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The 2008 American Community Survey

The 2008 American Community Survey
 

April 2007 Volume 13 Number 2

Minimum Wages, Poverty


The Senate voted 94-3 on February 1, 2007 to increase the federal minimum wage from $5.15 to $5.85 within 60 days of enactment, and to $6.55 in 2008 and $7.25 in 2009. The bill also includes tax breaks for small businesses, some of which hire minimum-wage workers. A federal minimum wage increase has already been approved by the House, but disputes over tax breaks for businesses that were included in the bill have delayed final approval.

Senator Saxby Chambliss (R-GA) offered amendments to the minimum wage bill that would eliminate the Adverse Effect Wage Rate in the H-2A program and redefine the prevailing wage that employers must pay as the entry-level wage.

The US is one of the few industrial countries without mandatory sick leave. About half of the US's 114 million private sector employees are eligible for paid sick leave offered by their employers. San Francisco is the first city to require employers to offer paid leave to all public and private employees working within the city limits, one hour for every 30 hours worked up to a maximum nine days a year, and seven states are considering some form of mandated sick leave.

The Healthy Families Act, introduced in March 2007 in Congress, would require private employers with 15 or more workers to provide seven paid sick days annually. One survey found that employers who provided sick leave offered up to 8.1 days a year, and that employees took an average 5.2 days a year. Many private sector employers have combined paid sick leave with paid vacation time, so that workers can use the accumulated days for vacation or illness.

California. California's minimum wage rose from $6.75 to $7.50 an hour in 2007. To be exempt from the minimum wage, private employees must generally earn at least twice the minimum wage, or $2,600 a month.

Los Angeles enacted an ordinance in November 2006 to require hotels around the major airport, LAX, to pay the city's "living wage" of $10.64 an hour without health benefits and $9.39 with them even though they did not do business with the city. After a threatened ballot referendum, the ordinance was repealed in January 2007, but a similar ordinance was enacted in February 2007 that includes infrastructure improvements near LAX and restrictions on the ability of the city to extend its living wage to other private businesses. It will go into effect in July 2007.

About 3,500 workers are employed at LAX-area hotels, and Unite Here has been trying to organize them via a "card check" under which a majority of workers signing union cards rather than a secret ballot election. The LAX-area hotels are likely to challenge the new ordinance in court, and most experts expect the effort to extend the living wage to private businesses that do not do business with the city to be struck down.

After a series of hepatitis A outbreaks at restaurants and catered events, Los Angeles county is considering requiring the 100,000 workers employed by 25,000 restaurants, 300 catering companies and 270 wholesale producers to be vaccinated. Las Vegas and St. Louis require hepatitis A shots containing antibodies for food workers. Some restaurants noted that the cost is about $200 a person and, with high turnover, there would be a constant flow of new hires seeking vaccinations.

Poverty. The poverty line for one person in 2007 is $10,210; for a family of four the line is $20,650 http://aspe.hhs.gov/poverty). The Luxembourg Income Study (LIS) database, with data for 30 nations from 1967 to 2002 http://www.lisproject.org), shows that the US has one of the highest poverty rates among rich nations, and a child poverty rate, 22 percent, that is twice the levels of child poverty in Europe.

The largest cash-transfer anti-poverty program in the US is the earned income tax credit (EITC), which provides up to $4,536 to legal workers with earnings of less than $38,348 in 2007. In 2006, some 22 million low earners received $41 billion in EITC credits and payments. If the credit exceeds the amount of taxes paid, the government issues a check.

The bursting of the housing bubble is likely to lead to 1.1 million foreclosures over the next six years, with many of those losing homes immigrants. Immigrants unfamiliar with mortgages sometimes agreed to loans whose terms they did not understand, and find themselves unable to repay as teaser rates expire and payments jump.

Job Corps. The Job Corps is a $1.5 billion a year program begun during the 1960s war on poverty to give youth who did not finish high school a second chance. The 60,000 youth who enroll in Job Corps each year stay in dorms at one of the 122 centers an average 11.4 months, learning remedial math and English as well as vocational skills; about 60 percent leave with a GED. The Job Corps costs $22,000 per participant, but some analyses say that reduced crime and higher earnings make it cost effective.

There were 4.4 million youth ages 16 to 24 who were neither in school nor working in 2005.

Erik Eckholm, "Job Corps Plans Makeover for a Changed Economy," New York Times, February 20, 2007.
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