Jefferson City, MO 70° View Live Radar Fri H 84° L 60° Sat H 83° L 60° Sun H 86° L 68° Weather Sponsored By:

Experts hope minimum wage increase will make a living wage more attainable

Experts hope minimum wage increase will make a living wage more attainable

February 11th, 2019 by Philip Joens in Business

Anthony Thomas walked into the room he shares with five other people at The Salvation Army Shelter of Hope in late December and beamed with pride.

The bed and everything tucked neatly underneath was his — in a world where he lacks his own place.

“We all have our own little quarters,” Thomas said. “It’s better than sleeping out there on the streets.”

Missouri’s minimum wage increased from $7.85 per hour to $8.60 per hour Jan. 1. As Thomas, 52, pieces his life back together, he and other advocates for the working poor hope a minimum wage increase approved by voters in November will help working residents earn a living wage.

Still, for Jefferson City residents lacking an education and formal training, advocates for the poor say a living wage may remain out of reach in the modern economy.

A Chicago native, Thomas moved to Central Missouri about three years ago from St. Louis. At first, he found work placing hoods on electrical transformers at ABB’s Jefferson City factory. The job paid $13 per hour.

But after nine months, the company fired him for repeatedly being late to work, he said. Thomas did not own a car and said he found it hard to find a ride from Fulton to the factory at 500 Missouri 94.

Thomas spent about 90 days working for Taco Bell in Fulton before moving to Jefferson City. In February 2018, he moved into the shelter and then found a part-time job in April as a cook at Captain D’s Seafood. Overall, he likes his job and said the restaurant’s owners treat him fairly.

One day, he dreams of becoming a manager and moving out of the shelter.

Before the minimum wage increase, Thomas took home only about $280 per week after taxes, he said in late December. At the time, he usually worked 18-25 hours per week, but sometimes got lucky and worked 30-35 hours.

In late January, Thomas said he still makes about $280 per week after taxes and his hours have varied more since the minimum wage increase went into effect.

As a divorcé with grown children, Thomas considers his needs pretty basic. All he needs is housing, transportation toiletries and food, he said.

Usually, he receives his schedule five days in advance. A shifting work schedule can make it hard to budget and bank money to save for an apartment, he said. During slow periods, his bosses sometimes asks him to clock out early, making him miss out on expected income.

“That’s a stumbling block too,” he said slowly.

Thomas cannot afford a car, so usually he walks the 2-mile trek each way to Captain D’s. On some days, he gets rides home from co-workers.

Shelter of Hope Director Brian Vogeler said the shelter at times gives residents bus passes when money allows.

When the shelter does not have passes and Thomas does not want to walk, he pays $1 each way to take JeffTran to work. On his income, the small expenditure can feel big, Thomas said.

“I might do that for three days, so that’s $6,” he said.

Without reliable transportation, Thomas said he finds it hard to look for jobs that pay more. For now, the shelter offers him a lifeline and gives him a bed, a hot shower and food.

One adult working full-time needs to earn $10.45 per hour in Jefferson City to earn a living wage, according to the Massachusetts Institute of Technology. As Thomas works his way toward that goal, he said he’s thankful for what he has right now.

“It’s not easy,” he said. “I just thank God I’m not addicted to drugs or alcohol, so my good days outweigh my bad.”

An out-of-reach wage

MIT defines a living wage as the amount needed to cover the cost of basic necessities. Last year, single adults in Jefferson City needed to earn $10.08 per hour to earn a living wage, according to MIT. In January, MIT updated the calculator to reflect new data from its data sources, MIT economics professor Amy Glasmeier said.

The changes do not reflect the recent increase to Missouri’s minimum wage, Glasmeier said. Generally living wage calculations only decrease after disasters or the loss of major employers.

“It rarely (goes down), but I can’t tell you that it wouldn’t do that,” she said.

Still, the updates reflect the treadmill on which on people on society’s margins live. With small gains also often come new small obstacles.

In Jefferson City, the hourly wage each parent in a two-parent household raising one child needs to make to earn a living wage increased from $11.94 per hour to $12.41 per hour, according to MIT. Each parent in a two-parent household with two children now must make $14.64 per hour to cover basic costs, up from $14.38 per hour last year.

In two-parent homes with three children, each parent must make $16.93 per hour, up from $16.58 per hour last year.

Single parents pay a steep penalty.

Last year, single parents raising one child needed to earn a minimum of $22.10 per hour to earn a living wage in Jefferson City. Now single parents with one child must make $22.46 per hour.

A single parent with two children needs to earn $26.53 per hour, almost $1 more than last year’s comparable figure of $25.58 per hour. A single parent with three children must now make $33.04 per hour, up from $32.51 per hour last year.

From 2013-17, Jefferson City residents had a median income of $54,216 per year, or $26.07 per hour for a person working 40 hours per week, according to the U.S. Census Bureau. In 2017, Jefferson City, residents had a mean income of $27,559, or $13.25 per hour for a person working 40 hours per week, according to the Census Bureau.

Thomas wants to be optimistic about his situation. The shelter provides him with a bed, food, a bathroom and other basic necessities.

“This is a great place to be,” Thomas said, “for a person just trying to get back on the right path to life.”

Still, being unable to earn a living wage takes a toll on him. At times since entering the shelter, he has battled depression and even thoughts of suicide.

“Sometimes I feel worthless,” he said of looking for full-time work. “Why should I even try to do all this?”

Vogeler, the shelter director, said all of the shelter’s clients struggle to earn a living wage because they lack the training necessary to get higher-paying jobs. Living on the margins causes other mental health effects because of the way humans tie their livelihoods to their identities, he said.

“Employment is probably more important than most people think,” Vogeler said. “It’s good for depression; it’s good for anxiety.”

Kristen Hilty serves as the executive director of Common Ground, an organization which offers Jefferson City families temporary financial assistance and access to healthy food.

Living wages also sit far out of reach for Common Ground’s clients, Hilty said.

“Even a two-adult family, it’s going to be hard,” she said. “There are some types of (factory) positions that hire $12-$14 (per hour), and certainly not if you work at Target or Walmart.”

Central Missouri Community Action provides assistance to families near the poverty line across Mid-Missouri. CMCA Executive Director Darin Preis said many of the nonprofit’s clients earn $9-$10 per hour.

“They’re making above minimum wage, but they’re still not making it,” Preis said.

Missouri’s unemployment rate sat at just 3 percent in November. In reality, the unemployment rate may be much higher, he cautioned.

In November, the state’s U-6 unemployment rate — a measure of unemployment that includes discouraged workers and people like Thomas who work part-time for economic reasons — was 7.2 percent.

Most workers, including Thomas, still coming back into the labor force lack college educations and work mostly in service or retail jobs, Preis said.

“Generally, they’re folks that have been in and out of jobs,” he said. “We’re really struggling to get quality employees.”

A labor reform

The idea of a minimum wage in the Western world traces its roots back to 1894 in New Zealand. The United States created a nationwide minimum wage of 25 cents per hour with the Fair Labor and Standards Act of 1938. Congress passed the bill intending to improve horrid conditions for working-poor U.S. residents and abolishing child labor, according to a history of the bill’s passage on the U.S. Department of Labor’s website.

At the time, the minimum wage was designed to set a fair wage and stop companies from undercutting wages and stretching hours for the country’s poorest residents, according to the Labor Department’s history. Seen in that light, the minimum wage was not designed to be a living wage, said Joseph Haslag, a University of Missouri economics professor.

“Living wage has a slightly more progressive objective associated with it,” Haslag said.

In November, voters approved raising Missouri’s minimum wage to $12 per hour over the next five years, in part because proponents argued doing so would help make the minimum wage a living wage.

The first raise took effect Jan. 1, increasing the minimum wage from $7.85 per hour to $8.60 per hour. Over the next four years, the minimum wage will jump by 85 cents per year until it hits $12 per hour.

Preis, Hilty and Thomas hope that will narrow the gap between the living wage and minimum wage.

Trade-offs will be made by increasing the minimum wage, Haslag said.

Generally, education is the best way to raise people out of poverty, he said. Economists also see an expansion of the federal Earned Income Tax Credit, which provides a tax credit to working families making less than certain thresholds, as a better tool to fighting poverty than setting artificial barriers in the labor market.

Raising the minimum wage likely will help people like Thomas, but it also likely will hurt many people like him, Haslag said.

“Some people are going to see an improvement in their economic outcomes,” he said. “But there are going to be some people who simply can’t produce value of goods and services equal to $12 per hour. Those folks are going to have a harder time remaining employed.”

Eighty years after the Fair Labor and Standards Act passed, some companies still take advantage of poor workers, Preis said. Still, he said he is encouraged by efforts to continue to improve conditions for low-wage workers.

“At least we’re trying to be above board about paying people fair wages,” Preis said. “We’re trying to improve the disparity between black and white wages, between men and women.”

Any plan to help low-wage earners will take many solutions, Haslag said.

“There’s no one simple solution that’s going to just solve all the problems we have with people earning too little income,” Haslag said. “We’re all going to have to work at it.”