The Livable Wage Act
The subject of fair and adequate compensation for hours worked seems to be an issue that is highly influenced by the ones paying the employees rather than the employees who are subject to the law. Currently the minimum wage in the United States is $7.50 per hour worked. That would mean that if an individual worked 40 hours in a week they would generate $300.00 every week. After taxes this number is much lower. If we take into account the expenses associated with providing the basic needs to be productive and thrive in today’s society such as , Health care, shelter, food, water, electricity, fuel and transportation it becomes very apparent that the federal minimum wage is not enough to cover these costs. In actuality it is only about half of what would be needed. The following is a breakdown of national monthly averages associated with the previously listed expenses.
Average rent paid: $799.00 (areavibes.com, 2012).
Average food bill: $292.30 (USDA, 2012).
Average Health Insurance (25-29): $233.14 (Bureau of Insurance, 2012).
Average used vehicle payment: $405.80 (Bankrate.com, 2012).
Average auto insurance bill: $56.83 (Bangor Daily News, 2012).
Average fuel consumption: $207.92 (Bureau of Transportation Statistics, 2012).
Average electricity bill: $103.67 (U.S Energy Administration, 2012).
Average water bill: $27.91 (Ellis, B., 2012).
Total Monthly Expenses: $1,980.37
With the total income of an individual working 40 hours a week for minimum wage being $1,200 this leaves a very large gap between what is provided and what is needed. The Sustainable Living Act attempts to address not only the issue of inadequate minimum wage standards but its effect on state and federal finance.
The residual effect of such low wages is felt most fiercely by the state in which the individual resides. This is due to the need for assistance that comes from state funding provided by tax payers. One of these is the Food Stamp program. The average monthly award to a single individual is $134.15 (Abrams, J., 2012). This could be eliminated with an increase of just $0.84 to the minimum wage. According to the average health insurance plan of $233.14 per month applying an increase of $1.50 per hour to the minimum wage standard would enable all workers to provide their own health insurance. In the fiscal year of 2010 both state and federal agencies paid out around $2.6 billion in medical expenses to those unable to provide health insurance privately. I am curious as to what percentage of this is awarded to people who are employed yet do not make enough to provide their own insurance coverage. Even just 10% eliminated would save $ 240 million dollars annually that could be used to either help small business achieve the minimum wage standard of education and job creation through infrastructure management.
By ensuring the means of our citizens to provide for these needs themselves the burden of the national and state governments to supplement these needs is lessened. As a natural byproduct the tax revenue required by both state and national government will be reduced allowing for lower taxes for all income groups.
Another benefit is the stimulation of the economy. With a livable wage individuals are more capable of using their income to acquire loans, purchase goods and invest, thus supporting the economic systems that run our country. The bottom line is that the workers are the ones who stimulate economic activity through their income. Therefore it behooves employers to provide their employees the means with which to support their business community.
The Following is a Hypothetical Bill to address the issue.
United States Congress
Committee: U.S Department of Labor Principle Author: Representative Christian L. Perry
Bill No: H.R. 333 Delegation: The Trinitarian Collective Party
Title of Bill:
An Act to Raise Minimum Wage to Meet Basic Living Expenses
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
1. Whereas the national average monthly payment for housing is $799, and since the
2. national monthly average cost of food for one individual age 19-50 is $292.30, and since
3. the average monthly cost of private health insurance for an individual 25-29 is $233.14,
4. and since the national average cost of a used vehicle is $16,000, and since the average
5. monthly loan payment would be $405.80, and since the average monthly cost of
6. automobile insurance is $56.83, and since the national average monthly cost of fuel is
7. $207.92, and since the national average monthly cost of electricity is $103.67, and since
8. the national average monthly cost of water is $27.91, and since the total national average
9. monthly cost of the previously described expenses is $1980.37, and since the current
10. federal standard of minimum wage is $7.25 for every hour of work performed by an
11. individual, and since the total monthly income of an individual performing 40 hours of
12. work receiving the minimum wage standard of $7.50 is $1,300, and since the total
13. monthly income of an individual performing 40 hours of work receiving the minimum
14. wage standard is $680.37 less than the total national average monthly cost of the
15. previously described expenses,
17. SECTION 1: This act may be cited as, “ The Sustainable Wage Bill”
19. SECTION 2: Each State, by county, shall create an agency to evaluate and manage
20. worker compensation wages in relation to basic living expenses.
21. Sub-SECTION A: Definition of “worker”, any individual receiving pay for
22. a service performed.
23. Sub-SECTION B: Definition of “basic living expenses”, Shelter, Food,
24. Health Care, Water, Electricity, Transportation, Fuel and Vehicle
27. SECTION 3: The Federal Minimum Wage shall be raised to that of $15.00 for every hour
30. SECTION 4: Each individual shall be solely responsible for providing health care for
31. him or herself and any legally established children.
33. SECTION 5: No employer shall be required to provide health care compensation and/or
34. coverage to employees.
36. SECTION 6: Money normally allocated to health care for individuals by employer shall
37. be divided evenly among all employees by way of the individuals rate of
38. pay, to equal at minimum the enacted federal minimum wage proposed in
39. SECTION 3.
41. SECTION 7: Through the enactment of SECTION 2, each state shall be responsible for
42. setting the minimum wage compensation in their respective counties to
43. match, based on full time employment, the expenses listed in SECTION 2:
44. Sub-SECTION B.
45. Sub-SECTION A: Each state must meet federal minimum wage enacted by
46. SECTION 3
47. Sub-SECTION B: Each state through the enactment of SECTION 2 shall
48. determine the income disparity between the federal minimum wage and the
49. county’s average cost of living as defined by SECTION 2: Sub-SECTION
51. Sub-SECTION C: Definition of “full time employment”, any individual
52. preforming 35 or more hours of paid service in a 7 day period.
54. SECTION 8: All businesses falling under the designation of “small business” shall be
55. eligible for state funding to help employers meet the minimum wage
56. enacted by SECTION 3.
58. SECTION 9: Funding both Federal and State that is currently being used to supplement
59. health care shall be further more used to facilitate the enactment of
60. SECTION 8.
62. SECTION 10: Upon failure to meet the standards enacted by this bill the entity shall be
63. subject to a fine of up to $50,000 and retroactive reimbursement of wages
64. unpaid to respective employees.
66. SECTION 11: Definition of “entity”, the owner of the business.
67. SECTION 12: Upon failure to meet the standards enacted by this bill the entity shall be
68. Subject to a Class C Felony charge.
70. SECTION 13: This Bill shall go into effect 1 year after passage.