Raise the floor on wages
Washington, DC,
August 8, 2013
|
Milwaukee Journal Sentinel
Tags:
Economy and Jobs
By Laura Dresser Congresswoman Gwen Moore (D-Wis.) recently stood up with and for low-wage workers, supporting an increase in the federal minimum wage to $10.10 per hour. No one should be surprised that she got scolded for it on these pages by the leader of the MacIver Institute, "free market voice for Wisconsin." But we can hope that Moore continues to pay attention to reality, not the scolds. The reality? It is impossible to make ends meet on $7.25 an hour, the current minimum wage. Overwhelming majorities of conservatives and liberals support an increase. And there is no economic consensus on negative effects of increases. Indeed, since landmark studies in the 1990s, the field of labor economics has continued to revisit and hash out the evidence on minimum wage increases, and a broad spectrum of economists and business leaders support raising it from the current level. Just looking at the boom at the bottom of Milwaukee's labor market helps make the case for raising the minimum wage. In "Raise the Floor Milwaukee," we consider "poverty-wage jobs" — currently jobs paying $11.19 per hour or less. At that wage, even with full-time, year-round employment, a worker cannot keep a family of four out of poverty. In 1979, 20% of metro Milwaukee workers held poverty-wage jobs (we adjust the threshold for inflation). By 2012, 26% — that's one in every four workers — held a poverty-wage job. Despite a generation of productivity growth and increasing technology and education, the workers at the bottom of the labor market are falling behind. That's the familiar story of inequality told from the bottom (where the suffering is growing) rather than the top (where income is skyrocketing). Inside the borders of the city itself, the problem is worse. More than one in three workers toil in poverty-wage jobs. That's 100,000 Milwaukee workers. With numbers like that, it is clear these workers aren't all teenagers. The median age of retail workers in Milwaukee, for example, is 28 years. This is not just a question of education or race, either. The problem is widespread: 28% of white workers, 38% of African-American workers and 50% of Hispanic workers earn poverty wages. Yes, less education makes poverty-wage work more likely, but education is no guarantee of escape from these jobs. Poverty-wage workers have problems beyond their paltry wages. Many workers cannot secure the hours they need to get by. They find that shifts are constantly changing and cut short or cancelled in response to consumer demand. Health insurance in these jobs is the exception, not the rule. Just 37% of poverty-wage workers get health insurance through work (compared to over 70% of better-wage workers). Other benefits — paid sick leave, vacation days, pensions — are even less common. Any reader experienced in low-wage work probably can name the jobs we are talking about here. Just three sectors account for the employment of 37,000 of the city's 100,000 poverty-wage workers. Food service, with two-thirds of its substantial workforce in poverty-wage jobs, is the largest contributor to Milwaukee's poverty wage problem. More than half of workers in both retail and residential and home health care also earn poverty wages. Each one of these three sectors is projected to grow — some of our most dynamic sectors are also some of our worst-paying. And, yes, those sectors are growing and projected to grow here and in states with much higher minimum wages as well, which again shouldn't surprise anyone who is watching the economy but seems to fly in the face of the predictions of doom that come from those who oppose increases. Milwaukee's problems — racial disparity and residential segregation, child poverty, crime and incarceration, catastrophic high school dropout rates, especially for African-Americans and Hispanics — are not inevitable. They are the product of an economy that has isolated the central city away from economic opportunity even as the economy has grown. And they are the product of trends that increasingly isolate everyone but the wealthiest from the real rewards of economic growth. An increase in the minimum wage alone won't solve these problems. But it is an important step in the right direction — and one that brings the rewards of some of our hardest work more in line with the cost of living. To view this article online, please click here.
|