It's the economy, folks: We need to raise the minimum wage

It's the economy, folks: We need to raise the minimum wage

March 19th, 2014 in Opinion Times

Ericka McCurdy couldn't pay her sky-high January electric bill without help from Chattanooga's Metropolitan Ministries.

She is a nurse's aide who makes $9 an hour and supports two children. McCurdy has worked for 15 years but often has been scheduled to work just 20 hours a week. Still, even if she clocked full-time hours, her yearly pay rate would put her below the poverty threshold of $19,530 for a family of three.

JeraLee Kincaid, 23, is an $8.50-an-hour cashier in a parking garage adjacent to the Marriott Courtyard hotel here. She hopes to go to college, but for now part of her paycheck is needed to help pay the medical bills for a niece with leukemia.

Landon Howard is a University of Tennessee at Chattanooga graduate with a degree in social work, but he can't find a job in that field so he works as prep cook at a local restaurant for $9.50 an hour.

Nick Mason, 34, of Hixson, works for $9 an hour as an assistant manager for Domino's Pizza overseeing a crew of six. He has been working in the pizza business for 19 years. He once attended UTC, studying to become a registered nurse. When his marriage broke up, he had to return to full-time work and devote more time to his two children, ages 7 and 5. The three live with Mason's parents to make ends meet.

These are real Chattanoogans who were highlighted this week in a New York Times report about how hard it is - even for some working Americans - to climb out of poverty in a time when the American Dream of ever-increasing incomes has flat-lined - especially in Chattanooga.

In this city where we congratulate ourselves for landing Volkswagen to begin rebuilding a manufacturing base and where our state lawmakers say no unions are needed because workers are doing great without them, the middle class is sinking.

Here are the stark facts: The prevalence of low-wage jobs here means 27 percent of the city's residents live below the poverty line, compared with 15 percent nationwide. Women head 42 percent of the city's poor households, and about 42 percent of the city's children are poor, nearly double the rate statewide.

In years past, nationally and locally, those making minimum wage or slightly above it were often teens or other inexperienced workers. Not any more. Today, more than half of those who make $9 per hour or less (minimum wage is $7.25 an hour) are age 25 or older. In Chattanooga, teens have been crowded out of the low-wage market by adults desperate for work. A study by the Brookings Institution's Metropolitan Policy Program found that in 2000 almost half those ages 16-19 in the Chattanooga area worked; but by 2012 fewer than one in four older teens were in the workforce.

Middle-class incomes across the nation, adjusted for inflation, have shrunk nearly 10 percent since 2000. And over the last quarter century, the typical American household income is slightly lower when adjusted for inflation. In Chattanooga, the 1989 median family income of $29,700 has risen to $53,100. But in today's dollars, we actually have 5.6 percent less purchasing power, according to the Bureau of Labor Statistics. Meanwhile, average middle-class debt has doubled.

All of this comes at a time when the income gap has widened to a new record. The top 1 percent of earners saw their incomes rise 19.6 percent in 2012, compared with a meager 1 percent increase for the remaining 99 percent of earners.

President Barack Obama proposes raising the minimum wage to $10.10 an hour. Currently 3.5 million Americans make $7.25 or less an hour. Some economic experts say the minimum wage should be closer to $12 an hour.

Republicans - including Tennessee U.S. Sens. Bob Corker and Lamar Alexander - oppose Obama's effort. Like other Grand Old Party partisans, they have glommed onto a single number in a mid-February Congressional Budget Office report. That number is 500,000, the CBO's estimate of how many jobs would be lost nationally if minimum wage is raised to $10.10.

The GOP, however, completely ignored the rest of the report which also said that nearly twice that number would be moved out of poverty.

"Real income would increase, on net, by $5 billion for families whose income will be below the poverty threshold under current law, boosting their average family income by about 3 percent and moving about 900,000 people, on net, above the poverty threshold," the CBO reported.

Here's another income/economy message that GOPers won't tell you: Economic crashes - like the Great Depression in 1930 and the Great Recession in 2008 - follow periods of increasing income inequality, especially when the top 1 percent of U.S. earners have more than 20 percent of total income.

Since the recession hit in 2009, the top 1 percent of income earners in the U.S. have captured a whooping 95 percent of the total income growth, according to researchers at the University of California at Berkeley.

It's time to support the $10.10 minimum wage proposal - regardless of your partisan colors.