The least expensive apartment available in The Times classified pages last week was a one-bedroom upstairs unit in Streator with a stove and refrigerator included. It rents for $475 a month, plus a deposit, for an annual total of $6,175.
The minimum wage in Illinois is, at present, $8.25 per hour, which works out to $330 per week for someone who works 40 hours a week, or $17,160 per year. Renting that apartment for one year eats up almost 36 percent of that worker’s gross income.
For that living cost to represent only 30 percent of gross income, the person would need to earn $20,550, about $9.88 per hour.
If going by the rule that housing costs plus all debt shouldn’t exceed 43 percent of monthly income, rent plus deposit plus any loans would have to top out at $7,572.30 per year, leaving $1,397.30, or about $116.44 for monthly car payments.
This math omits the electric bill, which isn’t included in the advertised rent, or a cellphone or internet access. Nor gas or insurance on the car or renter’s insurance or the patient obligation for any medical care, or food, toiletries or clothing. Or taxes. Factoring all that, it’s probably safe to rule out any leftover funds for things like community college tuition or saving for the next security deposit or car.
This, of course, is just fine for the folks who say the minimum wage isn’t intended to be a living wage, but entry-level pay for part-timers, high schoolers and unskilled workers. Accepting that position requires ignoring the actual history of minimum wage laws in America, enacted under president Franklin Roosevelt in 1938 against heavy opposition from multiple flanks.
“No business which depends for existence on paying less than living wages to its workers has any right to continue in this country,” Roosevelt said in a 1933 statement on the National Industrial Recovery Act. “By living wages, I mean more than a bare subsistence level — I mean the wages of a decent living.”
The notion of a decent living is highly subjective, but being able to afford a roof over your head and food on your table seems a good place to start. It’s been 81 years since we’ve been forcing companies to meet a basic standard —�granting exemptions along the way — and the fight against a recently approved minimum wage increase schedule in Illinois shows government can’t rest on the issue.
If FDR’s lofty oration isn’t convincing, consider Chris Rock’s line from a 1991 “Saturday Night Live” appearance:
“Do you know what that means when somebody pays you minimum wage? You know what your boss was trying to say? It’s like, ‘Hey if I could pay you less, I would, but it’s against the law.’ ”
Businesses pay as little as possible for labor for the same practical reasons they charge as much as the market will bear for goods and services. Most consumers are price conscious and many grumble when costs increase. Rare is the person who likes to be told what to do with their money.
For the vast majority of workers, market forces dictate salary and not the legal minimum. But the entire structure rests on that one foundation, and when lawmakers hold firm on what constitutes a living wage, the window shifts for all sorts of people who don’t take home a large enough share of the value they produce for their employers.
People who earn more money can spend more money. People who earn less money need help from the government just to get by, whether that be assistance with food or rent or heating bills or medical coverage. Allowing companies to continue to underpay employees relative to the cost of living simply shifts the burden of providing for those workers onto the broader national tax base.
The minimum wage in Illinois goes up to $9.25 per hour on Jan. 1, then to $10 on July 1, 2020, and $1 per hour the first of each year until it hits $15 per hour in 2025, at which point future increase are tied to the consumer price index.
Some employers will lay off workers. Some will reduce hours. Some will pass on increased payroll costs to customers. Some will absorb the higher minimums by accepting smaller profit margins.
No one should pretend these increases will have zero negative effect on employment. But neither should we accept the lie that it’s better to allow such low wages while subsidizing the working poor through tax dollars.
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March 12, 2019 at 10:05PM