By Royce West
One of the unexpected outcomes of the two year plague that is COVID-19, was that minimum and low-wage workers were able to find their voices. And although some would adamantly block out reason to maintain the status quo, it is clear that increasing the federal and state minimum wage is past overdue.
Last year, after federal COVID relief efforts included additional payments to Americans who had been cutoff from jobs, the howls began that too many recipients of weekly $300 pandemic payments no longer wanted to work. The payments were on top of standard state unemployment benefits that have been available to separated workers since the program’s inception in 1938.
During the last quarter of 2021, the average weekly unemployment benefit paid in Texas was $407. The maximum amount that those eligible can receive is $549; all based on the recipient’s past earned wages. The minimum weekly benefit is $71.
Texas was among the first states to stop paying the extra $300 federal benefit before it was scheduled to expire last September. The thought of recipients living-it-up on $700 a week, or a little more than $2,800 a month per person, was too much for the Texas Association of Business to stomach. They urged Texas’ Governor Greg Abbott to shut it down. And he did. Keep those figures in mind.
On average, state unemployment benefits come to about $1,630 monthly. Where am I going with this? At $7.25 an hour, a minimum wage worker earns $290 a week before taxes. Even without pandemic supplements, unemployment recipients on average receive nearly $120 per week more than minimum wage workers get in gross pay!
That’s $1,160 per month (before taxes) that a person is supposed to live on, if this level of impoverishment can be described as “living.” This is before, not after paying for rent, food, transportation and clothing. And oh yes, kids cost money too! Even if there are two minimum wage workers in a household, it’s still $500 less monthly than one person received in combined pandemic unemployment benefits. So it makes sense that some minimum wage workers may not have been overly anxious to return to front line jobs where their lives could be at risk.
Let’s plug those wages into how much it costs to live in 2022. Those two minimum wage workers, even without kids, cannot afford to live in a 2-bedroom apartment in the Dallas area, which according to Rent.com, now costs an average $2,414 a month. It’s consistent with 2020 findings by the National Low-Income Housing Coalition that said a minimum wage worker cannot pay rent for a two-bedroom home in any state in the U.S.
Prices for new and used automobiles have both increased by thousands due to the COVID supply-chain, shortage of processing chips. Gas prices, even in petroleum-king Texas, hover above $3.00 per gallon; meaning a minimum $40 fill-up for most cars. And I don’t need to mention how much more we all now spend at the grocery store or the hike in fast food prices.
Three times in the past, I’ve authored bills that would have increased Texas’ minimum wage. None were granted a hearing. Two bills filed by House Democrats in 2021 failed to move – as predicted by Lt. Gov. Dan Patrick while speaking to the Texas Business Leadership Council a year ago. Their opposition is the same, raising the minimum wage will prove too costly for small businesses and will eventually cost workers their jobs. A new twist was added last year when a House member evoked the automation boogey-man, saying that raising the minimum wage would mean more self-serve kiosks in stores and fewer workers. Funny, that’s already happened. Yet, I’m unaware that owner’s savings have been shared with customers or remaining workers.
But outside Texas, some have seen the light. California will be the first state to raise the minimum wage to $15 an hour for businesses with more than 25 employees. As of 2021, 29 states, plus the District of Columbia, have raised their minimum wage above the federal $7.25 floor. Twenty-nine states have proposed incremental increases to at least $15 an hour. Nine states have agreed to index the minimum wage based on the cost of living, while 10 states’ minimum wage increases kicked-in in 2021 following earlier passage of voter initiatives or new legislation. Even Florida raised its minimum wage to $15 in 2020, supported by 60 percent of voters.
National retailers like Amazon, Target and Starbucks have raised minimum pay to $15 an hour. Costco pays $17. Walmart pays $12. Starting pay at Texas-based Buc-ee’s averages $14 an hour. Studies say increased pay produces better employee productivity and retention. A study by the Economic Policy Institute pointed to a 2020 survey of small business owners by CNBC which concluded that an increase in the minimum wage “would have no impact on their business.” But we’re stuck at $7.25.
Those who say no to increasing the minimum wage are woefully out of touch with those who work for it. Maybe they should be forced to walk in that man’s shoes to see just how uncomfortable they are.