Enriching the minimum wage discussion

History shows the minimum wage was meant to be a meaningful policy tool to help working families, not limited to “entry level” work or teens. In fact, efforts to establish the wage came as policy makers were trying to remove young teenagers from the workforce.

The spin against any minimum wage increase — or even having a minimum wage — has become predictable. This should surprise no one. Policy makers since President Franklin D. Roosevelt have battled the same stuff.

A little relevant history might be just what is needed as Iowans consider the arguments for a national, state or even local increase, which passed in Johnson County.

History shows the minimum wage was meant to be a meaningful policy tool to help working families, not limited to “entry level” work or teen wages. In fact, efforts to establish the wage came at the same time policy makers were trying to remove young teenagers from the workforce.

The U.S. Department of Labor website has an interesting paper published almost 40 years ago by a DOL historian, Jonathan Grossman: Fair Labor Standards Act of 1938: Maximum Struggle for a Minimum Wage In it, Grossman relates a story about a young girl’s note to Roosevelt, telling of pay being cut from $11 a week to between $4 and $6 a week. 

To a reporter’s question, the President replied, “Something has to be done about the elimination of child labor and long hours and starvation wages.”

“Starvation wages” are your concern if you expect the wage to be meaningful to a household budget.

Interestingly, Iowa Policy Project research shows what is needed for a household budget. In Linn County, where a very low $8.25 has been suggested by a split task force, a single parent needs to make between $21 and $25 an hour to support a household on a bare-bones, basic-needs budget without public supports. In Polk County, it takes between $22 and $27 for a parent in similar circumstances.

IPP and Economic Policy Institute analysis also show this issue is scarcely about teens. Statewide, more than 4 out of 5 workers affected by an increase to $12 are 20 years old or older. A quarter of them have children. Over half of them work full time. On average, they account for over half of their family’s total income.

County supervisors in Johnson County have taken the baton across generations from FDR, to assure families have a chance. They acted last year to raise the local wage in three steps to $10.10 by next January 1, and they have already taken two steps, to $9.15.

Discussions are moving ahead in Polk County, Linn County and Lee County. Passing a local wage is a significant signal to state leaders that they are through waiting for action. Any county must consider whether the content of its action is significant as well — however bold it may seem to pass local law on this issue, the amount does matter.

And for those who say, “Let the market handle it,” just wake up. Clearly, it does not. As FDR stated in 1937:

The truth of the matter, of course, is that the exponents of the theory of private initiative as the cure for deep-seated national ills want in most cases to improve the lot of mankind. But, well intentioned as they may be, they fail…. (T)hey have no power to bind the inevitable minority of chiselers within their own ranks.

Though we may go far in admitting the innate decency of this small minority, the whole story of our Nation proves that social progress has too often been fought by them. In actual practice it has been effectively advanced only by the passage of laws by state legislatures or the National Congress. [1]

Do we value history? Do we value work? Do we value families? Do we value practical solutions through public policy? We are about to see.

[1] Franklin D. Roosevelt: “Message to Congress on Establishing Minimum Wages and Maximum Hours.,” May 24, 1937. Online by Gerhard Peters and John T. Woolley, The American Presidency Project. http://www.presidency.ucsb.edu/ws/?pid=15405.

owen-2013-57By Mike Owen, Executive Director of the Iowa Policy Project.

Contact: mikeowen@iowapolicyproject.org

Connecting dots draws tough course for Iowa jobs

Why is job outlook dim? Don’t blame an educational gap or the business cycle. Long-term projections favor low-wage service jobs over better-paying sectors.

The chart projecting Iowa jobs in the near future is not pretty.

click on image for interactive version

Using the most current state level numbers, for 2008-2018), this graph shows that the fastest growing jobs taking larger shares of the Iowa job market through 2018 are in sectors that pay lower than the state median wage. Dots represent occupations; blue dots pay higher than the statewide median wage (2011 numbers) and red dots pay lower. Move your cursor to each dot to see the occupation, its 2008 employment, its median wage and projected employment.

Only 4 of 18 occupations projecting job gains over 1,500 by 2018 pay better than a median wage, and only one of the 10 occupations projecting job gains over 2,000 pay better than the median. Six occupations (retail sales, office clerk, nursing aides, home health aides, food preparation, and customer service) project job growth greater than 4,000 and the highest wage in this group falls more than $2.00 short of the median wage.

Why is this happening? Don’t blame it on an educational gap, in which workers with skills pull away from the rest. As the Center for Economic and Policy Research has shown — here and here and here — today’s low wage workers are older and better educated  than ever.

It also is not an artifact of the business cycle, as the Department of Labor estimates in long-term projections that about a third of new jobs through the next decade will be in low-wage service occupations (retail, home health care, child care, janitorial).

Combine these projections with the troubling trend of the last business cycle, which hit good jobs hard. The National Employment Law Project has shown (here and updated here), that job losses during the recession were concentrated in mid-wage occupations, while job gains during the recovery have been concentrated at the low end.

Our work, it seems, is cut out for us — well-paid or not.

Posted by Colin Gordon, Senior Research Consultant

Note: Colin Gordon is a Professor of History at the University of Iowa and Senior Research Consultant at the Iowa Policy Project. This post is taken from his blog, TelltaleChart.org