Minimum Wage

Minimum Wage 05-04-05

Nevadans have always been known for their enterprising spirit and hard work. From the Comstock Lode to the Fabulous Las Vegas Strip, their accomplishments are legendary. But in recent years, some of those who give the most have been slipping further and further behind - I'm referring to minimum wage workers who do some of the toughest jobs in our community, like providing care for our elderly and small children.

Currently, these minimum wage workers, many of whom are women, can work 40 hours a week, every week and still earn less than $11,000 a year; that's 28 percent below the federal poverty level for a family of three. The buying power of the minimum wage has dropped 44 percent since 1968. It is worth less today than in all but two of the last 48 years; and its value is lower relative to the average wage than it has been since the 1950's. It had increased as quickly as CEO pay since 1990, however, it would today be $15.71 per hour, more than three times its current rate.

Can you imagine living on $11,000 a year? Since the last increase in the minimum wage in 1997, costs of housing, utilities, healthcare, and gasoline have all gone up from 135 to 170 percent. That doesn't count unexpected repairs, school supplies, or any recreation. A gallon of gas today is around $2.50, car insurance is at least $500 a year, median rent is $700, the median cost of a house in NV is over $300,000, and a venti latte is $3.50 plus tax - one a day for a year comes to $196 - just to put it in perspective.

A new poll by the nonpartisan PEW Research Center shows that Americans overwhelmingly support an increase in the minimum wage: 82 percent said it was an important priority and only 6 percent opposed an increase. The numbers are similar to the results of the Nevada ballot question last fall when over 68 percent of the state's voters pushed the yes button on question 6 to raise the minimum wage by $1.00 to $6.15 and tie further increases to CPI.

The minimum wage is a popular issue because Americans and Nevadans believe that everyone deserves the opportunity to earn a decent wage for a hard day's work, whether they're a young worker trying to earn money for college or a single mother supporting a family. In short, the minimum wage is about fairness, the value of work, and the opportunity to succeed - which is the American dream.

A November 2004 article in Business Week, entitled "Minimum Wage: The States Get It", argues that raising the minimum wage and indexing it to inflation, as Washington, Oregon and Florida have done, are ideas that are "long overdue and should be emulated by Congress and other states". It goes on to point out that modest hikes to keep the low paid abreast of inflation will cost few if any jobs. This counters the arguments of such groups as the NFIB and has been widely embraced since 1995 studies by UC-Berkley economist David Card and Princeton economist Alan Krueges found no job losses among New Jersey fast food restaurants hit with minimum wage hikes. In a statement issued by the Economic Policy Institute, 562 other economists, including four Nobel Prize winners, all supported a modest increase in the minimum wage, saying, "The benefits to the labor market, workers and the overall
economy would be positive." The President's Council of Economic Advisors concurred.

Let us take a lesson from some of the most successful businesses in history, beginning with Henry Ford who in 1914 doubled his minimum wage to $5 per day to fight high rates of turnover, heavy training costs, and too much absenteeism on his assembly line. As a result, production surged and profit skyrocketed. "It was the finest cost cutting move we ever made," Ford said.

More recently, James Senigal, CEO of Costco, one of Walmart's competitors, defended his company's higher wages. "I see first hand how low wages can create a vicious cycle of high turnover and low productivity." If we want businesses to prosper and people to be more
productive, we must raise the minimum wage and we must do it now. It's fair. It's morally right. It's what the people want. And it makes good economic sense for Nevada.

http://www.leg.state.nv.us/titus/docs/050305_MinWage.pdf