Raising State Minimum Wage Hunter Cole Sophie Watt

Reference Material (print out for handout with data) MINIMUM WAGE– Explain state, and fed minimum wage laws. Fed minimum wage: $8.25-$7.25 and does not increase automatically for inflation. Displays the data from MIT study in a table with Montgomery living wages needed to survive with a single adult, adult couples, and adult couples with children (1-3).

Alabama’s Minimum Wage Status According to our research the federal minimum wage is $8.25 without health insurance. If employees are given health insurance and there are under 100 employees within the firm, then the mandated federal wage is $7.25. If health insurance is offered but the firm has more than 100, then the wage is $8.25. This is where AL gets its minimum wage from AL= Federal Minimum Wage Smaller states like ours set the true limits on minimum wage, since our living wages are normally lowest– the fed. Government can not make minimum wage less than one adults living wages in this area.

How is minimum wage calculated? Living Wages– Amount needed to live in an area with necessities Formula for Calculating: living wage= Basic needs budget + (Basic needs budget * Tax rate) Basic needs budget = Food cost + child care cost + (insurance premiums + health care costs) + housing cost + transportation cost + other necessities cost MIT study in 2016 determined the amounts/salaries needed to live in every major area in the U.S. Our research includes the results of this study’s observation of demographic, and economic statistics for the Montgomery populous area. These demographics are separated by family capacity

Why do we need higher wages? Income inequality- currently the income inequality ratio is 16.8, ranking Alabama at 41st in the nation As demonstrated on the handout families with more than 1 adult, and any children simply cannot sustain on minimum wage. The fact these families cannot sustain is not our opinion, but is supported by the premise that when minimum wages, and even living wages are calculated, $7.25 is simply not enough to support a family, even in AL.

Basic Expenses of Families in 2015 The1999 living wage was $5.15, it is much higher as of 2015 (see handout). Yet the minimum wage has changed little to none in AL. However, America wants it’s families to be able to get by, in all states. States like ours with low minimum wages are often at the precipice for change. Alabama’s lower rate of basic expenses, and low costs of living impart are some of the factors that affect minimum wages.

Process to Raise State Minimum Wages Step 1- Know the political, and economical atmosphere Step 2 - Propose bill to state legislator Step 3- Get bill passed with a majority from both House of Rep. and State Senate The governor can veto this legislation if they see fit. These obstacles have caused minimum wage status in this state to remain stagnant.

We may ask ourselves, “why should I care We may ask ourselves, “why should I care? This issue does not affect me, I do not make minimum wage.”

However, we could not be any farther from the truth. States with low minimum wages set the precedence for the fed minimum wage. The government sets this federal minimum wage in proportion to the lowest and highest state’s needs in terms of basic family expenses AL needs to go ahead, and raise the minimum wage to $9.25-$8.25 so we are not one of the first ones affected by the presidential increase that is noted on p. 2-3 of handout– feel free to take these handouts with you and read this section after the presentation

Why it Matters Locally The rest of the state is looking to Montgomery as the political capital to spearhead the movement to raise the state minimum wage. AL unemployment percentage is 6.1% which is the 42nd lowest percentage among states in U.S. (this is not good we can try and correlate with example on next slide showing a state who raised wages and saw decrease in unemployment rates).

Repercussions to Raising State Minimum Wage What would happen if we raise it– The dollar gap for health insurance would cause AL minimum wage to be $9.25 an hour, or $8.25 an hour for firms with over 100 employees Decrease potential amount of workers, and families on public assistance programs that are both federally, and state funded Unemployment rates will decrease–

Effects on Small Businesses According to DOL Reports Will small businesses be able to sustain at a minimum wage such as the one Ms. Watt and I are proposing at a modest $9.25 per hour? “Higher wages sharply reduce employee turnover which can reduce employment and training costs.” “A July 2015 survey found that 3 out of 5 small business owners with employees support a gradual increase in the minimum wage to $12.” These small business owners stated an increase "would immediately put more money in the pocket of low-wage workers who will then spend the money on things like housing, food, and gas. This boost in demand for goods and services will help stimulate the economy and help create opportunities."

Raising AL Minimum Wages The citizens of this great state deserve to be able to live comfortably at the living wage for this state even while earning minimum wage. These workers should in turn be able to earn enough to support their families but as we see form figure 1.1 and 1.2, this Is not the case Families in this state are struggling and as of two years ago 77,000 people in this state were living at the poverty line.

We must act now and raise the minimum wage!