Child poverty rates highest in states that haven’t raised minimum wage

Ricarra Jones of the group Maryland Fight for 15 speaks at a news conference in Annapolis in 2019, surrounded by state legislators who supported a $15 an hour minimum wage. Photo by Danielle E. Gaines.

Of the 20 states that have failed to raise the minimum wage above the federal standard of $7.25 an hour, 17 have more than 12% of their children living in poverty, according to an analysis of wage and poverty data in Chamber News of the States. Anti-poverty advocates say that’s a sign that lawmakers desperately need to increase the federal minimum wage and do more to help struggling families.

Congress had a chance to achieve the latter by increasing the child tax credit before the end of the year, but Democratic lawmakers did not find a deal with Republicans to include it in the omnibus spending package. The expansion, which was part of America’s Rescue Plan, provided qualifying families with up to $3,600 in monthly installments and has increased benefits. 3.7 million children out of poverty at least temporarily.

Raising the minimum wage would not be as fast or as significant an improvement, but in 2019 Congressional Budget Office Analysis found that increasing the amount to $15 an hour would lift more than 500,000 children out of poverty. And the Institute for Economic Policy estimated in 2021 if Congress succeeded in raising the minimum wage to $15 by 2025, up to 3.7 million people would not have to live in poverty — 1.3 million of whom are children.

Ben Zipperer, an economist at the Economic Policy Institute, said there is a strong link between the minimum wage and poverty.

“It’s not a 1-1 link, but there’s a pretty strong link,” said Zipperer, who has expertise in minimum wage labor markets, inequality and low wages. “The main determinants of poverty in this country are whether you work and how much you work, so whether you have a job throughout the year and how many hours a week or weeks a year you work at that post. … And then the third [determinant] it is the amount you were paid for an hour of work at your job. If you’re getting a relatively low wage, the minimum wage affects that.”

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Congress last raised the minimum wage in 2009, but 30 states, including Maryland, now require employers to pay more than the federal standard, according to the National Conference of State Legislatures. Many municipalities have also passed living wage laws for city or county workers.

Twenty-seven statesincluded New Jersey, Florida, California and Missouriwill raise their state’s minimum wage in 2023, after legislation is passed or voter-approved ballot measures that gradually increase the state minimum wage over several years or tie it to inflation. Washington ($15.74), California ($15.50) and Massachusetts ($15) will have some of the highest state minimum wages in 2023, although the high cost of living in those states moderates the effect on poverty rates.

Maryland’s minimum wage is also going up on January 1st — to $13.25 an hour for businesses with 15 or more employees and $12.80 an hour for businesses with 14 or fewer. The state is set to reach a $15-an-hour minimum wage for large businesses in 2025 and for smaller businesses in 2026 — but Gov.-elect Wes Moore (D) has suggested he’d like to speed up that timeline.

In Missouri, where the minimum wage will be $12 next year, 2018 analysis The Economic Policy Institute found that Proposition B, the ballot measure responsible for the wage increase, would increase wages for 677,000 people in Missouri.

States whose legislatures have not raised the minimum above the federal $7.25 an hour include Mississippi, Louisiana, Georgia, Oklahoma, Tennessee, Kentucky, Arkansas, North Carolina and South Carolina. All have child poverty rates of 20% or higher, according to US Census data analyzed by 24/7 Wall Street, a financial news site. Mississippi has the highest child poverty rate in the United States, at 27.6%, followed by Louisiana at 26.3%.

Zipperer said many of these low minimum wage states are concentrated in the Southern United States for a reason. He cited the political deals made by lawmakers leaving out Black workers of the labor rights gains of the 1930s, made for Southern Democrats.

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“The legacy of that racism affected the early years of the national minimum wage and labor law in general in the United States, and while it was somewhat ameliorated and overcome by the civil rights movement, you see a parallel to what it is now when you have a lot of money. places in the South that don’t have a minimum wage or that have a very low minimum wage, so they follow the federal standard that Congress has refused to raise for the past 13 years,” he said.

He added, “That reduction in the cost-of-living-adjusted value of the minimum wage disproportionately harms the lowest-paid in the US economy and because of our sexist and racialized labor market, that is women and people. color.”

In Louisiana, for example, 64% of women of color earn less than $15 an hour, while 58% of Black workers and 50% of Hispanic workers also earn less than $15 an hour, according to the report. Oxfam Americaanalysis of US Census data.

The results of that diversity can be seen in an analysis of data on the quality of life of Lousians conducted by Talk Poverty, a project of the Center for American Progress. it received:

  • 19% of people in Louisiana had an income below the poverty line in 2019.
  • 20% of working-age women and 29% of Black Louisianans in 2019 lived below the poverty line.
  • Louisiana ranked 42nd in the nation in high school graduation rates and 45th in higher education attainment during the 2017-2018 school year.
  • In 2018, 20% of young people between 18 and 24 years of age without advanced school degrees were not at school or working.
  • From 2017 to 2019, 15.3% of Louisiana households were food insecure.

Peter Robins-Brown, executive director of Louisiana Progress, said several factors contribute to the number of Louisianans living in poverty. Louisiana has not prioritized funding programs that would provide economic relief, its tax reform is focused on benefits for the wealthy and businesses, and it has a particularly unfair criminal justice system that punishes the poor, who he said.

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“Social services in Louisiana are largely underfunded, making it easier for generational poverty to continue,” Robins-Brown said.

The state is also in favor rights of landlords on the rights of tenants and people who live in the south of the state and who experience the worst weather disasters high premiums on homeowners insurance, which further contributes to economic inequality, Robins-Brown explained.

Although Louisiana Gov. John Bel Edwards Democrat, and showed support for raising the minimum wage, both chambers of the Louisiana Legislature are controlled by Republicans. Louisiana is one of them 24 states no process for citizens to offer ballot initiatives and voter referendums.

“House and Senate committees that deal with labor issues are a low priority for Republicans and Democrats because industry interests tend to determine the outcomes in those committees,” Robins-Brown said.

For these reasons, Robins-Brown says Louisianans are counting on the federal government to take action to raise the minimum wage. He said his organization supported the expansion of the child tax credit because it was a powerful tool to reduce child poverty.

Last conference fail to increase the minimum wage in 2021, when it was proposed as part of a larger pandemic relief package. fifty Senate Republicans and seven Senate Democrats voted against raising the minimum wage to $15 by 2025. Another missed opportunity is the exclusion of expanding the child tax credit in Congress’ omnibus bill to reduce child poverty.

“The child tax credit reduced poverty significantly during the recent expansion of that program and unfortunately that was temporary,” Zipperer said. “But I think that’s a very clear indication that we have the ability, to some degree, to end a lot of poverty in this country. You just have to overcome the political opposition to do that.”

Josh Kurtz contributed to this report.


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