This oped piece by Don Baylor ran in the Austin American-Statesman on Thursday, Jan. 30, 2014. Read in the Statesman here.
In Tuesday’s State of the Union, President Barack Obama sounded the call for a higher minimum wage to boost economic activity and restore purchasing power to millions of workers and families across the United States, including Texas.
Simply put, the current federal minimum wage of $7.25/hour is too low for many families to afford basic items like housing, food, and transportation, forcing Texans to forgo the necessities or seek public assistance to fill the gap between their income and these routine expenses. As this gap widens, raising the minimum wage becomes a crucial correction to a labor marketplace that continues to create jobs that don’t pay enough to afford the basics of everyday life.
The debate on the minimum wage is often about teenagers, turnover and time. First, only 1 in 10 minimum wage workers in Texas is a teenager; more than half of these workers are supporting children themselves. Second, many studies have shown that minimum wage hikes also benefit employers through lower turnover and increased productivity. Third, since the last increase, we have seen tremendous wage stagnation at the bottom of the income scale, making an increase necessary to adjust for rising inflation over several years.
As recently as 1996, the federal minimum wage was stuck at $3.35/hour until President Bill Clinton, with a divided government, signed legislation to raise the minimum wage to $5.15/hour. The minimum wage remained at $5.15 until 2007, as many states took action to raise their minimum wages above the federal standard. Again, in 2007, President George W. Bush, with a divided government, signed legislation to raise the minimum wage to $7.25/hour.
Even with this federal increase, states and cities continued to examine the adequacy of the federal minimum wage compared to local costs of living. As the minimum wage loses ground to the basic costs of living, our economy stalls as workers cannot spend enough to jump-start economic activity.
In January 2013, the Center for Public Policy Priorities hit the road to share our new data on the income necessary to meet basic needs within a bare-bones budget in Texas’ 25 metropolitan communities — no eating out, no vacations, and also with no savings goals and no student loans or credit card bills to meet. In the Austin area, a family of four needs to earn more than $50,000 to afford the basics, while a single person needs to earn $21,612, or $10.81 per hour, a figure that is 40 percent higher than the current minimum wage.
Our research also shows that in many areas of Texas, one of every two or three new jobs is low-wage, undermining economic vitality and community-level goals. Over and over, we heard from communities across Texas that low-wage employment was a barrier to many community goals: better health outcomes, more household savings, lower use of predatory loans, increased educational attainment and more parental involvement.
National research shows no evidence that the minimum wage increases over the past few decades led to widespread job loss or reduced opportunity. Quite the opposite. Market failures, such as the Great Recession, have destroyed the most jobs and cut off opportunity for many workers seeking to climb the economic ladder.
Whether in Bryan or Brownsville, this widening gap — between a low-wage budget and basic expenses — was well understood by civic leaders. Unfortunately, due to a policy choice by the Texas Legislature, municipalities, outside of public contracts, are prohibited from establishing local minimum wages. Until the Legislature meets, it’s up to Congress to give 17 million, including 2 million Texans, a fighting chance to meet their household budgets and support communities that are proactively moving forward on economic development and financial empowerment. We urge Congress to pass a minimum wage hike this year to boost Texas communities and make work pay for hard-working Texas families.
