Women need a raise in the minimum wage

In a far-ranging speech that covered everything from climate change to AIDS, President Obama presented a few proposals that are particularly important for women: Implementing universal preschool, passing the Paycheck Fairness Act, and raising the minium wage. As Bryce Covert notes, all three of these policies would help combat the gender pay gap, since “balancing children and work, making the minimum wage, and being forced into secrecy about paychecks” are all huge factors.

Raising the minimum wage from $7.25 to $9 per hour would affect approximately 21 million workers. About two-thirds of minimum wage workers are women, and they are disproportionately women of color. At the current rate–which is lower than it was a few decades ago and hasn’t changed at all in the last three years–a minimum wage worker makes $14,500 a year. That isn’t enough to afford rent in any state in the country.

minimum declining over time

In fact, $9 per hour still only gets you a woefully inadequate $18,720 per year. If the minimum wage had kept up with inflation since 1968, it would now be over $10.60. The fast-food workers who recently went on strike in NYC are calling for $15. A recent study by Demos suggested that the minimum salary for retail jobs at companies like Walmart should be $25,000 a year. ETA: And if it were pegged to productivity increases, it would be $21.72 per hour.

Of course, Speaker Boehner has already rejected the hike, claiming–contrary to the claims of most economists–that it would increase unemployment. Rep. Paul Ryan articulates to conservative logic: “The goal ought to be is to get people out of entry level jobs into better jobs, better paying jobs. That’s better education and a growing economy.”

This is such bullshit. Sure, education is great in-and-of itself. And it is indeed a travesty–though one that Republicans resolutely refuse to address–that the promise of economic mobility this country espouses is actually a joke. But no matter how many people are “pulled out of poverty”–whether by their own bootstraps or the silver bullet of education or whatever–there will still be low-wage jobs that need to be done.

We need service workers, and domestic workers, and farm laborers. And they need a wage they can live–not barely survive–on. As President Obama said, “In the wealthiest nation on Earth, no one who works full-time should have to live in poverty.” That shouldn’t be a radical idea.

Chart via.

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7 Comments

  1. Posted February 13, 2013 at 3:50 pm | Permalink

    A living wage is in no way economically feasible.

  2. Posted February 13, 2013 at 11:40 pm | Permalink

    While I absolutely affirm the right to a livable income, I do not believe that a hike in the minimum wage will tend toward that end, not because I believe that Paul Ryan’s or Speaker Boehner’s logic. To suggest that a lower minimum wage or better education will get people out of low-income jobs is absurd – as you said, there will always be a demand for low-wage jobs and the idea of “pulling oneself up by one’s bootstraps” is an utter myth. However, a hike in the minimum wage could actually hurt those in poverty it is seeking to protect, as argued by Weekly Standard editorial assistant Whitney Blake “here= ” and by moderate economist at the Atlantic Daniel Hamermesh “here = “. From what I’ve gathered from the discussion, the minimum wage ascribes a value to one’s labor that, if not met, actually results in unemployment. Let’s say that the skills of a person are worth $5 and the minimum wage is $9. As a result, companies have no financial incentive to hire the person whose work is worth $5 and they are left jobless. In fact, raises in the minimum wage have been shown to increase unemployment among African American males who, as a result of a faulty education system, residential segregation, and minimal opportunities, have a lower net worth economically speaking. Furthermore, the majority of workers in low-income jobs use minimum wage salaries as second or third sources of income so that in reality, these workers’ families make about $43,000, according to the Census Bureau. Moreover, minimum-wage jobs are typically held by white teenagers seeking supplementary income, so any increase in the minimum wage would benefit these groups predominantly, resulting in only minor gains for other employees. Lastly, raises in the minimum wage have been shown to increase dropout rates among these teenagers because it gives them a supposed economic incentive to leave school.
    However, you might be wondering how, in the absence of minimum wage, we are to prevent companies from abusing and exploiting their workers. It’s a fair point. In an ideal system, the way it would work is companies, through the workings of a competitive marketplace, would be forced to offer their workers economically sustainable salaries. For instance, if company A offers to pay someone worth $5 a $6 per hour salary, company B would step in and try to offer a more competitive salary of $7 in order to extract labor from company A. As the forces of competition in a free market played out, the worker’s salary would come closer and closer to a livable income as defined by the forces of the marketplace. Companies would now have financial incentive to hire employees even if their net worth were below minimum wage and to attempt to retain those employees (since turnover rates are costly) through competitive salary increases.
    Obviously this model is somewhat idealized and the debate among economists is still unresolved (studies say raising the minimum wage would significantly hurt employment while others claim it would have a negligible effect), yet my point in posting this comment is to argue that the solution to economic inequality and poverty is not as simple as raising the minimum wage (I would actually suggest that tax rebates are more effective in solving this important issue). Thus, although the Republican party has (classically) demonstrated that their reasons for keeping the current minimum wage are not sound, their opposition to a raise in the minimum wage is not entirely unfounded. Raising the minimum wage is not an easy solution (and may not be a solution at all) to correcting economic inequity or generating a livable income for all Americans. Rather, we need to take a bipartisan standpoint that critically and comprehensively examines all of the economic issues at play.

    • Posted February 15, 2013 at 3:29 pm | Permalink

      Is that true though? The studies I’ve seen linked to during this discussion show no impact on employment at all for increasing minimum wage. They also show that alot of minorities and working for minimum wage – not just “white” teenagers.

      I find it hard to believe it would encourage anyone to drop-out – does anyone really find working for $9/hr for the rest of their life appealing? If they do, chances are they weren’t going to go to college or do anything beyond this anyways.

      And I definitely don’t believe that “letting the market decide” is the answer. I’m not anti-capitalism – I think capitalism gets a bad rap from feminists often – but I don’t think it solves everything either. Because humans are naturally greedy and self-interested. Companies won’t pay anymore then they have to. They rely on people who desperate for work to hire people for absurdly low wages while the upper wigs in the company rake in tons of cash.

      Even if you don’t raise it now – it should be indexed against the cost of living so it automatically raises overtime as the cost of living increases. That minimum wage is well below the equivalent from the 1960s is a big red flag we should all be concerned about.

  3. Posted February 14, 2013 at 12:31 pm | Permalink

    Minimum wage-type jobs NEED to be performed; no matter how much education people have, someone needs to do those jobs. There is nothing shameful about any kind of work, regardless of how rote or unskilled it is. What is shameful is hiding behind the banner of improving education and pushing “better” jobs instead of paying the people who work these necessary jobs a living wage.

  4. Posted February 14, 2013 at 4:16 pm | Permalink

    Hmm.. I just don’t know. As a recent college grad, I went to work for a nonprofit assisting women with chemical dependency in their residential treatment center at $9/hr. I am not allowed to work more than 30 hours per week nor is anyone else at my level or the next level up. When I was hired, they said my college education could get me into a house manager position. I found out I would be making $10 per hour. I’ve already seen many coworkers with the job clock out and continue to work to avoid going into overtime while completing all their work. The work means managing a house of up to 16 women and assisting in meeting needs and supervising meds/calls/activities as well as billing state programs for the hours they spend. Keep in mind, they REQUIRE a minimum bachelor’s degree to get this job. The workload increases, but the hours do not. Recently, they upped the pay to $11/hour and I have to decide if I want to take this part time job with my college education or keep looking. I just don’t know because many of my friends with no education are earning more than me as servers. The women I’m supposed to be helping are actually receiving more in government aid, food stamps, and medicaid while I don’t get any benefits and try to keep my hours low so as not to go into over time. It’s not that I don’t believe these women and their children should receive aid, they should, but I’m just sort of wondering what *I* am supposed to do? I work part time as a server and even though I hate the job, what choice do I have? I keep applying to public and private organizations, hoping my experience in residential treatment will get me somewhere. I am just so scared right now. I don’t have any answers or opinions. I just think it’s crazy out there for those of us on the entry end of the job market. Organizations just won’t hire people full time to avoid paying benefits.

  5. Posted February 14, 2013 at 4:16 pm | Permalink

    I guess my point is that there’s all this attention to “unskilled” laborers, but it’s actually just as bad and sometimes worse for those of us WITH skills!

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