Raising the minimum wage might not help in the long run
Poverty is thriving in the United States, fueling the fire of debate surrounding minimum wage.
The National Employment Law Project has been campaigning for a raise in the federal minimum wage, saying raising it is “one of the best tools we have to lift incomes.”
NELP touts raising wages as a foolproof solution to the problems of America’s poor, but raising wages is simply a Band-Aid covering the wounds of a larger problem.
The minimum wage varies across states, but cannot go below $7.25 per hour, which is just where Texas’ minimum wage falls at.
Debate over whether raising this amount would lead to better quality of life is hot on both sides of the issue.
According to the Cato Institute, in response to higher minimum wage, “businesses would respond to the increased costs by reducing employment, particularly for low-skilled workers.”
Raising wages is not the magic solution people need.
According to the Houston Chronicle, $63,600 is the annual income required for a family of two adults and two children to have an “adequate but modest” living.
The costs incurred by a typical family of four come out to “$945 for housing, $754 for food and $577 for transportation … based on a variety of government and private data.”
NELP says it is “fighting for a wage families can live on.” But even a raised minimum wage may not be enough to pull people out of poverty.
The rise to $10.10 from $7.25 is not that much, and a four-person family with both adults working full-time at $10.10 an hour and quality of life being OK, is not a reality.
According to Forbes, low-wage retail jobs are undergoing a “shift to part-time service work.” In other words, no matter where the minimum wage is set, full-time work is hard to find in sectors that pay minimum wage.
This is the era of Obamacare, and many businesses that employ low-wage workers shy away from offering full-time hours due to the increased costs of benefits required for full timers.
The fact that many retail jobs pay above minimum wage also merits a mention.
As of 2012, The Bureau of Labor Statistics reports a median pay of $10.29 per hour for “retail sales workers” – a number that falls above the federal minimum wage of $7.25 per hour.
In looking at individual companies, Starbucks Corp. reportedly pays between $7.63 and $10.63, Gap Inc. has a new policy that dictates $10 an hour and Walgreens Co. pays an average of $9 an hour.
If people are living in poverty despite the majority of workers earning above minimum wage, then simply raising that limit is not the answer.
Efforts such as transitioning programs to help workers get out of low-paying jobs, companies helping their employees meet educational goals through initiatives like self-scheduling and even offering tuition assistance would do more for low-wage earners than simply raising minimum wage by a certain amount.
A complex issue like poverty cannot be solved with a quick, one-size-fits-all approach. More creative, flexible and individual solutions must be put into place to make a genuine difference for the poor.
Opinion columnist Elizabeth Murphy is an advertising sophomore and may be reached at [email protected].