Minimum Wage Report Predicts Mixed Impact on Workers

The federal minimum wage, currently $7.25 an hour, was last raised in 2009. As the 2014 congressional elections approach, raising the minimum wage has become a major topic of debate. Proposed legislation called the Fair Minimum Wage Act would raise the minimum wage to $10.10 an hour over a three-year period, with a raise of .95 each year. After reaching $10.10, the wage amount would be tied to inflation so that increases would automatically occur as the cost of living increases.

Last month, the nonpartisan Congressional Budget Office (CBO) released an analysis of how the proposed legislation would impact low-wage workers and the job market. By 2016, when all raises would be implemented, the CBO’s major predictions are that

• 16.5 million low-wage workers could see their incomes increase; 
• 900,000 families could be lifted above the federal poverty line; 
• total employment could be reduced by 500,000 workers, representing 0.3 percent of the workforce. 

The report immediately became a source of political controversy, especially the portion about potential job loss that could be caused by raising the minimum wage. The authors of the report point out that the unemployment numbers could vary widely, from a very small reduction in jobs up to a reduction of one million workers. “Raising the minimum wage could destroy as many as one million jobs, a devastating blow to the very people that need help most in this economy,” Senator Mitch McConnell responded.

Supporters of the minimum wage increase counter by saying that the focus on the jobs portion of the report has overshadowed the positive predictions about how many workers would be helped by the raise. Even if the report’s numbers about job loss end up being correct, said Jared Bernstein, economist at the Center on Budget and Policy Priorities and former Obama administration economist, “the beneficiaries far, far outweigh the people who are hurt by this.”

Who Are Minimum Wage Workers?

Even before the most recent recession, the percentage of Americans relying on low-wage jobs has been rising. New research by economists from the University of Massachusetts in Boston found that one in seven US workers is now part of a household where the 2 main income source is a low-wage job (though many of these jobs pay above the current federal minimum wage).

The first image of a minimum wage worker that often springs to people’s minds is a teenager working part-time at a fast-food restaurant. An analysis by the Economic Policy Institute (EPI) of workers who would benefit from an increase to $10.10 paints a different picture. It finds that 88 percent of workers who would be affected by the raise are at least 20 years old and that a third of affected workers are age 40 or older.

Women have long held low-wage jobs in disproportionate numbers, and the EPI’s research finds that 56 percent of those who would benefit from the raise are women. A little more than half of affected workers work at least 35 hours per week. Twenty-eight percent have children.

Crystal Dupont is one worker who often can’t make ends meet with her minimum wage job. She works in a customer service call center in Houston, making between $7.25 and $8 an hour and working 30 to 40 hours per week. She has fallen behind on her car payments and has taken out payday loans to cover basic expenses. “I try to live within my means,” Dupont says, “but sometimes you just can’t.”

After her father passed away, Dupont’s disabled mother lost her home to foreclosure. Since Dupont couldn’t afford a place of her own on her wages, they moved into an apartment together. Her wages and her mother’s disability benefits and food stamps are all they have to survive on. Despite the financial strain she’s under, she has taken out student loans to take business technology classes at a community college. She devotes many hours to studying on her days off, she says, because “it tells me that there’s more than what I’m doing now out there—there’s more to life than this.”

Faith Voices for a Living Wage

People of faith have often been at the forefront of efforts to raise the minimum wage, whether at the state or federal level. Some are prompted by Scriptures that warn against oppressing workers in their wages. Others decide to speak up after realizing that many of the people who approach their church’s food pantry for help are also working.

Beginning with the 1908 Methodist Episcopal Social Creed, The United Methodist Church has advocated for a living wage for all. The term living wage is used to describe the amount needed to meet basic necessities, which the minimum wage frequently does not cover.

The Reverend Jan Bolerjack, pastor of Riverton Park United Methodist Church in Tukila, Washington, devotes much of her time as a pastor to advocating for a living wage. She has seen how struggling to survive impacts families. “There’s such a ripple effect right down to the kids,” she says. “They end up living in stress-filled homes because the parents aren’t able to cope. I see so many parents at the end of their rope, just trying to cope, to hold things together.”

While our culture may encourage us to think of issues such as minimum wage only in economic or political terms, Scripture and our faith tradition challenge us to look at all aspects of God’s world in light of our faith. This is why the Reverend Gorton Smith, a retired United Methodist pastor in Las Cruces, New Mexico, joined with other faith leaders and workers in advocating for a $10 per hour minimum wage in his city. “This is not an economic issue,” Smith said at a recent rally. “This is a moral issue. People should be able to feed their kids and go to the doctor.”

Interfaith Worker Justice, which mobilizes faith leaders across the country on economic justice issues, is encouraging people of faith to sign an open letter to Congress in support of the $10.10 minimum wage proposal. “We respect the dignity of our neighbors who toil under the yoke of today’s unjust minimum wage,” the letter states, “and we call on our elected leaders to ease their burden by making the minimum wage a family wage.”

Scarcity Versus Abundance

Many discussions about pay and working conditions for low-wage workers tend to focus on questions of what we can afford. Will raising wages raise prices for consumers? Will a higher minimum wage mean fewer jobs? These are legitimate concerns, particularly as our economy continues a long and slow recovery. It certainly makes sense to look at economic research about the results of past minimum wage increases.

Yet for people of faith, we are called to take a wider perspective and ask society other difficult questions. Are we providing charity to low-wage workers while neglecting the call to seek justice with them? Have we behaved as if God has not gifted us with a creation that provides enough for all?

Parker Palmer points out that when we act on our fears that resources are scarce, this does in fact become true. Consuming more than we need pushes up prices and reduces resources. “The tragic victims of this self-fulfilling prophecy are, of course, the ‘have-nots’ of this world who lack the capital to act out their economic fears,” Palmer writes. “For them, scarcity is no assumption at all: It is a hard and cruel fact of life. But that fact is created by people who have a choice—the choice to assume scarcity and grab all one can get, or the choice to assume abundance and to live in such a way as to create and share it.”

An abundantly generous God provided manna to the Israelites when they were in the wilderness, promising there would be enough provided each day. Amidst the murmurings of doubt among his own disciples, Jesus fed the multitudes by multiplying only a few loaves of bread and fish. Surely God’s people can find ways today to act out of a spirit of abundance as we consider the struggles of minimum wage workers.

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