Minimum wage proposals worthy of consideration

Posted: Monday, January 22, 2001

The following editorial appeared in Friday's Anchorage Daily News:

There appears to be agreement in Juneau that Alaska's lowest-paid workers are due for a raise.

Democratic Gov. Tony Knowles has proposed a two-step increase to $7.15, and then automatic increases tied to the Consumer Price Index. Republican Rep. Pete Kott of Eagle River has proposed a two-step increase to $6.90, with no CPI-linked raises.

Either way, we raise the floor for Alaska's lowest-paid workers, and that's good.

Since Alaska's first year of statehood, the minimum wage here has been 50 cents more than the federal minimum, by law.

In 1959, that made a bigger difference than it does now. With the federal minimum then at $1, most Alaskans could be paid no less than $1.50, or 50 percent more than low-wage workers Outside.

Today, Alaska's minimum wage of $5.65 is less than 10 percent more than the federal minimum of $5.15. Here's how Alaska stacks up against the rest of the West Coast.

California, $6.75;

Washington, $6.72;

Oregon, $6.50, and

Alaska, $5.65.

"We pay baby sitters more than the minimum wage," said Senate President Rick Halford, saying he'd support an increase.

As Rep. Kott and others have pointed out, according to the latest available (1998) Department of Labor figures, only about 14,000 Alaskans are classified as low-wage workers, in the range $5.65-$6.74. That's 5.5 percent of all wage and salary workers.

What an increase in the minimum wage would do is take some of these workers closer to a living wage. That's closer - not there.

State Labor Commissioner Ed Flanagan said a decent minimum wage is part of the social contract. An honest day's work should fetch an honest day's pay, no matter how menial or unskilled the work in some people's eyes.

The Department of Labor says a single parent with two children working full time at the current $5.65 minimum wage will make $11,752, far below the federal poverty level of $17,690. Even at $7 an hour, that parent will make only $14,560.

The governor's proposal to link yearly increases to the Consumer Price Index is intriguing. Essentially, minimum-wage workers would get raises to match cost-of-living increases. In terms of purchasing power, these wouldn't be raises at all, but a means to keep many low-end workers and their families from sinking further below the poverty line.

The state of Washington is alone among the states in linking minimum wages to the Consumer Price Index. Voters there passed a minimum-wage initiative in 1998, and their first automatic increase just kicked in this month, raising the minimum by 22 cents to $6.72.

That idea needs study, especially an evaluation of Washington state's experience. But there's little dispute about whether to increase basic minimums now.

"An implicit moral code operates just under the surface of our otherwise impersonal economy," former U.S. Labor Secretary Robert Reich said during a 1996 battle to raise the federal minimum wage. " ... the vast majority of the time, the vast majority of us are content to allow the market to dictate who should get what, and how much.

Capitalism works best when it is unfettered.

"But there are times and there are conditions when we insist on a minimum standard of fairness ...

"This implicit moral code stands for the simple proposition that anyone who works hard should earn at least enough to keep themselves and their immediate families clothed, fed and sheltered."

A fair minimum wage is one of the ways we live by that code. Gov. Knowles' and Rep. Kott's proposals are welcome.

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