Dear Future President:
Currently, many working Americans are unable to afford a decent quality of life. The lack of a national economic policy and programs that create a livable wage for workers has negative impacts for all Americans. These negative impacts include the high costs associated with poverty, increase in crime, and poor health and nutrition especially in children. American economic growth is also impacted as lower-income families do not have money to spend on extras. According to Lawrence Summers, in “Focus on Growth for the Middle Class”, wealth distribution is the best way of solving the impacts of poverty.
For most minimum wage workers, the cost of housing, food, and transportation exceeds their income. According to the National Low Income Housing Coalition, a minimum wage worker in Boston, Massachusetts would have to work 128 hours weekly to afford the life basic necessities- housing and food. In a lower cost area such as Alabama, a minimum wage worker would need to work 75 hours weekly to afford just the rent on a two bedroom apartment. Without adequate incomes, many working people are forced to choose between necessities. These necessities may include heat, air conditioning, health insurance, food, and child care for people with young children. Who would want to go without these everyday items?
Minimum wage workers are less likely to be able to live in decent housing in stable, safe neighborhoods. Poorly maintained housing can lead to having an unsafe environment, for children and themselves. Distressed neighborhoods are less likely to have good schools, parks, and community centers. Lawrence Summer’s in his article “Focus on growth for the middle class” writes that “nothing is more important to the success of industrialized democracies than sustained increases in wages and living standards for working families”. With the sustained wages Lawrence Summer wants, minimum wage workers are more likely to live in an all around better neighborhood.
To make matters worse, the wage inequality continues to grow. According to Michael Grynbuam and his article “Living cost rising fast, wages are trailing”, “weekly average salaries failed to keep pace with the inflation rate.”. The cost are felt by all Americans. Some economists have argued that as Americans cut back their spending, demand for products and services will drop, forcing businesses to lower their prices. Families without enough income do not buy extra items, go out to dinner or spend money in the local economy. This lack of livable income is one factor contributing to sluggish economic growth in America.
Some economist believe that the way to solve the income inequality is for the government to provide support programs and affordable housing. According to Emily Badger’s article “The basic reason why there just isn’t enough decent housing for the poor”, the American housing market does not provide enough low-income housing. “The private market can't, on any meaningful scale, create new affordable housing for the very low-income from scratch.” The United States already has some government programs in place to help low-income families. These programs include health care, day care for parents with young children, food stamps, and public transportation. Unfortunately, the demand for these programs far exceeds the available resources. According to Richard Eskow in “A Higher Minimum Wage Will Not Hurt Minorities or Eliminate Jobs”, one out of every ten kids in America is eligible for affordable day care. He believes that “ 7 million kids” and their families are missing out on the affordable government programs, due to their inaccessibility. This inaccessibility of support programs is identical to the state of availability of low-income housing. As Emily Badger had stated, there just isn’t enough low income housing in the American housing market.
Despite the inadequacies of existing support programs, many argue that America cannot afford to expand them; other believe that expanded program will create a “welfare nation”. While we personally do not agree, James Sherk argues in his paper“ Raising the Minimum Wage Will Not Reduce Poverty”, the reason many people are in poverty is due to the fact that they are lazy. He claims that “ the median family with children living below the poverty line works only 1040 hours a year in total- just 20 hours a week.”. Under-employment or working part-time might indeed be part of the problem of poverty but no one should have to work 128 hours a week to afford food and housing. So while there may be people who take advantage of the government programs, we should not have people in America, who have such low- incomes that they can not afford basic necessities. Many economist argue that government programs and affordable housing are the best solution to income inequality.
Other policy makers believe the inadequate income issues would be solved by increases to the minimum wage and establishment of a federal living wage. In “Raising the Minimum Wage Will Help the Poor” by Holly Sklar, she argues that poverty is a direct result of income inequality and that establishing a federal minimum living wage. Some cities have attempted to create living minimum wages. One such City is Los Angeles. In “Los Angeles Lifts Its Minimum Wage to $15 Per Hour” Michael Reich stated that “The proposal will bring wages up in a way we haven’t seen since the 1960s. There’s a sense spreading that this is the new norm, especially in areas that have high costs of housing.” Prior to the establishment of the living wage rate, almost 50% of the city's workforce had earned less than 15 dollars an hour. The minimum wage raise to the new 15 dollars an hour, has created a better distribution of wealth in Los Angeles. Much of the City’s economy is booming because of this increase. The economic boom is projected not only to affect Los Angeles’s economy, but almost every city and town near Los Angeles. This is a major success story, showing that raising the minimum wage will help.
Despite the success of Los Angeles, there are people who believe that raising the minimum wage would result in the elimination of job, especially unskilled positions. In his recent article, “Raising the Minimum Wage Will Not Reduce Poverty” James Sherk argues there is no evidence that raising the minimum wage would lead to higher unemployment” He is of the opinion that most minimum wage jobs are entry level and are held by persons who do not support themselves such as students. He further contends that due to the nature of government program raising the minimum wage may result in low-income families being ineligible for government programs.
Sustained economic growth is one effect of addressing income inequality. In his article, “Focus on Growth for the Middle Class”, Lawrence Summers makes a compelling case that wealth distribution is the best way of solving poverty. Distribution rates must be similar to the early 1980’s, “If US had the same wealth distribution, the bottom 80% would have 1 Trillion or -11,000 dollars per family- more. This top 1% income earners would lose 1 Trillion or- 750,000 dollars per family- less. ” The author cites examples in other countries- Canada and Australia- show address inequality leads to sustained economic growth.
In summary, we hope you agree that a balance approach is the most likely path to livable wages. Increasing the minimum wage and expanding accessibility of effective government programs can address income inequality, providing economic growth and prosperity. As the newly elected president, we acknowledge that there is much on your agenda, but hope you will focus on this critical issue. Dear Future President, we hope that in the future, America can support policies and programs that provide benefit to all.
With Great Admiration and Respect,
Pookey Noodlan and Lou