Minimum wage is not a living wage

June 16, 2017
Jim McNutt/Observer-Reporter Exterior of the Observer-Reporter building in Washington.

For quite a while now – perhaps perpetually – there have been debates at the local, state and national levels about raising the minimum wage.

One proposal that has gained some traction among proponents of an increase is a large leap to a mandatory hourly wage of $15. Others have suggested reaching that figure in a series of steps, while some have advocated for a lower figure. One thing we know for sure is that the current federal minimum wage of $7.25 an hour, which hasn’t budged since 2009, is most assuredly not a “living wage.”

That is borne out by a new annual report issued by the National Low Income Housing Coalition that found there are no metropolitan areas in the entire country where a person working a full-time, minimum-wage job could afford to rent a two-bedroom apartment. The report said even a one-bedroom apartment would be affordable only in 12 counties in Arizona, Oregon and Washington state.

According to a story in the Washington Post, “You would have to earn $17.14 an hour, on average, to be able to afford a modest one-bedroom apartment in a safe area without having to spend more than 30 percent of your income on housing. Make that $21.21 for a two-bedroom home – nearly three times the minimum wage.”

One might argue – accurately – that rental costs in metro areas are higher than one would find in a more rural setting – like “Little Washington,” for instance. But rents aren’t cheap here, either, especially after the Marcellus Shale boom that pushed up prices and cut down on open housing. In the Thursday edition of this newspaper, a one-bedroom apartment in Washington was listed for $550, plus utilities, and a two-bedroom house was going for $700, plus utilities. If you have a $50,000-a-year job, that’s not a problem. If you’re making minimum wage, it’s certainly more daunting.

The answer from some quarters is for those minimum-wage earners to “go get a better job.” That can be easier said than accomplished. Not everyone has the educational background, skills or physical ability to perform jobs that offer higher wages. And we do need people to work in our convenience stores and fast-food restaurants. Those jobs and the people who perform them have value. If we raise the pay of minimum-wage workers, we might very well save money on the other end by not having to pay for food assistance and other supplementary programs.

As of last year, there were 29 states that had minimum wages higher than the federal figure – Pennsylvania isn’t one of them – and some cities across the nation have taken it upon themselves to raise the rates employers must pay. San Francisco is slated to become the first U.S. city with a $15 hourly minimum wage on July 1, 2018, and Seattle will have a $15-an-hour minimum wage by 2021. We don’t expect to see an economic collapse in those locales or any others where workers’ pay is boosted.

Some years ago, John Schnatter, the founder and CEO of the Papa John’s pizza chain, famously (or, perhaps, infamously) whined that because of the Affordable Care Act, he’d have to raise the price of a large pizza by 14 cents. Yes, a dime and four pennies. His company’s Facebook page was soon flooded with comments from people more than happy to bear that “burden” to help Schnatter’s workers obtain health-care coverage. Said one, “I lose more than that in a week under my sofa cushion.”

If the minimum wage is increased, might you have to pay a bit more for your fast-food burger or a candy bar at the local gas station/convenience store? Very likely. But remember, unlike tax cuts that make the already wealthy wealthier, money that flows into the hands of minimum-wage workers is plowed right back into the economy. Those folks are living paycheck to paycheck, and they spend the money they receive. We think it’s time they receive more. Maybe not $15 an hour, but definitely more than $7.25.



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