WORKING WOMEN'S STAKE IN MINIMUM WAGE HIKE
April 5, 2005

George W. Bush has shown little interest in adjusting the minimum wage. Working women have a large interest in changing the president’s mind on this subject.

If Bush takes no action during his second term, this country will have completed an 11-year record stretch without any adjustment in the minimum wage. The current federal minimum wage of $5.15 per hour is over 40% below the 1968 level adjusted for inflation. A fulltime worker taking no vacation or holidays and earning the federal minimum wage earns 55% of the federal poverty line for a family of four and a much smaller percentage of what it takes to actually pay the rent and basic living expenses in most parts of the country.

Such a worker qualifies for much of what remains of public support and assistance, placing the burden on taxpayers to pick up where employers fail to pay a living wage.

As many as 15 million workers–12.5% of the workforce–could be positively impacted by a $7 minimum wage; 7.4 million minimum wage workers would receive a direct raise, while another 8.2 million workers earning near the minimum wage are likely to benefit indirectly.

A $7 minimum wage would lift a low-income family of four out of povert, according to Eileen Appelbaum of Rutgers University and a team of researchers who studied the problem last year.

“An increase in the minimum wage to $7, combined with the Earned Income Tax Credit, Food Stamps, and the Child Tax Creditk would raise such a family’s earnings to 108% of the poverty line,” the study found.

Critical for Working Women

Increasing the minimum wage is a critical issue for working women. Even though women make up only 48% of the workforce, 61% of direct beneficiaries of a minimum wage increase would be women. About 1.4 million working mothers would receive a direct raise and three million working mothers could be positively impact by a minimum wage hike.

In the absence of federal action to hike the minimum wage, many states  have stopped waiting around and are beginning to take action on their own.

“Living wage” laws have now been enacted in 123 cities and counties.   Thirty-one of the 50 states, plus the District of Columbia, have either set a minimum wage higher than the federal level or have had bills introduced in their legislatures this year that would do so.  Fourteen of these, plus D.C., have already created minimum wage levels higher than the federal, or–in the case of Florida–have put the law on the books though it has yet to take effect.

Voters in Nevada passed a minimum wage increase by ballot initiative last November that included indexing to the cost of living. Initiatives in Nevada must be passed twice; the second vote, which is expected to succeed, will come in 2006. 

But just as working people and their unions have brought the fight to the state and local level, so has big business. As a result chiefly of lobbying and campaign contributions from hotels and restaurants, and the “think tanks” they fund, eight states have banned city-level minimum wage laws, according to David Swanson of the International Labor Communications Association.

In the Bay Area, activists are trying to follow up on their successes in San Francisco with living wage campaigns in Berkeley, Oakland, and Emeryville.

Some of the state-level campaigns for a minimum wage hike aim to index the minimum wage to the cost of living. 

Business groups continue to argue that minimum wage hikes cause job losses. But there is no evidence of job loss from the last minimum wage increase, according to the Economic Policy Institute.

A 1998 EPI study did not find any systematic, significant job loss associated with the 1996-97 minimum wage increase. In fact, following the most recent increase in the minimum wage in 1996-97, the low-wage labor market performed better than it had in decades (e.g., lower unemployment rates, increased average hourly wages, increased family income, decreased poverty rates).

Likewise, studies of the 1990-91 federal minimum wage increase, as well as studies by David Card and Alan Krueger of several state minimum wage increases, found no measurable negative impact on employment. And a recent Fiscal Policy Institute (FPI) study of state minimum wages found no evidence of negative employment effects on small businesses.

It is still possible that President Bush will recognize the huge level of popular support for a minimum wage hike and choose to get on the train before it leaves the station. Senator Edward Kennedy has introduced a bill that would raise the federal minimum to $7.25 by 2007.