32 HR Magazine September 2017
as Sen. Bernie Sanders (I-Vt.), who this year introduced a bill to
gradually raise the federal minimum wage to $15 per hour by
2024, a Republican-controlled Congress is unlikely to approve
such a move any time soon—and even many advocates of an
increase concede that a jump that large would likely lead to the
elimination of jobs.
In the meantime, however, the fight has spurred nationwide
debate, and legislators in numerous cities, states and counties
have jumped in to provide higher minimum wages, creating a
patchwork of requirements. In 2017 alone, 21 states—
including California, New York and Florida—have raised their state
minimums, with current rates ranging from a modest $7.50
to a high of $11, with incremental raises to come. Some cities
have gone even further. Seattle, for example, recently hiked its
minimum to $15.
Another complication: Minimum-wage laws often phase in
the wage increases gradually over a series of years, and with varying requirements for businesses of different sizes and for tipped
employees. As further legislation is considered in state capitols
and city halls from coast to coast, employers and HR professionals face a complex and ever-changing compliance climate.
At the same time, leaders at an increasing number of companies are voluntarily opting to raise minimum pay, either to stay
competitive in today’s tight labor market or out of a growing
recognition that few people can make ends meet on the current
Not Enough to Get By?
Although a dollar goes further in some places than others, living on
minimum wage is tough everywhere—especially if you’re trying
to support a family, as about one-third of minimum-wage workers
are. According to a recent report from the National Low Income
Housing Coalition, there isn’t a single U.S. state in which people
earning $7.25 per hour can afford the rent for a two-bedroom
apartment, assuming they are spending 30 percent of their income
on housing, which tends to be the nationwide norm. At that rate,
an individual would have to work an unsustainable 117 hours per
week to pay the rent.
“These are workers who have trouble affording rent and living
without racking up significant credit-card debt,” says Paul Sonn,
general counsel and program director at the National Employment Law Project, which favors a higher minimum. “Getting a
$3,500 raise [to their yearly pay] is enough to enable workers
to afford better housing and to cover basic living costs without
going into debt. For workers with children, it enables them to
afford healthy food and nutrition and other things,” he adds. “A
wide range of social and public health indicators improve when
workers at the bottom get raises,” Sonn says.
For now, though, many minimum-wage workers—including 52
percent of fast-food workers and nearly half of home-care workers—rely on government subsidies such as food stamps and Medicaid, according to a 2015 report from UC Berkeley’s Center for Labor
Research and Education. These statistics suggest why some people
argue that a stagnant minimum wage forces taxpayers to subsidize
businesses that employ large numbers of low-wage workers.
On the other hand, opponents point out that the minimum
wage was never intended as a living wage, but rather a learning one. “I’m continually reminding legislators that the wage
is just one part of the investment that an employer makes in
an employee,” says small-business lobbyist Randi Thompson,
Nevada state director of the National Federation of Independent
Business. When a business hires younger or entry-level workers,
she notes, the workers are often essentially getting paid to learn
how to do the job. Once they start excelling , she says, then they’ll
see their salaries increase in kind.
Forcing employers to pay higher than market rates, she says,
reduces opportunities for these entry-level jobs and requires
employers to cut back hours, raise prices or even lay off employees. Such regulations take a disproportionate toll on small businesses, which have a harder time absorbing the greater expense
and administrative costs of compliance. “It’s so simple to say,
‘Oh, just raise the price for a burger by 5 cents’—that might be
fine for a McDonald’s,” Thompson says, “but it’s not for a small