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MN2020 - Higher Wage Can Help Minnesota Families Thrive
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Higher Wage Can Help Minnesota Families Thrive

September 25, 2013 By John Clay, Guest Commentary

A $9.50 an hour Minnesota minimum wage would help working families and working adults pay for basic needs, according to an upcoming report by Jobs Now Coalition in Saint Paul. The report looks at Minnesota workers whose wages are below $9.50 as well as those slightly above, who would see a raise due to what economists call the "spillover effect.”

Out of a total of 357,000 Minnesota workers across the demographic spectrum who would see a raise, about 77 percent are age 20 or older. And 33 percent are married or are parents.

"The economic security of families is critical to the health and well-being of our children," says Peggy Flanagan, executive director of Children's Defense Fund Minnesota.

The report shows that some 137,000 children in Minnesota would benefit from increased parental income if the state minimum wage were increased to $9.50 an hour.

Parental income matters for children’s academic success and future prospects. A 2011 report by Julia Isaacs of the Brookings Institution Center on Children and Families shows that an additional $1,000 of average income throughout early childhood can result in higher reading and math scores for children in low-income families.

Rev. Alison Killeen, who ministers at First Congregational Church of Minnesota, sees wages as a moral as well as practical issue. "God calls us to treat one another with dignity and equity," says Killeen. "Increasing pay for those at the bottom of the pay scale would be an investment in workers’ dignity and would help families not only survive, but to thrive."

But job seekers in Minnesota, including adults who are raising a family or who hope to build savings to raise a family, face a job market in which a significant share of openings offer low wages, according to the latest Job Vacancy Survey by Minnesota’s Department of Employment and Economic Development.

Only 42 percent of all Minnesota job openings require education beyond high school, and 45 percent of all openings are part-time. The median wage for all part-time openings is $9.00 per hour and for food preparation and serving openings is $7.50 per hour.

Low wage jobs like these can constitute a significant share of family income. If minimum wage were $9.50 an hour, among parents who would get a raise, this wage is 52 percent of family income, on average. And for 23 percent of parents who would get a raise, their wage is the sole source, or 100 percent, of family income.

Flanagan of Children’s Defense Fund notes that many low-wage parents must work multiple jobs to meet basic needs. "Child care costs consume a significant part of a family’s income," says Flanagan, who adds that in St. Louis County, for example, licensed child care costs over $6,000 per year. Research by Jobs Now Coalition shows that the cost is even higher in the Twin Cities Metro—about $8,000 per year for one child.

That’s a big chunk out of $15,080 a year for a full-time worker at today's effective minimum wage of $7.25 an hour.

Derah Garth, a working mother in Saint Paul, knows the challenge firsthand. She works two part-time jobs to try to make ends meet, but still can’t afford childcare. “Every week my schedule is different, which means that every week my daughter's schedule is different," says Garth. “My daughter often does not know where she will be sleeping each night, because when I get called into work, I need to find a family member who can take care of her on short notice.”

“As a mother, to call living on minimum wage difficult is an understatement, it's really a struggle to survive," says Garth.

The proposed new wage of $9.50 an hour would yield $19,760 a year for a full-time worker and would mean a raise for about 63,000 parents in Minnesota.

If the federal minimum wage had maintained it's purchasing power since 1968, it would today be over $10.70 an hour, or $22,256 a year for a full-time worker, according to the US Bureau of Labor Statistics. If minimum wage had kept pace with average productivity gains, as it did in the decades leading up to the 1960s, it would today be about $22.00 an hour.

The Minnesota Legislature is expected to take up the $9.50 an hour minimum wage bill in the first weeks of the 2014 legislative session. Some 137,000 children—about one in every ten children in Minnesota—would benefit if the state raised the minimum wage to $9.50 an hour.

"When you increase family income, you improve child outcomes” Flanagan explains, “and by improving child development outcomes, we are helping to ensure a prosperous future for Minnesota. Increasing the minimum wage to $9.50 an hour is a first step."

John Clay is policy director at JOBS NOW Coalition.

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8 Comments:

  • Kathleen Douglas says:

    September 30, 2013 at 7:26 am

    The proposed new wage of $9.50 an hour would yield $0 annually for 63,000 parents in Minnesota because they will be laid off.  There is a market value for each job and when wages are forced to be higher than that market value, there will be consolidation and a push to automation.

    Heck, at $9.50 an hour (plus all taxes, insurance etc) it probably makes sense for McDonalds to outsource the person operating the drivethru!  The person you talk to could be from India and then you just swipe your card.  I’m sure the drive-thru window worker prefers a job that pays $7.25 an hour versus a minimum wage of $9.50 but no job.

    • Grace Harkness says:

      September 30, 2013 at 10:38 am

      Conservatives, right-wingers,  or greedy gots,  or whatever you want to call them,  have always claimed that raising the minimum wage would result in fewer jobs,  businesses failing,  the sky falling and every bad thing.

      However,  history proves otherwise.  Every time the minimum wage has been increased the prosperity of the country as well as the incomes of millions of families has improved.

      Raising the minimum wage is good for everyone,  not just the people getting the wage, as all of them have more money to spend for everything they need.

      • Ken Meyer says:

        September 30, 2013 at 1:47 pm

        It seems to me that, if anything has been proven by “minimum wage” laws is that they’re counter-productive.  Look at past “minimum wages”.  Then compare them with today’s.  Why isn’t today’s minimum wage - which is several times more than that of a few decades ago - sufficient?  Could it be that past so-called “minimum wage” laws simply drove inflation, and cast workers from jobs that, until an inflation adjustment was made, simply did’t justify paying such a wage?

        Raising the minimum wage is NOT “good for everyone”.  In fact, I can’t help but think it’s BAD for “everyone”....especially those on fixed incomes (read “seniors”) who can’t afford the resulting inflation, and those who will lose their jobs until inflation has caught up with the declared wage (the particularly unskilled).  Meanwhile, everybody is paying higher prices.

        At best, a “minimum wage” is a smokescreen, designed to camouflage reality.  The real “minimum wage” is that which the market has determined the labor in question to be worth; no more, no less.  Trying to “trick” that natural valuation process isn’t going to help anyone….and is going to hurt quite a few.

    • Roanld Leurquin says:

      September 30, 2013 at 1:43 pm

      Kathleen, where do you get this number of lost jobs from?
      Right now, I disagree with it, but without knowing where it comes from I cannot base my disbeleif on anything other than what Grace states regarding conservatives.
      The stats in the post are all verifiable, but yours are not.
      Ive heard all the claims in the past obout loss of jobs due to wage increses and have never heard the reality of it after the wages go up, so my belief that its just hype by the conservatives remains.
      Thanks.

  • Robert Nepper says:

    September 30, 2013 at 10:02 pm

    If we can solve our problems by raising the minimum wage, why not treat the opposite end of the situation?
    Let’s MANDATE that everyone HIRE (one or maybe two) workers. That mandate would create so many new jobs that people would bid up wages way beyond any minimum wage to get the help they needed!  WOW!  Problem solved.

    But how would YOU (and everybody) like being MANDATED to create a couple of jobs?  Outragous? yes, but lets work out a compromises for the benefit of everyone?

     

  • Robert Nepper says:

    September 30, 2013 at 11:48 pm

    The jobless problem is worse than the minimum wage issue, so let’s solve the jobless problem first. If we can produce a sufficient number of good jobs, perhaps the minimum wage issue will go away (if employers are pressed to pay more than the minimum wage to get the help they need!). Check to see if anyone is paying a minimum wage in Williston, ND where the oil patch is booming!
    Let’s start by mandating employers to simply “Use or Return” all employee inventions, to which they claim ownership! You just can’t imagine how many new GOOD jobs that mandate could produce for us!

    For example, Chester Carlson invented the fantastic Xerox copier process in his kitchen while working days for an employer who was making auto parts – but his employer already contractually OWNED it! Surprised? You shouldn’t be; it is happening all across the USA.
    Carlson assumed that his employer would do nothing with it in its undeveloped state, other than to “sit on it” because it (cost him NOTHING) and required technology too far removed from his auto parts business…
    So Carlson attempted to get the owner’s sign-off so he could get it developed elsewhere. Carlson produced a demo of his invention for the boss which produced a few “worse than terrible” copies. His boss then quickly signed the release of his “worthless” invention.  That signature was worth BILLIONS!  Because once freed from the normal corporate strangulation of unwanted employee inventions, Carlson was now free to patent it and have it developed into a huge $50 BILLION entirely new xerographic industry creating a half million good jobs!  (Wall Street Journal May 8 1989) Normally such inventions would be CRUSHED by the firm (to keep employed inventors focused on assigned tasks ONLY)! Can we afford this ongoing terrible DESTRUCTION of new products and good jobs?

      But Wait!  State Senator Chuck Wiger has already drafted and introduced a bill (SF 21) that would mandate release of unwanted employee inventions. All it needs now is for readers concerned with “more good jobs” is to urge their own state legislators to co-author SF 21 and to author a companion bill in the Minnesota House.

    If just ONE released unwanted invention could produce a HALF-MILLION new jobs, try to imaging how many HUNDREDS of unwanted inventions could produce!

     

     

  • Mike Downing says:

    October 1, 2013 at 12:40 pm

    The best way for helping children is to postpone having children until you attain the education and skills necessary to afford children.

    Minimum wage laws artificially and negatively impact the global free market that properly values education, skills and output of workers.

  • tim says:

    December 9, 2013 at 3:32 pm

    How does raising the minimum wage to 9.50 Help the people making 10 or 11 an hour. Not at all. I dont see how giving 16 year old kids a pay increase helps families that are barely getting by. Just because the minimum wage goes up ddoesn’t mean everyone gets a raise. It means anyone that makes a little more than minimum just got poorer.