Minimum Wage Workers and the Threat of Increases


A quick update study from the RI Center for Freedom & Prosperity finds that legislative proposals at the state level to increase the minimum wage to $8.25 per hour would cost workers in the state 432 jobs, measured against last year’s $7.40 per hour rate.

Even worse would be the proposal suggested by U.S. Congressmen Jim Langevin and David Cicilline to increase the national minimum to $10.10.  That would cost 3,466 Rhode Islanders their jobs.

In a press conference this morning, replayed in large part by Dan Yorke on 630 WPRO, the Congressmen presented the image of struggling families working full time in minimum wage jobs just to subsist.  That is simply not the profile of this group of people.

The following chart applies to the Rhode Island proposal of $8.25 and shows households with at least one member currently earning that amount or less:

Living Situations of Rhode Island Households with a Member Earning $8.25 or Less per Hour

Even among households with at least one minimum-wage worker, only 14% are families living at these low pay rates; that’s about 0.75% of all workers.  Even moving the line up to $10.10, only approximately 17% of workers making that amount or less in Rhode Island are either single parents or spouses with households living on their income, or about 3.20% of all workers.

  • Mike Silvia

    I'm always amazed at the path you take to justify your agenda. The characterization may not represent the majority of families living on minimum wage, but the point of all this is that the minimum wage should be raised to a living wage, as fair compensation for an hour's work.

    I would also argue that childless, single people still need to pay rent, buy food, cover transportation, etc. And a family with minimum wage as supplemental income is not necessarily supplementing an income that is much higher than minimum wage. So, math methodologies aside, thousands of individuals and families suffer if their only option involves working for minimum wage.

    Minimum wage growth is far behind compared to salary growth for certain professions, and I'm not even considering how it translates into purchasing power. Here's some average pay growth data (1981-2012) for just a few professions:

    Minimum wage: +116.4%
    Teacher: +165.9%
    Congress: +186.8%
    NFL Player: +910.1% (1986-2012)

    It's not that easy to get trend data by profession, but I'd be willing to bet teachers' pay growth is on the lower end. I'd like to find is some data on CEO pay. I know it's out there, but I didn't have a lot of time to pull together. Based on what I've read, CEO pay has grown astronomically, and income disparity rises. Those at the top of the food chain will continue to get stock options, supplemental retirement plans, increasingly disproportionate salaries, hefty bonuses and countless immeasurable perks that are not available to the rank and file. Meanwhile, the bottom of the food chain keeps getting squeezed.

    If left unchecked, employers — particularly publicly-held employers — will continue to ship jobs overseas, lower pay, deny rights and strip benefits. So, if employers threaten to get rid of jobs if forced to raise an hourly wage by less than a dollar, I say, OK. However, employers will more likely squeeze those at the bottom in other ways — cutting hours to avoid paying benefits, or reducing or eliminating benefits entirely. Oh well, at least the Affordable Care Act holds employers somewhat accountable when it comes to providing health care insurance.

  • Dan

    Mike – What is preventing this hypothetical single person living alone on minimum wage from living with family or finding roommates? Living alone is really irresponsible if you can't afford it and is not at all a natural state of human existence. I've lived with others my entire adult life. This is the problem with progressivism – it imposes its top-down control mandates across the entire population to account for the most extreme examples when most people are making responsible decisions and managing just fine.

  • Mike Silvia

    Again, I'm amazed at the path to justification. You're missing the entire point. What is the extremity of that one example on which you wish to place focus? I would say that you are very lucky you have been able to live with roommates or family members. People are alone for a variety of reasons, and families can be cruel. Unfortunately, I've known quite a few people who were thrown out of the house and disowned simply for who they were. But all that aside, how much do you think it costs to live with a roommate? A share of rent in the worst apartment, and in the worst town, is still not free. Add food, soap, deodorant, laundry detergent, utilities, transportation, etc.

    When you say "most people are not making responsible decisions," are you talking about those earning minimum wage, because I thought that's what this post was about. Nevertheless, if people were making responsible decisions, there wouldn't be excessive credit card debt, so many under-water homes (because people weren't smart enough to realize the real estate market is cyclical), or so many children born into families that can't provide opportunity. But that's not a discussion for this topic.

  • Ken

    It's min wage for a reason. Non skilled non Professional.
    Maybe people need to learn you can't have babies and not be married or
    at least continue to live together as a family. You have no business starting a
    family if you can' afford it. Spend your time getting educated with a skill first.
    Live with family or friends. You don't have the money to live on your own and the tax
    payer should pay your way.

  • Mike Silvia

    It's still an hour worth of time, and it needs to grow proportionally.

  • Dan

    Mike – You did not quote me correctly. I said that most people are making responsible decisions and managing their finances fine, meaning we don't need to radically restructure our market economy across the board according to your evolving "living-wage" whims to account for the most extreme examples we can imagine. This is especially true for people earning minimum wage who choose to live alone and not pool any of their resources, as most of us do. If they can't afford the rent, they should move or find roommates to pool resources, as I did in college and afterward.

    Progressives believe the entire world should be carpeted for collective comfort. We who advocate individual responsibility feel putting on shoes is a better option.

    • Mike Silvia

      Sorry about misplacing the "not." That's my opinion, which is the opposite of yours for some of the reasons I mentioned.

  • Dan

    My reply comment required approval before posting and has now disappeared from the site. There weren't any swear words or links in it. I don't understand.

    • I don't know what happened. I've approved it now. I'll keep an eye on the automatic notifications to see if anything like that happens again.

  • Nowadays, minimum wage cannot sustain the needs of a family. So live independent. That's the best thing to do.