Minimum Wage Hike Could Still Fall Short

Graph showing cost of living

businessinsider.com

In his State of the Union address, President Obama spoke of factory towns, where the jobs have disappeared, and communities where poverty is so entrenched work seems like a distant dream.

And he spoke about people who are working hard, and still not earning enough to live.

“Today  a full-time worker making the minimum wage earns $14,500 a year.  Even with the tax relief we put in place, a family with two kids that earns the minimum wage still lives below the poverty line,” the president said.

“Tonight, let’s declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty, and raise the federal minimum wage to $9.00 an hour.”

Obama asked Congress to  raise the federal minimum wage from $7.25 to $9 in stages by the end of 2015 and automatically adjust for inflation thereafter. The plan would help 15 million workers, according to the White House.

“It could mean the difference between groceries or the food bank; rent or eviction; scraping by or finally getting ahead,” said the president.

But if you ask T. Sanders, a formerly homeless woman working a low-wage job in Montgomery County, Md.,, struggling  workers like herself will need a bigger raise to make ends meet. She  contends that the president’s proposed $1.75 increase would do little to change the condition of the homeless and working poor in the D.C. region.

“I think we need to be clear on what its really going to do… Will it provide some extra dollars? Yes. Will it allow someone to move into a new place? No. Its not enough money to make that kind of change.”

Sanders, whose job as a residential counselor at the Jubilee Association provides her with an apartment, said she would not be able to afford her own housing on her $10.50 per hour wage, which is already $1.50 above the proposed increase.

“My wage still isn’t a living wage,” said Sanders, who despite holding a master’s degree from the University of Baltimore spent over a year unemployed and living out of shelters and a friend’s car. “If I hadn’t got an apartment with the job I would still be homeless.”

In the District, where the D.C. Minimum Wage Act Revision of 1992 sets the wage floor one dollar higher than the federal rate, the national increase would mean a jump from $8.25 to $10.

For many of District residents unable to afford their own housing, however, the increase is not enough.

“That $10, its nothing,” said Andre Colter, who has been chronically homeless in D.C. since high school and has worked a long list of low wage jobs. “You can’t live comfortably off that.”

Colter’s most recent employment came over a three-month period last summer, when he was contracted through a temp agency to do house cleaning and maintenance for George Washington University. During that span, he made an hourly rate of $9.25 working 40 hours a week plus optional overtime.

“I was already a dollar over the minimum, and that still wasn’t enough,” Colter said, contending that even had he sustained the work indefinitely he would never have been able to afford housing.

Colter was paid every two weeks, with checks generally amounting to around $700 for a total of roughly $1,400 per month after taxes. Subtracting a monthly food expenditure of  $400 and a modest entertainment budget, Colter says he was left with about $900 per month, excluding any emergency costs.

“That’s not enough to rent anything in D.C.,” he said. “Maybe a closet or a storage shed.”

According to an annual report by the Department of Housing and Urban Development, the fair market value of a one-bedroom apartment in the District is $1,191 per month for the fiscal year of 2013.

In its Out of Reach 2013 report, the National Low Income Housing Coalition estimated that an individual living in D.C. must earn $56,472 to afford the market rate of a two-bedroom apartment. That equates to $27.15 per hour, nearly three times the proposed minimum wage rate.

A $1.75 raise would provide a 40-hour a week laborer with a yearly increase of only $3,640.

“We need something that’s compatible with the cost of living in this jurisdiction,” said Colter. “We need to get out of the mentality of saying there’s a minimum wage and start saying there’s a living wage.”

The District does have a living wage rate, set at $12.50, but applies only to employees of businesses receiving government contracts or assistance of $100,000 or more.

Though they insist the increase will do little for those trying to afford housing, both Sanders and Colton do agree that the plan is a step in the right direction.

“Every little bit helps,” said Sanders, who believes the additional $280 a full-time minimum wage laborer would see per month make a difference in paying a light bill or avoiding reliance on a food bank. “We’re talking about people that could be at the bottom of the working class. An increase of even a small amount may help those families.”

Colter believes the benefit would be more emotional than financial, with the increase serving to boost the morale of the working poor.

“It’s a start. It would give us hope that things are getting a little better.”

With economists divided over the effect of an increase on a struggling economy and Republicans concerned over potential harm to small business, it is unclear whether the proposal will be able to make it through Congress. Regardless of the fed’s decision, however, some have suggested that the District move forward on its own initiative.

When questioned by members of the press in February about the District increasing the minimum wage without federal prompting, Mayor Vincent Gray left the possibility open.

“We might,” Gray said. “We’ll consider that.”

Whether the District’s wage floor is raised or not, Colter and Sanders stress that for the homeless community, a minimum wage adjustment is ultimately a superficial fix, and that more expansive governmental initiatives are necessary to promote real change.

Colter contends that increasing the amount of affordable housing is a much more prominent issue.

“We have become a nation comfortable with the term ‘affordable housing,’ not realizing who it’s actually affordable to. We’ve phased out low income housing,” he said.

As an educator, Sanders believes the answer lies not in adding dollars to income but rather in the training and development of the working class.

“In most cases, these minimum wage jobs require fewer skills and less education. If you want to put money somewhere, put it into training people so they can go out and take care of themselves,” she said.

“People becoming more self-sufficient helps everyone in the long run.”


Issues |Jobs


Region |Washington DC

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