Making Work Pay Should be a 2016 Priority

Georgians today are working harder and for more hours than ever before. Yet they still struggle to get ahead. Many of the new jobs our economy is adding don’t pay much and take-home pay for workers in a wide range of fields is flat, or falling, compared to past levels. Low wages create a steep hurdle to hardworking Georgia families, striving to reach the middle class and provide a brighter future for their children. State lawmakers can take advantage of the tools at their disposal to give these families a hand. That could include investing more in child care or enacting a new Georgia Earned Income Tax Credit. One of the most direct, and effective, steps lawmakers could take to boost incomes is to raise Georgia’s paltry state minimum wage.

Meager paychecks are the norm today for too many Georgians. About one in six Georgia workers, an estimated 651,000 people, make less than $10.10 an hour according to the nonpartisan Economic Policy Institute. That works out to about $20,000 in annual income for a full-time worker or the equivalent of the national poverty line for a family of three. And not only are wages too low, for many they’re also headed in the wrong direction. Wages dropped an average of 10 percent for Georgia workers in low-wage jobs from 2009 to 2014. Low-wage workers in Georgia make less today in inflation-adjusted dollars than in 1997.

Flat and falling paychecks make it harder for working Georgians who are directly affected, of course. But shrinking incomes are a problem for all Georgians, not just workers at the bottom struggling to reach the middle class. Families that can’t make ends meet don’t have disposable income to spend at local shops and restaurants, which hurts small businesses and local communities. When jobs don’t pay enough for families to be self-sufficient, people are more likely to turn to the taxpayer-funded safety net. And when families can’t afford to live in safe neighborhoods with decent schools, their kids are far less likely to thrive in the future. That weakens the next generation of Georgia workers and taxpayers and undermines tomorrow’s economy.

Raising the state’s minimum wage could deliver a booster shot to many working families, and by extension the state’s economy and communities. Increasing Georgia’s minimum wage to $10.10 an hour over three years would give a raise to nearly a million Georgia workers, according to a 2014 GBPI analysis. About one in four Georgia women and one in five men can benefit from the change. And more than 500,000 Georgia children can benefit indirectly, since they live in households with at least one affected worker.

Lawmakers should consider the $10.10 proposal but also keep in mind a range of possible paths to success.

Raising Georgia’s statewide minimum wage to a more modest $8.20 an hour, for example, would benefit nearly 440,000 Georgia workers, or 11 percent of the state’s entire workforce. Another option is to let Georgia’s local governments set their own minimum wage requirements, as is allowed in many states. Georgia cities and counties are now forbidden from requiring private employers to meet high job standards on wages, hiring practices or employee benefits such as paid family leave. Scaling back this one-size-fits-all policy can pave the way for metro Atlanta, Savannah and other higher-wage communities to pursue slightly different wage policies than lower-cost parts of the state.

State lawmakers in 2016 can also look to other policy options to boost Georgians’ incomes. More funding for child care subsidies can free up money for families to afford basics such as transportation, school supplies or better housing in a safer neighborhood. A state Earned Income Tax Credit can provide a bottom-up tax cut to more than a million Georgia families who work but struggle to make ends meet due to low-wage jobs. The best strategy is for Georgia lawmakers to consider these and other options in combination with a higher minimum wage. Enacting a higher minimum wage and the state tax credit together, for example, creates complementary benefits. The two policies target slightly different populations and deliver their value along different timeframes throughout the year.

Finding ways to help more families work their way into the middle class is critical to ensuring a strong economy and high quality of life, both today and for future generations of Georgians. Anyone who’s willing to put in a solid day’s work should be able to keep their family out of poverty and provide a decent environment for their children. A range of policy options show promise and deserve to be on the table for debate in 2016 and beyond, a higher minimum wage included. Lawmakers can take a close look at the potential of the time-tested tool when they return to the state capitol in a few weeks.