Federal minimum wage goes up today
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Tuesday, July 24, 2007
By Erin Quinn
Tribune-Herald staff writer
In her black visor and purple Taco Cabana polo shirt, 54-year-old Alice Carreon spent Monday morning sweeping up the Waco fast food restaurant’s parking lot.
Dirty diapers. Beer bottles. Half-drunken fountain drinks that leaked soda on her shoes when she picked them up.
The soft-spoken mother of six and grandmother of 13 has been working in Waco fast food restaurants for the past 10 years. She has no car. And the bills just keep piling up.
She married too young at 15, she said, and never had a chance to have dreams of her own.
While she makes $6.25 an hour, $1.10 more than minimum wage, Carreon is hoping that the federally mandated $2.10 increase in minimum wage which takes effect today will help her.
The raise will be phased in between now and summer 2009. Minimum wage workers will get an additional 70-cent boost each summer for the next two years, ending in 2009 at $7.25 an hour. That comes to just above $15,000 yearly before taxes for a 52-week work year.
Someone in such a job and earning $5.85 an hour would bring home $12,168 a year before taxes. The federal poverty level for singles is $10,210, for couples is $13,690 and is $17,170 for families of three.
Congressman Chet Edwards released a statement Monday saying 1.7 million Texans will benefit from the increase.
“I believe an honest day’s work deserves an honest day’s pay and this needed increase rewards work, not welfare,” he states in the release. “This increase is long overdue.”
The hike in minimum wage is the first in a decade. About 1.7 million people made $5.15 or less in 2006, according to the U.S. Labor Department’s Bureau of Labor Statistics.
“The reality for a minimum wage worker is that every penny makes a difference because low-wage workers make the choice between putting food on the table and paying for electricity or buying clothes for their children,” said Beth Shulman, former vice president of the United Food and Commercial Workers Union.
Poverty and the minimum wage are becoming a major issue in the Democratic presidential race. John Edwards and Barack Obama are emphasizing raising the minimum wage during their tours of impoverished areas.
Edwards, who said he wants to eliminate poverty within a generation, favors raising the minimum wage to $9.50. Obama is advocating a “living wage” that would go up as inflation rises and he has promised to eliminate the phrase “working poor.”
More than two dozen states and the District of Columbia already have minimum wages higher than the federal one. Even in those states, an increase in the federal minimum wage probably will have a ripple effect.
“It’s a long overdue first step,” said Cindia Cameron, the national organizing director of 9to5, the National Association of Working Women.
Minimum wage workers typically are young, single and female and are often black or Hispanic.
Even when the full increase is enacted, minimum wage workers will be just scraping by. “It’s not enough money to meet your basic needs, I’m talking about your rent, your gas, and gas to get back and forth to work,” said Sonya Murphy, head organizer of the Mississippi Association of Community Organizations for Reform Now, or ACORN.
But at the same time, employers who pay many of these low-wage workers say increasing the minimum wage only means they have to raise the prices of the products, cut back on employees’ hours or let some workers go.
“When you go into the grocery story now, you may be checking your own groceries, you may be bagging your own groceries,” said Jill Jenkins, chief economist for the Employment Policies Ins ute. “All of these things are because of mandated wage hikes. When you have to pay more, employers begin to find other options to keep costs down.”
According to the National Restaurant Association, the last minimum wage increase cost the restaurant industry more than 146,000 jobs and restaurant owners put off plans to hire an additional 106,000 employees.
At $7.25 an hour, the most likely response from restaurants will be “increases in menu prices, elimination of some positions and reduction of staff hours to try and offset some of the increased labor costs,” said Brendan Flanagan, the association’s vice president of federal relations.
Others say the effect on the economy will be negligible.
A PNC Economic Outlook survey done in April showed three out of four small- and middle-market business owners said raising the minimum wage would have little or no impact on their businesses. “In a tighter labor market, they already raised wages to be compe ive,” said Stuart Hoffman, chief economist for PNC Financial Services Group.
Regardless, Edwards states “The bottom line is that Americans who work in full-time jobs should not be living in poverty in the United States of America.”
The Associated Press contributed to this report.