$620 a Week

What about the typical worker? That's measured by examining median pay; half make more, half less. In 2019 the median wage was $34,250 or $620 a week.

That's a real increase since 1990 of $5,712. That sounds good until you realize that in round numbers it works out to that dime an hour raise every January.

How about the average wage which includes those with ginormous paychecks? Real average pay rose by $12,225 to $51,916. That's two dimes and a penny more per hour each January. How much would you notice an extra $8.40 a week – before taxes?

Now let's turn to the extremely well paid, people whose pay increases alone meant they gorged on wage pie while most everyone else got crumbs.

Let's consider all workers making $1 million or more, roughly one in every thousand workers. Their share of the national wage pie rose mightily, from 3 cents in 1990 to a nickel in 2019. That leaves everyone else with a smaller share of the pie to divvy up.

What about the super-paid workers who made $10 million or more in 1990 and 2019 using 2019 dollars?

More Super-Rich

The number of super-paid workers is for sure small. But it grew five-fold from 739 to 4,024.

Their average gross pay increased from just shy of $2 million to almost $2.5 million. Simply put in 2019 they got six days of pay for five days of 1990 work.

Also, a record 222 of these workers were paid more than $50 million in 2019, averaging $89 million each.

Even if we assume that employers pay these top earners what they are worth, a society whose rules and regulations lavish every more pay on those to the top while hardly growing wages for two-thirds or more of the workforce is neither stable nor enduring. The chasm between the super-paid and everyone else is huge and widening and can destroy support for democracy, as we saw with the failed coup on Jan. 6.

Without unions to bargain for workers pay simply is not going to improve. Indeed, our government has put downward pressure on wages through the welfare "reform" act President Bill Clinton signed, which flooded the market with women who have few job skills and little education, a stealth subsidy for many employers because they could pay less. The child tax credit for working parents has morphed over time into a subsidy for employers who now capture its benefits by not raising pay. Those are just of many anti-worker policies our government put in place during the past 40 years.

Congress can fix this. It has to step in as a proxy union for powerless workers and raise the minimum wage. If we could afford a minimum wage in the 1960s that's equal to about $12 an hour today then we can afford to raise our pay standards in today's much wealthier America.

And to those small businesses that say they will fold if they have to pay their workers more there is an answer: Raise prices.

If you can't afford to pay a living wage and you can't raise prices, your business is already failing so put it out of its misery. You can always start a new business in the future — and with people making more money your chances of success will be much better because more customers will have more money to spend.

Is The Minimum Wage Really A Living Wage?

Is The Minimum Wage Really A Living Wage?

Under pressure to raise his state’s minimum wage, Wisconsin Gov. Scott Walker confidently declared that there was no need to do so. Low-wage workers had filed a complaint charging that the state’s minimum wage — $7.25 — did not constitute a “living wage” as mandated by state law. But the Republican governor’s administration, after examining the issue, announced earlier this month that it found “no reasonable cause” for the complaint.

That official government finding was supposed to come from a dispassionate investigation. Yet, documents reveal that it was largely based on information provided by the state’s restaurant lobby, which represents major low-wage employers including fast-food companies.

Indeed, the Raise Wisconsin campaign, which is pushing for a higher minimum wage, requested all documents on which the state based the “living wage” ruling. And the only economic study that the administration released in response was an anti-minimum-wage analysis from the Wisconsin Restaurant Association — a group that lobbies against minimum-wage increases.

Of course, there are plenty of ways to see that the minimum wage is not a living wage. For instance, there is data showing that nearly half of all restaurant workers live at or near the poverty level. Alternately, some low-wage employers have acknowledged that people who work for them can scarcely make ends meet. Last year, McDonald’s corporate documents effectively admitted that its low-wage jobs do not provide enough income on which to survive.

In light of those realities, Democrats have made GOP opposition to a higher minimum wage central to their 2014 election campaign. They were bolstered a few months ago when the Associated Press reported that “the 13 U.S. states that raised their minimum wages at the beginning of this year are adding jobs at a faster pace than those that did not.”

Some Republicans have responded by embracing a higher minimum wage, but not Walker, who is locked in a tight re-election battle and is seen as a prospective 2016 presidential candidate. With various localities in his state voting on minimum-wage referendums in 2014, he has drawn withering criticism for saying, “I don’t think [the minimum wage] serves a purpose.”

Then came the back and forth over his state’s living wage law. With Walker’s Democratic challenger, Mary Burke, surging in the polls, his administration was forced to respond to the low-wage workers’ complaint, which argued that the current minimum wage violates state statutes requiring “every wage paid” in the state to be a “living wage.”

As the complaint showed, Wisconsin’s current minimum wage provides an annual income well below the federal poverty line for a two-person household. According to data compiled by Massachusetts Institute of Technology professor Amy Glasmeier, a single parent with one child would need to earn more than double the state’s existing minimum wage to cover essential expenses such as housing, food and health care.

Despite those facts, Walker’s administration issued a ruling rejecting the complaint. Thanks to the documents released from the investigation, we know it did so based on a restaurant industry study declaring that that raising the minimum wage could “do more harm than good.”

In evaluating the living-wage question, why did Walker rely primarily on the less-than-disinterested restaurant industry? It is hard to know for sure, but following the money reveals an important fact: Before the ruling was issued, Walker’s campaigns had taken in more than $200,000 from donors in the restaurant industry, according to data from the National Institute on Money in State Politics.

That’s a lot more cash than Wisconsin’s low-wage workers can probably muster — especially when the state’s minimum wage remains at $7.25 an hour.

David Sirota is a senior writer at the International Business Times and the best-selling author of the books Hostile Takeover,The Uprising and Back to Our Future. Email him at ds@davidsirota.com, follow him on Twitter @davidsirota or visit his website at www.davidsirota.com.

Photo via Wikimedia Commons

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Food Stamp Use Shows Continued ‘Underemployment’ Pain

Food Stamp Use Shows Continued ‘Underemployment’ Pain

By Tim Henderson, Stateline.org

WASHINGTON — Luxuries were affordable for Linda Fish before she lost her job in retail management in 2009.

“I won’t lie. The dinners out, the perfect martinis, the salon visits with a master stylist, and the rooms at nice hotels when I was too lazy or tired to do the long commute home — these things I could afford and they made me very, very happy,” the Chicago resident wrote on her blog soon after she became unemployed.

But in the years after she lost her job, Fish “learned to stop worrying and love minimum wage.” She gained a new appreciation for beans, pasta, and oatmeal when she took a $9 per hour job as a bookstore clerk. It was a shock, Fish said, to go downscale “in a culture where we have been systematically weaned from living with family, cooking our own food, sewing our own clothes, walking,” she told Stateline.

Fish had a job, but she was what economists call “underemployed.” The plight of people like her might explain a puzzling discrepancy between the declining unemployment rate and the rising rate of food stamp usage.

The overall U.S. unemployment rate has steadily declined since the recession officially ended in June 2009. But many Americans still are finding it hard to get by, even if they do have jobs. A key indicator of economic hardship — enrollment in the Supplemental Nutrition Assistance Program (SNAP), commonly known as food stamps — is higher in every state than it was five years ago, even though unemployment has dropped in every state during the same period.

Economists say the official unemployment rate underestimates economic pain, since it doesn’t include people who have stopped looking for work or who are barely getting by with part-time or low-paying jobs. The official U.S. unemployment rate is 6.3 percent. But an alternative federal measure that includes people who want to work but are too discouraged to keep looking, and those working part-time though they would prefer to work full time, is 12.6 percent.

Fish never had to resort to food stamps, but enrollment in the program is another way to capture the “underemployment” of people like her, according to the Food Research and Action Center (FRAC), which advocates to reduce hunger in the United States. “SNAP is an important lifeline for many people struggling with unemployment and underemployment,” the center said in explaining its emphasis on the expanded unemployment numbers.

South Carolina, for example, has an official unemployment rate of 5.3 percent, down from 11.4 percent in the depths of the recession. No other state has had a steeper decline. But the state has an underemployment rate of 11.9 percent.

States with the highest underemployment rates are California, Nevada, and Arizona, where the expanded rate is 16 percent. The lowest rates are in North Dakota (5.5 percent), Nebraska (7.3 percent), and Wyoming (7.9 percent).

There are now five states, along with the District of Columbia, where at least one in five people are on food stamps — Mississippi, Oregon, New Mexico, Tennessee, and West Virginia. In 2009, there were none in that category, according to a Stateline analysis of data from the U.S. Department of Agriculture, which administers the program. The highest usage rate at that time was 17 percent in the District of Columbia.

Generally, food stamps are available to people making up to 130 percent of the poverty level, currently $2,552 a month for a family of four, and provide up to $189 a month per person. The benefit money is issued on a debit-style card, unlike the original stamps and coupons that were used when the program first began.

Nationwide, food stamp usage has started to drop slightly from the 2012 historic high of about 48 million people. It is currently down to about 46 million, in part because some states have reinstated work requirements. But total enrollment remains nearly triple the 17 million food stamp users in 2000. In 2009 nearly 39 million people were on food stamps, and the number rose to 44 million in 2010.

Yet in every state, unemployment is down from 2009 levels, ranging from South Carolina’s dramatic drop to New Mexico’s mild improvement from 6.9 percent to 6.3 percent.

Much of the discrepancy between improving employment news and continued economic suffering, as measured by food stamp use, is due to people who may be employed but making far less than they were before the recession. While Fish, the former retail manager, lost her job in middle age, underemployment is particularly rampant among young college graduates. A New York Fed study this year found that underemployment for college graduates has been steadily climbing since 2001 and the quality of their temporary jobs has steadily dropped.

Since food stamps are federally funded but administered by states, participation also can reflect how successful a state has been at signing up those who are eligible, including jobless workers.

“If you look at areas that were especially impacted by the recession, you’ll see some have really aggressively pushed to boost participation,” said Jennifer Adach, a spokeswoman for FRAC.

The USDA measures food stamp participation compared to the number who are potentially needy, using unemployment, poverty, and near-poverty as factors, to show which states could benefit from more outreach. According to its most recent report in 2012, Delaware, the District of Columbia, and Vermont signed up the highest percentage of potential beneficiaries, while Wyoming, California, and Utah reached the lowest proportion of the needy.

AFP Photo/Scott Olson

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Endorse This! Mary Poppins Won’t Work For Minimum Wage Anymore

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Mary Poppins has had enough of working for the minimum wage and she’s letting everyone know in the way she does best, in song. In this great video from Funny or Die, everyone’s favorite magical nanny informs the children exactly why she can no longer make ends meet making minimum wage and how her meager paycheck disappears before it ever hits the bank. She also informs the children that “just a $3 dollar increase can make a living wage.”

I think we can all agree that it’s time that Mary Poppins, and tens of millions of Americans making the minimum wage just like her, got a raise.

Endorse This delightful musical lesson about the working poor from the world’s favorite flying childcare worker and share this video!

Video courtesy of Funny or Die.

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