The Washington Post
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November 23, 2005
It's time that the poorest working Virginians got a raise. Virginia's hourly minimum wage of $5.15 remains unchanged since 1997. Because inflation has eroded the wage's value, minimum wage workers earn just a third of what the average American worker makes today, the largest such gap since 1949. Since 1997, the minimum wage has decreased in value by 17 percent. A single Virginia worker earning the minimum wage makes only $9,893 annually, or $824 a month, after deductions for Social Security and Medicaid. That's hardly more than the official Federal poverty level of $9570 for a single person in Virginia.
Minimum wage earners work as hard as anybody else. Yet they find themselves hopelessly behind in meeting the escalating costs of daily living, even with food stamps, rental assistance, and other forms of aid. Rents have soared, and thousands of people are waiting in line for years to gain an affordable place to live.
According to the U.S. Department of Housing and Urban Development, the median "Fair Market Rents" reveal housing markets that leave many behind. For one-bedroom units and three bedroom units in several regions of the state show, median monthly rents are:
- $915 and $1537 in the Washington , DC , area
- $668 and $1086 in the Richmond-Petersburg area
- $653 and $921 in the Norfolk , Virginia Beach, and Newport News area
- $463 a month and $921 a month Roanoke area, and
- $493 a month to $1042 in the Montgomery County area
To pay a middle-range rent for a typical two-bedroom unit in the Hampton Roads area, for example, would require a household to earn $15.15 an hour and work 118 hours a week. Similar median rent figures pertain to other areas as well.
That the minimum wage cannot keep pace with the rising cost of living is evident in food stamp rolls. N early 486,000 Virginians received food stamp benefits last year, a 41 percent increase since 2001. Or to look at it another way, if the Federal minimum wage had gone up at the same rate as that provided a CEO from 1990 to 2000, it would have reached $25.50 an hour. In 1980, the average CEO at a major company made the same amount of money per year as 97 full-time minimum wage workers; by 2000, it took 1,223 minimum wage workers to match what a CEO made.
Some will argue that raising the minimum wage will force businesses to lay off employees in order to hold down business costs. In fact, the opposite is true. No reputable study of the effects of minimum wage increases and employee retention has revealed layoffs. Princeton economists David Card and Alan Krueger studied minimum wage employees in New Jersey , and found little or no impact on employment. Economist Robert Solow, an MIT Nobel Laureate, states in an article that the "main thing about the research is that the evidence of the job loss is weak. And the fact that the evidence is weak suggests the impact on jobs is small."
According to studies, such as the Economic Policy Institute has undertaken, tangible benefits accrue not just to workers but also to businesses, the economy and society in general, if Virginians of modest means receive a raise in the minimum wage. An increase would certainly ease financial burdens on Virginia 's lowest income households, creating greater family stability. Employees would stay on the job and absenteeism would decline as workers would have greater satisfaction in their jobs. The cost of retraining new people would diminish. Greater productivity on the job would take place. Money earned from a higher wage would go back into the economy to purchase goods and services. Particularly important, providing a floor under hourly minimum wage levels would also reduce reliance to some extent on government services. And, of course, businesses can claim state and federal tax deductions for the cost of doing business.
While Virginia continues without a minimum wage increase, other states, both red and blue, have moved forward. In fact, seventeen, including the District of Columbia, have raised their minimum wage since 1997, when Virginia last approved an increase. Florida and Nevada voters overwhelmingly approved minimum wage referenda with heavy margins, respectively, 71% and 68%.Washington and Oregon have required annual adjustments to their states' minimum wage in light of inflation. Nine Republican governors lead states that have raised the minimum wage. A Pew Research Center Poll conducted in December 2004 found that 86% of those surveyed supported raising the federal minimum to $6.45 an hour.
The Federal government has repeatedly rejected a raise in the Federal minimum wage. Now it's time for Virginia to what it is necessary and right for the lowest paid workers in the state. Raising the minimum wage is the minimum we should do.
Delegate Al Eisenberg