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Friday, December 28, 2012

Low-wage RI workers will get a raise on January 1

State minimum wage will go up by 4.7%
By Will Collette

Starting January 1st, Rhode Island’s minimum wage will climb to $7.75 from its current $7.40. Rhode Island is one of 18 states, including every New England state except New Hampshire, that sets the minimum wage higher than the federal rate.

Around 11,000 RI workers are currently paid minimum wage and will directly benefit from the raise. Another 18,000 RI workers will have their wages adjusted upward.

After January 1, year-round full-time work at minimum wage will give a worker an income of $16,120 a year.

The Rhode Island AFL-CIO notes that 64% of minimum wage workers are over 20 years old, 69% work more than 20 hours a week, and 40% have at least some college training.

RI AFL-CIO President George Nee says the raise “will help promote economic growth by boosting the exact kind of consumer spending we need to accelerate the post-recession recovery.”

Conservatives argue that the minimum wage actually hurts the economy by causing employers either to not hire unskilled workers or to cut back on their hours, but there is little evidence to support this claim. What is proven is that employers that pay their workers low wages (e.g., Wal-Mart) pass the costs to help workers and their families survive onto others.

Even at the new rate, a worker earning only $16,120 a year will need Food Stamps, heating assistance, the Earned Income Credit and other types of public and private assistance to feed, house and clothe their families.

One large concentration of minimum wage workers can be found among the ranks of day laborers dispatched from the many temporary employment agencies found around the state. I have worked with Fuerza Laboral to go after temp firms that not only employ workers at minimum wage but also often commit “wage theft” by not paying their workers at all.

Charlestown’s median income for a family of four is currently at around $84,000, or more than five times the annual income of minimum wage workers. However, Charlestown’s unemployment rate seems stuck around the 10% mark. As more unemployed workers run out of benefits – and that doesn’t even factor in the impact of the impending “fiscal cliff” that will eliminate all federal extended unemployment benefits – Charlestown’s median income may drop.

Though much of Charlestown’s poverty is not very visible, it’s there, evidenced by the steep increases in demand for local social services and food assistance from church food pantries, RI-CAN, the WARM Center and the Jonnycake Center.

RI Kids Count tallies 217 Charlestown children whose families receive Food Stamps; 424 Charlestown children are on Medicaid.

While this increase in the state minimum wage is welcome, and the $500 in added income will certainly be spent helping not only those workers but also our economy, we need more jobs and businesses that pay decent wages and benefits to provide people with a chance to live better lives.