Cartoon Truth:

Even with raise, low-wage earners on thin ice

Even with raise, low-wage earners on thin ice
During the midterm elections, voters in Arkansas, Nebraska, Alaska and South Dakota voted to increase their state’s minimum wage – news widely heralded as a step in the right direction for low-wage earners. 

    But will it make a real difference for working families? In 2013, 75.9 million Americans were paid by the hour, according to the U.S. Bureau of Labor Statistics. Of that number, 1.5 million earned precisely the federal minimum wage -- $7.25 an hour. An additional 1.8 million had wages below the minimum. So 3.3 million workers earned the federal minimum or below, roughly 4.3 percent of all hourly workers.
     That number is only part of the picture, however. States set minimum wages also, and state minimum wages aren’t that much higher than the federal minimum wage. (If the state’s minimum wage is lower than the federal rate, employers must pay the federal rate, according to the U.S. Department of Labor. If the federal rate is lower, employers must pay the state rate.)
     While we have long thought of these workers as teenagers taking a first job at the neighborhood burger joint, an analysis by the Center for Economic and Policy Research painted a different picture. Indeed, 36 percent of low-wage earners -- those earning $10.10 an hour or less – are ages 35-64.
     A proposal to raise the minimum wage to $10.10 an hour could lift 4.6 million Americans out of poverty, according to the December 2013 study, Minimum Wages and the Distribution of Family Incomes, by Arindrajit Dube, an economics professor at the University of Massachusetts, Amherst.
     As for the four states where voters agreed to raise the minimum wage, this is what workers can expect, according to the National Conference of State Legislatures:
  •  Alaska: The rate will go from $7.75 per hour to $8.75 per hour in January 2015 and $9.75 per hour in January 2016.
  •  Arkansas: The minimum wage was $6.25, and the new rate will be $7.50 per hour effective in January 2015. By 2017, the minimum will be $8.50 per hour.
  •  Nebraska: The rate will go from $7.25 to $8 in January 2015 and $9 in January 2016.
  •  South Dakota:The rate will go from $7.25 per hour to $8.50 effective January 2015. Starting in 2016, there will be indexed increases.

     But families need more than that. According to the Economic Policy Institute, in rural Alaska, a parent with one child needs $54,945 to pay for housing, transportation, food, child care, health care, taxes and other necessities. In rural Arkansas, a parent and child would need $37,462. In rural Nebraska, the total is $41,505, and in rural South Dakota, $40,921.




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     Summit tackles work-life issues