Minimum Wage And A Living Wage example essay topic

The living wage initiative is a movement to pull the many families living at the poverty line, due to the underdeveloped minimum wage, into an income bracket that will allow them to provide basic needs for themselves. In order to completely understand the fuel behind the living wage initiative movement, the insufficiency of the current minimum wage, the people that would be benefiting from the ordinances, and how successful the programs might have and the future possibilities they might offer, must be examined. President Roosevelt established the minimum wage in 1938, through the Fair Labor Standards Act. The wage was set at 25 cents an hour, which at that time equaled about one half of the average hourly wage in the economy. Today, the minimum wage is no more than 37 percent of what the average hourly wage is, and at an all time low. Under President Lyndon Johnson, the Federal poverty standards were set.

This was a study done to establish what the minimum wage was, and if a person could still survive on it. However, this poverty standard has been maligned over the years because of its rather unrealistic assumptions on many counts. The minimum wage was on a steady downward slide and hit a major low in the 1980's when President Reagan and Congress completely abandoned any minimum wage increases. The gap between the minimum wage and the poverty level is so great today that many economists do not even relate the two anymore. The minimum wage has become a significant problem because it has not increased proportionally to the inflation our economy has experienced in the past years. If the minimum wage had paralleled inflation since 1968, the current wage would be over eight dollars.

However, it is a mere $5.15 an hour, which is not a "living" wage that any family could survive on (Fiscal Policy Institute). Another factor is that unlike the year 1938, when the first national minimum wage was established, the minimum wage now applies to over 90 percent of the population (Sense and Nonsense on the Minimum Wage). A major reason this gap in the cost of living and the minimum wage has occurred is due to the varying degree of living costs in different areas of the country, therefore a blanket national minimum wage is not adequate. For example, the cost of living in Jacksonville, Florida for housing has inflated so that a minimum wage of $10.48 an hour is required. However, in Clay, West Virginia, the minimum wage required to provide housing is $6.25. This example illustrates how the minimum wage to provide basic housing costs can vary greatly from state to state.

The nation's attitude towards this problem presently is to return the power of setting the wages to the local governments. This would accommodate the economic individuality that is found not only in every state, but also in every city and country across the nation. The solution to this "cookie cutter" wage conflict is to create a system that insures a continuum of flexibility. This means that if a community wishes they could set the wage which gets the minimum wage workers off the street and into some form of housing, or they could set the wage that would insure a single working mother and her child a one room apartment. These factors have all provided fuel to the fight for a living wage initiative (Universal Living Wage). It is often confusing to understand what the difference between a minimum wage and a living wage is.

A minimum wage is a nationally set rate that may or may not provide a large enough income to support a family above the poverty line. Much of this is dependent on where you are living, and more than likely the minimum wage worker will be forced to make decisions between health care, food, or childcare. A living wage would acknowledge certain basic needs; some are to merely raise the current wage, while others seek to solve more inherent problems (Making a Living). Using a system like this enables each community to set the efficiency at whatever they choose (Universal Living Wage). The lack of individuality of wages throughout the nation has lead to a significant population of impoverished people.

So, the question is, who is this massive population of impoverished people made up of? According to Lonnie Johns-Brown, who is part of the National Organization for Women (NOW), 70% of the minimum wage workers are women, despite the fact that there are more men in the work force. Furthermore, one-third of women earning minimum wage are the single head earners of their households. African Americans are even worse off in getting any type of employment at all.

According to John Rosenblum of the Washington Jobs for Justice, black unemployment is twice that of Caucasians (Making a Living). A survey was recently conducted in fourteen homeless shelters around the country. They found 202 families in the shelter, including 370 children. Forty-two percent of them were employed at minimum wage or even slightly higher, and 28% of them had received no government assistance. The number of homeless families has significantly grown over the past decade, however so has the number of employed members of those families. A statistic such as this is largely due to the gap that has grown between the minimum wage and a living wage.

Most minimum wage workers's al aries are eaten up by inflation (The Other America). The push for living wages is an inflation adjustment to catch up to, not to simply raise wages. The lack of a solution to whether or not the minimum wage should be increased, has allowed the minimum wage to slide further and further below the cost of living (Economic Opportunity Institute). Despite all of the problems caused by the insufficient minimum wage, many feel that moving toward a living wage initiative would not be an improvement, and could possibly cause more problems for the more indigent population. One opposing point is that the number of people earning the minimum wage is small and inconsequential. In contrast to that thought are the results of a study done by the Preamble Center in Austin, Texas.

The study showed that 11.8 million workers are directly affected by the current minimum wage, and three-quarters of those people are adults of whom 40% are sole providers for a family. There is a concern that passing a living wage would be bad for local economies because they would go out of business. A living wage initiative could be beneficial to local economies; they depend on local money to stay in business, and the more money the city dwellers have, the more customers a small business can get. It is often thought that the people who would benefit the most would be the upper class housewives and teenagers because they make up most of the minimum wage earning population.

This is not true because according to a report entitled, The Sky Hasn't Fallen, the rise in minimum wage did increase earnings with the lower-wage workers, and 57% of the gains from the increase go to individuals supporting families (Clearing the Air). There are more than 700,000 workers in New York alone who earn under $6.75 an hour; 50% are full-time workers and more than 70% are adults. Out of 500,000 working New Yorkers earning $7.75 an hour, 63% of them are full-time employees, and 90% of them are adults (Fiscal Policy Institute). Another apprehension is that a wage increase would lead to job loss. Employers who have to pay higher wages and provide better benefits might possibly cut down the number of people they employ and hire more skilled workers, which consequently are not usually from the lower class populace. The statistics have shown that wage increases have not lead to job cutbacks, and if there is discontent with the thought of paying workers more, perhaps the focus could be set on the benefits that should be provided to the lower income families.

Many feel that the local governments should handle minimum wage campaigns. Numerous local campaigns have been very successful. However, what about those areas that are not able to head a campaign due to formidable opposition or small rural communities? Workers in these areas also deserve a fair living wage; many smaller underdeveloped areas require some kind of governmental assistance to head a living wage ordinance (Clearing the Air). Although local campaigns are very lengthy and difficult to initiate, there have been many extremely successful movements. There have been successful drives in 84 locations around the United States, and there are over 75 active campaigns across the nation.

In December of 1994, the Baltimore City Council passed a bill that required companies that have service contracts with the city of Baltimore to pay workers $6.10 an hour. The bill also included steps to increase the wage over a four-year period; it has since been increased to $8.20 an hour. Milwaukee has also passed a program, but it is considerably different. In 1995, Milwaukee won a living wage ordinance that set the federal poverty line for a family of three at $6.05 per hour. In 1996, a minimum wage of $7.70 an hour was set for all workers employed by the public schools or contractors with the schools. In 1997, the hourly wage for janitors, security guards, and parking lot attendants, was set at$6.25 an hour.

Boston's campaign began on Labor Day of 1996. The strategy used was to introduce the actual law, which gave the Chamber of Commerce very little time to combat the movement. Los Angeles' movement was sparked by the defense of a thousand unionized workers. Around 300 of these employees were replaced due to the fact that the city brought in non-union contractors. In March of 1997, there was a unanimous override of a previous veto on the living wage set in place by Mayor Richard Riordan. The poverty level in Boston for a family of four working 40 hours for 50 weeks was set at slightly over $9.00 an hour.

Chicago's campaign began in the summer of 1995. Chicago's road to victory was unquestionably tumultuous. In 1997, the ordinance was voted down, but in 1999, with the help of intense political mobilization, the ordinance was passed by a unanimous vote. The wage was set at $7.60 an hour. New York State has many current living wage campaigns, including New York City, Buffalo, Rochester, Long Island, and Syracuse (Fiscal Policy Institute).

It is quite apparent through the above examples that each living wage campaign is different, and the resulting ordinances are diverse as well. This quality is part of what makes the living wage initiative as successful as it is. No two living wages are the same; an activist must adapt their strategy to the distinct conditions of their community. For example, the cost of living in New York, meaning housing cost and the average cost of providing the basic needs to live, is much higher than that of a state such as Oklahoma. Therefore, it is only logical that the minimum wage to live on should be greater in New York than it is in Oklahoma.

This illustrates once again that the unique quality that the living wage initiative has to offer is that of being personalized to fit the needs of the region it is being designed for. It seems to be a common theme found throughout living wage ordinances is that of alternate wages employers must pay if there are no benefits provided. For example, Syracuse, New York has a minimum wage of $8.96 per hour if there are health care benefits included. However, if there is no insurance coverage, it would be $10.58 an hour. Syracuse is not the only ordinance with this policy. Burlington, Vermont, Rochester, New York and New York City are just a few areas that share the same statute of price compensations for the lack of benefits.

A living wage enables workers to meet their needs for nutritious foods, clean water, shelter, clothes, education, health care, and transportation, while also allowing for a discretionary income. The living wage should be enough to provide for the basic needs of workers and their families. Unfortunately, many minimum wage workers are the sole providers of the family income. The living wage should take into account not only the cost of living, but also social security benefits, and the relative standards of other groups. The living wage for each area must be calculated because every city has very different economic situations. Members of the United States Living Wage Campaign have drafted an algebraic formula for determining the living wage in any given area.

The formula takes into account the average number of family members and adult wage earners per family in a specific area, as well as the sum of the cost of living (Universal Living Wage). The living wage is a reasonable solution to the serious problem of the minimum wage and poverty line gap. Using a living wage ordinance, each community is able to set its own standards and pay the minimum wage employees enough to keep employed families from living below the poverty line. The unique quality of the living wage programs is that no two are the same. This prevents smaller communities from going bankrupt by paying their minimum wage employees a sum that is only necessary to supply if they were living in New York or any other area with a higher cost of living. There have been many successful living wage campaigns and programs all across the nation because they are specific to each area.

The massive amount of people in America who are employed and receive minimum wage, but still cannot even live at the poverty line because of the disproportional relationship between inflation and the minimum wage. This dilemma needs to be dealt with and resolved; the living wage initiative provides a very effective solution.