SoV – Policy Article

Minimum Wage = $7.25 in 21 US States

The last time Indiana raised its minimum wage was in 2007, when it went from $5.15 to the Federal level of $7.25. But $7.25 is hardly a living wage. At 40 hours a week, 52 weeks a year, that’s barely more than $15,000 – $6,600 less than the federal poverty level for a family of three.

Of course, the federal poverty level itself is a blunt and unreliable tool which does not account for differences in the cost of living from state to state or between rural and urban areas. Nor does it adequately reflect the amount of income that a family actually needs in order to survive without government assistance.

That’s where the Self-Sufficiency Standard comes into play. This is a county-by-county assessment of the actual cost of living. The Self Sufficiency Standard for Tippecanoe County, Indiana is $48,510 for a family of three – more than twice the federal poverty level. To earn that kind of money, a minimum wage employee would have to work more than 125 hours per week.

During the 2020 legislative session, there were two attempts to raise the minimum wage in Indiana, but neither was successful. Senate Bill 176 proposed raising the minimum wage to $10 an hour starting on July 1, 2021, and increasing to $15 by July 2023. After that it would have increased by the same rate as the consumer price index. The bill never even got a committee hearing.

While the Indiana house democratic caucus did not introduce a bill, representative Cherrish Pryor (D, Indianapolis) did try to attach a minimum wage increase as an amendment to Senate Bill 409. That effort also failed.

People opposed to an increase in the minimum wage often argue that most minimum wage workers are young and working supplemental jobs not intended to support their families. However, a 2013 report from the Economic Policy Institute shows that in fact 36% of minimum wage workers are over 40, 28% have children, and on average they earn about half of their family’s total income.

While business leaders and government representatives may be able to argue both sides of this issue, those of us working on the front lines of social service are all too familiar with working parents coming through our doors, seeking help as they struggle to support their families on one, two, or even three different minimum wage jobs. These families deserve better, and we can help them by advocating for an increase in our state minimum wage.

While this policy article highlights legislation from Indiana, we would love to hear what legislative issues are affecting clients in your communities. If you have a legislative or policy issue that you’d like to see highlighted in a future newsletter, please email it to dreamteam@lumserve.org.

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