What impact would $9 minimum wage have on Michigan families?
One of the proposals that President Barack Obama presented in his State of the Union address Feb. 12 was to increase the federal minimum wage from the current $7.25 to $9 an hour.
Here’s the snippet from the official transcript:
We know our economy is stronger when we reward an honest day’s work with honest wages.
But today, a full-time worker making the minimum wage earns $14,500 a year. Even with the tax relief we put in place, a family with two kids that earns the minimum wage still lives below the poverty line. That’s wrong. That’s why, since the last time this Congress raised the minimum wage, 19 states have chosen to bump theirs even higher.
Tonight, let’s declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty, and raise the federal minimum wage to $9.00 an hour. (Applause.) We should be able to get that done. (Applause.)
This single step would raise the incomes of millions of working families. It could mean the difference between groceries or the food bank; rent or eviction; scraping by or finally getting ahead. For businesses across the country, it would mean customers with more money in their pockets. And a whole lot of folks out there would probably need less help from government. In fact, working folks shouldn’t have to wait year after year for the minimum wage to go up while CEO pay has never been higher. So here’s an idea that Governor Romney and I actually agreed on last year — let’s tie the minimum wage to the cost of living, so that it finally becomes a wage you can live on. (Applause.)
This is not the first time the topic of minimum wage, or a related topic of living wage, has come up in recent years. That’s one of the reasons I compiled a chart I jokingly headlined “How broke is broke?” The second edition was a highly talked about newspaper column in fall 2012 and I’ve since added even more statistics to my collection.
I think the “how broke is broke?” chart is the best way to illustrate the impact of various wage and salary levels on Michigan families. I built this list around a family of two adults and two young children, as it is a commonly referenced demographic for statistics.
Will increasing the minimum wage make a difference to the working poor?
Yes. A noticeable one.
Will increasing minimum wage to $9, or to the $10 that has been proposed in Michigan, get low-income working families to an economically secure situation?
Not completely, and you’ll see why as you review the numbers.
The “How Broke is Broke?” chart – Feb. 2013 edition
- $14,684 – Eligibility bracket for a family of four to receive energy-related emergency assistance from the Michigan Department of Human Services.
- $15,080 – Annual income for one full-time worker earning the federal minimum wage of $7.25 an hour.
- $15,392 – Annual income for one full-time worker earning the Michigan minimum wage of $7.40 an hour.
- $18,720 – Annual income for one full-time worker who earns $9 an hour.
- $20,800- Annual income for one-full-time worker who earns $10 an hour, a pay scale that Michigan Sen. Bert Johnson, D-Detroit, has proposed as a state minimum wage by January 2015.
- $23,050 – 2012 federal poverty guideline for a family of four as reported by the U.S. Department of Health and Human Services, as it applies to the 48 contiguous states. Percentages of this figure are used to calculate income eligibility for multiple government programs.
- $29,120 – Annual income for one full-time worker who earns $14 an hour. Do remember there was quite an uproar in 2008 as $14 an hour became part of the “two tier workforce” discussions in southeast Michigan.
- $29,965 – Income cut-off point for a family of four to receive free school lunches and breakfast during the 2012-13 school year in the 48 contiguous states, according to the U.S. Department of Agriculture Food and Nutrition Service.
- $29,965 – Income cut-off for participation of a family of four in the Women Infants Children food and nutrition program funded by the U.S. Department of Agriculture and administered through the Michigan Department of Community Health.
- $29,976 – Annual household income cutoff for a family of four on food stamps, per the USDA web site, unless other qualifications are met.
- $30,784 – Annual household income when two full-time workers earn the current Michigan minimum wage of $7.40 an hour.
- $34,000-$50,950 – Income eligibility range for a family of four in most of Monroe County, Mich., for the homeowner program run by Habitat for Humanity of Monroe County, Mich. The Luna Pier income eligibility range starts at $26,000 for a family of four.
- $34,575 – Income cutoff for a family of four on the 2012-13 winter for Winter Protection Plan for winter heating bills via Michigan Gas Utilities. This is 150 percent of poverty level.
- $34,575 – The Michigan income bracket that applies to a family of four for the Lifeline telephone program that allows one discounted (sometimes free) wireless or landline phone service per low income household. You might know this program by its inaccurate nickname of “Obama phones.”
- $37,440 – Income when two wage-earners are working full time at $9 an hour each.
- $42,643 – Income cut-off point for students in a family of four in the contiguous 48 states to receive reduced-price school lunches during the 2012-13 school year.
- $44,700 – Income cut-off for Monroe County, Mich., family of four to receive groceries in fall 2012 from the Emergency Food Assistance Program administered by the Monroe County Opportunity Program.
- $47,162 – Income cut-off on the Earned Income Tax Credit during 2012 tax filing year for a married couple filing jointly with two qualifying children, according to the Internal Revue Service.
- $50,034 – Median household income for Monroe County, Mich., in 2010, according to U.S. Census Bureau.
- $57,000 – or less for gross adjusted income for taxpayers to use FreeFile service for tax season 2012, according to the Internal Revenue Service. According to the IRS, 70% of all taxpayers have an AGI of $57,000 or less.
- $58,240 – Annual household income when two full-time workers are earning $14 an hour.
- $62,000 – Annual income for two adults and two children that a study in 2011 by the Wider Opportunities for Women in partnership with the Michigan League for Human Services said met “basic economic security” in Michigan.