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Banking on change


“USF student Alexis White worked for minimum wage at McDonald’s and Wendy’s for the first few years of college,” could have been a sentence in just another story about hard work overcoming any challenge. But the real world doesn’t always go along with the simple stories people like to believe in. 

In reality, though the small checks supplemented financial aid and provided a little extra spending money, White still had to live with her mother who helped with car payments she needed in order to drive between work and school.

White often   worked the night shift before early morning classes. She said her grades suffered because she struggled to stay awake in class. White quit her job.

Thankfully, White said she didn’t need to work because of those in her life who lent a helping hand. Yet walking away from a minimum wage job may be a luxury many can’t afford. 

For workers without family support or those expected to support a family of their own, White said she doesn’t think minimum wage is enough money on which to survive.

“I saw people who couldn’t afford to go school or didn’t have anyone to help,” she said. “If I was a single parent, I wouldn’t be just some kid with a job. I’d be trying to sustain my life and family. I would want to be paid more.”

Many agree with White, including the president. In the 2014 State of the Union address, President Barack Obama called for a national $10.10 minimum wage. 

Though Congress has not taken action, state legislators across the country have introduced legislation along the lines of this recommended level. 

Even in Florida, where the $8.05 minimum wage is already higher than the federal mandate of $7.25, four Democrats in the Florida House of Representatives felt it was necessary to file a bill (HB 47) that would raise it to $10.10 at the beginning of 2016.

Rep. John Cortes, one of the bill’s co-sponsors, said raising the minimum wage is an act of compassion for one’s fellow man.

“I’ve worked in the hospitality area for the past nine years, and minimum wage doesn’t do anything for those poor people,” said Cortes in an interview with The Oracle. “I’m used to seeing people living in their cars, working three jobs just to make a living and then they don’t have time for their kids, because they (don’t have) the right money to raise a family — it helps those at the bottom.”

Nonetheless, Cortes said the bill has no chance of passing and was left for dead before being given the chance for a vote on the floor. 

The reasons for why it may not be the time to raise the minimum wage are complex. Susan MacManus, a USF political scientist, said many Florida lawmakers don’t feel any urgency.

“The economy is improving, unemployment is going down and a number in the private sector are increasing the minimum wage on their own. It’s also not an election year,” she said. “The conditions are very different … it’s not the burning issue that it was last year.”

As the economic climate is ever changing, experts often differ on what the minimum wage should be. If it is set too low, employees suffer. If it is raised too high, employers suffer. 

The Economic Policy Institute claims that raising the minimum wage to $10.10 across the country would put $51 billion into workers’ pockets and increase the U.S. GDP by $32.6 billion from the creation of approximately 140,000 new jobs.

The Congressional Budget Office, on the other hand, projected the increase would result in a loss of around 500,000 jobs. While this would leave some workers with more money, it would leave many others without a wage. 

Economics, a science without a lab to test in, often relies on theory. 

The people most skeptical of raising the minimum wage, MacManus said, are fiscal conservatives and business owners. Small business owners are often especially worried about being hardest hit.

“The argument is that after increasing the minimum wage to a certain point — and finding that threshold is always a challenge — fewer people will hire minimum wage employees,” MacManus said. “That causes businesses either not to hire people or to let workers go.”

Chris Johnson, a USF Student Government senator and a political science major, has worked minimum wage jobs since the age of 15 and said he understands how increasing wages can bind the hands of job creators.  

Whenever someone is paid more, businesses must find that money from somewhere else. Other than cutting down on employment, Johnson said he noticed businesses cut expenses in another place:
quality of product.

“(Chick-fil-A) might make a cheaper and not as tasty chicken sandwich, which customers would decide they don’t like and would spend less money,” he said. “(The business) would then have less money to pay their now more expensive employees.”

Proponents of wage increase often make minimum wage themselves or are otherwise sympathetic to those getting by on it. 

“The argument is that it is not sustainable — you can’t live on that kind of income,” MacManus said. “The argument is that if you really want to make people free of government assistance … you give them an income they can live on.”

Another rationale is that better-paid workers may feel less resentful, more productive and less likely to leave their place of employment. This would consequently save a business money, as well as time, to interview and train new hires.

“I used to be a manager,” Cortes said. “I paid them good, I took care of them. I never had any problems with anyone leaving. If you’re going to have underpaid employees, they are not going to stay when getting abused.”

A better-paid employee, Cortes said, has more money to pay for things, which helps businesses out in the long run.

“People go out to eat more, even if it’s a fast-food joint once in a while. They’ll help the economy,” he said. “How can it effect the economy when the guys spending money got more money to spend?” 

Fiscal conservatives often contend that higher wages would end up driving up production costs. Workers might make more money, but goods they spend it on are then more expensive. 

“All you’re really doing is moving the goal post,” Johnson said. “You’re not actually improving the standard of living.”

Offering a quick fix to people’s money problems, Johnson said, is what he saw as a cheap way to get votes.

“What they’re really doing — for political gains — is appealing to those more concerned with getting their bills paid tomorrow than making sure their savings account is good 10 years from now,” he said. “Whatever they’re paid today is going be worth a lot less in 10 years.”

Though it is difficult to establish cause and effect when considering the economy, much of the current anxiety comes from income inequality — the notion that the gap between the rich and poor is widening.

While poverty has declined and the standard of living has improved, according to the Economic Policy Institute, wages have stagnated for workers while capital snowballs for the rich. 

Minimum wage is often seen as an answer to decrease this gap, at least in the short term. Whether it’s the right answer for this state, it may be awhile until Floridians find out.

Both HB 47 in the Florida House and an identical bill in the Florida Senate (SB 114) are waiting in committee before going to the floor for a vote. Cortes said the Republicans are unlikely to put it on the committee’s agenda for consideration.

As the state government ended committee meetings by time of print, another attempt at a high minimum wage will have to wait until next year.

Hiking the minimum wage to such a level hasn’t happened in any other states but soon won’t be unprecedented. 

So far, it looks as if five states are set to increase the minimum wage to $10 or more in the coming years. These states are California, Connecticut, Hawaii, Maryland and Vermont, as well as the District of Columbia. 

MacManus said many Floridians are in favor of increasing the minimum wage, but often underestimate the influence their voice can have.

“They are not organized as an interest group that reflects their size of the population,” she said. “There’s a lot of cynicism. They think involvement isn’t going to change anything.”

Cortes said he recommended people call their representatives to let them know their feelings on the issue.