The $15 an hour minimum wage was cut from the federal relief bill. Yet I wonder if a higher minimum wage is enough to cover the cost of living.
When people are working, they should be able to afford healthy food, a safe and maintained home, clothing, supplies, needed technology, transportation to work and health care.
The pandemic has amplified financial troubles for many folks, and we may be paying for some unexpected items. Yet, according to a January CNN report, only 39% of Americans can afford a $1,000 emergency. Many financial emergencies are much more expensive than that.
One example is health care, and it’s not cheap. For example, MNSure has a monthly rate for a silver plan for Stearns County in 2020 of $301.11. The plan’s deductible is $3,000, well above that $1000 dollar threshold, and I suspect many of us have a deductible higher than $3,000.
The pandemic has hurt many families with the deaths of loved ones. The average cost for a funeral in the U.S. is $7,000-$9,000. An estimate for end-of-life care and funeral costs is $21,840 in Minnesota.
Even with my family’s comfortable, middle-class existence, I try not to think of these numbers when I go to sleep at night. For families that are barely earning enough to cover the basics, $21,840 is a big financial blow.
No one should have to flirt with bankruptcy when they’re in a long-term relationship with a job. If we can’t get a $15 an hour minimum wage passed, what could we do instead?
One idea is to stop subsidizing large corporations with their ultra-low tax rates and reallocate that money.
Amazon’s corporate tax for 2019 was 1.2%. The average tax rate for Americans in 2019 was 14%. Amazon didn’t break any laws, but it took full advantage of corporate tax breaks. For a company with earnings in the billions, imagine how much a 14%t tax rate could help fund necessary items.
Another idea is to give people a break on health care. Saving up for that large deductible year after year is difficult. With subsidized health care, people could stay healthy, whether they’re part-time or full-time workers. Businesses could stop paying high health care rates and raise wages to attract good employees.
A controversial yet surprisingly effective option is guaranteed salary. Headed by Mayor Melvin Carter, St. Paul created the People’s Prosperity Pilot, designed to help those hit hardest by the pandemic. The chosen families welcomed newborns into their household, and their earnings met the poverty criteria. Beginning in the fall, the 150 families received $500 per month to spend as they choose for 18 months.
Some of the objections to the program have been that folks who get the benefit would waste it, but that’s not the case. Stockton, California, implemented a similar program, and their results show that residents spent the money mostly on food, with 37% of the payment. Next was merchandise at 22%, utilities were 10%, and car costs were 10%. “Less than 1% of the money went toward alcohol or tobacco,” according to a Business Insider report.
This payment allowed them to be able to pay unplanned expenses. And the surprising result is that unemployment dropped in this group from 12% to 8% within the year.
How much is enough? Effective programs, such as guaranteed salary and fully subsidized health care, may be a good way to support all families during hard times.
— This is the opinion of Times Writers Group member Linda Larson, a St. Joseph resident. She is the author of the national award-winning “Grow It. Eat It,” and “A Year In My Garden.” Her column is published the second Sunday of the month.