Wage hike might wean 19% from aid

Nearly a fifth of Utah workers would benefit from increasing the state's minimum wage to $7 per hour from $5.15, allowing many to wean themselves from public-assistance programs.

So say members of a governor-appointed panel studying living-wage issues who met Wednesday with members of the Legislature's Business and Labor Interim Committee.

Increasing the wage is not a recommendation of the Governor's Minimum Wage Working Group, said chairwoman Pamela Atkinson, noting that data are not complete at this point. If Utah were to raise wages, it would join 16 states that have set or are considering a minimum wage higher than the $5.15 federal level, which is also now under reconsideration.

Utah's minimum wage has been $5.15 for eight years. By law, Utah must at least match the federal rate.

A person getting $5.15 per hour is paid $10,700 per year. If that person is in a two-person household, that household is at only 80 percent of the federal poverty level, Atkinson said. And theoretically, the person could get more than $16,000 in benefits form public-assistance programs.

She said statistics show that 19,000 Utah wage-earners, or 2.8 percent of workers, earn $5.15 per hour or less, while 103,000, or 11 percent, make more than $7.15 per hour. Robyn Lipkowitz of Utah Issues said 19 percent of the Utah work force would be affected by a minimum-wage increase to $7 per hour.

Atkinson called the data "very revealing."

"It's pretty obvious as a result out there that many families who are earning minimum wage are often having two jobs just to barely keep going, and even with the two jobs, they tend to qualify for many of those public-assistance programs, so basically the taxpayers are supporting many of the families who are on minimum wage," Atkinson said.

Lipkowitz said many people believe teenagers are the typical low-wage earners, but nearly half are married people with children.

"It seems almost inconceivable a family can live on that ($10,700 annual) wage, when you think about a gallon of gas is going to cost $3 a gallon, and someone earning minimum wage would have to work about a full day to put gas in their car," she said. Doubters often have said job losses would result from such an increase. Atkinson said some states that have increase wages are doing well, while others still suffer from high unemployment with minimum wages of about $7.

Lipkowitz said many studies show that increases in minimum-wage levels actually boost the economy through better productivity, decreased employee absentee- ism and turnover, lower recruiting and training costs and improved morale.