Wednesday, May 30, 2018

People Working 40 Hours A Week Need A Livable Wage

Donald Trump recently bragged about the official unemployment rate dropping to 3.9%. And I will admit that the rate is finally getting down to an acceptable range. But that doesn't tell the whole story about employment in the United States.

While the incomes of the top 10%, and especially the top 1%, have grown to record levels, that is not true for most American workers. The income for the lowest 80% of workers has basically remained stagnant for several decades -- and that means they actually have less buying power (thanks to inflation).

It's even worse for those who make at or near the minimum wage (which for most states remains at $7.25 an hour -- $15,080 a year). Too many of those new jobs currently being created are low-wage jobs, and it is expected that soon about 25% of the workforce will be working in those low-wage jobs (jobs paying at or near the minimum wage). Those people are already in serious economic trouble, and as prices climb, that trouble gets worse all the time.

One way of illustrating this economic trouble for low-wage families is to look at the cost of housing. The federal government standard for affordable housing is that it not take more than 30% of a workers income. Limiting housing to 30% of income leaves money for other necessities (food, clothing, transportation, etc.). Households paying more than 30% for housing are considered cost burdened, and those paying over 50% are considered severely cost burdened.

The charts above, from the National Low Income Housing Coalition, shows the problem facing low-wage workers. The top chart shows the income level that would be required for a family to rent a decent 2-bedroom apartment. Note that the minimum wage would not allow a family to rent a 2-bedroom apartment without severely burdening that family. It would require double the minimum wage (or more) in any state.

But it's worse than that. It's not just families that are severely burdened by low wages. The second chart shows how many hours an individual must work in each state to afford a 1-bedroom apartment. Again, in no state could a minimum wage worker afford a 1-bedroom apartment by working only 40 hours. It would require over 60 hours a week, and in many states it would require over 80 hours a week.

The existence of (and growth of) low wage jobs in this country is a national shame. No one who works 40 hours a week should have to live in poverty -- but that is the case currently for millions of hard-working Americans. We can, and should, do better than that. In the richest nation in the world, it is a crime (wage theft) for 20% to 25% of workers to be working for a wage that keeps them mired in poverty.

We need to substantially raise the minimum wage. Republicans will try to tell you that would hurt our economy and cost jobs. That's a lie. Raising the minimum wage would actually help most Americans and boost the economy. It would provide a decent standard of living for the lowest-wage workers. It would boost economic growth because those workers would spend that new money. It would boost business profits as they met the increased demand created by that increased spending. And it would take many off of government assistance rolls -- saving the taxpayers money.

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