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My Turn: How our government supports slave labor

With a minimum wage of $7.25, many families must rely on numerous government programs to survive.

Increasing wages for the lowest paid among us would greatly reduce government dependence and the annual deficit of the federal government.

These are things all of us should support.

Let me use a real life example:

A mother and her two teenage children live in the Concord area. The children’s father is deceased. The mother works as close to full time as her employer, a major retailer, will allow. She is paid $10.25 an hour and her total income for last year was $20,500.

How did her family manage to survive? Her biggest expense was rent at $1,000 per month.

Section 8 housing provided a $650 per month subsidy and she paid $350 per month.

Using the IRS tables for Earned Income Tax Credit, she received $250 per month in food stamp benefits to assist in buying some of the family’s food. (Two teenagers remember!)

She received some federal fuel assistance for winter heating from the Community Action Agency amounting to $500 for the year.

Her employer provides health insurance for her but not her children. The children are covered by the New Hampshire Medicaid program, funded 90 percent by the federal government and 10 percent by the state government. If she bought commercial insurance for the children, it would probably cost about $3,000 annually.

This is how the family survived 2013:

Wages: $20,500

Earned Income Tax Credit: $4,100

Section 8 rent assistance: $7,800

Food stamp assistance: $2,400

Fuel assistance: $500

Health insurance (Medicaid): $3,000

Total: $38,000

This family’s earned income of $20,500 was supplemented by more than $18,000 in government financial assistance.

If this mother’s employer paid her $15 per hour (perhaps required by a minimum wage at that level), she would have earned $30,000 and would need and receive much less in the way of government subsidy, probably only the Medicaid for her two children and a much smaller Earned Income Tax Credit.

If her retail industry employer would also include family health insurance as an employer provided benefit, even that subsidy would not be necessary.

Note that this family’s income is too high to qualify for the federal state Temporary Assistance for Needy Families program that most people consider “welfare.”

Also note that reinstating a New Hampshire minimum wage, even at the proposed rate of $9 in 2016, will not help this family in any way as the mother’s wage is already $10.25 per hour.

Why do we, the public, agree to subsidize low-paying employers through these programs instead of insisting that employers pay a livable wage?

Minimum wage should be at least $15 hour.

(Doug Hall lives in Chichester.)

Legacy Comments9

Nice column! Here is some more information supporting an increase in the minimum wage, including the top 5 reasons for an increase. "1.Good for Families: According to economist James Galbraith, raising the minimum wage would raise the incomes of 28 million Americans. Women would particularly benefit because they tend to work for lower wages than men. 2.Good for Economic Recovery: To get the economy back on track, spending power has to be in the hands of those who actually spend in the real economy. That means regular people, not the super-wealthy who tend to hoard wealth or invest in financial products. The minimum wage story is not just a story about income inequality, but rather it’s about an elite that has hijacked the economic system and made it work less productively than before while redistributing more of what is working to themselves. 3. Helps People Get Out of Debt: During the early part of the post-war period, particularly the 1950s and 1960s, entrepreneurship was more concerned with building productive capacity and putting workers to work actually making useful things as opposed to creating financial Frankenstein products like credit default swaps. As our economy has become increasingly directed toward Wall Street and the so-called FIRE (finance, insurance, real estate) sectors, more wealth has migrated to the top 1 percent. On top of that, real wages have increasingly lagged behind the growth in productivity. 4. Protects Workers From Abuse: A higher minimum wage would also help to mitigate the abusive, exploitative working practices of a number of employers, who take advantage of the currently low minimum wage to seek cut-rate help. Such employers often use undocumented labor, which further undermines America’s working poor. 5. Justice for Working Americans: Most of all, a big jump in the minimum wage would be a reparation. Because let’s be clear: class warfare has already been undertaken on behalf of the 1 percent. The past 30 years have witnessed a dramatic redistribution of national and personal income in favor of profits for the rich. At the same time, this period has been associated with a dramatic decline in the performance of the US economy. To raise the minimum wage would be literally the minimum we could do for those who have suffered from the economic crisis: the working population. It would be an act of justice.

You did understand the point of the article right?

was her husband an illegal alien??...if not....where are the survivors SS benefits included in her gross?

Exactly right, Mr. Hall. When the owners of Walmart are in the top five richest people in the world and yet the stores hold a food bank for the employees, something is very wrong. Not only do these companies have the tax payers subsidize the low wages they pay to their workers, , to ad insult to injury, they hide their assets overseas so that they themselves don't have to pay their fair taxes.

I say you and Mr Hall open up a new retail shop in Concord...and you can pay your employees $15 and hour and include health insurance for the family. You wont have any trouble finding a store...just rent out one of the many empty ones. |Say you need 10 employees to start...thats only $6000 a week in payroll....only $24k per month on top of your rent and all the other monthly bills. Dont worry about all that though..I know you can do it...anyone could.

Sour grapes.

again - NOT AN OUNCE OF PROOF in that statement by Tillie

Anybody else see the one sided economic problem with this so -called solution?

got the address wrong...he lives in Rio Linda

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