The Politics of Poverty

Ideas and analysis from Oxfam America's policy experts

US child poverty rates are shameful – would raising the minimum wage help?

Posted by
Oxfam and EPI found that nationwide, more than 15 million children live in households that depend on the earnings of low-wage workers. In some Congressional districts, as many as 75,000 children—more than two out of five children in these districts—live in low-wage families. Learn more: http://bit.ly/1Ap8Clo

New report shows that more than a quarter of the nation’s children live in households supported by low-wage workers.

Jasmin Gracia works 35 hours a week in a New York City restaurant for $8.50 an hour. With no tips nor benefits, the 27-year-old tries to support her four-year-old daughter and unborn child. She lives in a subsidized apartment in the Bronx with her partner, his cousin, and grandmother. Like many working parents in the US, she relies on food stamps to keep her family fed.

Gracia is just one of a 25 million Americans who would get a modest raise if Congress raised the federal minimum wage from $7.25 per hour—where it’s been stuck since 2007—to $10.10.

Congress’ refusal to raise the minimum wage not only hurts low-wage workers like Ms. Gracia but also a staggering 60.6 million people including the workers and their family members, according to new research on the working poor in the US released this week by Oxfam America and the Economic Policy Institute (EPI).

The vast majority of low-wage workers: Not teenagers

Jasmin Gracia, a 27-year-old mother and NYC restaurant worker, speaks at an Oxfam-hosted event on rights for low-wage workers in Washington, DC on December 3rd. Photo: Oxfam America.

Despite the lingering stereotype that low-wage workers are teenagers, 88 percent are not. In fact, the report shows that more than 35 percent of low-wage workers, or 9 million of them, are parents. These six million mothers and three million fathers not only care for 15.4 million children, who generally have little chance to move up the social ladder, but these workers are the primary breadwinners in families that include millions of spouses, aging parents, siblings, and other relatives.

My low income and having no savings put a whole lot of stresses on my family,” Ms. Gracia said. We want to move to our own apartment and get married, but we can’t afford either.”

Low-wage work: Not a second-income

The research also debunked the myth that low-wage workers provide second incomes in middle- or upper-income families.Oxfam and EPI found that workers earning the minimum wage contribute well over half (56.4 per cent) of their families’ income. To be able to survive, millions depend on government benefits like food stamps, turn to food banks and pawn shops, or go deep into debt, typically using payday lenders that charge triple-digit interest rates.

The purchasing power of the minimum wage has been eroding for decades,” said David Cooper, economic analyst at the Economic Policy Institute, and is more than 30 percent less below what it was in 1968 in inflation-adjusted dollars.

Although some contend that raising wages would cost jobs, most studies find virtually no net job loss from the minimum wage increase. Rather, some studies have found that states and localities that have raised their minimum wage have experienced stronger-than-average job growth. In fact, raising the minimum wage would both pump more than $32 billion in spending power back into the economy and reduce the cost of taxpayer-funded benefits.

Low-wage work: Supporting our nation’s children

The study burrowed down to look at data in each of the nation’s 435 congressional districts (and Washington, DC). While the districts with the highest proportion of children living in low-wage families are in East Los Angeles and coastal Texas, every region of the country has at least one district where more than one-third of children and other members of working families are in households with low-wage workers (see above).

The US Census reporting that one in five American children live in poverty—a higher proportion than in almost every other developed country according to UNICEF. Raising the minimum wage would not only benefit workers but would help reduce our nations’ tragically-high child poverty rate.

Millions of workers and their families are struggling to make ends meet because we’ve let the minimum wage stagnate for too long,” said Cooper.

“There’s no need for it – we can boost family incomes for a quarter of the people in working families nationwide if Congress acts.”

Share this story:

Join the conversation

  1. kzpyodchaye@gmail.com'Cristina

    Terence – are you claiming that the drop in unlmmeoypent was related to the raise in minimum wage? I think you’ll find if it wasn’t, the drop would have been greater. Besides, claiming NZ unlmmeoypent rates as evidence is a bad idea given the rise in people on various other types of benefit, not to mention dubious ‘educational’ schemes which also drive the rates down.In fact, you could probably disregard the, what is it, 1/5th of the population who work for the Government? After all, that’s just a more rarified form of welfare :-)Genius – who died & made you God? What right have you, or anyone else, to dictate by force what kind of economy NZ develops? Moreover, what gives you the idea that it’s possible to control economic development? Again, read Ludwig von Mises, who proved that central economic control is in fact impossible, due mostly to the ammount of data involved.Millsy – mmmm, smell the burning strawman.

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *