Minimum wage workers in SC favor increase (+ survey)
03/15/2014 6:03 PM
03/07/2015 4:38 PM
For 40 hours every week, 28-year-old Columbia resident T. Pollock works in the $195 billion U.S. wireless industry helping low-income customers get cell phones and service.
She makes $9.50 an hour — more than $2 above the $7.25 an hour federal minimum wage.
Pollock finishes up her five-day-a-week, full-time job just in time to make it home to her second job — a four-hour, minimum-wage home health gig in which she provides care, bathing and sitting for a seizure patient.
After her 60-hour work week, the mother of two faces a stark, increasingly common economic reality in 2014: She still can’t quite make ends meet.
“A lot of times, it’s like my grandmother used to say — I have to rob Peter to pay Paul,” says Pollock.
The rising debate over raising the $7.25 an hour federal minimum wage has a staunch ally in Pollock, a certified nursing assistant and a customer service representative for a cellphone company.
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The Obama administration and Democrats in Congress have been pushing for a wage increase for two years, currently proposing $10.10 an hour indexed to inflation. However, Congress right now is discussing raising the wage to $9.50.
In South Carolina, only about 42,000 of the state’s 1 million hourly paid employees make the federal $7.25 an hour minimum wage or less, according to the 2010 U.S. Census. However, experts say nearly half a million S.C. workers could be affected by a potential increase in the wage to $10.10, as employers adjust other hourly workers’ pay to those whose pay is raised by the minimum wage.
South Carolina, whose leaders at times pride themselves on opposing all things federal, is one of five states — Tennessee, Alabama, Mississippi and Louisiana being the others — that does not have its own minimum-wage law, adhering instead to the federal standard.
Twenty-one states have a minimum wage higher than the $7.25 federal mandate, which wage increase proponents note was last lifted in 2009, and 19 states have a minimum wage set at $7.25, same as the federal.
Criticism of the minimum wage often has focused on some of the nation’s most prosperous and high-profile retailers including Wal-Mart and McDonald’s.
Wal-Mart, the nation’s largest private employer and world’s largest retailer, has long been criticized for low pay. Some of its employees have publicly insisted the retail giant raise its pay scale, declaring they need public assistance to survive on a Wal-Mart paycheck.
Wal-Mart, responding to the criticisms, has said it does not start all its employees off at the minimum wage. Last month, in a surprise move, the retailer said it now is studying support of a new wage minimum increase.
Fast-food giant McDonald’s recently said for the first time it could be forced to raise wages due to the increased focus on income inequality.
The company, which reported nearly $5.6 billion in profits last year, said protests by workers against its wage structure mounted on social media and mobile communication now pose a risk to its business.
While the company’s profits showed a slight increase in 2013 from $5.5 billion in 2012, sales are off and stock prices have been buffeted.
McDonald’s, much like Wal-Mart, also does not start all its employees off at the minimum wage.
Both big retailers, however, have been referred to by critics as major welfare queens, many of whose combined 2 million to 3 million employees suck up disproportionate amounts of public assistance to supplement their low pay.
A recent, adversarial study sponsored by two U.S. universities concluded that fast-food workers cost U.S. public assistance coffers more than $7 billion a year from 2007-11, and 52 percent of the families of fast-food workers get some form of public assistance.
Benny Clark, a businessman who owns four McDonald’s in the Columbia area, said most of the 200 or so people he employs in his stores make more than the minimum wage and he would have to “look hard” to find one who makes only minimum wage.
Some, however, do make just the $7.25 an hour. “And they’re overpaid,” Clark said candidly with a laugh.
“Look, I’m not an economist, so I don’t know what the overall impact is (of possibly raising the minimum wage),” Clark said. “What I do know as a businessman is that at the end of the month, I’ve got to have a positive number down there (on the bottom line).”
That means if wages rise, prices for cheeseburgers and fries likely will, too, he said.
“Congress didn’t ask me to vote,” he said. “All I know is, if I’m going to pay state taxes and my city taxes, the prices have got to go up — for me and for everybody else. It’s a vicious cycle,” he said.
Clark’s McDonald’s franchises are on Gervais Street at Huger Street, Two Notch Road at Beltline Boulevard, Harbison Boulevard and Dutch Square at Broad River Road, and he said he’ll roll with whatever comes down.
“My people are the key to my business,” Clark said, “and I have to compete. That’s the situation we find ourselves in.”
According to the Bureau of Labor Statistics, few people in the U.S. actually are paid only the minimum wage. Roughly 1.5 million hourly paid workers earned the minimum wage in 2012, and a total of 3.55 million hourly workers earned at or below the federal minimum wage.
Minimum-wage workers are disproportionately young, with 50.6 percent between 16 to 24, and 24 percent are teenagers between 16 and 19.
Minimum-wage earners are mostly white, making up 78 percent and half of them are white women, the federal figures show. Sixty-four percent of minimum wage earners are part-time workers.
Minimum-wage earners work mainly in leisure and hospitality, 51 percent; followed by retail, 16 percent; education, 9 percent; and health services. Occupationally, nearly 44 percent work in food preparation and serving, with 15 percent in sales and related occupations.
Kelly K. is a 41-year-old, white female, who works 20 to 30 hours a week as a server in a Columbia-area restaurant. Excluding tips, she is paid $7.25 an hour.
Right now, Kelly is “making it” only because her lifestyle is heavily subsidized by a community-based recovery program that is designed to help participants get back on their feet after a life calamity.
Kelly, for instance, rents a house through the community-assisted local program she is connected with in which she pays only $175 a month in rent. Last month, with record cold temperatures, Kelly paid a $157 electricity bill and $50 water bill. She averages about $50 a week in groceries, she said, and also buys a monthly bus pass for $40.
“If I wasn’t in this (program) that helps me with the rent, I don’t think I would be able to make ends meet,” Kelly said. In two months, the mother of four expects to be re-united with her two small children (the other two are grown), who she will also be responsible for supporting, and she will have to find another place to live.
Kelly said her best hope going forward is to land a better job, like the one she once held as a dental assistant, making $21 an hour.
In the meantime, “I think they should raise (the minimum wage); I really do,” Kelly said. “Raise the minimum wage and not raise the prices of everything else.”
Like many other minimum-wage earners, Kelly doesn’t buy the oft-stated argument that raising the minimum wage would sack jobs, spur layoffs, or for that matter, cause prices to rise.
“Stuff is outrageously high as it is right now,” Kelly said. “I don’t believe they would have to raise prices. I know they would say that they would have to, but really, I don’t think that they would, just because stuff is so high.”
A check of prices with the U.S. Bureau of Labor Statistics reflects Kelly’s concerns about the rising cost of living, and the inadequacy of wages.
In January 2004, a gallon of unleaded gasoline in an average U.S. city sold for $1.59. In January 2014, that same gallon of petro cost $3.32. A pound of ground chuck beef sold for $2.58 a pound in 2004; 10 years later it costs $3.58. Fresh, whole milk sold for $2.87 a gallon in January 2004; in January 2014 it cost $3.55. A dozen grade A fresh eggs sold for $1.57 in 2004, while that same dozen cost $2 in 2014. A pound of ground roast coffee sold for $2.89 in 2004. In January 2014 that pound of joe cost $5.02. Electricity costs have risen over the past 10 years, too. The same is true for fresh chicken, bread, apples, bananas and so forth, the federal figures show.
“It’s just so hard to make it on $7.25 an hour,” said Kelly K. “That’s how I feel about it.” Even a raise to the federally-proposed $10.10 an hour would be tough to live on, she said.
For Pollock, the 60-hour-a-week working mom, rent, lights, water, a car payment and insurance, day care, household expenses, groceries, cellphone and an 11-year-old daughter in school all create a very long to-do list for her, even with two income streams.
“I never even calculated it as that (60 hours) — I just know it’s got to get done,” Pollock said.
Like retail and the fast-food industry, home care now is a hot job sector in the U.S., as more of the elderly decide to age at home, rather than in institutions. That puts certified nursing assistants like Pollock and other home care workers who must be trained in critical positions of both care and responsibility. Yet, statistics show pay for home care aides is among the lowest in the service industry.
“One of the things that frustrate me is that you’ve got people that don’t want to work,” Pollock said. “I think the system should help people who are working and want to work and that have a job. But you have people that are taking advantage of the system. They’re sitting at home and having all these children and selling their food stamps, and selling this and doing that and don’t want to work.
“I think the system should be in place for people like me that work one and two jobs trying to make ends meet — to assist them more than these people that are just sitting at home, not doing anything,” Pollock said.
For all the fuss Congress and corporate America in particular are putting up about raising the minimum wage, $7.25 per hour historically is very low, according to Larry Glickman, a University of South Carolina labor and consumer historian, who also authored the book “Living Wage.”
“If you look at what the minimum wage was in the ’60s, through the early ’70s, it would be (in today’s dollars) the equivalent of $12 to $15 an hour,” Glickman said.
Most people understand that today’s minimum wage is not yesterday’s livable wage, Glickman said, meaning a wage people can live on, support a family and buy groceries, in exchange for a huge portion of their time and effort over the period of a week or month.
It is considered significant, Glickman says, that a state does not have a set minimum wage. Commonly, the argument is that it helps in recruiting businesses to the state, expands employment, and frees up employers from regulations and restrictions, Glickman said.
There also is the theory that the absence of a minimum wage helps young and unskilled workers who might be priced out of the market if the minimum wage were set too high, Glickman said.
“My sense is that those theories are specious,” Glickman said. Most recent studies show the past conflict between a high minimum wage and employment no longer exists, precisely because the minimum wage is so historically low now that raising it won’t crowd out employment, Glickman said.
Minimum-wage critics — those who argue against raising it or those who are in favor of abolishing it — tend to forget that minimum-wage earners are also zealous consumers, almost by necessity, Glickman noted.
Whereas wealthier earners are more likely to sock away their earnings in stocks and other investments, minimum earners are going to spend, because they need to, said Glickman.
While raising the minimum wage to the proposed $10.10 an hour would be a “huge” percentage increase in the wage, it would still be below the 1968 wage equivalent, he said.
Over the past 20 years, the “Wal-Mart” effect has taught people that keeping prices low by keeping wages low was beneficial, Glickman said. But leading economists have begun to reject that concept, he said.
“While that’s undoubtedly been a benefit for some of the population, it seems that now more and more people are questioning it because of the fact that we do have people who work at Wal-Mart, work at McDonald’s and that’s not enough to make ends meet, so they need to have another job, or a third job.”
Glickman contends a minimum-wage increase would be positive for the South Carolina economy. “We’ve really moved away from the idea that South Carolina should be the place where unskilled, low-wage, workers exist and that’s why companies want to come here.
“We’re trying to become a more modern economy, and I think, succeeding in a lot of ways. We’re saying don’t come here because you can pay your work force the minimum. Come here because you going to have a great work force and an army of consumers if you pay them well.”
S.C. voices on minimum wage
“South Carolina’s unemployment rate is at a five-year low, and our state’s economy is the fastest-growing on the East Coast. Creating thousands of new jobs, not putting more government mandates on small businesses, is the best way to improve job opportunities for the people of our state.”
Doug Mayer, spokesman for Gov. Nikki Haley
“I believe the minimum wage should be increased at the federal level so that hardworking people are able to provide for their families. Any increase should be phased to minimize any burdens on small businesses.”
Sen. Vincent Sheheen, D-Kershaw
“(Our) waitresses easily make $16 an hour. What’s so darn frustrating is some of our employees who are paid $10 an hour won’t come in to work regularly like they should. Labor is hard to find and it’s a challenge for the restaurant business.”
Bobby Williams, CEO of Lizard’s Thicket. Of his 700 workers, 43 — mostly students and part-timers — make $7.25 an hour
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