Legal Learning: $15 an hour not a big deal
"Fifteen dollars an hour is not a big deal. It's a big victory but not a big deal," according to a speaker at the American Bar Association annual meeting in August. She pointed out that if the federal minimum wage of 15 years ago had kept up with inflation, it would be $19 today.
Minneapolis became the first Midwestern city to adopt a $15 minimum wage last June, to be phased in by 2024. Other cities across the country, including Seattle, San Francisco and Washington, D.C., have also adopted a $15 minimum wage, and St. Paul leaders are considering doing the same.
The Minnesota Chamber of Commerce promptly filed a lawsuit against Minneapolis last summer on the ground that the city ordinance of $15 an hour conflicts with state law. However, in late December, the Chamber dropped its lawsuit without explaining why. A business called Graco Inc. remains in the lawsuit, claiming that "a city mandating a minimum wage is a slippery slope." The courts will eventually rule on Graco's objections.
Fifteen dollars an hour comes out to $2,600 a month or $31,200 a year (if you work 40 hours a week), less FICO. It would be difficult for many of us to live on that amount. You would have to spend no more than $750 per month on housing, $400 per month on food, $450 per month on transportation and $170 per month on phone and internet. If you're supporting a spouse and/or children, there isn't much left over for other expenses or for savings.
Just imagine what it is like trying to make ends meet on the federal minimum wage of $7.25 an hour ($15,000 a year), which hasn't been raised since 2009. In Minnesota, the minimum wage is higher. As of Jan. 1, it went up to $9.65 an hour if you work for a large business with annual gross revenue of $500,000 or more, or $7.87 an hour for everyone else. This minimum wage applies to all hours worked, whether part time or full time, and is in addition to any tips you might earn.
About 250,000 Minnesota workers earn less than $9.65 per hour ($20,072 a year).
All of the speakers at the ABA annual meeting agreed that the minimum wage is less than the minimum Americans need to survive.
"The minimum wage does not allow people to provide something as basic as housing," said moderator Antonia K. Fasanelli, executive director of the Homeless Persons Representation Project in Baltimore. She added that about four of 10 people are making less than $15 per hour, "and everyone knows you can't make ends meet" on that income.
One of the solutions offered at the ABA meeting was a concept called "universal basic income." The idea is that a basic income system would replace the current welfare system and offset a portion of the gap between wages and living costs. For example, a person could get a minimum of $1,000 per month in straight income and would make choices on how to use that money.
One speaker noted that many Libertarians who want to shrink government programs have joined with progressives who seek to help the working poor, and are calling for a radical shift in support for the needy.
"There is an enormous amount of wealth," the speaker said, "and there is a distribution problem."
Mark Zuckerberg of Facebook fame is one of the advocates of this idea. For more information about it, check out en.wikipedia.org/wiki/Basic_income.
It sounds to me like an idea worth thinking and talking about.
James H. Manahan is a Harvard Law School graduate. He handles family law, wills and probate in and around Lake County, and does mediation everywhere. He writes a regular column on legal issues for the News-Chronicle. The opinions expressed in this column are those of its author and are not to be attributed to his employer.