The Wage War: Should America's Working Poor Get a Raise?

Amie Crawford, 56, relocated to Chicago to be closer to family about 14 months ago. Despite three decades of experience, she couldn’t find a job as a designer. Luckily, she says, “I was debt free and had savings to fall back on.”

Still, as her time out of work dragged on, she grew anxious. She decided to take a job at a fast-food restaurant in the Magnificent Mile, a high-end shopping district on Michigan Avenue.

“It was just something to bring money in while I continued my job search,” she says. Crawford has been making $8.25 an hour, the state’s minimum wage, which is a dollar more than the federal rate.

She’s supposed to get 40 hours a week, but she often doesn’t. Last week, she worked 28 hours.

“My take-home pay for February was $788 dollars,” she says. “Minimum wage needs to be higher.”

The reason an increase needs to happen now, Crawford explains, “is that in today’s economy, anyone can wind up in a minimum wage job.”

Crawford was speaking to reporters March 6 in Washington during a press conference held on Capitol Hill by Iowa Senator Tom Harkin (D), who last week introduced a bill to raise the federal minimum wage to $10.10 an hour. That would bring a minimum wage earner’s annual income up to $18,000 from $14,500. The poverty threshold for a family of three, as defined by Washington bureaucrats, is $19,090.

Reynoso is required to use his own car, and Domino’s doesn’t provide insurance or gas. If his wage goes up to $10.10, he says, “I could send my daughter to a better school. Or I could get a better apartment. We could live more comfortable with less problem.”

“Right now we are just surviving,” says Reynoso.

According to Harkin the minimum wage, which was last increased in 2006 from $5.15 to $7.25, needs to keep pace with the rising cost of living.

“Rents are going up, food’s going up, gasoline is going up—everything’s going up but we haven’t had a decent increase in the minimum wage,” Harkin told reporters. “We’re committed to this. We’re going to do everything possible to move this bill through.”

Harkin’s bill faces opposition from powerful business interests. While some employers such as Costco have supported lifting the minimum wage, the Chamber of Commerce ardently opposes it. Its argument: Jobs will be lost as employers need to scale back workforces to pay fewer workers more.

“That argument comes up every time we try to propose any minimum wage of any sort because corporations and their trade associations and all the folks they pay to do research are publicly focused on job loss,” Jen Kern, minimum wage campaign coordinator at the National Employment Law Project, an advocacy group for low-wage workers, tells TakePart. “We’ve raised the minimum wage countless times both federally and in the states. The majority of the research is on our side.”

Some countries have a significantly higher minimum wage and have lower unemployment than the United States. For instance, Australia’s staggered minimum wage system ensures adult workers earn at least $15.96 per hour. And that country started the year with a 5.4 percent unemployment rate -- as opposed to 7.7 percent in the most current U.S. figures (that 7.7 percent represented a four-year low).

Still, even politically liberal economists disagree over whether or not raising the minimum wage is the best way to help America’s working poor.

In the New York Times recently, former White House economic advisor Christina Romer called raising the minimum wage “half-measures” because it’s not the most effective way to alleviate poverty.

Instead, she called for “a more generous earned-income tax credit” and “universal pre-K education.”

“Why settle for half-measures when such truly first-rate policies are well understood and ready to go?” she wrote.

Joseph Sabia, an assistant professor of economics at San Diego State University, agrees with Romer that a federal increase will be ineffective. “The vast majority of beneficiaries are second- or third-earners living in households with incomes of over two or three times the poverty line, often teenagers or young adults,” Sabia writes in an email to TakePart. “Among the vast minority of affected workers who are near the poverty line, many are hurt by minimum wage increases because employers respond to higher wage bills by reducing hours or laying off workers.”

That economic argument is lost on the majority of people. A Gallup Poll released March 6, 2013, found some 71 percent of those surveyed supported raising the federal minimum wage to $9 an hour, which President Obama proposed during his State of the Union address. Only 27 percent opposed the increase.

Activists are rallying around those numbers. “People just don’t buy the argument that if businesses in 1968 were paying the equivalent of $10.60 an hour today why the minimum wage is $7.25,” says Kern, whose group is mobilizing support for the increase.

“Minimum wage isn’t an anti-poverty program, it’s our nation’s labor standard for wages,” Kern says. “This is not our No. 1 goal for ending poverty, to raise the minimum wage, but what’s the argument not to?”



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