Building an Economy that Works for Everyone

Yakima Herald: Kick ‘em when they’re down – lower the minimum wage

It takes chutzpah to say – with a straight face – that paying workers less for their labor will actually make them better off. But that doesn’t some people from trying.

Gubernatorial candidate Dino Rossi recently brought up the idea of lowering Washington’s minimum wage in a debate with Gov. Chris Gregoire. And now the Yakima Herald has sounded off in favor of ending cost-of-living adjustments:

The constantly increasing state wage base is outstripping the original intent of a minimum wage. It was never designed to be a living wage. It was supposed to be an earnings floor for workers…

If someone doesn’t want to earn just the minimum wage, then the solution is to get the education and/or skills and training needed to go up the wage ladder to qualify for better jobs.

That position ignores the economics of inflation, living wages, our labor market, and the bottom line.

First: A minimum wage increase at the rate of inflation does nothing more than preserve buying power for low-wage workers. Washington’s minimum wage is effectively no higher today than it was in 2001, when cost-of-living adjustments began.

In fact, if the state’s minimum wage in 1968 had kept pace with inflation all along, the minimum wage would be about $9.47 today.

Second: Washington’s minimum wage is not a living wage – far, far from it. In Yakima, both parents would need to earn at least $11.58 an hour at 40 hours/week to make ends meet. (The basic family budget for two parents and two children in Yakima is $48,178 for housing, childcare, and other necessary expenses, assuming one school age and one preschool child.)

That of course assumes you never take a day off to, say, get yourself or your child to the doctor. And since 43% of American workers don’t get paid sick days, a minimum wage family’s real income would likely be even less.

Third: A popular myth about the minimum wage is that the majority of its earners are teenagers and young people in entry level positions. But according the state Employment Security Department, about 2.5 percent of Washington’s work force, almost 57,000 full-time workers, earned the minimum wage in 2007.

A recent University of Illinois study (quoted here) found “the typical minimum wage earner is hardly a middle-class teenager earning pocket-change—almost half of this population is above the age of 25, and 41 percent work full-time.”

Fourth: Increases in the minimum wage have had little effect on employment. The two years following passage of Washington’s initiative saw the largest percentage increases in Washington’s minimum wage. During the same two years, employment actually increased in the very industries employing the largest number of minimum wage workers.

A University of Indiana study found no causal link between a higher minimum wage and decreasing unemployment, stating “we cannot assume that minimum wage increases will have a negative impact on employment change.”

Some economists now propose that low-wage employees are better able to enter and stay within the labor market with the promise of earning better income. (Translation: People are better off when they earn more money.)

A decent minimum wage is one of our state’s best tools to make sure no one working full-time lives in poverty.

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