Cost of Living in Texas Rises as Minimum Wage is Stuck in 2009

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(Sources: the proposed increase rate of $10.10 comes from bills in the 85th Texas Legislature, the Statewide Livable Wage comes from Massachusetts Institute of Technology’s Livable Wage Calculator)

A popular social media meme these days is the #10YearChallenge, in which users post pictures of themselves from ten years ago and today to show how they’ve changed over the last decade. When it comes to the minimum wage in Texas, however, the #10YearChallenge would show no change at all.
The federal minimum wage, which currently sits at $7.25 per hour, was mandated in July 2009 and has not risen since. And while more than half the states in the country and several cities have raised their minimum wage in recent years, Texas lawmakers in 2002 tied the state minimum wage to the federal rate and it has not changed.
For tipped workers in Texas, the situation is even worse as they make as little as $2.13 an hour.
In recent elections, voters in a number of states have passed ballot measures to increase the minimum wage, including in two conservative states, Arkansas and Missouri, in the November 2018 midterm.
At the beginning of 2019, nineteen states increased their minimum wage, either because of inflation adjustments, recently passed legislation or ballot measures. That brings the number of states to 30, including the District of Columbia, which have a minimum wage higher than the current federal rate.
Meanwhile, it is increasingly becoming difficult for working Texans to afford living in the Lone Star State. Costs of housing, utilities, transportation, and health insurance continue to rise while wages remain stagnant. One proposed solution is raising the minimum wage.
As the saying goes, everything’s bigger in Texas, and that includes the number of minimum wage workers. The U.S. Bureau of Labor Statistics reported that in 2017, Texas had 196,000 workers making at or below the federal minimum wage of $7.25, more than any other state. An analysis by the left-leaning Center for Public Policy Priorities (CPPP) shows that 2.4 million Texans would earn a pay raise if Texas raises the minimum wage to $10.10 per hour.
The federal minimum wage falls far short of what is needed to make ends meet. According to the Bureau of Labor Statistics inflation calculator, $7.25 in July of 2009, the last time the federal minimum wage was raised, has the same buying power as $8.49 in November of 2018. As costs have risen, the minimum hourly wage simply has not moved.
Rep. Senfronia Thompson (D – Houston), the author of the law that tied the state’s minimum wage to the federal rate back in 2002, believes that Texas ought to raise the minimum wage. She told the Texas Tribune that the wages of working Texans are not keeping up with “the cost of living and the cost of goods and services.”
Jonathan Lewis, an economic opportunity policy analyst for the CPPP, argues that the current minimum wage is a “poverty wage.” To illustrate his point, he said a full-time minimum wage worker in Texas working 40 hours a week, 52 weeks a year would earn $15,080. The federal poverty limit of a single adult is $12,100. For a single working adult with a child, however, the federal poverty limit goes up to $16,460. The current minimum wage is not livable for working Texas families.
To earn a livable wage, a single adult Texan needs to make $11.03, according to the MIT Living Wage Calculator. The Texas Family Budget tool, published by the CPPP, suggests the living wage is even higher when looking at major metro areas of Texas. In the Austin-Round Rock metroplex, for example, a single adult would have to make $13 an hour to earn a living wage.
One common argument against raising the minimum wage is that it is unnecessary because the “the majority of people earning minimum wage are young people starting in entry-level positions.” The opposite, in fact, is true.
CPPP reports that seventy percent of workers in Texas who would benefit from a minimum wage increase are between the ages of 25 and 64, while only three percent between the ages of 16-18. The average worker who would benefit from an increased minimum wage is a 36-year old woman, according to left-leaning think tank Economic Policy Institute.
The Bureau of Labor Statistics reports that 56.6 percent of minimum wage workers in Texas were women. One in five are single parents, and 14.7 percent are single mothers, according to CPPP. Veterans are also affected, which one estimate shows 20 percent of whom could benefit from a minimum wage increase.
Affordable housing advocates argue increasing the minimum wage is one way to help working Texans afford to pay rent or even buy a house. With a lack of affordable housing options across Texas, there are few places a full-time minimum wage worker can afford to live, leaving some to become homeless. In Dallas County, for example, an individual would have to work three full-time jobs at minimum wage to afford to rent a two-bedroom apartment.
As Lewis told Reform Austin, “workers are also consumers.” Increasing the minimum wage would increase the spending power of the working class and their increased participation in the economy would boost it as a result.
A recent comprehensive survey of literature on the effects of raising the minimum wage on employment shows minimum wage increases are not tied to a net job loss, especially when the high turnover in the low wage job market is taken into account. Further, economists now argue that the benefits of a higher wage counteract any negative effects.
Several studies of cities and states which have increased the minimum wage show increases in annual earnings of workers, more productivity from workers and less turnover for businesses. One recent study showed that between 2013 and 2017, wage growth at the bottom was the highest in 15 states that increased their minimum wages.
Despite the apparent benefits, Texas has been unwilling to raise its minimum wage. Since 2009, legislation attempting to do so has never even gotten out of committee, apart from a 2015 joint resolution passing 4-3 in the Business and Industry Committee to reach the House floor. 92 lawmakers, however, rejected the proposed constitutional amendment to put a minimum wage increase before Texas voters.
With the 86th Texas Legislature now in session, four bills have so far been filed in the House and the Senate to raise the minimum wage. Three of those bills raise the minimum wage to $10.10, two of which are tied to proposed constitutional amendments to put the issue to the voters and the third of which is a standalone bill filed by Rep. Thompson. The fourth bill, filed by Rep. Reynolds (D – Missouri City), raises the minimum wage to $15. Another two bills authorize local municipalities to establish a minimum wage.
There is optimism among advocates who want to increase the minimum wage. Ed Sills, communications director for Texas AFL-CIO told Reform Austin, “we think in the context of this Legislature, … a minimum wage increase has the best chance it has had in years.”
Texas lawmakers have an opportunity this session to help lift working Texas families out of poverty and enable them to participate in the economy by increasing the minimum wage.

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