Published: March 11, 2063 12:06 pm            

Minimum wage, maximum debate

CNHI News Service

OKLAHOMA CITY -- Raising the minimum wage rate is a passionate debate this session at the Oklahoma Capitol, but not to Dominic Jann just a few blocks away.

Paying minimum wage isn't an option for the Carl's Jr. restaurant general manager, not with several neighboring fast-food businesses competing for the same workers.

Competition, in effect, is setting his restaurant's minimum wage.

"The lowest I'm starting is $5.75, and it's frustrating because it's still hard to find good people," he said.

Yet, Jann said he wouldn't mind Oklahoma raising its minimum wage of $5.15 because it wouldn't reduce his hiring and some of his employees depend on their jobs to make ends meet.

Jakki Smith, a 2 1?2-year employee there, is among them. The Oklahoma City resident lives with her sister, Marilyn Smith, and they support each other on lower-wage jobs. Raising the minimum wage wouldn't affect her because the restaurant has always paid her more, yet she believes it should be raised because "the cost of living is too high for $5.15 an hour."

Sen. Debbe Leftwich, D-Oklahoma City, agrees. She authored legislation that would raise the minimum wage 50 cents a year for five years beginning Jan. 1, 2007.

Senate Joint Resolution 49 also says if the federal wage rises in that time, the Oklahoma rate would be the eventual $7.65 or 50 cents above the federal wage, whichever is higher.

"This measure will help those working Oklahomans across the state who struggle to provide for their families instead of relying on government services," Leftwich said.

Seventeen states and the District of Columbia have minimum wages above the federal level, six have no state law concerning a minimum wage and 25 states have rates that match the U.S. level. Two states, Kansas and Ohio, have minimum wages lower than $5.15, though workers in those states must be paid the higher rate if they are eligible.

The senator cited U.S. Department of Labor statistics that say more than 40,000 Oklahomans earned the minimum wage or less in 2004. Businesses that employ fewer than 10 full-time workers, gross less than $100,000 and/or conduct interstate commerce have a $2 an hour minimum.

A study by Lynn Gray of the Oklahoma Employment Security Commission show the state's most common lower wage jobs include waiters and waitresses (approximately 24,810 jobs), food preparation and servers (120,950), fast food cooks (12,350) and cashiers (42,070).

Wages at the 10th percentile are $5.49 an hour for wait staff, $5.52 for fast food cooks, $5.56 for food preparers and $5.61 for cashiers. Tenth percentile rates among other groups include $5.54 for farm, crop and nursery workers, $5.56 for parking lot attendants and $5.62 for maids.

Supporters of raising the minimum wage say it will help reduce poverty. According to U.S. Census Bureau estimates, about 503,000 Oklahomans lived below the poverty line, including 117,000 children ages 5-17.

The bureau's 2005 poverty threshold for a three-person household, such as a single parent with two children, was $15,735 a year. An hourly wage of just under $7.60 would cover that.

Many others, though, say raising the minimum wage is bad for business and the wrong way to fight poverty. Oklahoma Labor Commissioner Brenda Reneau wrote in her "Straight Talk" column that nearly 5 percent of hourly workers in Oklahoma had jobs that paid below minimum wage in 2003, compared with the 3 percent national average.

She believes raising the wage could make the state's figure even higher.

"Employers will react to a hike by trimming some minimum-wage jobs," she said. "After existing jobs disappear, many workers will shift to legal lower-than-minimum jobs."

Last month, a House of Representatives bill to raise the rate one time to $6.15 -- legislation less aggressive than the Senate bill -- failed in a partisan vote to get out of committee. Republicans who shot the bill down echoed Reneau's view that it could cut jobs, plus, they said, most employers already pay more than the minimum.

Help-wanted classified ads in Oklahoma newspapers appear to support that stance.

Mark Neighbors, whose Parkway Cleaners business in Edmond was hiring last week, said he has started his employees well above minimum wage for years as a way to attract better workers, much like Jann.

The strategy has paid off, as a trade organization has ranked Neighbors' business among the top 30 cleaners in the United States and Canada for a second straight year.

"You don't want to pay the minimum because you get the minimum level of person," he said.

Unlike the restaurant manager, though, Neighbors believes raising the minimum would negatively affect his and other businesses.

"If you raise minimum wage, the amount above minimum wage you'd have to pay will have to rise, too," he said. "Businesses across the board will have to charge more to the customers to keep up."

While supporters of raising the minimum say it helps heads of households pay the bills, opponents say a sizable percentage of minimum-wage earners are teens and young adults living with their middle-class parents.

Reneau said about half of such workers are younger than 25 and raising the rate would cut opportunities from teens and young adults wishing to enter the job market.

As for families making a living at or near minimum wage, some say those jobs provide stepping stones to better employment.

"Simply finding full-time work, including jobs at or near the minimum wage, provides the poor with the means to escape poverty," economist Paul Kersey said in a 2004 Congressional hearing. "Research by the Employment Policy Institute shows 47 percent of families living below the poverty line in 1997 managed to make it over the poverty line in 1998.

"If the minimum wage is increased from $5.15 to $6.65 per hour," he said later, "demand for unskilled labor could drop by as much as 15 percent in jobs that earn the minimum wage, resulting in the loss of hundreds of thousands of jobs and making it more difficult for poor families to take this escape route out of poverty."

Supporters of raising the wage don't buy it, saying many studies show little or no job losses after raising the rate. The most prominent such study is "Myth and Measurement: The New Economics of the Minimum Wage" completed in 1995 by David Card and Alan Krueger.

So the debate rages on in the Senate this year and beyond.

Representing one side, a Children's Defense Fund report published in July 2004:

"The current earnings of a single parent working full time at minimum wage covers only 42 percent of the estimated cost of raising two children. This is down from 48 percent in 1997 when the minimum wage was last raised. If the minimum wage is raised to $7 per hour, it would cover 57 percent of the cost of raising two children, a significant improvement for working families."

Reneau and others who oppose raising the minimum wage offer an alternative.

"The remedy is better education, improved skills and an affordable market for benefits," the commissioner said. "As for small businesses, the real engine for job growth, they need higher profits before they can hire more people for better jobs."

At the ground level, Neighbors, the Edmond business owner, flatly said of raising the wage, "It's going to affect us."

A minimum wage earner might say the same thing.

James S. Tyree is CNHI News Service Oklahoma reporter.

        

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