Texas' Minimum Wage
June 28, 2017Share:
With the Republicans owning our government top to bottom, at least in Texas, it seems the discussion of raising the minimum wage has disappeared from the public discourse—but the current rate remains a day-to-day millstone for many of our fellow citizens.
When the 2015 Texas Legislature turned down a modest raise from $7.25 (set 8 years ago) to $10.10 in the state’s Minimum Wage, they effectively told nearly 2.4 million Texans that their lives didn’t matter.
It’s often claimed that the minimum wage is meant for teenagers just starting out, but only 3% of minimum wage workers fit that description. The remaining 97% are single adult workers, 18 and up, single working parents, or families, all trying to live on an annual salary of about $15,000. Note that they earn too little to qualify for an ACA subsidy, and of course, too much for Medicaid (since Texas didn’t increase the Medicaid threshold). Talk about adding injury to injury.
In our Senate District (22), the statistics to be found around the minimum wage are astounding! For instance, a minimum wage increase would benefit the 29% of McLennan County workers who work for that wage. Across the district, 22% of all workers work for the minimum wage.
Half of these workers have children in the home. On top of that a third of these families are single parent. It is estimated that for a single parent household in a Texas urban area the minimum hourly wage required is almost $21/hour, more than 2.5 times our current minimum wage. In 1968, the minimum wage was $1.60. That would be equivalent to $10.86 in 2015. Look at the rise in the CPI (red line) compared to the minimum wage adjusted-for-inflation (blue line).
Further, research carried out since the mid-90s and as recently as 2013 show that increasing the Minimum Wage actually increases economic activity, leading to increased sales, wage growth, and profits. Private employers such as Walmart, Target, Starbucks, and McDonalds have recognized this too, recently raising their internal minimum rates. A 2014 poll of small businesses found 61% of business owners not only supported the increase to $10.10, but also wanted to see the minimum wage tied to the CPI, as is done in 15 other states.
How can we implement a raise to $15/hour? Many of the states setting new, higher wage targets do this by step-increases, indexing the raises in over time, typically a period of 3 to 5 years. Also, many states provide for a 2-tier wage floor, one for businesses booking say, more than $500,000 in sales and another lower one for those below. Another method of reducing impact on smaller businesses is to give them a longer time to achieve full wage parity. New York State, for instance, sets two scales: one for the high-cost NYC downstate region and another for upstate. They also use a sliding scale for adoption of the tiers, based upon company size, with smaller companies having more time to implement it.
Because cities typically have a higher cost-of-living than the rural counties, some states encourage municipalities to set their own minimum wage higher than the state rate. Of course, in regressive Texas, the State has passed a law that bars cities from raising the minimum wage above the federal level for private employers, although the city can set it higher for their employees and employees of city contractors.
The bottom line is that raising the Texas Minimum Wage is good for Texans, especially for the 1/5 of our workers now consigned to impoverished earnings. One of the first things the soon-to-be-BLUE Texas needs to do is raise the minimum wage to a real, living wage. It’s good for our citizens and it’s good for Texas.