Push to hike minimum wage grows as workers’ ranks swell
With many more lowerpaid workers in today’s economy, some call for a higher ‘livable wage.’
Before the recession, Amie Crawford was an interior designer, earning $50,000 a year patterning baths and cabinets for architectural firms.
Now, she’s a “team member” at the Protein Bar in Chicago, where she makes $8.50 an hour, slightly more than minimum wage. Crawford, now 56, says she needed to take the job to stop the hemorrhaging of her retirement accounts.
Crawford is also working with a Chicago group called Action Now, which is staging protests to raise the minimum wage in a state where it hasn’t been raised since 2006.
“Thousands of workers in Chicago, let alone in the rest of the country, deserve to have a livable wage, and I truly believe that when someone is given a livable wage, that is going to bolster growth in communities,” she said.
If it seems that situations such as Crawford’s are more prevalent these days, it might be because there are more workers in lower-paying jobs than there were a few years ago. Of the 1.9 million jobs created during the recovery, 43 percent have been in the low-wage industries of retail, food services and employment services, according to a study
by Annette Bernhardt, policy co-director of the National Employment Law Project in New York.
At the same time, many workers are experiencing significant earnings losses after taking a new, lower-paying job. About one-third of the 3 million workers who lost their jobs from 2009 to 2011 and then reemployed said their earnings dropped 20 percent or more, according to the Bureau of Labor Statistics.
The rise of low-paying jobs in the recovery, experts said, has cut the spending power of people who once worked in middle-class occupations.
“You see workers trading down their living standards,” said Joseph Brusuelas, a senior economist for Bloomberg who studies the U.S. economy. Now, Brusuelas said, there’s an oversupply of workers and they’re willing to take any job in a sluggish economy. That includes temporary jobs without benefits and minimum-wage positions.
Efforts to increase wages for these workers are sputtering in an era of austerity when businesses say they are barely hiring, much less paying workers more.
The New Jersey state legislature sent Gov. Chris Christie a bill to raise the state’s minimum wage to $8.50 an hour from the federal minimum of $7.25 this month, but he hasn’t signed it and has signaled he might not. An earlier effort in New Jersey to tie the minimum wage to the consumer price index was vetoed by the governor.
Lawmakers in Illinois are also trying to push a bill that would increase the minimum wage, after an earlier effort this year failed. The Legislature last voted to raise its minimum wage in 2006, before the recession, and the governor agreed.
“A higher minimum wage means a person has to pay more for each worker,” said Ted Dabrowski, vice president of policy at the Illinois Policy Institute, which opposes raising the minimum wage.
“Companies have a few choices — increase prices, reduce the number of people they hire, cut employee hours or reduce benefits. When employees become too expensive, they have no choice but to reduce the number of workers.”
The Center for Economic and Policy Research in Washington, however, says there is little indication from economic research that increases in the minimum wage lead to lower employment, and, because higher wages mean workers have more money to spend, employment could increase.