These written remarks in support of a higher state minimum wage reflect the full version of the abbreviated testimony provided by GBPI’s Wesley Tharpe at the Feb. 11, 2016 meeting of the Georgia Senate Insurance and Labor Committee.
Thank you Mr. Chairman, members of the committee. My name is Wesley Tharpe and I serve as a senior policy analyst at the nonprofit Georgia Budget and Policy Institute, where I focus on tax and economic policy.
In my work there over the past five years, I’ve become intimately familiar with the sometimes sobering data on where working Georgians stand in today’s economy and the policy tools that are available to help them. And the bottom line is that modest minimum wage increases, sometimes phased-in over time, are an effective, time-tested way to boost hardworking Georgians who are trying to lift themselves into the middle class.
Meager paychecks are the norm for too many Georgians. About one in six Georgia workers today makes less than about $10 an hour, or roughly $20,000 a year for a full-time employee. That’s the level a full-time worker needs to keep a family of three above the poverty line.
Not only are wages too low, for many they’re also heading in the wrong direction. Wages fell for a typical low-wage worker in Georgia by 10 percent from 2009 to 2014, or in other words since the Great Recession. This is a continuation of a long-term trend whereby workers have largely been shut out of the fruits of economic growth over recent decades. Since the end of the 1970s, adjusted for inflation, wages for Georgia’s low-wage workers have risen 1 percent. That compares to 22 percent for high-wage workers.
The failure of state and federal minimum wages to grow alongside a growing economy is a big contributor to that trend. If the minimum wage had simply kept pace with inflation from its historic peak in the late 1960s, it would be nearly $11 today. Or, if it had kept pace with the rate of productivity growth during that time – in other words the fact that people are working harder, longer and adding more value to the economy than ever before – the minimum wage would be more than $18 an hour today.
States and cities across the country are recognizing that these trends are bad for families, businesses and the economy, and they’re turning to minimum wage increases as a time-tested tool to try and bend the needle. Twenty-nine states plus Washington, D.C. now have a state minimum wage higher than the federal level, and 61 percent of Americans live in one of those places.
In closing, allow me to stress that in GBPI’s view the specific amount of an increase is less important than the general need to recognize that stagnant wages for workers are one of the most critical economic challenges of our time, and that there are lots of reasonable options for lawmakers to pursue this policy and help a whole lot of Georgians as a result.
We’ve found, for example, that raising Georgia’s minimum wage to $10.10 an hour over three years would give a raise to nearly 1 million working Georgians, or about a quarter of the state’s workforce. Or, just going to $8.20 an hour – only 15 cents higher than Florida – could raise wages for an estimated 440,000 workers. Georgia lawmakers could also simply empower local governments in higher-cost areas of the state to pursue their own locally tailored standards.
Whatever the specific approach, raising wages would provide a powerful boost to hardworking Georgians who are trying to do the right thing, while putting the state’s economy and businesses on a firmer foundation for the future. Thank you and I’m happy to take any questions.