So how many of you who are against corporate greed and want to see an increase in minimum wage spend money at places that pay staff minimum wage?
Really think about it for a moment. Are you contributing to this condition and complaining about it at the same time.
I work in affordable housing and the way I see it is that you pay for this cost of underpaying workers one way or another. Referencing the chart
The One posted about who is actually served by an increase in the minimum wage, it is clear that these are adults trying to make a living and still provide for their families (or even just themselves). These are people who pay for housing (among other things).
Households that fall below certain thresholds (namely those who cannot afford the housing in their community without paying more than 30% of their gross income – what we call “cost burdened”) often end up either living in housing that is subsidized or utilizing HUD vouchers. Sometimes both.
Subsidized rental housing is largely financed through the Low Income Housing Tax Credit program which forgoes tax income by giving private investors (primarily large corporations) write-offs for purchasing tax credits that help finance the deal (they write off their investment from the bottom line before filing). They get this tax break every year for the affordability period – usually 15 years for the tax investor.
On top of the tax credit program, most municipalities kick in some percentage of “gap” funding (because the tax credits themselves do not leverage enough to build these projects). These are largely tax dollars being used.
Then there are HUD vouchers which fill the gap between a household’s rent and what is deemed “affordable” based on their income. There are way fewer vouchers being used than there is demand. Our City has waiting lists of years to qualify.
In my view, underpaying workers just means they cannot meet their daily needs effectively (housing, food, etc.). Either you have employers pay a wage that allows them to do that, or you leverage taxes and create incentives elsewhere. However you slice it, we are ultimately just trying to make up the difference.
When people wax on about self-made people who started out poor and pulled themselves up, they are largely talking about a different time in our nation. The burden of housing costs alone is much greater than it was in the past. In 1950, the average home value was $7,354 whereas the average annual income was…wait for it…$3300 (remember, a lot more of our nation lived and worked on farms and in rural areas). In 2014, the average income is $51,017 and the average home price is $188,900. So, in this timeframe, housing increased from 2.2 times the average income to 3.7 times. Most households also need a car today (which costs an average of $31,252).
One of the key factors in the above figures is that the minimum wage has not kept pace with cost of living increases and has not even stayed level with itself as adjusted for inflation. In 1968, minimum wage was $1.60 which today is equivalent to $10.70. The minimum wage is currently $7.25.