Minimum
wage increase overdue: Help for lowest-paid workers
won't put burden on businesses that employ them
Atlanta
Journal Constitution
Editorial, 11/12/06
Enlightened
self-interest seized hold of voters in six states
last week. Ohio, Missouri, Montana, Colorado,
Nevada and Arizona overwhelmingly approved higher
minimum wages for their residents.
The
margins of passage suggest those voters had no
trouble determining the 9-year-old federal standard
of $5.15 an hour is obsolete and that it consigns
many adult workers to permanent poverty.
Just
as obvious was the fact that poorly paid workers
can become a burden on taxpayers: A minimum-wage
employee struggling to put food on the table and
a roof over her family's head is going to have
a hard time paying an emergency room bill.
Now
it's up to Congress to extend that common sense
to states — including Georgia — that
have resisted raising their own wage standards.
In Georgia, the excuse for opposing a higher minimum
wage has been a desire to create "a pro-business
climate."
There's
now a solution for that type of shortsighted intransigence.
The Democrats who won control last week of the
U.S. House and the Senate are in a position to
increase the federal minimum wage for the first
time since 1997. (They've set a target of $7.25
an hour.) The higher of either the federal or
state minimum applies, so a national increase
would push up wages in Georgia and a score of
other states where the pay standard is behind
the times.
Even
President Bush appears receptive to an increase.
On Wednesday, he said the minimum wage is a subject
on which he and Democratic House Speaker-to be
Nancy Pelosi should be able to "find common
ground."
That's
welcome news.
At
the same time, the president made it clear he
wants to protect small business against the cost
of higher wages. Certainly that should be a factor
in the deliberations. However, federal law already
excuses businesses with less than $500,000 in
annual revenue from paying the minimum, and provides
other exemptions as well. State laws also shelter
some businesses from the minimum.
However,
while many of the obstacles to a higher minimum
wage are falling, opponents will continue to argue
that an increase would be counterproductive because
higher wages would drive employers to hire fewer
workers. But repeated studies in states that have
raised their minimum wage provide scant evidence
that happens, and at worst the impact appears
minimal.
Last
Tuesday, voters in six states apparently weighed
that slight negative against the reality that
the federal minimum is now worth little more than
$4 because of inflation, a fact that proved a
more compelling influence. The proposals approved
Tuesday also protect low-wage workers against
a future erosion of buying power. The new minimums
in those states will be adjusted every year for
inflation.
That's
an issue Congress needs to address as well.
In
Georgia, about 66,000 workers earn the minimum
or less, according to the U.S. Labor Department.
But thousands of others earn anywhere from a few
pennies more than the minimum to just under the
$7.25 wage Democrats are expected to pursue. More
than 200,000 Georgians would be assured of a pay
raise if the federal minimum were lifted to $7.25,
according to the Economic Policy Institute, a
Washington think tank.
Overall,
three times that many workers would benefit from
a minimum-wage increase because a domino effect
would lead to pay hikes for better-paid employees,
the institute suggests.
Rather
than point to those numbers as a reason to oppose
an increase, Georgia businesses should consider
the example of Oregon. That state raised its minimum
wage four years ago, and it's difficult to detect
any fallout.
Oregon
has the second-highest minimum wage in the country
($7.50 an hour, going to $7.80 in January). But
employment growth remains healthy even in industries
that rely on minimum-wage workers, The Wall Street
Journal reported this month.
The
higher minimum also has been good for business,
according to Dan Gardner, who heads Oregon's Bureau
of Labor and Industries. Instead of "saving
for a Hawaiian vacation," as Gardner told
the Journal, low-wage workers recycle their earnings
into the economy.
"Minimum-wage
workers," he told the newspaper, "are
the only class of workers you can give a raise
to and guarantee that they're going to spend the
money and spend it in the local economy."
That,
too, produces a pro-business climate.
POVERTY
CHASM WIDENS
Full-time
workers paid the federal minimum wage make about
$10,300 a year. That hasn't changed since 1997,
when the federal minimum was increased to $5.15
per hour. In contrast, the federal poverty guidelines
used to determine eligibility for aid programs
have risen every year.
Annual
earnings Poverty guidelines
on minimum wage Single person Family of three
1997
$10,300 $7,890 $13,330
1998 $10,300 $8,050 $13,650
1999 $10,300 $8,240 $13,880
2000 $10,300 $8,350 $14,150
2001 $10,300 $8,590 $14,630
2002 $10,300 $8,860 $15,020
2003 $10,300 $8,980 $15,260
2004 $10,300 $9,310 $15,670
2005 $10,300 $9,570 $16,090
2006 $10,300 $9,800 $16,600
Source:
U.S. Department of Health and Human Services
David
McNaughton, for the editorial board (dmcnaughtonajc)
http://www.ajc.com/opinion/content/opinion/
stories/2006/11/11/edwage1112.html
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