It used to be that the minimum wage provided more than just gas money for middle-class teen-agers. Back when it was $1.60 an hour, in 1967, a 40-hour work week at minimum wage brought home enough to support a family of three. Now, at $3.35, it is scarcely enough to keep one worker out of poverty. The working poor will keep working themselves deeper into poverty as long as the minimum wage is stagnant.
Congress established the minimum wage in 1935 to prevent workers from savagely undercutting each other during the Depression. In doing so, it sought to guarantee a decent--a minimum--standard of living for all workers. Until this decade the minimum wage did that, equaling about half of the average private industry wage. But the wage floor that Congress built has sunk into the depths of neglect. Today's minimum wage is only 38% of the average private industry wage, its lowest point by that measure since 1949. Its buying power has dropped 25% since 1981, when Congerss last raised it. It was inadequate then, a cruel joke now.
About 8 million individuals now work at or near the minimum wage. A worker clocking a 40-hour week 50 weeks a year at minimum wage earns $6,964. For an individual not heading a family, that's just above the official poverty line, generously drawn at $5,600. Try living on it. Worse, try supporting a family. The minimum wage is dismally deficient for any worker who has to support someone else. The income, for example, of a family of three headed by a minimum wage worker is $1,700 under the poverty line--20% less than it takes to live decently. Minimum wage earners are not just well-to-do teens; indeed employers in some cities and suburbs cannot find anyone to work at that wage. Almost half of minimum wage workers are 25 years or older, and one of every four is a head of household. In 1984, 2.1 million people worked full-time year round, but they and their families remained in poverty, including 1.2 million heads of households.
Most states, like California, prop up the the working poor with programs such as Medicaid, food stamps and AFDC. These usually do not, nor were they designed to, lift a family out of poverty. They just make poverty less miserable.
In some states, workers forfeit their benefits once they take a job. That, of course, destroys the incentive for welfare recipients to take a job that pays less than welfare, as in most circumstances minimum wage jobs do. Thus it is expensive and self-defeating to keep the minimum wage so low. Taxpayers are subsidizing the wages of the working poor, making up for what employers ought to be paying.
After five years of inaction, Congress should lift the minimum wage to at least $4.35 an hour, which would be equivalent to its traditional level of half the average private industry wage. If raised gradually, it wouldn't squeeze employers who have to pay more. A better minimum wage won't stoke inflation; there are simply too few who work at it. It might result in fewer jobs, but any loss should be more than offset by higher earnings. And those stung would most likely be youths, not adults. Raising the minimum wage would cut welfare expenses, restore the purchasing power of the working poor, and most important, lift many of them from the throes of poverty.
Economics aside, the decision to raise the minimum wage is a moral one. It is unnecessary and unconscionable for persons to work and be poor. The term, working poor , should be an oxymoron. Right now, it's not. Congress can change that.