Thursday, May 25, 2006

Melinda Fulmer: Living Wage?

Living wage: How about $9 an hour?
by Melinda Fulmer
MSN: Money

Donna Riley never liked taking handouts. The 49-year-old parking lot attendant had for years subsisted on disability payments for her injured back and $6-an-hour part-time work, eventually filing for bankruptcy in 2003 because of her mounting medical debts.

In 2004, when the city of Buffalo, N.Y., passed its last living-wage ordinance, raising city contractors' minimum pay to $9.03 plus benefits, she saw the opportunity to finally get off disability and work full time.

Now, Riley and her husband, who also works for a city parking company, make $6 more an hour combined -- enough to pay all of their bills and buy their first new car.

"Driving out of the car lot at the dealer with a brand new car was a total blow-away," Riley said. "Now we are working on buying a house."

With federal minimum wage stuck at $5.15 since 1997, many cities and states are taking matters in their own hands. They are enacting minimum wages for city contractors and, increasingly, mandatory minimums for all area businesses in an attempt to lift the fortunes of workers on the lowest rungs of the economic ladder.

The floor has sunk
As it stands now, a worker making the federal minimum wage would make $10,712 a year, or less than $1,000 above the 2006 poverty line of $9,800 for an individual.

"If the minimum wage had kept pace with inflation, it would be more like $9 right now. We've let the floor sink so low, it's historically less than we were paying back in the 1960s," said Jen Kern, director of the Association of Community Organizations for Reform Now (ACORN), an advocacy group that has led the "living-wage" movement.


Twenty states, the District of Columbia and 140 cities and counties have now voted in new living-wage laws. Washington state's minimum wage is $7.63 an hour, highest of any state. And several cities have set their own rates much, much higher: Santa Cruz, Calif., for example, requires that city contractors pay more than $12 an hour, plus health benefits. Lawrence, Kan., sets minimum pay for all workers in the city at 130% of the federal poverty threshold.

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