WIll We Ever Raise the Minimum Wage?
The paltry $7.25-an-hour federal minimum wage hasn't been raised in over a decade, and the majority of those underpaid hard workers are women, who are treading dangerously close to the poverty line.
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Jordan Scott remembers watching Sen. Kyrsten Sinema (D-AZ) give a flippant thumbs down and curtsy in the Senate as she voted against raising the minimum wage on March 5.
“I was irrationally angry at the time,” said Scott, a hotel worker from Philadelphia who works for minimum wage. “I mean she grew up homeless in an abandoned gas station. How does she not remember what that feels like—to not have money to live on?”
In Pennsylvania, where Scott works, minimum wage is only $7.25 an hour. Contrary to Republican opinion and other disinformation being disseminated about minimum-wage workers, they are not all unskilled teenagers looking for summer jobs at fast-food restaurants or city pools. Rather, minimum-wage workers are predominantly adult women.
Scott represents the typical minimum-wage worker: female, under 35, and working in the hospitality industry, which comprises the largest percentage of minimum-wage workers. According to the U.S. Bureau of Labor Statistics (BLS), just under three-fourths of workers earning the minimum wage or less in 2019 were employed mostly in food preparation and service-related jobs.
And Sen. Sinema was one of eight Democrats to sunder the effort to add a minimum- wage addendum to the Biden-Harris relief package. But it was her apparent disregard for the poor and that flounce that angered millions of Americans—mostly Democrats and progressives—like Scott.
Yet for all the fury with Sen. Sinema back in March, and a nationwide petulance among business owners about raising wages to lure back low-wage workers in the ongoing pandemic, there has been no movement on a federal minimum-wage increase. The federal minimum wage has been stagnating at $7.25 since 2009.
Nor has there been an effort to end sub-minimum wage, which, under the Fair Labor Standards Act (FLSA), is currently $2.13 for servers and bartenders and has not been raised in 25 years. Sub-minimum wage ranges between $2.25 and $4.25 an hour for workers with disabilities and youth workers in training. Some states have tried to end sub-minimum wages altogether and pay restaurant workers a standard minimum wage irrespective of tips.
It is impossible for Scott, who is currently a part-time college student with plans to pursue a career in hotel management, to subsist on $7.25 an hour. “It’s poverty wages and we need help,” she explains.
She’s not wrong. A full-time minimum-wage worker like Scott in Pennsylvania, as well as those in other minimum-wage states working a 40-hour week, 52 weeks a year, will earn, before taxes, $58 per day, $290 per week, for a total of $15,080 annually—but only takes home $13,673.38 after taxes. The national poverty level for a single-person family is $12,880.
While that poverty line is standardized for the entire U.S., the cost of living varies widely within the states, meaning some—like Scott in an expensive metropolis like Philadelphia—will have even less disposable income to spend on rent and food than a minimum-wage worker in Idaho or North Dakota. Meanwhile, the same hotel company that Scott works for in Philadelphia pays a minimum wage of $12 an hour across the Delaware River in New Jersey.
Bureau of Labor Statistics (BLS) states that the industry with the highest percentage of workers earning hourly wages at or below the federal minimum wage is leisure and hospitality (about 10 percent). About three-fifths of all workers paid at or below the federal minimum wage were employed in this industry, almost entirely in restaurants and other food services. For many of these workers, tips may supplement the hourly wages received. Factor in the pandemic and the closure of thousands of restaurants nationally, plus lower occupancy in hotels, these low-wage workers have suffered most.
The inequities for minimum-wage workers have been highlighted due to the pandemic and the ongoing shortage of low-paid workers. But the impact seems not to have been grasped by the Congress, which has made no move since that Senate vote in March. But despite Sinema’s fateful flounce and the ruling of the Senate parliamentarian, Speaker Pelosi insists on her party’s promise to raise the minimum wage to $15 an hour. “House Democrats believe that the minimum-wage hike is necessary,” said Speaker Pelosi, adding that House Democrats are “determined to pursue every possible path in the Fight For 15.”
And employers have failed to appreciate that these wages have left workers struggling, living in poverty. Many employers, in fact, have bullied and chastised people for not returning to work; while some larger corporations have acceded to raising their minimum wage, they’ve cut those workers’ hours to compensate.
Walmart, the world’s largest private employer, offered a different sleight of hand: On Sept. 9, Walmart spokeswoman Anne Hatfield said that the company is raising hourly wages and eliminating the additional pay on Jan. 31, 2022, rolling it into its workers’ base pay. The bonuses have been paid quarterly for decades.
“The overwhelming majority of our associates say their hourly wage is the most important part of their pay and by folding the bonus into the overall pay raise, associates receive consistent, predictable pay,” said the company’s statement. A week earlier, Walmart announced that the retailer planned to raise wages for their more than 565,000 store workers by at least one dollar an hour.
Those “essential workers” so lauded throughout the pandemic have been risking their lives for poverty wages since the initial lockdown. Many of them have had to cope with angry, abusive, even violent customers who were refusing to accept mask requirements and now vaccine requirements.
The ongoing pandemic has revealed a national underclass of mostly women, often Black and Latinx workers who are—in addition to making and serving our food—caregivers, retail and maintenance workers. The woman checking out your groceries; the aides in hospitals and nursing homes caring for COVID patients; nannies; cleaners everywhere, like the many women cleaning hospital rooms, hotel rooms and the houses of middle-class families now all working from home.
According to the U.S. Department of Labor, 29 states and D.C. currently pay above the federal minimum wage of $7.25 per hour. Washington, D.C.’s $15.20 hourly minimum wage is the highest in the country; California is the state with the highest minimum wage at $14 per hour. Two states, Georgia and Wyoming, have a minimum wage below $7.25 per hour—they pay just $5.15 an hour. Five states have not adopted a state minimum wage, putting workers at highest risk: Alabama, Louisiana, Mississippi, South Carolina, and Tennessee.
Alana Ricci left New York City for Wyoming, where she has been living for the past decade. But while she was living reasonably comfortably prior to the pandemic, her work as a hairdresser came to an abrupt halt with the national lockdown.
Now amid a semi-post-pandemic economy, her old salon, where she made $19 an hour plus tips, has closed permanently. When Ricci’s unemployment ran out, she found work in a nursing home for the state’s minimum wage. “I could drive across the border to Colorado, if I could find a job there, and be making $12 an hour minimum wage. But I can’t. And it’s pretty terrible.”
Ricci, who recently turned 50, saw a very different future for herself when she left New York. “I really thought I would be able to save money, travel out West, which I have always loved, and spend more time with my partner.” But, she says, her partner also lost his well-paying restaurant manager job in the pandemic and they are now barely subsisting. “The money I am making is for really hard work. And I am so tired at the end of a shift. I just want to sleep. It’s not a great life for us, right now.”
Ricci’s niece, Olivia, still in New York, has not fared much better. A nanny who does fashion design on the side, said she has been “thoroughly abused” during the pandemic.
“Did you see those articles in the [New York] Times?,” she asks. “That was me and my friends. The expectations were ridiculous. I like taking care of kids and it gives me time to do my own work, but when the lockdown hit, the hours got worse, the demands got more and it was just out of control.”
Olivia says that she knew some nannies were being paid more than she was, “but I was told my wage was an ‘entry position’ wage and I thought they would raise my pay when the pandemic hit.”
They didn’t. Olivia quit her job when the family she worked for wanted her to relocate outside the city to their summer home in the Poconos. “I would have been trapped, hours away from my friends and my apartment and my real life,” she says. “Other nannies didn’t feel like they had options. But for $12.50 an hour (minimum wage in New York) in a place I could never leave when they weren’t offering more money? No.”
Ai-Jen Poo, director of the National Domestic Workers Alliance (NDWA) advocacy group, has concerns for women like Scott, and the Riccis. She is also the co-director of Caring Across Generations, a national coalition of 200 advocacy organizations working to transform the long-term care system in the U.S., with a focus on the needs of aging Americans, people with disabilities , and their caregivers. In particular, Poo’s work focuses on underpaid women. She has been outspoken on the issue of how the U.S. has created a seemingly permanent underclass of American women workers by gendering poverty with low wages in these caring and service professions.
“The way we value work itself often has to do with gender and race: Work that is associated with women, particularly immigrant women and women of color, is less valued,” explained Poo.
“Care jobs are the quintessential example,” said Poo—jobs like the ones the Ricci women hold. “At a median annual wage of $13,000, those who work in our homes as home-care workers are barely able to care for their own families on their earnings.”
The National Women’s Law Center affirms Poo’s argument and raises it with harrowing statistics. The lifetime pay gap of women kept in low-wage jobs is as stunning as the lack of access is stultifying.
“This ‘lifetime wage gap’ exists across the country: In every single state, career losses for women overall based on today’s wage gap would amount to hundreds of thousands of dollars—and in 11 states women’s career losses would amount to more than half a million dollars,” according to NWLC.
The numbers are stark: Based on today’s wage gap, women overall lose $406,280 over the course of 40 years in the workforce. Black women lose more than twice that: $964,400, while Latinx women lose close to three times as much, at $1,163,920.
These numbers mean the difference between being able to stop working and retire, and working until they can no longer physically bear it. Demitra Williams, 61, is a home health aide in Philadelphia, with no savings. “How was I supposed to raise my kids and save money?” she asks. “And when will I be able to retire? Probably never. Maybe, definitely, never.”
The National Association for Home Care & Hospice reports that one day in a nursing home is four times as expensive as twelve hours of home care. So why aren’t we paying these women more? As Poo said after the 2020 election, domestic staff—caretakers like Olivia Ricci, e.g.—are vital in allowing others to work. “They not only benefit those workers and their families, but they help the rest of America get back to work,” Poo said. “These are jobs that are job-enabling jobs, so we need to invest in these jobs becoming good jobs.”
According to the Economic Policy Institute, raising the federal minimum wage to $15 would lift the pay of 32 million workers. In 1968, a minimum-wage worker earned $10.59 per hour in inflation-adjusted terms, 46 percent more than today’s $7.25 federal minimum wage. The minimum wage today would be over $22 per hour had it tracked productivity increases over the last five decades.
The Raise the Wage Act of 2021, which phases in a $15 minimum wage by 2025, would raise the earnings of 32 million workers, or 21 percent of the workforce. Nearly a quarter—23 percent—of all workers who would see a raise are Black or Latinx women, a disproportionate percentage of the U.S. workforce in 2020. This includes 3.4 million Black women and 4 million Latinx women.
A new study by Lending Tree, released on Sept. 14, adds to the argument for raising the minimum wage, revealing that median homeowner and rent costs in every state are unaffordable to those earning the minimum wage. “In terms of raw dollars, owning and renting have become less affordable since 2000,” LendingTree researchers stated in the report, which underscores how minimum-wage workers are at risk of homelessness in many states. The median monthly homeowner costs in 2000 were $771 higher than what was affordable, while the median rent was $296 higher than what a minimum-wage worker could afford. In 2019, the affordability gap widened to $1,072 for owning and $423 for renting.
Contrary to the arguments of Republicans and some companies where management makes hundreds of times what minimum-wage workers earn, raising the federal minimum wage would stimulate consumer spending, help businesses’ bottom lines, and grow the economy. An increase would improve worker productivity and reduce employee turnover and absenteeism. It would also boost the overall economy by generating increased consumer demand.
As the House Democrats Committee on Education and the Workforce explained, “The real value of the federal minimum wage has declined 24 percent since 1968. Today, the federal minimum of $7.25 leaves an adult with two children thousands of dollars below the federal poverty threshold. This is unacceptable.”
It is. Raising the minimum wage is essential to growing a post-pandemic economy and raising women out of poverty. “I want a better life for myself,” says Scott. “I want to rise from a job to a career, right here, at this hotel. But you can’t get that—you can’t get ahead—when every week’s paycheck puts you further and further behind.”
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