Saturday, August 19, 2006

The minimum wage scandal, and the GOP hypocrisy

Editorial: Raising the Minimum Wage
America, Jesuit weekly, August 28, 2006

Nowhere in the United States is it possible for a full-time worker earning the minimum wage to rent a one-bedroom apartment at market rates. Despite this shameful reality, Congress has again balked at increasing the minimum wage from its present $5.15 an hour - unchanged since 1997. According to a report by the nonprofit Center on Budget and Policy Priorities, it is now at a half-century low, with a purchasing power that has fallen by 20 percent since the last increase. By contrast, the same report notes that the "benefits of our impressive production growth have flowed to those at the top of the income and wealth scale."

A full-time minimum wage worker earns only $10,712 a year. Even two wage earners in the same household would barely bring their combined incomes above the federal poverty level of $19,157 for a family of four—two adults and two children. Women, many of them single mothers, are especially affected when it comes to their struggle to provide the basics of life for themselves and their children. With inflation cutting ever more deeply into their meager incomes, more and more who work at minimum-wage jobs find themselves pushed into poverty and homelessness.

Recognizing the struggle required to survive on the federal minimum wage, over 20 states have taken matters into their own hands by raising their minimum-wage standards to higher levels. Washington State's is the highest, at $7.63 an hour. Some municipalities have taken still greater steps. In Chicago, for example, the city council in late July approved passage of the so-called big-box bill. This ordinance, which applies to huge retailers like Wal-Mart and Target, calls for a minimum wage of $10 an hour, with annual indexing for inflation. Not surprisingly, Wal-Mart and similar big-box stores fought passage of the ordinance. But this new minimum approaches what most would view as a living wage—a wage sufficient to meet such basic needs as shelter, food and medical care. It is already in place in cities like Santa Fe and Albuquerque, N.M., as well as San Francisco, Calif., and Washington, D.C. Helpful as such local moves are, though, what is needed is action on the Congressional level that would benefit workers nationwide.

Business interests like the U.S. Chamber of Commerce and powerful lobbies like the American Hotel and Lodging Association have long opposed any increase in the minimum wage, claiming that it would stunt job growth and harm small businesses. But a report by the nonprofit Fiscal Policy Institute has concluded that states with minimum wages above the federal level have actually experienced faster growth in small businesses and retail jobs than states where the federal level has prevailed.

Over the years, the U.S. Conference of Catholic Bishops has consistently advocated an increase in the minimum wage. A statement released by the conference in February cites the U.S. Labor Department’s finding that about 40 percent of the workers who would benefit are the sole wage earners for their households. Overall, an increase would have a positive effect on over eight million low-wage workers. Not only would women be particularly helped but so too would members of minority groups and the poor in general. In the same statement, the bishops make reference to a living wage as "integral to our understanding of human work." Raising the minimum wage would at least be a start toward viewing work not as a job only, but, as the bishops also observe, "a reflection of our human dignity." The present minimum wage denies workers that dignity.

Just before its August recess, the House of Representatives passed a measure that would have raised the minimum from $5.15 to $7.25 in three stages over the next three years. The nonprofit Economic Policy Institute has estimated that even this modest increase could have meant a significant annual wage increment of approximately $1,200. But in what advocates for the poor have called a cynical ploy, a provision attached to the House bill called for a reduction in the estate tax that would have primarily benefited heirs to large inheritances. It would have had the adverse effect of lowering government revenues by over $700 billion over the next decade, which could in turn have led to a cutting back on programs that benefit low-income people. For primarily partisan reasons, when the measure went from the House to the Senate in early August, the combination of a wage increase, coupled with the estate tax provision, caused both measures to fail.

Congress has been diligent in regularly raising its own wages. It should now raise the wages of those who are among the nation’s poorest workers.

Copyright, America, 2006


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