It seems that the term poverty has been sidelined from our national discourse, even though 15 percent of all Americans, and 26 percent of African-Americans experience poverty. The Fair Labor Standards Act was signed into law on June 25, 1938, so perhaps 75 years later is a good time to explore the roots of the minimum wage and why it remains important.
When the law was passed, it applied to industries that employed only a fifth of the workforce. Private household workers (or “domestics,” mostly African-American women), and farm workers (mostly African-American at that time, though later mostly Latino) were exempted from the law.
Now domestic workers are included in the Fair Labor Standards Act to the point that employers are required to issue these workers W-2 forms if they are regular workers, to withhold Social Security and other federally-mandated taxes from their pay, and to match Social Security contributions as required by law.
Of course, many of these workers are paid informally, or “under the table,” and they make less than the minimum wage.
Those who receive tips as little as $30 a month in tips earn just $2.13 an hour. That’s certainly something to think about when providing your server between 15 and 20 percent at the end.
Some restaurants may offer more than the minimum $2.13 an hour, but many do not pay as much as minimum wage (currently $7.25).
While agricultural workers should, technically, earn the minimum wage, there are enough exceptions to this provision that many agricultural workers do not earn $7.25 an hour.
Additionally, undocumented immigrants have little leverage at the bargaining table. They earn less than the minimum wage when they are desperate for employment.
Small farms are also exempt from paying the minimum wage. Someone who earns the minimum wage of $7.25 an hour who works 40 hours a week, 52 weeks a year, earns about $15,000 a year. If they are an hourly worker without benefits who takes any time off, the $15,000 earnings drops off. While many minimum wage workers are part-time workers, some cobble together several part time jobs to make enough money to live.
Hardly a living wage
For full-time workers, parents, and others, the minimum wage is hardly a living wage.
President Obama has suggested raising the minimum wage to $9 an hour over a three-year period, taking the annual minimum wage for a full-time worker to almost $19,000 a year.
The Federal Minimum Wage Act would increase hourly wages to $10.10 by 2015, making annual pay about $21,000 by that year. It would also index the minimum wage to inflation.
The feisty and fantastic new Senator from Massachusetts, lawyer Elizabeth Warren, has indicated that she considers $22 an hour (or about $45,000 a year) a living wage.
Least and left out
About 2 million people earn the minimum wage, and another 1.6 million actually earn less.
These are the people recorded, not the actuality of those paid under the table. This represents less than 5 percent of the workforce, but this is why we should pay attention to them.
African Americans, Latinos, and women are most likely to be represented in this 3.6 million. They are more likely to be young (though those 18-25 are adult and may be raising families), less educated and single.
They are the least and the left out. They are young women raising families, students trying to scrap together living expenses, or those with qualifications but not opportunities.
These folks work in service and hospitality industries, serving our food, parking our cars, taking care of our mamas, and cleaning our rooms when we stay in hotels. I don’t care if they are 4.7 percent of the labor force, less or more. The bottom line is that it is overtime to raise the minimum wage.
(Correction: In my column last week, I erroneously said the Howard University College of Medicine did not admit any African-American males this year. I restated a comment I heard during a “think tank” at Rodham Institute. I was extremely remiss in not fact-checking this statement. According to Howard, as of June 18, 2013, of the 120 newly admitted medical school students, more than 30 percent are African-American men. My apologies to Howard University and anyone inadvert.
Julianne Malveaux is a Washington, D.C.-based economist and writer. She is president emerita of Bennett College for Women in Greensboro, N.C.