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Minimum wage not enough to beat poverty, research says

Published: Saturday, June 9 2012 8:00 a.m. MDT

Scott G. Winterton, Deseret Morning News

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SALT LAKE CITY — For America's lowest-paid workers, working full-time isn't enough.

There isn't a state in the country where it is possible to afford a two-bedroom apartment at fair market rent working 40 hours a week at minimum wage, according to a report on rent affordability from the National Low Income Housing Coalition.

Even in Arkansas and West Virginia, which boast the nation's most affordable rent, a person with a minimum wage job would have to work 63 hours a week to rent a two-bedroom. In California, Maryland, Washington D.C., New Jersey and New York, a person would have to work at least 130 hours. In Hawaii, they'd have to work 175.

The federal minimum wage, which is $7.25, hasn't changed since 2009. In real terms, America's lowest-paid workers make less than they did in 1968, according to Remapping Debate. With an annual income of $15,080, a full-time minimum wage worker's salary is just under the 2012 federal poverty threshold of $15,130 for a family of two. It falls well below the poverty threshold for a family of three, which is $19,090.

"It’s clear that there’s a mismatch between the minimum wage and the cost of living (or at least a decent cost of living)," wrote New York Times editorial page editor Andrew Rosenthal in a recent blog post. "In New York, which is in the midst of a fight over raising the minimum wage, two individuals would need to work 68 hours a week each to manage the rent on a two-bedroom unit. If they have kids, the 70 percent of their paychecks left after rent won’t get them very far."

Saying the minimum wage hasn't kept pace with inflation, three U.S. Congressmen are pushing to raise the federal standard to $10 an hour, CBS News reported. Reps. John Conyers Jr., D-Mich.; Jesse Jackson Jr., D-Ill.; and Dennis Kucinich, D-Ohio, proposed a bill Wednesday that would boost the wage and require an annual increase tied to inflation.

“This legislation is long overdue and sorely needed," Conyers said. "More than 30 million Americans would see their wages increased, which would provide an immediate boost to the economy."

Some argue, though, that raising the minimum wage would actually hurt the poor.

"Few policies are as destructive as the minimum wage at keeping the young and least skilled out of the job market," The Wall Street Journal recently opined. "By setting an arbitrary wage floor, politicians make it impossible for businesses to hire people for many entry-level positions. The jobs simply disappear."

A minimum wage boost earlier this decade resulted in a roughly 20 percent cut in jobs for young, low-skilled workers, according to recent research from Cornell University. The National Restaurant Association, the U.S. Chamber of Commerce and the National Federation for Independent Business have all spoken out against a wage hike.

"Businesses who have lived with minimum-wage increases and economists who have studied the issue say minimum-wage hikes don’t increase spending, nor lower unemployment," wrote business journalist Elizabeth MacDonald in a editorial for Fox News. "On the contrary, businesses say they have to use more profits for pay, cutting into job creation, especially when the economy is stuck in neutral gear."

Two-thirds of Americans support raising the minimum wage, according to an October poll from the Public Religion Research Institute.

During his 2008 campaign, President Barack Obama promised to bump the minimum wage to $9.50 by 2011. Presidential hopeful Mitt Romney has said he believes the minimum wage should rise with inflation, but doesn't support raising it while unemployment is high.

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