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Minimum wage: $15 an hour would help close income disparities and lessen food insecurity

MinnPost photo by Peter Callaghan
The $15-an-hour minimum wage would be an important first step in addressing the racialized economic disparities that plague the city of Minneapolis.

Last year, the Minneapolis City Council commissioned a study on the potential impacts of adopting a $15-an-hour minimum wage. On Oct. 5, the findings of that study were presented to the council. Overall, the report presents an optimistic view of the proposed wage increase.

The authors of the report are experts in the field of economics. Samuel L. Myers, William Sprigs, and Monica Garcia Perez all hold Ph.D.s and have taught at universities around the country, including the University of Minnesota, St. Cloud University, Howard University, and Rutgers. The research their report draws on is peer-reviewed (the gold standard for academic publishing) and their chosen methodology is well defended in the report.

The study’s findings show multiple positive outcomes that would be achieved by adopting a $15-an-hour minimum wage.

A first step in addressing disparities

First, the $15-an-hour minimum wage would be an important first step in addressing the racialized economic disparities that plague the city of Minneapolis. The impact of the wage increase would be most felt in Minneapolis’ black and Hispanic communities. That’s because 41 percent of black workers and 54 percent of Hispanic workers are in the kinds of low-wage positions that would be affected by a higher minimum wage. In contrast, only 17 percent of white workers would be affected.

To be clear, the wage increase would benefit low-income workers of all racial backgrounds. But because employment practices are deeply racialized in Minneapolis, the benefits of the minimum wage increase would impact blacks and Hispanics the most.

If the City Council is serious about addressing the deep and significant economic inequality in this city between racialized groups, the $15-an-hour minimum wage has to be a part of that process. There is no other policy proposal on the table that would do as much to address the injustices of the racialized economic system in Minneapolis.

$15 an hour would lessen food insecurity

Second, the minimum wage increase would significantly reduce the number of families in the metropolitan area struggling with food insecurity. Right now, there are thousands of families in the area who are “food insecure,” meaning they regularly run out of money for food before they are able to buy more. They are forced to skip meals and suffer from hunger because they do not earn enough money to be able to feed themselves and their families.

Increasing the minimum wage to $15 an hour would lessen food insecurity in the region by 6.9 percent. It would make 17,000 households in the region food secure. That’s 17,000 working families that would no longer have to experience hunger; 17,000 sets of parents who would no longer have to skip meals to make sure their children eat; 17,000 households with children who would have the proper nourishment to grow and develop. These numbers — and the families they represent — are not insignificant.  

The study also predicts many additional positive impacts of the proposed wage increase: 

  • There are 19,000 households in which adults are working, and still not making enough money to escape poverty. The wage increase would positively impact 73 percent of these households.
  • There are 68,000 workers in Minneapolis in their prime adult working years who are earning so little that they cannot afford to buy basic necessities, let alone save for retirement. The wage increase would help these workers meet their needs.
  • The wage increase would help immigrant families, impacting 29 percent of workers who have already naturalized and 39 percent of workers who have not yet become citizens.

While I could continue going on about the positive findings in the report, I want to avoid talking about the issue of the $15-an-hour minimum wage in only abstract terms. Because the report is predictive and the families and workers it describes are presented as simply numbers and statistics, it’s easy to lose sight of what it at stake in the fight for $15.

‘So much would change’

Instead, I would ask that we consider the experience of Virginia, a low-wage worker who cleans buildings downtown. She’s had her job for five years and makes $9 an hour. She supports her family of five with the wages she earns.

When I spoke with Virginia, she told me, “$9 really doesn’t make it for all of the bills — between gas and electricity and water and all the other bills. So, we have to stretch those $9 as much as we can to make it work.”

“So much would change,” she said, if she earned a $15 an hour wage. “Children need many things. They need bread. They need eggs. They need fish. They need to be able to eat.” For Virginia and her family, the wages she earns are not enough to feed her children sufficiently. An increase in wages would mean that she could provide them with what they need to grow and thrive.

Virginia and I talked about the fact that some people have said that $15 is too much to pay workers. She rejects this idea. “$15 [an hour] would barely cover all the expenses we have to pay for. I don’t think it’s too much to ask for. There’s a lot of poor, working, humble families that are working hard.” These workers deserve to be able to take care of their families and have joy in their lives.

I’ve included my conversation with Virginia here because I want to make clear the stakes of this struggle to raise the minimum wage. When reading economic policy reports it is easy to lose sight of the people represented in the reports’ figures. It’s easy to overlook their experiences and stories.

Hard work, all over the city

It is important that we remember that the numbers discussed in the report refer to actual working people and actual struggling families. These are workers who are doing hard work for low wages. They are working in schools throughout the city. They are providing care for the elderly and incapacitated. They work in construction, manufacturing, and janitorial services. Low-wage workers are providing the services that make more affluent people’s lives comfortable and convenient.

It’s past time that we address the widespread racialized economic disparities in Minneapolis. And it is unconscionable that we have working families that are suffering from being unable to buy enough to eat. These are both issues that the proposed $15-an-hour minimum wage would positively impact. The Minneapolis City Council must act now.

Kathleen Cole, Ph.D., is an assistant professor in the Department of Social Science at Metropolitan State University. Her views do not necessarily represent the views of her employer. 

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Comments (7)

  1. Submitted by joe smith on 10/13/2016 - 09:37 am.

    What is going to happen to the 10

    small business owners who employ 5 workers each and currently pay their workers $10 an hour for 30 hours a week ($15,000+ a yr) when that goes to $15 an hour ($20,000+ a yr)? The owner will go from making $60,000 to $35,000 and have decisions to make. I would sit down with my workers, show them the numbers and discuss options to keep everyone employed. Ask them to help pay with electrical bill, employee insurance, property insurance, heating/cooling costs, property taxes, mortgage payments or decide which 1 or 2 we should let go.

    It is math folks, not some study, that determines employment.

    • Submitted by Michael Friedman on 10/13/2016 - 11:03 am.

      the flaws

      1) This line of thinking presumes that small business revenue remains the same. However, if wages are increased so does purchasing power and small business in some cases may benefit.

      2) This line of thinking prioritizes the following as a policy choice: either hard-working families must experience wage stress/hunger, or public taxpayers must pick up the tab and subsidize the profit rate of small business owners.

      3) This line of thinking ignores the example provided by the author. Is the downtown building right now hiring more cleaners than necessary? Of course not. They will need the same number of cleaners if they want to have clean buildings and will now be required to pay the true costs of human labor –and the cost of a regular employee should include what is required to meet basic expenses without government subsidy.

    • Submitted by RB Holbrook on 10/13/2016 - 02:08 pm.

      Show Your Work

      You’re assuming that the business owner will continue to pull in the same revenues if he “lets” one or two of them go. How, pray, is he bringing in as much as he is now? Could it have anything to do with the efforts of his employees?

      • Submitted by joe smith on 10/13/2016 - 07:22 pm.

        RB, when you own a business and have to let

        Employees go, your time as owner goes from 40-50 hours a week to 50 plus. You make up for it yourself because if it fails you take the hit. Go talk to any small business owner and ask him what happens when he has to let go an employee, he will tell you. The good news is you don’t even need a study to do that.

        • Submitted by RB Holbrook on 10/14/2016 - 09:15 am.

          Is It Just the Hours?

          A lot of small businesses rely on forging personal connections with customers. How is putting in 10-20 more hours per week going to take care of that? What happens if customers follow the employee they liked to her new gig?

          As I’m sure you know, there is more to running a business than just putting in the hours.

  2. Submitted by Frank Phelan on 10/13/2016 - 09:44 am.

    Business Socialism

    If this means that hard working tax payers won’t be so heavily subsidizing low wage employers, I’m in favor of it. Sounds like good conservative kitchen table economics to me.

  3. Submitted by Ilya Gutman on 10/13/2016 - 09:10 pm.

    Questions

    The author may try to answer two questions: 1. How come in the last 8 years poverty rate and food stamps use went up with all the minimum wage increases? 2. How come the poverty level in Minnesota is less than in Oregon and Washington state which had a much higher minimum wage?

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