Minnesota Sen. Paul Wellstone has introduced legislation to raise the nation's minimum wage $1.50 an hour by Jan. 1, 2004.

The proposal comes amid mounting evidence of the wage's inability to keep workers out of poverty as its purchasing power continues to decline. The declining value can be seen in several ways:

* The minimum wage would have to increase nearly $3 an hour, to $8.14, to have the equivalent value it had at its peak in 1968, according to U.S. Labor Department inflation calculations.

* Minimum-wage workers essentially have taken a pay cut equivalent to $1.93 since 1968, according to a new report by the Economic Policy Institute.

* A family of four with two working adults would have to work four minimum-wage jobs - or 160 hours a week - to meet their basic needs, according to the Minnesota Jobs Now Coalition.

'If we look at what the minimum wage ought to be - $8 per hour - then we find that 18 percent of the workers in the state earn less than this,' said Kris Jacobs, executive director of the Jobs Now Coalition.

Wage frozen for last 5 years
The current minimum wage of $5.15 already has lost 10 percent of its value since it took effect in September 1997, according to the EPI report. One result is that a full-time worker in a minimum-wage job - putting in 40 hours a week, 52 weeks a year - earns only $10,700 a year. That income is more than $4,300 below the official 2002 government poverty guideline for a family of three.

'This is unacceptable,' Wellstone said. 'Many of these workers are families with children, struggling to make ends meet.'

The gap is worse if you adhere to the argument that the poverty line underestimates the true cost of supporting a family in the current economy.

The Jobs Now Coalition, for example, estimates that a family of three actually needs to earn nearly $11,000 above the poverty line to maintain a bare-bones standard of living in Minnesota. And that's with one parent working and one staying home with the child. If both parents work, they'd have to earn more than $20,000 above the poverty line, the coalition says.

Increase would be in 3 steps
The minimum wage is not indexed to inflation, so it remains stagnant unless Congress votes to increase it. Even with four increases during the 1990s, the real value of the minimum wage is still 19 percent lower today than it was in 1981, according to the EPI report.

Wellstone's proposal would increase the minimum hourly wage to $5.75 within 60 days after the law takes effect; to $6.25 on Jan. 1, 2003; and to $6.65 on Jan. 1, 2004. The legislation is co-sponsored by Sen. Edward Kennedy (D-Mass.) and others in the Senate; companion House legislation is sponsored by Rep. David Bonoir (D-Mich.).

Wellstone said an increase of $1.50 an hour would raise incomes of full-time minimum-wage workers by $3,000 a year - enough to buy 15 months worth of groceries, pay 7 months of utility bills or several months' rent, or pay tuition at a community college.

'Since a minimum-wage increase goes to families who need every dollar for basic needs, raising the wage will provide a much-needed spur to our slowly recovering economy,' he said.

The EPI report supports Wellstone's argument, saying 61 percent of the benefits would go to households in the lowest 40 percent of income brackets. It says the proposal would directly mean higher pay for 5.6 million workers - 2 million of them immediately.

The report also says a higher minimum wage especially would benefit women and minorities, and workers in the retail, service and food industries.

Countering opponents
The EPI report disputes common arguments against raising the minimum wage - that it primarily benefits teenagers and, rather of helping low-wage workers, eliminates their jobs.

'Most of the workers who would directly benefit from the proposal - 68 percent - are adults,' the report says. If you add possible 'spillover' effects on workers who earn less than $1 above the minimum wage, 'these workers are even more likely ? to be adults working full time,' it says.

The report also estimates that Wellstone's proposal would affect about 4.5 percent of the workforce. The previous increases in the minimum wage - in 1996 and 1997 - affected twice as many workers 'and did so without leading to any measurable disemployment among those affected,' the report says.

Even increases during the weak economy of 1990 and 1991 failed to cause 'measurable employment losses,' the report says. 'There is little evidence for any negative effect on employment from past increases in the minimum wage, regardless of the business cycle.'

This article was written for The Union Advocate newspaper, the official publication of the St. Paul Trades and Labor Assembly. Used by permission. E-mail The Advocate at: advocate@mtn.org