L.A. Times Reports Low-Paid Workers Don't Have Much Money Even After Increase in the Minimum Wage

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Tuesday, 27 May 2014 14:11

The Los Angeles Times had a news article telling readers that workers in Connecticut are still having a tough time making ends meet even after the minimum wage in the state was increased by 45 cents to $9.15 an hour at the start of 2014. The headline of the piece, which reflected the content of the article, read:

"In Connecticut, some minimum-wage workers say raise has not helped much."

The piece included comments from economists who have criticized the minimum wage, saying both that it would cost jobs and that it is an ineffective way to reduce poverty. The piece did not present the views of any of the large group of economists who have studied the minimum wage and found that it had little or impact on employment.

Nor did it discuss the views of any economists whose research indicated the minimum wage could have a substantial effect in reducing poverty. The Congressional Budget Office agreed with this assessment in the analysis of the minimum wage it released earlier this year. The article instead touted increases in the Earned Income Tax Credit (EITC) as a preferred way to address poverty. The article ignored evidence that the EITC lowers wages for low-paid workers who do not qualify for the credit.

The article tries to present a case that the minimum wage is already costing Connecticut workers jobs:

"Employment growth in Connecticut has lagged behind the nation since December, data show. Nationally, employment grew 0.62% from December through April, while employment in Connecticut fell 0.19% over the same time period.

"Much of that drop-off was related to the elimination of 10,900 jobs in January, the month employers had to start paying 45 cents more. In the previous three years, Connecticut had added an average of 4,000 jobs over the same time period."

Actually Connecticut has been lagging the country in employment growth throughout the recovery. The country as a whole had created jobs at a 1.1 percent annual rate from the end of the recession in June 2009 to December of 2013. Connecticut had created jobs at just a 0.7 percent annual rate.

Job losses are also not unusual in erratic state data. According to the Bureau of Labor Statistics Connecticut lost 9,000 jobs from June of 2013 to September of 2013.

The piece also implies that most minimum wage workers are teenagers who are working for spending money:

"Another argument from business owners against increasing the minimum wage: It doesn't help the presumed beneficiaries — working-poor families — because many minimum-wage workers are young people learning their first jobs or working part time while going to school.

"Case in point: Bridgeport, Connecticut's largest city and one of its poorest, decided to raise the minimum wage for all city employees to $10.10 on July 1.

"But that will mainly benefit people who work at the city's golf course, like Meaghan Derry and Yogabeth Arias. Derry's husband supports the family with a higher-paying job, and Arias is a high school student who will go to college in the fall.

"The extra money Arias has earned this year from the 45-cent raise has mostly gone to pay for her prom."

In fact, the majority of workers earning near the minimum wage are over age 25 and the vast majority are over the age of 20. Almost 10 percent have a college degree and another 33.3 percent have some college.