Jobs Now Coalition's view: Higher wage can help families thriveA $9.50-an-hour Minnesota minimum wage would help working families and working adults pay for basic needs, according to a report by the Jobs Now Coalition, based in St. Paul.
By: John Clay, for the News Tribune
A $9.50-an-hour Minnesota minimum wage would help working families and working adults pay for basic needs, according to a report by the Jobs Now Coalition, based in St. Paul. The report looks at Minnesota workers whose wages are below $9.50 as well as those slightly above who would see a raise due to what economists call the “spillover effect.”
Of 357,000 Minnesota workers across the demographic spectrum who would see a raise, about 77 percent are age 20 or older. And 33 percent are married or parents.
“The economic security of families is critical to the health and well-being of our children,” says Peggy Flanagan, executive director of Children’s Defense Fund Minnesota.
The report shows that some 137,000 children in Minnesota would benefit from increased parental income if the state minimum wage is increased to $9.50 an hour. Parental income matters for children’s academic success and future prospects. A 2011 report by Julia Isaacs of the Brookings Institution Center on Children and Families shows that an additional $1,000 of average income throughout early childhood can result in higher reading and math scores for children in low-income families.
The Rev. Alison Killeen, who ministers at First Congregational Church of Minnesota, sees wages as a moral as well as a practical issue. “God calls us to treat one another with dignity and equity,” says Killeen. “Increasing pay for those at the bottom of the pay scale would be an investment in workers’ dignity and would help families not only survive (but) thrive.”
Job-seekers in Minnesota, including adults raising families or who hope to build savings to raise families, face a job market in which a significant share of openings offer low wages, according to a Job Vacancy Survey by Minnesota’s Department of Employment and Economic Development. Only 42 percent of all Minnesota job openings require education beyond high school, and 45 percent of all openings are part-time. The median wage for all part-time openings is $9 per hour and for food preparation and serving openings is $7.50 per hour.
Low-wage jobs like these can constitute a significant share of family income. A minimum wage of $9.50 an hour among parents who would get a raise would constitute 52 percent of family income, on average. And for 23 percent of parents who would get a raise, their wage is the sole source of family income.
Flanagan, of the Children’s Defense Fund, notes that many low-wage parents must work multiple jobs to meet basic needs. “Child care costs consume a significant part of a family’s income,” says Flanagan, who adds that in St. Louis County, for example, licensed child-care costs more than $6,000 per year. That’s a big chunk out of $15,080 a year for a full-time worker at today’s effective minimum wage of $7.25 an hour.
If the federal minimum wage had maintained its purchasing power since 1968, it would today be over $10.70 an hour, or $22,256 a year for full-time work, according to the U.S. Bureau of Labor Statistics. If minimum wage had kept pace with average productivity gains, as it did in the decades leading up to the 1960s, it would today be about $22 an hour.
The Minnesota Legislature is expected to take up the $9.50 an hour minimum wage bill in the first weeks of the 2014 legislative session. Some 137,000 children — about one in every 10 children in Minnesota — would benefit if the state raised the minimum wage to $9.50 an hour.
“When you increase family income, you improve child outcomes,” Flanagan said. “And by improving child development outcomes, we are helping to ensure a prosperous future for Minnesota. Increasing the minimum wage to $9.50 an hour is a first step.”
John Clay is a labor market analyst for the St. Paul-based Jobs Now Coalition.