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Workers' Fate Is in Governor's Hands

Schwarzenegger can set a model for the U.S. by signing a minimum-wage boost.

September 03, 2004|Beth Shulman | Beth Shulman, author of "The Betrayal of Work" (The New Press, 2003), is affiliated with the Russell Sage Foundation's Future of Work program.

How prescient "The Terminator" was when the movie's tagline announced, "Your future is in his hands." Gov. Arnold Schwarzenegger truly can affect the fate of millions of people.

The California Legislature has passed a bill that would increase the state's minimum wage from $6.75 an hour to $7.25 on July 1, 2005, and to $7.75 on July 1, 2006. The proposed increase would still keep people who work for the minimum wage and their families under the federal poverty line. But it would set a standard for the rest of the country to follow. Schwarzenegger should sign the bill without hesitation.

The Census Bureau has released the 2003 U.S. Income, Poverty and Health Insurance Report, setting the poverty threshold for a family of four at $18,810 a year ($9 an hour).

Working people in California, with its astronomical housing costs, can barely survive, let alone raise a family, on that salary. One in four jobs in the United States today pays less than $8.70 an hour, but it takes nearly double that for a family to provide for its basic needs. Increasing the minimum wage would offer working men and women at least a fighting chance to provide for themselves and their families in California.

The governor's spokesperson said his decision would depend on how the increase would affect job creation in California. But we already know the answer. Contrary to the Republicans' party line for resisting the increase -- that businesses would flee the state or slash jobs -- studies have shown that raising the minimum wage actually encourages job growth.

The Fiscal Policy Institute, a Washington think tank, found that from January 1998 to January 2004, employment rose 6.2% in the 12 states with minimum wages higher than the federal standard of $5.15, compared with just a 4.1% increase in states that kept to the federal level.

A study by the Economic Policy Institute, as well as statewide studies in Pennsylvania and Oregon, shows no statistically significant job losses resulting from the 1996-97 federal minimum wage increase. What's more, the same studies indicate that increasing the minimum wage has direct economic benefits.

Increasing the earning power and thus the buying power of low-wage workers allows them to better contribute to the economy. But failing to raise the minimum wage fuels a vicious cycle, as low-wage workers fall progressively behind, creating an even wider chasm between them and other workers.

According to new research from the Russell Sage Foundation, once this divide becomes entrenched, it becomes increasingly difficult for low-wage workers and their families to break free.

Falling incomes, for example, make it harder for families to gain access to high-quality child care or adequately funded public schools. They are unable to afford tutoring, college exam prep courses or four-year college educations, which, the study indicates, represent one of the best hopes of lifting low-wage workers out of poverty.

Every day in California, low-wage workers, such as security guards, nursing home workers and teaching assistants, make our comfortable lives possible. How are these hard-working men and women rewarded? They aren't. For the third straight year, the number of Americans living in poverty and without health insurance has increased. In California, there were 4.6 million people (13.4% of all Californians) living in poverty in 2003; the national average was 12.7%. Child poverty in the state also rose, to 1.7 million poor children (18.6% of all of California's children); the national average was 17.6%.

We have turned working families into the new poor. It is a blight on our democracy that in the richest country in the world, workers cannot support themselves and their families. Raising the minimum wage is the first step toward undoing this damage. Polls show that 70% of Californians support this measure.

As California goes, so goes the nation. Gov. Schwarzenegger, do the right thing and lead your state and the nation in rewarding hard work by raising the minimum wage.


The article states inaccurately the "number of Americans" living in poverty and without health insurance. The figures, based on Census Bureau data, refer to the number of people in America and do not specify whether they are citizens.

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