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Friday, July 28, 2006
Minimum wage stuck in place since '97; congressional action stalls

By Mark Pattison
text only version

In his 1931 social encyclical "Quadragesimo Anno," Pope Pius XI said, "The wage paid to the working man must be sufficient for the support of himself and his family."

In that case, the current federal minimum wage of $5.15 would not qualify. Someone working 40 hours a week, 52 weeks a year at the minimum wage would earn $10,712. According to the U.S. bishops' Catholic Campaign for Human Development, the federal poverty line for a family of three is $16,090.

The minimum wage was last raised in 1997. According to the federal Bureau of Labor Statistics, one would need to have $6.51 today to have the same buying power $5.15 had in 1997 --- an increase of 26.4 percent.

The bishops have been monitoring bills that would raise the minimum wage. One would raise it immediately by $2 to $7.15 an hour. Another would raise the wage by $2.10 in three 70-cent increases --- the first would take effect immediately upon the bill's signing, and the other two on the one- and two-year anniversary dates of that signing.

In June, the Senate wrestled briefly with minimum-wage bills. A bill proposed by Sen. Edward M. Kennedy, D-Mass., won 52 votes but failed because a Senate procedural point required it to get 60 votes, according to Thomas Shellabarger, a policy analyst for the U.S. bishops' Office of Domestic Social Development. Failing to get even a majority in the Senate was a bill by Sen. Rick Santorum, R-Pa., which tied a minimum-wage hike more modest than Kennedy's to what Shellabarger called "radical changes" in the Fair Labor Standards Act.

"The great irony that everyone is pointing to is that members of Congress have had their pay increase by $30,000 since the last time the minimum wage was raised," Shellabarger said. "That's three times what a minimum-wage worker earns."

Twenty-one states and the District of Columbia have recognized the income inequality at the lowest rungs of the economic ladder and have implemented minimum-wage increases for their residents. The highest is Washington state, with a $7.63 minimum wage that is indexed to inflation. "There are some people who fear that if you set that wage too low, you're always going to have people below the poverty line, but that's a political decision to make," Shellabarger said.

One indexing method that has been advanced, according to Shellabarger, is tying the minimum wage to that locality's housing market, making rents more affordable, but "I don't know how complicated you want to make it," he cautioned.

When the idea of a minimum wage was first introduced in the 1920s --- it did not become federal law until 1938 --- some thought "it should be half of the average wage," Shellabarger said, "so if the average wage is $16.50 an hour, the minimum wage would be $8.25, so as the average wage moves, so would the minimum wage."

One concept that takes those concerns into account is the "living wage," which has been adopted by more than 40 city and county governments throughout the nation over the past 15 years. While it generally applies only to workers whose employers hold contracts with those governments, the laws require those contractors to pay a set minimum, often indexed to inflation, to workers doing work for the locality -- and an even higher wage if the contractor opts not to offer health coverage.

Washington Examiner columnist Jay Ambrose, in a July 19 column, cited Bureau of Labor Statistics studies showing that "something less than 1 percent" of all workers make only the minimum wage. "Most are under 25, and many are in households with a number of jobs and an average total income in all the households of $40,000," he added. Ambrose's solution: "Stop the annual flow of hundreds of thousands of illegal aliens to this country, thereby lessening a supply of workers who view $5.15 and even less as a marvelous amount."

But the Economic Policy Institute, using Labor Department data, said the minimum wage's purchasing power is at its lowest since 1955. Further, it's only 31 percent of the average wage paid to nonsupervisory employees, the lowest rate it's been since 1948, two years after those kinds of statistics were first being kept.

If it is not raised by Dec. 2, the minimum wage will have stayed at the current rate longer than at any time in its history, outstripping the 1981-90 stasis that took in two terms of the Reagan administration and most of the first two years of President George H.W. Bush's only term in office.

Should Congress adopt a higher minimum wage, it doesn't matter whether it's $7.15 or $7.25 an hour, Shellabarger said: "Neither is going to be a living wage, in which a family of three is going to be able to support themselves. We're getting closer, but we're not there yet."

---CNS



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