NCPA - National Center for Policy Analysis

How About a $30 an Hour Minimum Wage?

January 17, 2002

A minimum wage hike will probably be included in the economic stimulus package currently being hammered out in Washington. Whatever the amount, living wage supporters will say it is not enough, and economists will ask, "Why not $30 an hour, or $15?"

But Holly Sklar, Laryssa Mykyta and Susan Wefald, authors of "Raise the Floor: Wages and Policies That Work for All of Us" (Ms. Foundation for Women), propose raising the minimum wage to $8 an hour -- supplemented with improved child care, health care, housing, and earned income tax credit policies, and raising the official poverty line to reflect a realistic cost of meeting minimum needs.

  • A full-time minimum wage worker earns just $10,712 per year -- not enough to support a family.
  • Adding another full-time minimum wage worker brings it to $21,424 per year, which exceeds the government's official poverty line of $17,463 for a two-parent-two-child household.
  • But according to the book's "Annual Minimum Needs Budget," a family of four realistically needs $36,835 for basics such as transportation, child care, rent, food, clothing, utilities and health care.
  • The authors argue that the current minimum wage of $5.15, adjusted for inflation, is 35 percent lower than 1968's minimum wage of $1.60 -- the last year, they say, in which it was possible to meet basic needs on a full-time minimum wage job.

"The point of a job is to keep you out of poverty," says Ms. Sklar. "If you have a full-time job, you should be able to make ends meet."

Source: Kristen Kauffman, "$8 per hour: Just enough?" Dallas Morning News, January 16, 2002.

 

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