Thoughts on wage Inequality

Did you know that the first people, in 1806, who tried to negotiate higher pay were found guilty for an “illegal conspiracy to raise their wages”? It was a group of shoemakers who formed an organization called the Federal Society of Journeymen Cordwainers to ask for more pay for the inhuman amount of hours they working.

Workers have the right to find a way to improve the system to enable it to work for them.

The federal minimum wage is $7.25 per hour, which is lower than the 2022 Colorado state minimum wage of $12.56. Pretty good, right? Well, not exactly. What does $12.56 really mean? How do we know if that’s a living wage? A living wage is the hourly rate that an individual in a household must earn, on a full-time basis (2,080 hours/year) to support their basic needs. Therefore, the missing part of the equation is cost of living.

Cost of living has significantly outpaced wage increases. Nationally, childcare and housing comprise 21.6% and 19.7% of household income, respectively. Costs rose faster for low-income working households because they spend more on goods and services with high inflation; and these households also spend more in a year than they earn in wages.

In Westminster:

Impacts of low wages

Income inequality has mainly been driven by the growth of hourly wage inequality and a corresponding decline of the labor share of compensation. How bad is this issue in Colorado? In 2018, out of 2.6M total jobs, 23% (over 600K) are classified as low-wage. Essential workers (e.g. healthcare, grocery workers) comprise ~50% of all low-wage workers in Colorado. Workers in the bottom 20% of earners saw their income fall, while the top 20% of earners have seen their wages rise substantially since 2000. Pandemic-related unemployment jumped 21% for low-wage workers earning under $27,000 a year. Note: women are more likely to work in low wage jobs than men, and Black/Latinx/multiracial worker are more likely to work in low wage jobs than white workers. And if you believe that most low-wage workers are teens, the reality is that more than half low-wage workers fall within the “prime working” years of between 25 and 54.

One out of every 11.7 Westminster residents live in poverty - reporting income levels below the poverty line. The poverty rate in Colorado hovers around 11.5%. Why does all of this matter? Well, our workers in low-wage careers are less likely to marry and more likely to divorce. They are more likely to experience family instability - because higher wages lead to more stable families.

In Colorado, the women's-to-men's earnings ratio hovers around 86%, and average weekly earnings fall 22% lower than men. The poverty rate for working single moms would slice in half if we eliminated the gender pay gap.

Childcare affordability is a silent killer in Westminster, and Colorado is the 11th most expensive state for childcare (avg. ~$14K/year). Low wages make childcare even more unaffordable, leaving our working families to make hard decisions about how to best care for themselves and their families.

Additionally, low wages are unhealthy, as low-wage workers are less likely to get decent health care because they can’t afford it. It is associated with increased hypertension, obesity, stress, low self-esteem and smoking.

The education gap is also heavily influenced by low wages. Low-income Black and Brown students need more access to resources, counselors and administrators that can help close the education gap and guide them through an uneven playing field.

For example, we can ensure low-income students can get an education with dignity without having to worry about cost or access to expensive menstrual products (Avg. ~$6,000 per year). We can help these students venture beyond the lines society has drawn for them.

What can we do about this

I’m driven to enable an environment for our working families to seize the opportunity for self-determination; and the reality is that control over your own destiny is inclusive of your work experience. Today, whenever I think of socioeconomic disparity, the first word that always comes to mind is hope.

I think of hope because this is an area ripe for cross-racial solidarity. Although Black and Brown people are disproportionately impacted by the income gap, poverty wages are distinctly shared across racial boundaries. After the aforementioned court case, as the country shifted into the Industrial Revolution, (Southern) anti-slavery sentiment was prevalent amongst mill workers (Northern), because they shared similar lived experience of grueling work in the factories of the cotton production process which originated from slave cultivation of cotton in the South.

Modern opponents of the need for a living wage will often say that current compensation is fair and/or say some variation of “just work harder and stop asking for handouts.” The reality is that society (mainly unions) has always had to fight the ruling class for every workplace feature we currently take for granted. Some examples include: lunch breaks, paid sick time, safety measures, the right to quit an intolerable job, and so many more hard-fought victories of the labor movement:

• 1938 (after centuries of worker exploitation): The Fair Labor Standards Act was signed; gives us the minimum wage, overtime pay, the 40-hour work week, the weekend (yes, literally), and ended child labor

• 1964: Anti-discrimination laws, and the right to equal pay. Pay discrimination by:

  • Race: Title VII of the Civil Rights Act of 1964

  • Sex: Equal Pay Act (which only applies to sex) of 1963

  • Age: The Age Discrimination in Employment Act of 1975

• 1970: Right to health and safety in the workplace

Solutions:

• Surprise: give your workers competitive, living wages

• Ban employers from asking you what your former wage was in order break the cycle of unfairly low salaries.

• Supplement local funds to raise minimum salaries for teachers statewide

• For the childcare crisis, higher wages along with subsidies/credits for low-income families will help these workers avoid the difficult choice of wages vs. family.

• Employer-provided funds for specific education and training opportunities for certificates and licenses

• Give low-wage workers schedule flexibility and help them realize meaning, purpose, and recognition for their work.
  
  

P.S. if you’re curious what a living wage should be, a research firm pulled this data together: