Chicago Defender-Moving beyond the minimum wage
By Andrea L. Zopp
Remember your first job? If you’re like a lot of people, it was for work that paid minimum wage. It may not have been a huge sum, but it was a start, and that money felt good in your pocket at 17, or as a young adult working your way through college, or saving up for a car. I certainly remember my first job and how it helped me establish a good work ethic and aspire to eventually move beyond a minimum wage job.
A minimum wage is where many people start in the workforce, but it’s certainly not where they expect to end up at, say, age 35. Yet, with the lingering impact of the Great Recession, 35 is now the average age of minimum wage workers in America. According to research by the Economic Policy Institute in Washington, 88 percent of them are at least 20 years old, about half are in their 30s and more than a third are in their 40s. These days, the typical minimum wage worker is responsible for half of their household income.
I recently participated in Mayor Emanuel’s Minimum Wage Working Group comprised of public and private sector leaders who were asked to examine policy around raising Chicago’s minimum wage. We recommended that the mayor introduce an ordinance to raise the minimum wage in Chicago to $13 by 2018. The increase would mostly benefit low- and moderate-income families, as it should. While this is progress, in reality, $13 an hour still adds up to poverty.
As more and more Americans struggle to get by on the minimum wage, the nationwide debate continues over whether to raise it. President Obama has proposed an increase in the federal minimum wage from $7.25 to $10.10. In Illinois, lawmakers are mulling over a statewide increase from the current rate of $8.25 an hour. But neither the national nor the state’s proposed increases would make a dent in the number of Chicago’s working poor. This city is the only metropolitan area in Illinois that ranks above the national average in cost-of-living expenses.
Realizing this, Mayor Emanuel convened the working group. Increasing the minimum wage to $13 would affect about 410,000 workers and inject some $800 million into the local economy over four years. While the committee believes that raising the minimum wage is a necessity, we were equally committed to making recommendations that minimize risk to businesses. That’s why we proposed phasing in the increase over four years, to give small retailers and restaurateurs time to adjust.
We also were concerned about pricing youth out of the job market. We recognize that those early job experiences are critical to developing important life skills for teenagers. Also, most teens are not the primary wage earners in their family, so we recommended that employers be able to employ workers under 18 less than the minimum wage.
The Group also recommended the state expand the Earned Income Tax Credit for childless workers and double the portion of the Illinois EITC from 10 percent to 20 percent.
I applaud leaders for stepping up on this issue. But I want to be clear that raising the minimum wage in Chicago from $10 to $13 is a merely a start, not a fix for the widening income gap. In Chicago, 22.1 percent of residents live below the poverty level, according to the U.S. Census, compared to 13.7 percent in Illinois and 14.9 percent nationally. Even at $13 an hour, a minimum wage employee working a minimum of 35 hours a week would still earn under $25,000 a year working full time. With Americans spending a higher percentage of income on rent, an estimated 31 percent, that leaves very little to live on. We’ve got more work ahead of us.
If the objective is to move more people out of poverty, then the focus has to be on preparing people for jobs that pay a living wage, not the minimum. That’s especially true for minorities who continue to lose ground in the race for economic equality. For women, the situation is worse. Women make up half the U.S. population, but represent more than half of workers being paid minimum wage.
African Americans have more access to places to spend money, but lag seriously behind when it comes to access to jobs that pay a living wage. That’s why at the Chicago Urban League, our workforce development initiatives have always been geared toward creating pathways to careers that pay enough to support families and sustain communities. So, while the minimum wage should absolutely go up, we must all be mindful that taking small steps up from the wage bottom floor won’t reverse the cycle of poverty.
Andrea L. Zopp is president and CEO of the Chicago Urban League
Published in the Chicago Defender on July 30, 2014