Editorial: Poverty and the minimum wage hike

According to revised figures released by the United States Census Bureau late last year, California has the highest poverty rate of any state in the country.

That rate is 23.5 percent, higher even than the District of Columbia (at 23.2 percent) and well ahead of second-place Florida (19.5 percent).

And according to an American Community Survey, three California metropolitan areas – Fresno, Modesto and Bakersfield-Delano – rank among the top five regions in the country with the highest percentage of residents living below the poverty line. Hard to believe, perhaps, but the Fresno area is the second most impoverished site in the nation, just behind the U.S.-Mexico border area of McAllen-Edinburg-Mission, Texas. Bakersfield-Delano and Modesto ranked fourth and fifth. The 2011 data compared large metro areas of 500,000 people or more.

The revised poverty figures now measure more than just the cost of food, and place poverty in the context of living costs, including housing, which is particularly expensive in California.

And lest we mistakenly assume that Fresno has to be an isolated pocket of poverty, it’s important to remember that the Redwood Empire Food Bank, which serves Sonoma County, is now feeding 78,000 people a month in what is considered to be one of the more affluent and recession-proof regions of California.

It is wise to keep these statistical realities in mind as Gov. Jerry Brown prepares to sign the minimum wage bill passed by the Legislature on Thursday. The governor has indicated strong support, stating that, “The minimum wage has not kept pace with rising costs.”

He’s right, but the California Chamber of Commerce, among other business interests, called the bill “a job killer” and warned that the wage-rate increase could doom the state’s slow recovery from the recession.

In fact, it is entirely possible that the first bump from $8 to $9 per hour, set to take place in July 2014, could result in some lay-offs or slowed job expansion. But it will also help thousands of struggling Californians to keep their heads above water, and most of the extra pay they receive will flow right back into the economy because minimum wage workers don’t save – they can’t afford to. The minimum will then rise again to $10 per hour in January 2016.

Washington State’s rate is pegged to the Consumer Price Index and is currently the highest minimum wage in the nation, at $9.19.

Exhaustive research suggests that past minimum wage increases have little or no negative effect on employment. And, in fact, low-wage jobs can have the adverse effect of increasing the cost of social services required to help low-wage workers survive. A recent Congressional study reported by Rep. George Miller revealed that a single, 300-employee Wal-Mart “super center” in Wisconsin cost taxpayers between $1 million and $1.75 million a year in federal safety-net benefits.

Hard figures are elusive, but one estimate puts the number of Californians who will benefit from the higher wage at 3.4 million. A full-time minimum-wage worker in California currently earns $16,512 a year, and anyone who considers that a live-able wage simply isn’t in touch with economic reality.