To Save Young Families, Raise Minimum Wage : Stuck at Its 1981 Level, Federal Standard Offers Little Hope as Route Out of Poverty

A family wage. Our nation’s commitment to support children by placing a floor beneath their parents’ wages spans half a century. But the family wage is rapidly disappearing. As we enter the 1990s, nothing is more important to the strength of our economy and the stability of American families than restoration of the minimum wage to provide an adequate income for workers and their families.

When the federal minimum wage was first established in 1938, America was mired in the depths of the Great Depression. Jobs were scarce and forced idleness was commonplace. But in the midst of widespread unemployment, President Franklin D. Roosevelt understood a basic truth: The rewards of hard work in a decent and civilized society must be sufficient to fulfill a family’s basic needs.

Today, we have forgotten this simple lesson. The federal minimum wage has remained at $3.35 per hour since 1981, losing a quarter of its value due to inflation during the past seven years. As recently as 1979, a minimum-wage worker employed full time throughout the year could earn enough to lift a family of three above the poverty line. In 1988, the same worker will earn less than three-fourths of the amount necessary to keep even a small family out of poverty.

Because one-third of all hourly workers ages 18 to 24 are employed at or near the minimum wage, our youngest and most vulnerable families are rapidly losing ground. Their median income (adjusted for inflation) has fallen by 23% since 1979. The consequences of this sharp income loss are particularly tragic for the nation’s children, so many of whom are growing up in families headed by young people. Nearly half of all children in young families are now poor.

With the minimum wage at its lowest level in more than three decades, many families can escape poverty only if they are able to send more than one parent into the work force. Yet the disappearance of a family wage also blocks this route to self-sufficiency by discouraging young adults from assuming the responsibilities of marriage. As Benjamin Franklin observed more than two centuries ago, “The number of marriages . . . is greater in proportion to the ease and convenience of supporting a family.” And without an adequate minimum wage, supporting a family is now impossible for many young Americans.

Declining earnings among young workers already have contributed substantially to falling marriage rates and rising out-of-wedlock childbearing among young Americans. For example, the proportion of young men earning enough to support even a small family dropped from 60% in 1973 to 42% in 1984--a profoundly disturbing trend given that young men with earnings above the three-person poverty level are consistently three to four times more likely to marry in their early 20s than their peers without such adequate earnings.

Congress can halt this disintegration of the economic base for young families through swift enactment of the Minimum Wage Restoration Act. The measure, sponsored by Rep. Augustus Hawkins (D-Los Angeles)and Sen. Edward Kennedy (D-Mass.), would restore the minimum wage through step increases over several years, with the Senate bill reaching $4.65 per hour by 1991 and the House version adding a fourth-year increase to $5.05 per hour in 1992.

In considering minimum-wage legislation this spring, Congress also has an opportunity to prevent future erosion of the family wage by establishing a mechanism for making automatic adjustments in the value of the minimum wage on an annual or biennial basis. Such periodic adjustments could be structured in a way that preserves the current oversight role and responsibility of the Congress, while at the same time ensuring that the minimum wage keeps pace with average pay levels.

Opponents of a family wage alternately exaggerate and underestimate its importance. Some claim that restoration of the minimum wage would result in major job losses, repeating a tired litany of dire predictions that have accompanied every previous congressional debate but never come to pass.

Others argue that a higher minimum wage would provide no help to families in poverty because most minimum-wage workers are young and single, forgetting that the earnings of young Americans are the foundation upon which our next generation of families will be built.

Congress must move quickly to re-establish a family wage for all Americans. At a time of scarce federal resources, restoration of the minimum wage--an anti-poverty measure that requires no additional federal outlays--represents an important opportunity. At a time when an entire generation of young families is increasingly in peril, the re-establishment of a family wage is an urgent necessity.