States bypass Congress, hike minimum wage

By Carey Gillam

As Congress battles over whether or not to raise the minimum wage, Main Street America is moving on.

More than a dozen U.S. states, including Massachusetts, Michigan, Arkansas and Missouri, have either already raised the minimum wage in their states above the federal level of $5.15 an hour, or have ballot initiatives for a raise in the works for November elections.

"The minimum wage needs to go up. People can’t make a living, even on $8 an hour," said Denver Williams, director of operations for Labor Connections in Kansas City, where workers line up at dawn to be matched with employers paying $6.50 or more for warehouse work, lawn care and other unskilled labor.

The U.S. Senate this week is expected to take up a measure that would raise the $5.15-per-hour minimum wage in three 70-cent steps until it reaches $7.25 in mid-2009. The House of Representatives on Saturday approved the increase but tied it to a cut in estate taxes, which Democrats oppose.

Opposition among business groups to a minimum wage hike had been strong, and Republicans argued that raising wages would hurt business growth and limit job creation. But Democrats say it is long overdue and hope the partisan divisiveness on the issue will help them in November congressional election.


Recent polls show more than 80 percent of Americans favoring at least a $2-per-hour increase in the minimum wage, which has been unchanged at $5.15 an hour since 1997, equating to $10,700 a year for full-time work, well below the roughly $20,000 needed to keep a family of four above the federal poverty level.

The purchasing power of the minimum wage is estimated to be at its lowest level since 1955 when taking inflation into account. And economic analysts say a triple whammy of rising costs for health care, housing and transportation, combined with rising interest rates, and slow job growth is making minimum wage an issue that resonates with millions of low and middle-income Americans.

"The momentum has been building as the value of the minimum wage has been eroding," said Center for American Progress senior economist Christian Weller. "People feel it in their pocketbooks every day."

In Missouri, where an estimated 42,000 people, or 2.6 percent of all wage workers in the state, earn at or below the minimum wage, a group called "Give Missourians a Raise" has gathered more than 200,000 signatures – more than double the number needed – on a ballot petition that would not only raise the minimum wage to $6.50 an hour, but would also require an annual adjustment based on changes in the Consumer Price Index.

Along with Missouri, Colorado and Ohio are working to get minimum wage increases on the ballot in their states as well. Arkansas canceled its ballot initiative after the legislature voted an increase to $6.25 an hour to take effect October 1. Michigan likewise this year raised its wage level to $6.95.

"You just cannot make it on minimum wage," said Janice Keeton, a 46-year-old waitress in Cincinnati who says she relies on her husband’s Social Security benefits to make ends meet. "If it wasn’t for him, I wouldn’t be able to live."

In the United States, about 1.9 million workers earn at or below the minimum wage, with most of those people working in service-oriented jobs, such as waitresses, according to the U.S. Department of Labor, Bureau of Labor Statistics.

Democratic leaders and union groups say the figure is closer to 7 million.


The movement to boost pay for these people extends literally from coast to coast. Lawmakers in Massachusetts last month approved a bill to raise that state’s minimum wage to $8 from its current level of $6.75. Republican Gov. Mitt Romney vetoed the measure Friday but lawmakers unanimously overrode the veto Monday night.

And in California, the Democrat-controlled legislature and Republican Gov. Arnold Schwarzenegger have agreed the state’s current $6.75 minimum wage rate should be raised to $7.75 an hour, though they disagree on tying the rate to inflation.

In addition, petition drives have gotten wage increases slated as ballot initiatives this fall in Arizona, Montana, and Nevada. Maine, Delaware, and Rhode Island have already bumped up their wage levels this year, even though they already were above the federal minimum wage.

"It’s a step in the right direction," said Sara Howard, deputy director for the Service Employees International Union’s Missouri state council. "If you work hard you should be able to provide the basic needs for your family. You should be able to put food on the table and provide a roof over their heads."

(Additional reporting by Andrea Hopkins in Cincinnati)

© Reuters 2006