Even with increase, minimum wage still doesn't add up

By Scott Alessi| comments | Print this pagePrint | Email this pageShare
blog Social Justice

On the surface, this sounds like good news: Rhode Island has increased its state minimum wage from $7.40 to $7.75--a full 50 cents higher than the federal minimum--to give a raise to the estimated 10,000 workers who earn the bare minimum within the state.

Those workers will surely appreciate their extra 35 cents an hour, or $14 a week if they have full-time, 40-hour jobs. But the truth is, even with the higher rate, living on minimum wage is still an incredible struggle.

Using the $7.75/hour rate as an example (and some states have established slightly higher minimums, with Washington state's $9.04 being the highest), that comes out to $310 for a 40-hour work week. That's $16,120 per year and about $1,343 per month--all before taxes (and I know that low income earners can get much of their tax dollars back at the end of the year, so for the sake of simplicity we'll just talk in gross earnings).

Even for a single person, $1,343 per month is going to be difficult to stretch out. When I was just starting my first job out of college and living in a suburban area, I spent months searching for a small, one bedroom apartment under $1,000 a month, and found many were well above that price. The national Center for Housing Policy reports the monthly median cost for renters is $830 and for home owners it is $1,037. So even at the median price, a minimum wage earner will spend 60 percent of their gross income just on housing, without even factoring in food, utilities, transportation, and other basic expenses.

But maybe you're lucky enough not to be the only wage earner in your household. Let's say your spouse is also a full-time worker earning the same minimum wage, making your household income $32,240 a year. But if you also have two children, your monthly costs probably included a larger (and more expensive) apartment or home, plus your children's food, clothing, daycare if they're too young for school, and other necessities.(For a great look at the sacrifices low-income earners have to make, try your hand at this interactive game created by a North Carolina-based charity).

But even though you're stretched very thin, your salary still puts you well above the federal poverty guidelines for a family of four, which is currently set at $23,050. In fact, you'd need to have five children before the government considered you to be "poor" on the minimum wage of $32,240.

Some politicians would rather we not use these kinds of "sob stories" when talking about the economy. But others, like Cardinal Timothy Dolan, understand just how difficult it is for people to survive on the current minimum wage. The bishops have continuously stressed the need for an economic policy that considers the needs of those who are struggling to make ends meet, and they're currently working on a document that applies Catholic teaching to work, poverty, and the "broken economy."

Hopefully the bishops are able to call attention to this issue and to rally Catholics behind the cause of supporting a just, living wage for all hard-working Americans.