NEW YORK - The U.S. Congress reached a dubious milestone at the start of the New Year: its 100th month without raising the minimum wage earned by millions of workers at the very bottom of the economic ladder.

With low expectations that action on the issue will be forthcoming -- at least, not unless there is a changing of the guard in mid-term elections in November -- advocates for the working poor are campaigning hard at the state and local level to translate popular support for a living wage into local ballot initiatives.

It's frustrating that we have to spend so much energy in raising the minimum wage, when what we really need are policies that make workplaces more family-friendly, provide health care, and that help bridge that gap between what the minimum wage pays and what you need to make ends meet.

Jeff Chapman, the Economic Policy Institute (EPI)

So far, 17 states and the District of Columbia have increased their minimum wages above the federal rate of 5.15 dollars per hour. Oregon, Washington and Florida have sought longer-term solutions, adjusting their minimum wage annually to keep pace with increases in the cost of living. Vermont will begin indexing for inflation in 2007.

And voters in Arizona, Ohio, Michigan, Colorado, Nevada, Arkansas and Montana will likely be given the chance to green-light increases in November.

In California, Republican Governor Arnold Schwartzegger just proposed a one-dollar increase in the state's minimum wage, from the current 6.75 dollars per hour to 7.25 dollars in September this year, and to 7.75 dollars in July 2007.

Lobby groups like the National Small Business Association have long argued that rising health care costs and competition from overseas firms are putting a squeeze on already-thin profit margins. Increasing the minimum wage, they say, would stunt economic growth and force small firms to lay off workers, or at least reduce their hours.

But according to a new study by the California Budget Project, recent increases in the state's minimum wage do not appear to have triggered job losses in low-wage industries like food service and retail.

The study also found that the purchasing power of the state's 1.4 million minimum wage workers -- most of whom work full-time -- is 33.1 percent lower today than it was in 1968, and amounts to less than would be needed to support a single adult, much less a family.

Other researchers have reached similar conclusions. The Fiscal Policy Institute found that an increase in New York's minimum wage to six dollars an hour had no negative effects on the main industries employing minimum wage workers -- restaurants and retail stores -- and that in fact, these sectors showed strong job growth.

"The evidence is all on the side that increasing the minimum wage helps and doesn't hurt," Jeff Chapman of the Economic Policy Institute (EPI), a non-profit think tank in Washington, told IPS. "The problem is the power that employers have in Congress."

Chapman noted that there is an "incredible disconnect" between states taking the lead to raise their minimum wages, even as their representatives on Capitol Hill refuse to address the issue at the federal level.

The Fair Minimum Wage Act of 2005, proposed by Senator Ted Kennedy, a Massachusetts Democrat, would increase the federal minimum wage for the first time since 1997, from 5.15 dollars to 7.25 dollars per hour, phased in over two years.

The increase, according to analysts at EPI, would impact 7.3 million workers, or nearly six percent of the workforce.

"This is quite literally the minimum we can do for working families," Chapman said. "It's frustrating that we have to spend so much energy in raising the minimum wage, when what we really need are policies that make workplaces more family-friendly, provide health care, and that help bridge that gap between what the minimum wage pays and what you need to make ends meet."

"One of the real successes in recent years is that average people are starting to understand that there are many Americans who don't have access to the things they take for granted," he added.

In the more than eight years since Congress passed the last increase, the buying power of the minimum wage has eroded by 17 percent, and is currently at its second-lowest value since 1955, EPI notes.

Even the chief executive officer of the retail giant Wal-Mart, which is not known as a particularly worker-friendly company, said he is urging Congress to consider raising the minimum wage so that Wal-Mart customers don't have to struggle paycheck to paycheck.

"While it is unusual for us to take a public position on a public policy issue of this kind, we simply believe it is time for Congress to take a responsible look at the minimum wage and other legislation that may help working families," Lee Scott said.

Heather Boushey, an economist with the Centre for Economic and Policy Research in Washington, believes that while it is important to raise the federal minimum wage, recent action in the states gives reason for optimism.

"The state-by-state process can be really good," she said in an interview. "Some of the pros are that a local minimum wage might be more in tune with the local labour market. On the other hand, it creates incentives for firms to move across states and leaves some workers behind."

"There has been a lot of lobbying (against raising the minimum wage), but there's also not a sense among politicians that there is a groundswell of support for this in Middle America," she said.

In fact, polls have consistently shown that the U.S. public supports raising the minimum wage -- one reason that recent ballot initiatives like those in Florida and New Mexico have been so successful.

New Mexicans for a Fair Wage, a coalition of labour unions, social service and religious groups, released a study Wednesday showing most states with wages higher than the federal minimum of 5.15 dollars an hour saw job growth and lower poverty.

The group says that 75 percent of registered voters in the state support raising the minimum wage from 5.15 dollars to 7.50 dollars.

Boushey has also debunked the argument that minimum wage jobs are just a temporary stop on the path to better work, finding that over a third of adults aged 25-54 in minimum-wage jobs remain in those jobs three years later.

In 2002, minimum wage workers earned an average of 68 percent of their total family income. But even if a worker is employed full-time, Boushey found, he or she earns just 10,300 dollars, below the poverty threshold of 13,020 dollars for a one-parent, one-child family.

"For me, it raises a moral and ethical question: if you want to live in a society where if people work they deserve to have a decent standard of living, you have to pay people that wage," Boushey said. "Employers are making choices -- these are not laws of nature."

Copyright © 2005 IPS-Inter Press Service

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