Let Justice Roll

Editorial: State should raise minimum wage so workers can afford basics
Atlanta Journal-Constitution, 7/17/07

The federal minimum wage will rise from $5.15 an hour to $5.85 next week, marking the first increase in 11 years. That means an additional $28 in the weekly paychecks of full-time workers earning minimum wage, enough to treat themselves, their spouses and their kids to a movie if they don't splurge on popcorn.

Even when the federal minimum wage rises, the state minimum wage will remain at $5.15 because the Legislature this year rejected an effort to change it. That means some workers in Georgia — those not covered by the Federal Fair Labor Standards Act — will not see an increase.

Two pending bills in the Georgia Legislature seek to push the state's minimum wage up to $7.25 by 2008, so that most hourly employees in the state, including those in home health, certain areas of farm and fishing and seasonal recreation, will benefit. The bills also create a trigger that would automatically adjust the minimum wage to keep up with increases in the cost of living. Passing these bills ought to be a priority for the 2008 General Assembly.

According to the Georgia Budget and Policy Institute, raising the minimum wage to $7.25 per hour would help 672,000 workers, 84 percent of whom are 20 or older and 66 percent of whom are full-time employees. Theoretically, families are supposed to be able to survive on minimum wage, but that's nearly impossible. In the last decade, the cost of living has jumped 26 percent while the minimum wage has fallen in real value. Today, that $5.15 per hour is worth just $4.10.

It was that loss of real income that finally spurred the U.S. Congress to pass the Fair Minimum Wage Act this year. The law establishes three hikes in the federal wage over two years; the hourly wage goes from $5.15 to $5.85 next week, to $6.55 in 2008 and to $7.25 in 2009.

Working a 40-hour week, 52 weeks of the year, a full-time minimum wage worker with a family of three now earns $10,712, well below the federal poverty level of $16,600. That's why 32 states have already raised their minimum wage above the federal level.

The Georgia Legislature has long resisted a higher minimum wage under the mistaken belief that higher wages lead to job losses. That mythology — perpetuated by the fast-food and other industries that rely on low-skilled labor — has been shattered by a series of recent studies by independent economists.

Economists David Card of the University of California, Berkeley, and Alan Krueger of Princeton studied the effects of a minimum wage increase in the midst of a recession in New Jersey in 1992. Their finding that employment actually increased confounded the conventional economic wisdom and began a re-examination of long-held assumptions that higher wages suppressed job growth. More recently, Paul Wolfson of Dartmouth studied states that raised their minimum wages and found "scant effect on either employment or labor supply."

Last year, more than 650 economists, including five Nobel Prize winners, signed a statement saying, "We believe that a modest increase in the minimum wage would improve the well-being of low-wage workers and would not have the adverse effects that critics have claimed. ... As with the federal increase, modest increases in state minimum wages in the range of $1.00 to $2.50 and indexing to protect against inflation can significantly improve the lives of low-income workers and their families, without the adverse effects that critics have claimed."

It's about time the state's lowest earners got a raise, so the next time they treat their kids to a movie, they can spring for popcorn, too.

— Maureen Downey, for the editorial board