Poverty Doesn’t Create Jobs

Portrait photo of Eliot Seide The faces of the working poor are mothers and fathers struggling to feed, shelter, clothe and educate their children. They aren’t lazy folks grabbing government handouts. They’re proud parents who are doing their best, but still aren’t getting by. They can’t put healthy food on the table and they can’t afford to live in a safe neighborhood. That’s because their hard work isn’t recognized with a decent paycheck.

These low-wage workers deserve a raise. They help us raise our children, care for our aging parents, clean our offices, serve our food, and more. They help everybody else do their jobs, yet they don’t share in the prosperity they help create. Their professions have been undervalued for far too long and it’s time to make their work pay.

People earning the minimum wage or less tend to be women who work in non-union jobs outside Minnesota’s largest cities. Take family child care providers as an example. Nearly all of them are women. They earn $2.83 an hour, on average in Greater Minnesota, according to the Department of Human Services. What the state pays providers to care for poor children isn’t enough for them to support their own kids. They could ask parents to pay more, but the working poor can’t afford a penny more.

Efforts to lift the wage floor are finally gaining steam at the state Capitol. Minnesota’s minimum wage now stands at $6.15 an hour. We’re one of only four states with a wage less than the $7.25 federal minimum. Polls show that a majority of Minnesotans support a wage hike and several proposals at the Legislature would raise the floor to amounts ranging from $7.25 to $10.58.

If Minnesota’s minimum wage had kept pace with inflation, it would now be $10.58 an hour. Nearly 500,000 jobs in Minnesota pay less than that. If half a million workers got a raise and earned $10.58 an hour, about $300 million a year would be pumped into Minnesota’s economy. That consumer spending would add enough revenue to state coffers to help 6,000 families get the child care subsidies they need to go to work. That would be a win-win for the working class – and it wouldn’t cost taxpayers one cent!

Many profitable employers argue that higher labor costs and higher taxes will kill jobs and diminish our state’s competitive edge. There’s no evidence to support that. What works are investments that grow the middle class. Putting money in the pockets of working families keeps the economy healthy for all of us, including those at the top.

Remember the myth of trickle-down economics? The theory was if government takes care of the top 1 percent, the rest of us will be okay, too. History has disproven that theory – prosperity hasn’t trickled down. Wages have stagnated and economic inequality has grown over the last four decades. Why? Unionization declined. As the economy became globalized, we didn’t invest in skills and education. Skilled jobs went offshore and low-wage work exploded here at home. We cannot continue to act as if all jobs are equal, regardless of their quality.

To understand the problem, imagine that the American Dream is on the third floor of the Mall of America. Rich people have an elevator with an easy ride to the top. The middle class has a long rope and a tough climb to get there. And the working poor have a short ladder that will never reach the dream.

We need an elevator that gives everyone a fair shot at the American Dream. Raising the minimum wage is the surest way to put families on the elevator to the middle class. To lift everyone, a good public education and a good union job are the real tickets to shared prosperity.

Eliot Seide is executive director of AFSCME Council 5, a union of 43,000 workers who advocate for excellence in public services, dignity in the workplace, and opportunity and prosperity for all working families.

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