JOBS NOW report shows how far Minnesotans’ wages go

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The state’s minimum wage – even if increased to $7.75 per hour – is not nearly enough to support a single adult, let alone a family.

With the federal minimum wage set to overtake Minnesota’s by this time next year, state lawmakers are feeling pressure to bump the state’s minimum wage from $6.15 to $7.75 per hour. But how far would a $1.60-per-hour increase go towards ending poverty?

That’s one question considered in the JOBS NOW Coalition’s most recent report, “The Cost of Living in Minnesota.” The report is a stark comparison of what families need to survive in the state’s economy and the availability of jobs that enable families to meet those needs.

The findings are troubling, especially for rural Minnesotans.

The report shows that the state’s minimum wage – even if increased to $7.75 per hour – is not nearly enough to support a single adult, let alone a family. What’s more, a growing share of Minnesota’s jobs – more than 1 million currently – do not pay wages sufficient to meet a family’s most basic needs.

Doing the numbers
What are those “basic” needs? The JOBS NOW report assesses the cost of food, housing, health care, transportation, child care, clothing and taxes in various regions of the state, and uses that data to develop “budgets” for various family models – single-parent, two-parent, etc.

These are no-frills budgets. JOBS NOW models its food budget, for example, on the U.S. Department of Agriculture’s Low-Cost family food plan. None of the family budgets includes money for “luxuries” like higher education, retirement savings, vacations or restaurant meals.

“There is no fun in these budgets,” said Kevin Ristau, education director of JOBS NOW and a co-author of the report. “They are frighteningly austere. Ordinary things that even lower-middle class people try to do – rent a movie or something – there are no allowances made for them.”

Ristau’s findings include the following:
• The average single Minnesotan with no children must earn $23,414 annually to meet basic needs. That’s $11.26 per hour, given a 40-hour work week.
• For a two-parent family of four in which both parents work, the cost rises to $50,928, or $12.24 per hour for each worker.
• A single parent raising one child needs $34,911 annually to meet the most basic needs. That works out to $16.78 per hour.

How many of Minnesota’s jobs that pay wages sufficient to meet those “basic-needs” budgets?

According to the JOBS NOW report:
• About one-third of the state’s jobs do not pay the $11.26 per hour necessary to support a single Minnesotan.
• 37 percent do not pay the $12.24 per hour necessary to support a two-parent, two-worker family of four.
• 56 percent do not pay the $16.78 per hour necessary to support a single parent of one.

Rural areas lag behind
The numbers are even more troubling outside the metro area, according to Ristau. “Wage levels outside the metro area are so much lower,” he said. “So many of these greater-Minnesota regions just have so many lousy jobs.

“I’m convinced that the biggest reason for that is that a really large share of the jobs that are still being created – and not as many are being created – are low-wage jobs. There hasn’t been much growth in the number of jobs since Bush became president, but what is being created, or what’s being kept, is mostly on the low end.”

For the first time ever, in fact, more than half a million Minnesota jobs pay less than $9.27 per hour, which is what the minimum wage would be had it kept pace with inflation since 1960. Outside the metro area, one in four jobs pays less than $9.27.

“Once upon a time, the minimum wage was a decent floor on our wages,” Ristau said. “The entire wage structure, at least the lower half of the wage structure, would be dramatically altered if we’d only bothered to keep it up, if the minimum wage hadn’t become a political football in the 1980s.”

Boosting the minimum wage to $7.75, then, is a step toward restoring the lost purchasing power the minimum wage – and with it, rural Minnesota – has suffered over the past four decades.

“By raising the floor, you ensure that all sorts of jobs that are barely good enough to support a family now might cross over that threshold,” Ristau said.

“Do we raise expectation or continue to lower them? If we are going to continue to lower them, then that means we’re supposed to be resigned to these hopelessly low-wage structures in rural America, and no one will make any effort to improve it at all.”

To read “The Cost of Living in Minnesota” online, go to www.jobsnowcoalition.org.

Michael Moore edits The Union Advocate, the official publication of the St. Paul Trades & Labor Assembly. Visit the Assembly’s website at www.stpaulunions.org