Minimum Wage vs. Adequate Income?

Jeanette Sherbondy, Ph.D. • April 18, 2018

It’s a shock to realize that no one who is working fulltime for the federal minimum wage can support herself in any county in the U.S. Each American has the same amount of time each day for working, something less than 16 hours. Some have incomes larger than the budgets of countries. That’s the upper 10 percent. Some work full time, every day, all year, with no vacations, and receive the federal minimum wage, and cannot support their families, and not even themselves.

In the absence of action by Congress, several states have raised the minimum wage. It’s not enough, but it demonstrates that it is worth it. Working production increases and there is faster wage growth, especially at the bottom, for those in the lower 10percent. Those states showed growth more than twice as fast as the others. Elise Gould, a researcher for the Economic Policy Institute, an independent, non-profit, think tank ( www.epi.org ), calculated that those states that raised the minimum wage at least once between 2013 and 2017 showed 5.2% growth whereas the others grew only 2.2% -- that is more than half! Women benefitted enormously and men’s wages improved also, but less dramatically, indicating that more men than women were already at or above the minimum. Maryland is one of those more fortunate states. Maryland raised its minimum wage to $9.25 starting in July 2017 and it will increase to $10.10 in July 2018, then $12 in July 2019. It will go up a dollar each year until it reaches $15 per hour in July 2022. The federal minimum wage is only $7.25/hour with no increases in sight.

The EPI (Economic Policy Institute) calculated for each and every county in the United States how much a household needs in order “to attain a modest yet adequate standard of living.” For each community and each metro area, EPI researchers calculated the specific costs for 10 different family types (1 to 2 adults with zero to four children). How do the counties of the Eastern Shore stack up?

In Queen Anne’s county, the costliest, a family of two adults (both fully employed) with two children needs at least $7,922/month or $95,067/year, for housing, food, childcare, transportation, health care, other necessities, and taxes. A family in Somerset County, the least costly, requires $5,985/month or $71,821/year. Even Maryland’s higher than average minimum wage is inadequate. Each person earning minimum wage in Maryland, working 40 hours a week for 52 weeks earns only $19,240 annually and both parents doing the same, only $38,480. That’s only slightly over half of what is needed for a “modest yet adequate standard of living” in Somerset County. (For the calculated “Modest Yet Adequate Standard of Living” for each county on the Eastern Shore, see the next article.)

Does Congress really think that the current federal minimum wage is sufficient “to ensure that all work would be fairly rewarded and that regular employment would provide a decent quality of life”? Congress is ignoring their obligation towards the working families they represent. The EPI ( www.earn.us) comments that the “decline in value of the minimum wage has contributed to wage stagnation, and is directly responsible for widening inequality between low-and middle wage workers.”


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