Ohio Valley workers and employers react as House votes for $15 minimum wage

The U.S. House of Representatives voted on Thursday to raise the federal minimum wage to $15 an hour, more than double the current rate of $7.25, which hasn’t changed in a decade. The bill is unlikely to wipe out the Republican-controlled Senate, where Majority Leader Sen. Mitch McConnell of Kentucky said he would not accept it.

But the vote adds energy to the election season debate over a living wage, an issue that resonates with tens of thousands of people in the Ohio Valley, where low-wage jobs have replaced better jobs. wages lost due to the decline of the mining and manufacturing sectors.

Credit House Education and Labor Committee

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Bobby Scott, chairman of the House Education and Labor Committee, on the podium with congressional Democrats and wage hike supporters.

In eastern Kentucky’s 5th congressional district — among the poorest in the nation — an analysis of the $15 hourly wage shows that some 93,700 people, or 42% of workers, would see a pay rise.

Eric McIntosh is one of them.

“I’m from eastern Kentucky, 24, and work for a minimum-wage sandwich shop,” McIntosh said. He lives in Morehead, in a flat above a consignment. McIntosh wants to see an increase in the minimum wage, so he can live a better life and pay to attend the trade school next door. But for now, he worries about more day-to-day concerns.

“Poverty anxiety, you’re nervous about every check you get, if it’s going to be enough, and it keeps you awake at night and it just makes your job worse,” he said. .

At the current minimum wage, McIntosh could still find himself well below the federal poverty line for families, even working full time.

A recent report from the Congressional Budget Office shows that raising the federal minimum wage to $15 an hour could lift about 1.3 million people out of poverty and raise wages for 17 million workers. But the CBO also warns that such a wage hike could result in the loss of more than a million jobs nationwide and could decrease the overall income of others.

Vicious circle

McIntosh described a cycle of low wages and job-related costs that keep him on a treadmill of earning just enough to keep his job, but never enough to get ahead.

“Some jobs require you to pay for your uniform,” he explained. But even maintaining the work uniform becomes another cost and another potential pitfall. “You can’t maintain your uniform, you end up getting fired.”

He said many workers end up using high-interest payday loan services to get by.

“But when all your money has to go to your bills, your back payments because you had to take out a payday loan,” he said. “It goes to all payday loan credit.”

Even getting to and from work is difficult. Transportation is a common problem for people working for minimum wage in a rural area. A report by the American Public Transportation Association found that while the rural population is declining, ridership in rural areas has increased.

McIntosh said he often had to rely on others for transportation and had seen co-workers lose their jobs because they couldn’t afford a minor car repair.

“And if people have more pocket money, we will generate more jobs,” he said. “We are going to buy more products. I guarantee you that if I made $15 an hour, I would buy a car for once.

He said he would also invest in his education and professional skills.

“To move forward in life, to be able to use those jobs as a starting point, you need to have money left over to reinvest in yourself,” he said.

Employer concerns

Opponents of raising the minimum wage focus on the costs to employers and the potential for job losses. The conservative Heritage Foundation argues that small businesses would not be able to raise revenues enough to cover the cost of higher wages, and employers would be forced to raise prices or cut costs by eliminating positions.

Fred Baumann is one of those small entrepreneurs who would be affected. He is Chairman of the Board of Baumann Paper Co., a Lexington-based company now in its third generation of Baumann family management.

“My father started the company in 1950,” he said. His daughter now runs the business, which distributes paper, plastic and other sanitary supplies. I met him in one of the many businesses his company supplies, a hotel and a restaurant.

Baumann said the company already pays many employees between $14 and $15 an hour. But if the federal minimum wage goes up, they will feel the pressure to raise their workers’ wages.

“We pay what the market asks us to pay to recruit skilled workers and retain them,” he said.

When we first spoke, Baumann didn’t know what the federal minimum wage was. He said he felt like it was about $10 an hour. It’s $7.25 in Kentucky. (In West Virginia it’s $8.75 and $8.55 in Ohio.) He worries that much higher pay will make workers less motivated.

“People need to have some initiative rather than handing things over to them,” he said. “My view is if you automatically get $15 an hour, then where’s the incentive?”

He said his company should consider whether it would be better to invest in more automation.

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Discover our interactive maps.

The CBO report offered a range of possible outcomes regarding the potential for job losses and noted that the forecasts came with a high degree of uncertainty. The median forecast shows 1.3 million potential job losses. A worst-case scenario shows that 3.7 million jobs could be lost.

The Economic Policy Institute, a left-wing think tank, conducted a separate analysis that questioned these job loss figures.

PPE economist Ben Zipperer said the challenges for businesses aren’t as big as the “scary stories” about raising the minimum wage might make some people think. He said part of the job loss due to higher pay can be explained by lower turnover.

“So when you raise the minimum wage, you actually reduce worker turnover and that makes it easier for companies to retain workers because they are now paying higher wages,” he said.

The CBO report also showed there may be no change in unemployment due to a $15 an hour minimum wage, and Zipperer said that’s consistent with most research done on minimum wage. He said that if all companies were forced to increase the salaries of their employees, it could increase a company’s ability to be competitive.

“It’s a lot easier for a restaurant to raise their prices a little bit when all restaurants have to do the same thing to accommodate a minimum wage increase,” he said.

EPA analysis also shows that the Ohio Valley region would see some of the steepest wage increases in the nation with a $15 minimum wage by 2024.

For example, the EPI report predicts that in large parts of eastern Kentucky, southern West Virginia and southeastern Ohio, about 40% of workers would see an increase in their wages.

According to EPI, some workers employed year-round in Kentucky could see their average annual income increase by about $4,000. In West Virginia and Ohio, workers could see about $3,000 more in average annual income.

Zipperer said it could help offset the region’s high inequalities.

“When you raise the minimum wage, reduce poverty, raise family income to the bottom, you actually reduce income inequality,” he said.

Click for an interactive map of the Economic Policy Institute, which advocates for a higher minimum wage.

Growing inequalities

At the end of 2017, the Special Rapporteur on extreme poverty and human rights for the United Nations, Philip Alston, carried out an information tour in certain places affected by extreme poverty. But these were not in a developing country, they were in the United States, including a visit to communities in the Ohio Valley.

Alston’s report to the United Nations Human Rights Council found that of the 40 million poor Americans, more than five million live in “absolute Third World conditions of poverty”. It also showed that Americans live shorter and sicker lives than citizens of all other wealthy democracies, and that the United States has the greatest income inequality of any industrialized country.

The report links these conditions to stagnant wages that force many workers to seek government assistance for food. The share of households that have an employee but also receive nutritional assistance has increased from about 20% in 1989 to more than 30% in 2015.

And the report found that the average annual wage of the bottom 50% of earners has stagnated since 1980.

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Credit Economic Policy Institute

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Click for an interactive map of the Economic Policy Institute, which advocates for a higher minimum wage.

Eric McIntosh didn’t have those kinds of facts and figures to describe his life as a minimum wage worker. For him, it’s something he feels and experiences on a daily basis.

“I wouldn’t know how to explain it or show it to these people,” he said. “It’s not something I can reduce to words because it’s not something that happened to me in words, it happened to me in experience.

“I can’t give you words for my empty stomach.”

About Wesley V. Finley

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