Minimum Wage Policiesin the United States

Karen Trietsch, MSSW CandidateUniversity of Texas at Austin – School of Social Work

History

Movement began in 1908 with National Consumers League protested sweatshop conditions for women

First laws were passed in states, often overturned by SCOTUS “protective legislation” – for women only opposed by unions

Great Depression, FDR, and Frances Perkins 1933 National Industrial Recovery Act – struck down by SCOTUS in 1935 1938 Fair Labor Standards Act (limited coverage, most women’s occupations not included)

Since then, minimum wage has been raised by every president except Ronald Reagan and Barack Obama

Peak purchasing power: 1968 - $1.60 would be worth $10.69 in 2014 Cities began increases in 1994

$10.56 in 2012 = $10.69 in 2014(Congressional Research Service, http://fas.org/sgp/crs/misc/R42973.pdf)

States with higher minimum wages

Pew Research Center, 5/20/15

http://www.pewresearch.org/fact-tank/2015/05/20/5-facts-about-the-minimum-wage/

State minimum wage rates

29 states and Washington D.C. have m.w. laws higher than federal level

23 raised their minimum wage in 2014 4 states were passed by voters

o AK, AR, NE, SD – all predominantly red

2 states have m.w. lower than federal levelo GA, WY

5 states have no m.w. lawo AL, LA, MS, SC, TN

States with higher minimum wage rates

Highest right now is WA = $9.47 Lowest higher amount is $7.50 = AR, ME, NM

Other upcoming increases 7/1/15 – DC = $10.50 7/1/16 = $11.50 1/1/16 – CA = $10.00 1/1/18 – VT = $10.50

16 states adjusted annually for CPI or Cost of Living Also DC

City/local minimum wage rates

Over 120 cities have a higher minimum wage First cities to raise m.w.

o 1994 – Baltimore, living wage for companies with municipal contracts or subsidieso 2003 – San Francisco – $8.50, $15.00 in 2015o 2003 – Santa Fe - $10.66 now

10 cities raised m.w. 2012-2013o 2013 – Sea-Tac = $15.00

Cities that raised m.w. in 2014 - 2015o San Diego (challenged), Oakland, Berkeley, Las Cruces (NM), D.C.o Seattle - $15 in 2018-2021, depending on size of business, sub-minimum for teenso Chicago - $13 by 2019

Los Angeles increases:o 2014 - Non-teaching school service emp. - $15o 2014 - Hotel workers - $15.37o 2015 - Raised city-wide in May 2015 – $9.00 $15 by 2020

Proposed city increases

Oakland - $12.25

Chicago city council calling for $15, supported by

Mayor Emmanuel

New York City - $15.00 Supported by DiBlasio, would require new state

law Cuomo wants $11.50 in NYC and $10.50 in NY

state

DC wants $15

State laws banning local increases

Texas – 2003 = HB 804o started in response to Houston ballot initiative

supporters said it would create level playing field for businesses in multiple cites throughout the state & it would halt the living wage movement “before it becomes a serious threat in Texas”

6 other states passed it in 2003-2004o CO, FL, GA, LA, NY, OR

Oklahoma passed it in April 2014

Demographics - 2014

16-19 y.o. 21.4% 16-24 y.o. 48.2% 25+ y.o. 51.8%

Men 37.2% Women 62.8% Women 25+ 33.7%

H.S. grad or more 77.0% Source: US Bureau of Labor Statistics, April 2015

White 76.3% Black 15.4%

Hispanic 17.3%

Full time 34.5% Part time 65.3%

Texas 12.1% Florida 6.1%

New York 4.6%

Minimum Wage Demographics 2014

Gender

MenWomen

Age

16-19 19-24 25 +

Arguments Opposing Minimum Wage

Ineffective anti-poverty measure Negative effect on employment Free market ideology Causes inflation Increases immigration

Arguments Supporting Minimum Wage

Morality & social egalitarianism, esp. poverty level of workers From 1950 – 1997, unemployment went up as often as it went down after

federal increases (8 & 8) Stimulates the economy as workers have more money to spend Increases job growth (46,400 jobs projected in LA region) Increases tax revenue to federal, state, and local governments Reduces public assistance expenditures Reduces economic inequality between gender, and whites and people of

color 62% - 73% of the public support increasing the federal minimum wage

Minimum Wage and Worker Productivity

Productivity increased about 243% from 1948 to 2012. If minimum wage had kept pace with worker productivity, it would have been $21.72

in 2012. (Center for Economic and Policy Research)

Source: Doug Short, http://wolfstreet.com/2014/11/13/corporate-profit-margins-vs-employee-compensation-in-one-disturbing-chart/

Minimum Wage and Poverty

Effects of increases on income 2015 poverty level is $15,930 for a family of two (US DHHS) $7.25 = $15,080 annual full-time minimum wage earnings (CPPP)

$850 below poverty level for family of two $10.10 = $21,008 for 2080 hours annually = + $5,928 $15.00 = $31,200 for 2080 hours annually = + $16,120

22% of U.S. children live in poverty, 25% of Texas children Most of these children have parents who work Texas is 38th in child poverty rates, 43rd in children’s overall well-being

Public cost of low wages

Public assistance to workers costs taxpayers $152.8 billion a year UC Berkeley Center for Labor Research & Education, April 2015

report Studied cost of aid to working families Studied Medicaid, CHIP, SNAP, TANF, and EITC 73% of families enrolled in public support are working families $2.69 billion in Texas (ranks 3rd behind CA & NY)