Minimum Wage Reality Check
It’s a hot day in Las Vegas, and I am standing outside a McDonald’s with the organizers of the Progressive Leadership Alliance of Nevada, a local nonprofit, and a handful of protesters. This is my very first protest, under the banner of the Fight for 15 Movement, a campaign to raise the minimum wage nationwide. I stand chanting with the group, but inside I’m a mess of emotions - anger, confusion, disbelief.
Just an hour ago, the burden of living in poverty had been a vague concept. Intellectually, I knew that living decently on minimum wage in a big city like Las Vegas was becoming impossible, but as someone raised with economic privilege I had never been exposed to that reality. It was hard and unfair, I conceded, but not something that I had spent much time thinking about.
Then I met the workers gathering to protest. One young man worked 40 hours a week for a major fast food chain, yet was still homeless. Another woman worked full-time but couldn’t even afford to take the bus to work – she had to walk over an hour each way. There were homecare workers in their 60s, unable to retire because they hadn’t received a pay increase in decades.
Their stories are repeated across the nation, among people we interact with everyday in restaurants, retail shops, and supermarkets. They are the people who put our purchases in little bags then smile and politely tell us to have a nice day. Meanwhile, their days are long and harsh - working full-time, often hustling to balance multiple jobs, and still somehow mired in the cycle of poverty in the richest country on earth.
I was in shock.
According to the U.S. Census Bureau, there were more than 40 million people living below the poverty line in 2016, the most recent year for which data is available. Perhaps more strikingly, data shows that 21% of all children in the United States live in poverty, a figure that surpasses former Eastern Bloc states Estonia, Slovakia, and the Czech Republic.
Economic inequality has become an alarming reality of life in the United States, with the gap between rich and poor having widened dramatically over the last 40 years. In 2015, the top 20% of earners in the country earned over eight times more than the bottom 80%, according to data from the Organization of Economic Cooperation and Development (OECD). This is the highest rate among developed countries, and the farther you climb up the income ladder, the starker the divide: the top 1% of earners take home nearly 40 times more than what the bottom 90% make.
The question begs itself: why is economic inequality so staggering in what is supposedly the richest country in the world? One likely factor is that the minimum wage has been virtually stagnant since the late 1970s. According to data from the Economic Policy Institute, between 1979 and 2015 the bottom 90% of workers saw an average real pay increase of just $6,000, compared to an increase of more than $400,000 for the top 1% of earners. Moreover, hourly compensation has floundered for the last 40 years even as worker productivity shot up by more than 130%. Translation: workers are getting paid less for doing more.
Income disparity has been a major cause of wealth inequality in this country, but there are other contributing factors. The often murky relationship between politicians and big business certainly hasn’t helped the matter - big business actively and aggressively lobbies Congress to pass legislation that benefits shareholders at the expense of workers. The most recent example, of course, is the GOP tax plan, which President Trump signed into law in late December. Republicans argue that their plan will “save” taxpayers around $1,600 a year, but that’s a sharp distortion of its true impact. In fact, the new plan lowers marginal income tax rates for nearly everyone except the lowest earners, who will continue to pay a 10% rate, even as the wealthiest Americans get a 2.6% decrease in their rate. The only other bracket to not see a tax rate decrease consists of individuals making between $200,000 and $500,000 annually, the distinctly upper-middle class. Perhaps more significantly, the tax plan doubles the exemption level for the estate tax from $5.6m to $11.2m, meaning the tax is only applied to estates over the $11.2m threshold. This specific policy allows the richest people in our country to restructure their estates so that they can pass significantly more of their wealth to descendants, further consolidating overall wealth in our country. Essentially, the Republican tax plan allows the wealthiest among us to take an even larger share of the economic pie, while its cumulative impact could cost taxpayers more than $2 trillion in revenue. Meanwhile, the poorest continue to pay the same tax rate and get fewer deductions while their wages stagnate. The rich get richer, the poor get poorer.
We know that poverty is the root of many social problems: crime, drug use, even psychological issues have been linked to this epidemic. In Brazil, for example, surging violence has been linked to huge gaps between the rich and poor. In Mexico, where the richest 20% of earners make more than 10 times what the poorest 80% make, the homicide rate exceeded that of war torn Iraq and Afghanistan in 2016. There is no question, therefore, that narrowing the wealth gap in our country is in the best interests of our society.
When I stood with the workers on strike that day, I was standing next to a young couple, fighting for their right to survive. They had anger, determination, and stamina on their side. But my eyes kept going to the group of elderly men and women, the homecare workers who had spent their whole lives working, now standing out in the sun because they couldn’t afford to retire. One woman told us that she was proud of the work she did - she helped people who were vulnerable and sick, and it was a worthy cause that she would not abandon. But who would take care of her when she was in that place? So far, her employers haven’t bothered. They won’t bother unless we make them.
Nadia Eldemerdash is a writer and editor based in Las Vegas. A journalist by training, Nadia's writing focuses on diversity, representation, and social and environmental issues. Her work has been published in Muftah, The Riveter, and Desert Companion. She is also an editor with The Tempest.