Idaho is a minimum wage state. Only Tennessee has a higher percentage of workers who earn at or below the federal minimum.
Fortunately, the Idaho Legislature has a chance to change that by passing a bill that will raise the state minimum wage to $9.25 per hour by 2016.
Let’s look at some facts:
- Workers in the bottom 20 percent of wage earners receive over $45 billion in government assistance each year.
- About half of all workers in the bottom 20 percent of wage earners (roughly anyone earning less than $10.10) receive public assistance.
- If the minimum wage were raised to $10.10, more than 1.7 million American workers would no longer rely on public assistance programs.
In other words, if you want to get people off public assistance, a minimum wage increase is a great tool.
Just to put that in perspective, Walmart workers in Idaho are estimated to receive $31 million in public benefits every year. Nationally that number is $6.2 billion. It’s a phenomenal subsidy to just one company.
Because taxpayers are already picking up the tab for low-wage workers, it only make sense to increase the incentive to work while reducing the need for pubic assistance at the same time.
Who would we be helping?
Minimum wage workers are NOT primarily teenagers. In fact, teenagers comprise less than a quarter of all minimum wage workers.
How much does a full-time minimum wage worker make?Try budgeting rent, a car payment, insurance, food, electricity, phone, gas, health insurance, taxes and extraneous expenses on $1,256 a month. It’s nearly impossible.
Now add a child. It can’t be done.
These are not entry jobs that lead to lucrative careers
Minimum wage isn’t just a starting wage. More than half of minimum wage workers have a high school diploma or less. The notion that these people are on the fast track to lucrative jobs is wishful thinking.
But it will kill Idaho’s economy
Idaho’s neighbors of Washington, Oregon and Nevada have raised the minimum wage. Washington’s is the highest in the nation at $9.47 per hour. None of those states have fallen into an economic morass. In fact, the Department of Labor Statistics showed states that raised their minimum wage grew faster than those that did not.
It’s about helping those who need help
Because the minimum wage is not indexed to inflation, the purchasing power of a minimum wage worker is approaching an all-time low. In the meantime, the age of the average minimum wage worker has gone up. The end result is a growing population of people who rely on public assistance to make ends meet. By raising the minimum wage, Idaho can incentivize work while easing reliance on public assistance.
It’s not going to solve all of Idaho’s problems, but it would be an encouraging step forward.