Three
GSPIA faculty members address the effect of Federal
Minimum-wage increase on workers, business, and consumer
costs; and what the "right" wage really
should be.
Ralph Bangs , associate
director of the Center on Race and Social Problems
and co-director of the Urban and Regional Analysis
Program at the
University Center for Social and Urban Research (UCSUR),
studies working wages and the cost of living in the
Pittsburgh area. A 1997 study Bangs coauthored found
that local working families with a basic, no-frills
lifestyle needed a minimum wage much higher than the
state and federal levels--at least $6-per-hour per
person for a couple with no children. Pittsburgh 's
cost of living meets the national average, while wages
for part-and full-time employees in the area are lower
than in the rest of the nation. "It's very clear that
the benefits of a minimum-wage increase would be greater
here," Bangs said. "The benefits of raising the minimum
wage are many and the negative effects are few."
Susan
Hansen, professor of political science
in Pitt's School of Arts and Sciences, said much of
the debate over the minimum wage has focused on its
alleged adverse effects on employment. Yet, recent
empirical research has found little evidence of higher
unemployment after an increase in the minimum wage.
As a result, the debate has shifted to the following
three issues:
* Impact on consumer demand: People who earn more
can spend and save more. This can boost the whole
economy;
* Impact on social services: People who earn more
will have less need for welfare or subsidized housing,
and are less likely to be homeless; and
* Fairness: Compensation for CEOs and elected officials
has increased markedly since the federal minimum wage
was last raised in 1997, while overall wages and median
family incomes have remained stagnant.
Hansen's publications include "The Impact of
a Low-Wage Strategy on State Economic Development,"
State Politics and Policy Quarterly, and "Life
Is Not Fair: Governors' Job Performance and State
Unemployment," Political Research Quarterly.
Hansen has joint appointments in the Graduate School
of Public and International Affairs and the Women's
Studies Program.
Angela
Williams Foster, professor of public
and urban affairs in the Graduate School of Public
and International Affairs, said raising the minimum
wage to $7.25 is a step in the right direction. "However,
for many households, the increase will be insufficient
for them to afford the bundle of goods and services
associated with everyday life," Foster said.
"A significant number of housing units will remain
out of reach for residents, without receiving additional
subsidies or making compromises in housing quality
standards." To afford a two-bedroom rental unit
in the Pittsburgh region (valued at $750 by the Fair
Market Rent), the household would need to earn an
hourly wage of $14.50-well above the minimum wage,
she said. "Additional policies are needed to
bring housing units within reach for all of our region's
residents, in order to fill the gap between the minimum
wage and a wage that would be consistent with typical
living expenses," Foster said.
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