A Dime a Day Keeps Poverty Away
October 25, 2012 7:32 am
The tipped minimum wage has remained static at $2.13 since 1991, and while efforts to raise the wage have met with some success on a regional level — and various studies have dispelled stereotypes of minimum wage workers as teenagers working summer jobs — the old argument of higher labor costs being passed onto consumers hasn’t been directly attacked. Until now.
To commemorate Food Day (October 24th), and emphasize that ethical eating means supporting ethical employment practices, the Restaurant Opportunities Center released a report yesterday entitled A DIME A DAY: The Impact of the Miller/Harkin Minimum Wage Proposal On The Price of Food.
The report studies consumer costs resulting from legislation that would raise the wage incrementally, to $9.80 for all workers and 70 percent of that for tipped workers. From ROC:
The bill, introduced last summer by Congressman George Miller (D-Calif.) in the U.S. House of Representatives and Tom Harkin (D-Iowa) in the U.S. Senate, calls for incremental increases of 85 cents an hour for each of the next three years to raise the federal minimum wage from $7.25 per hour to $9.80 an hour. Similarly, this would raise the tipped minimum wage from its current $2.13 an hour to 70 percent of the full federal minimum wage.
“Raising the minimum wage at its core is about respecting and valuing work,” said Representative George Miller (D-Calif.). “No one who works hard every day and plays by the rules should live in poverty. It’s also good economic policy. Giving minimum wage workers a raise will help millions of working families make ends meet and help grow the economy.”
While a higher minimum wage would creat 100,000 new jobs and increase the GDP by $25 billion (according to the Economic Policy Institute) grocery store prices would increase by only one-half of one percent, and restaurant prices by about one percent. That increase is estimated to cost consumers about 10 cents a day, at most.
From the report:
The average U.S. household spends $3,827 a year on food eaten at home and another $2,634 on food eaten out. In real numbers, the researchers say, the price of a $20 restaurant meal would increase 45 cents over three years, and grocery bills would rise less than 3 cents per day. Conversely, non-tipped wages would increase by 33 percent, and tipped workers would see more than a 100 percent wage increase. Together, over the three years the law would need to fully take effect, these increases would translate into a cost of at most 10 cents more per day, on average, for American households.
Representative George Miller, co-sponsor of the bill that was introduced by over 100 House Democrats in July, spoke about the need for it:
Raising the minimum wage at its core is about respecting and valuing work. No one who works hard every day and plays by the rules should live in poverty.
That is surely worth ten cents a day.
Image from here