Christensen 1

Sierra Christensen

ENGL 2010

26 April 2018

Minimum Wage, Minimum Poverty

Poverty is a widespread, harrowing issue, and our best tool to fight the rampant American

in-work poverty is through raising minimum wages and living wages. A minimum wage is the

lowest amount an employer can pay its employee, and has a great effect on the amount and depth

of in-work poverty in a nation. Unskilled workers who cannot afford to get the education needed

for a higher income still need to support themselves and their dependents. A living wage is the

hourly wage that it would take for a certain number of people (usually calculated between one

and five) to live just above the poverty line, which usually varies between states. The concept of

minimum wage is contested because some negative repercussions are believed to overpower the

overall benefit of minimum wages. Raising the minimum wage, to a living wage for adults, can

improve the quality of life of workers and their families in many ways, end the vicious cycle of

poverty, and help the millions of impoverished children who cannot help themselves.

Firstly, I would like to address the issue of bias, so I begin with a personal story. When I

was fourteen, my dad left my mom and has since brought her to divorce and custody courts

repeatedly, slamming her with tens of thousands of legal fees and attorney payments over the

past five years. My mom, siblings and I moved in with my mom’s parents, who had to take a

second mortgage out on their house to help pay for all the court and attorney bills.

Even though my mom found a decent job and was able to become slightly more self-

sufficient, her debt continued to rise and my little siblings and I could feel the rising pressure.
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Eventually, we had to get food stamps because my dad wasn’t paying child support and was

making everything as difficult and expensive as possible on our family. It is not physically

possible to communicate the stigmatized shame we felt when we had to ask the government

officials for food stamps, or the unconditional judgment from every cashier.

Throughout all of high school, I wasn’t able to participate in anything that cost more than

$10; including sports, clubs, dances, etc. I got a job the summer I turned fifteen so that my

siblings and I could participate in those activities. Doing so also provided me with the

opportunity to list some of those extracurriculars on my college applications.

My situation for the past five years has been terrible. However others’ are much, much

worse. I tell you this not to evoke pity or take a cheap-shot at your humanity, but only to show

where my personal experience fits into this argument, and to demonstrate that I know what a

small amount of poverty over a short period of time feels like intrinsically, especially from a

child’s perspective. Luckily we did not have to depend on a minimum wage income, but my

experience lead me to research what solutions could lead all those experiencing in-work poverty

to the better level of poverty that I experience.

Reduce In-work Poverty

My mothers’ situation is defined as in-work poverty. In-work poverty is when people

who have jobs are still in poverty. The current poverty line for a family of four is at $24,858

(United States, Congress, Wage and Hour Division). It is not possible to meet this line on a

minimum wage salary. A full-time minimum wage worker gets $14,500 for 40 hour weeks, 50

weeks a year, and according to economic reporter Michael Kinsley, most large corporations like

Walmart could pay their employees this much without losing large portions of profit (Kinsley).
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With higher education becoming more expensive and more commonly required for higher-wage

jobs, too many people and their families are left behind to perpetually struggle. My mother was

able to get a job above minimum wage since we were in a small town and she had some previous

office and bookkeeping experience. However without her past experience and my grandparents

to fall back on, we would have been forced to live in a women’s or family shelter—where we

would have joined 88,024 women and children worldwide who are found in shelters (“Global

Shelter Data”).

Ending the Cycle of Poverty

These women and children have entered what is called the cycle of poverty. It may sound

like a cliche name, however it is a devastating trap for literally millions of Americans. It can

begin in a variety of ways: a parent loses their job, the economy crashes, a health issue arises or a

natural disaster greatly affects a person’s means and livelihood, divorce (typically for women),

the death or imprisonment of a breadwinner in a family unit, or similar reasons.

If the head(s) of household have kids or dependents, then they are dragged into poverty as

well. Without adequate assistance from the government, extended family, or other sources, they

stay impoverished perpetually. In reality, the cycle of poverty means that those kids whose

parents were victimized by a negative event or even if they just “messed up” are raised for an

extended period of time near or below the poverty line. This robs those children of experiences

and resources available to those higher above the poverty line, like a square three meals a day,

not being constantly worried about your family’s economic well-being, school sports,

extracurricular programs, or even new clothes every year, or family vacations once in a while.
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From personal experience, I know the residual burden slammed onto kids when they are thrust

into poverty, and I am not the only one.

Impoverished Children

Children are a huge percentage of Americans in poverty, and these children are never to

blame for their family’s financial situation. Children cannot work or earn money for themselves,

though will sometimes try as I will discuss

later. As said by Mary Walsh, “...educating

and caring for low-income children can no

longer be considered a “side issue” in our

nation …” (Walsh 1). The last time

impoverished children were counted by the

National Center for Children in Poverty

which was in January of this year, the

number of children in poverty exceeded 28 million, which is about 41 percent of all American

children (Koball). Obviously, this issue is widespread in today’s society.

Now, these children are not being ignored by the government or other social outreaches,

but these services are meant to subsidize a lower class income, not to compensate for poverty.

For example, the USDA started a program in the summer of 2017 called the “Summer Food

Service Program” to provide over 200 million free meals to children under 18 while school is not

in session (“Summer Food Service Program”). Those older than 18 can also purchase those

meals for only a few dollars to eat a hot meal with their children.
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There are other similar programs for poor children, but all of these programs have

incredibly limiting stigmas surrounding them. To prove a point, no one actually knows how

many peers in their high school or grade school qualified and/or partook in free or reduced lunch,

even as someone who did make use of that program. No one ever talked about it and avoided

bringing it up in any conversation. As another example, college students joke about being broke

and showing up to any event where pizza is promised, but only because we have a very obvious

and excusable reason for being in financial instability.

If one’s financial status is anywhere close to poor, and one feels that it is their fault—then

said person will not share that fact. Whether it is a student getting free school lunches or another,

we are all afraid everyone will think less of us if they knew our socio-economic standing. We

fear that once someone realizes that we are actually in need, they will immediately look down

with disgust—because how dare we make bad financial decisions or buy a house when the

market could crash at any time or have so many kids just in case your husband gets bone cancer

and has their leg amputated. All of these examples are not made up, but reality for some of my

close family friends.

In the meantime, these children cannot do much to help the financial situation of their

families. One of the most common responses for urban children in poverty is to join a gang. An

expert on the relationship between impoverished children and crime, Robert Muller of the

Psychology Today ​journal came to the conclusion that poverty, growing up in broken homes, and

domestic violence are the top reasons for children joining gangs, as well as seeing the gang as a

replacement family that will better provide financial support and social status than their actual

family (Muller). Of course, growing up in poverty and joining a gang are both huge proponents
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to dropping out of high school and never receiving a higher education. This further perpetuates

the cycle of poverty, as any kids either impoverished children or more specifically

gang-members will also grow up in similar conditions.

Now one always hears about those stories where people escaped poverty with “some hard

work and determination”. While escaping poverty often requires these attributes, it is nigh

impossible without help from encouraging teachers and role models, and government assistance

in the form of food stamps, Pell grants, temporary assistance for needy families (TANF),

Medicare, government-subsidized child-care, housing, wages, and a number of other things.

When looking at the number of social programs available to those in poverty, and the

technically low percentage rates of Americans actually in poverty, it would seem logical that

poverty is to be shortly eradicated. Instead, as quoted in a New York Times article summarizing

all that has been done in the name of stopping poverty, Ronald Reagan said, “We fought a war

on poverty, and poverty won” (Edelman). There are many possible reasons for this failure, one

could be that our national economic situation is not capable of raising 40 million Americans

above poverty. Perhaps Americans are more focused on their individual rights than on those of

their fellow community members. Whatever the reason, the real argument is how to win this war

on poverty.

Implications and Counter-Arguments

Although it has innumerable benefits for millions of people, raising the minimum wage is

not a perfect solution and can have some negative effects. Those who oppose higher minimum

wages usually focus on the potential job losses, the possibility of corporations moving jobs out of

the United States, the closing of smaller business who won’t be able to adjust to the higher
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wages, and the loss of job growth in times to come. Most of these are likely, though not in the

devastating numbers opposers like to use.

As mentioned above, raising the minimum wage is not ideal, and there are many

implications involved, but it is easily proven that it is the best solution. Some jobs would be lost

from layoffs to some corporations may move their jobs out of the States. Opposers like to argue

that middle-class teens who live at home and have jobs for spending money will benefit from a

minimum wage increase more than adults. However, when compared to the many guaranteed

benefits to the millions of workers and their families, these possible drawbacks are rather

diminutive. For example, contrary to popular

belief only ten percent of all US

minimum-wage workers are teens, and the

average age of the minimum wage worker is

36 (DeSilver). Adjacent is a chart visualizing

the total number of minimum age workers in

the US by age. This shows that 90 percent of all minimum wage workers are nineteen or older,

which means the vast majority are likely in college, saving for college, in a family, or saving for

a family. It makes logical sense that these people would need to make more than $14,500 a year,

especially at full-time hours.

Several reliable sources have calculated the possible job losses from raising the minimum

wage. An article by Annie Lowrey, the current New York Times economic policy reporter

continues, summarized the Congressional Budget Offices’(CBO) study that was conducted after

President Obama proposed to raise the minimum wage in 2016. In its estimation of job losses,
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the CBO determined that about 0.3 percent (approximately 500,000) jobs would be lost from

raising the minimum wage and indexing it to inflation, if even that—the complete range was zero

to a million jobs lost (Lowrey). This means that the CBO, a trusted bipartisan governmental

group admits that even in the worst-case scenario, a million jobs are lost in order to support 41

million workers.

In response to companies moving their jobs out of the country—this is a common

“threat” from major companies that are already making billions a year in profits, who get tax cuts

from our government just for being in the US (Rogers). As dubious as this sounds, it is always

possible that some companies will follow through on this threat. However, it is only a possibility,

and when compared to the guaranteed positive results, there is less to fear and more to look

forward to.

Other proposed solutions are basic expansions of the social programs and safety nets

already offered, especially Earned Income Tax Credit or EITC. EITC is a refundable tax credit

low-wage families can receive when they file their tax returns and has run since 1975. However,

this system has a work disincentive, meaning that the more hours one works, the less one gets

paid (Quinn). Obviously, this program is not effective, since poverty has only increased since

1975 when the program was initiated, and this leaves minimum wage with the most benefits and

the fewest drawbacks of commonly proposed policy solutions to poverty.

Yet, the potential dangers of raising the minimum wage and installing a living wage are

one reason why the minimum wage has stayed so low. Combined with the gridlock that happens

in Congress every time minimum wage is discussed and the polarity of citizens who do and do

not support it: inaction worsens the situation every day.

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Proposal

From comprehensive research of studies, raw statistics and the results of post hoc social

experiments, a possible solution can be formed. This solution would be to induce a local living

wage. As said by Eric Rosten in an article describing and analyzing the effectiveness of living

wages, a local living wage is the wage determined to be the amount needed to sustain life just

above the poverty line for a certain area (Rosten). It would be determined at local levels, at the

State level at least, and perhaps county and/or city if requested by citizens. In order to prevent

the drastic discrepancy of price inflation and wage inflation, the local living wages would be

adjusted annually for inflation by the State departments of labor, county councils (if applicable),

or city councils.

In order to address the common concern of teenagers being paid more than is good for the

economy, there would be a built-in clause for age-based exceptions. This may sound

questionable, but the United Kingdom has a system of living wages and a national minimum

wage, based on ages that has worked for several years (Wills). On the United Kingdom’s

government website, the system is explained. If you are at school-leaving age (18-20) you

qualify for the national minimum

wage, meaning employers decide

your wages if you are younger than

that. According to the UK’s

government website, one receives

the national minimum wage until

they are 24, and when one turns 35 they qualify for the national living wage—the amount it takes
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to live decently in the UK besides in expensive London (“National Minimum Wage...”). This

system enables all parts of the

suggested proposal—the age-based

exceptions, being adjusted every

year for inflation, allowing for a

person who can’t afford higher

education to still be able to love

above poverty and allow for living

wages to be determined at a more

local level for more expensive areas.

It is important for the wages to be tied to inflation and adjusted every year because inflation has

been skyrocketing and wages have been left in the dust, as seen in the chart to the right.

Conclusion

Raising the minimum wage, specifically to a living wage for adults, can end the vicious

cycle of poverty, improve the quality of life of workers and their families in many ways, and

help the millions of impoverished children who cannot help themselves. In-work poverty is such

a rampant problem, and our best tool to fight it is through living wages. Despite minimum wages

and living wages being highly contested, the benefits of the proposal definitely outweigh the

costs when doing nothing is the only other option.

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Works Cited

DeSilver, Drew. “5 Facts about the Minimum Wage.” ​Pew Research Center​, Pew Research

Center, 4 Jan. 2017,

www.pewresearch.org/fact-tank/2017/01/04/5-facts-about-the-minimum-wage/.

Edelman, Peter. “Why Can't We End Poverty in America?” ​The New York Times​, The New York

Times, 28 July 2012, www.nytimes.com/2012/07/29/opinion/sunday/

why-cant-we-end-poverty-in-america.html.

“Global Shelter Data Count.” The Global Network of Women’s Shelters, Nov. 2015.

Kinsley​, Michael. "Walmart Can Solve the Inequality Problem." ​New Republic​, vol. 244,

no. 17, 21 Oct. 2013, pp. 12-14. EBSCO​host​, ​http://dist.lib.usu.edu/login?url=http://

search.ebscohost.com/login.aspx?direct=true&db=aph&AN=90544944&site=ehost-live.4

Koball, Heather, and Yang Jiang. “Basic Facts about Low-Income Children.”​National Center for

Children in Poverty​, 23 Jan. 2018, www.nccp.org/publications/pub_1194.html.

Lowrey, Annie. "Study Finds Mixed Effect in Changing Wage Law." New York Times, vol.

163, no. 56417, 19 Feb. 2014, pp. B1-B2. EBSCOhost, dist.lib.usu.edu/login?url=http://

search.ebscohost.com/login.aspx?direct=true&db=aph&AN=94487942&site=ehost-live.

Muller, Robert. “Poverty, Broken Homes, Violence: The Making of a Gang Member.”

Psychology Today​, Sussex Publishers, 24 Aug. 2013, www.psychologytoday.com/us/

blog/talking-about-trauma/201308/poverty-broken-homes-violence-the-making-gang-me

mber.

“National Minimum Wage and National Living Wage Rates.” ​GOV.UK​, United Kingdom,

www.gov.uk/national-minimum-wage-rates.
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Quinn, Joseph F. and Kevin E. Cahill. "The Relative Effectiveness of the Minimum Wage and

the Earned Income Tax Credit as Anti-Poverty Tools." ​Religions​, vol. 8, no. 4, Apr. 2017,

pp. 1-17. ​EBSCOhost​, doi:10.3390/rel8040069.

Rogers, Brishen. "Justice at Work: Minimum Wage Laws and Social Equality." Texas Law

Review, vol. 92, no. 6, May 2014, pp. 1543-1598. EBSCOhost, dist.lib.usu.edu/login?

url=http://search.ebscohost.com/login.aspx?direct=true&db=aph&AN=96071038&site=e

host-live

Roston, Eric, et al. "How Much Is a Living Wage?." Time, vol. 159, no. 14, 08 Apr. 2002, p. 52.

EBSCOhost, dist.lib.usu.edu/login?url=http://search.ebscohost.com/login.aspx?direct=

true&db=aph&AN=6417295&site=ehost-live.

“Summer Food Service Program.” ​Food and Nutrition Service​, United States Department of

Agriculture, 20 July 2017, www.fns.usda.gov/sfsp/summer-food-service-program.

United States, Congress, Wage and Hour Division. “History of Federal Minimum Wage Rates

Under the Fair Labor Standards Act, 1938 - 2009.” ​History of Federal Minimum Wage

Rates Under the Fair Labor Standards Act, 1938 - 2009​, United States Department of

Labor, 2010. www.dol.gov/whd/minwage/chart.htm.

Walsh​, Mary E. and Maria D. Theodorakakis. "The Impact of Economic Inequality on Children's

Development and Achievement." ​Religions​, vol. 8, no. 4, Apr. 2017, pp. 1-12.

EBSCO​host​, doi:10.3390/rel8040067.

Wills, Jane and Brian Linneker. "In-Work Poverty and the Living Wage in the United Kingdom:

A Geographical Perspective." ​Transactions of the Institute of British Geographers​, vol.

39, no. 2, Apr. 2014, pp. 182-194. EBSCO​host​, doi:10.1111/tran.12020.

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Image Citations

DeSilver, Drew. “5 Facts about the Minimum Wage.” ​Pew Research Center​, Pew Research

Center, 4 Jan. 2017,

www.pewresearch.org/fact-tank/2017/01/04/5-facts-about-the-minimum-wage/.

McMahon, Tim. “Cumulative Inflation 1913-2013.” ​Inflation Data​, Tim McMahon, 1 Apr. 2014,

inflationdata.com/Inflation/Inflation_Rate/Long_Term_Inflation.asp.

Kopczuk, et al. “Cumulative Change in Real Annual Wages, by Wage Group, 1979-2012.

”​Ballotpedia​, Ballotpedia, 19 July 2014,

ballotpedia.org/File:EPI_Change_in_Wages2014.png.

Kramer, Julie. “Summer Food Service from Project Bread.” ​BDCWire​, Boston , 5 Aug. 2015,

www.bdcwire.com/summer-food-service-from-project-bread/.