By Carlos Salinas
The federal minimum wage is $7.25. A state can set a minimum wage higher than the federal wage, but cannot set a wage lower than the federal minimum. Oklahoma follows the federal standard of $7.25, however if some specific requirements are met specifically, if a business makes less than $100,000 annually then the employer can pay its workers $2 an hour. Oklahoma, as a state, usually follows the federal guideline for minimum wage, but historically actually had a minimum wage lower than the federal minimum wage.
Before 1988, Oklahoma posted a minimum wage on average 35 cents lower than the federal minimum wage. Oklahoma has also never posted a state wage higher than what Congress had mandated the federal minimum wage should be.
In 2010, the federal minimum wage was set at $7.25 and has remained at this rate for the past seven years. A common misconception about minimum wage is that it is set at a rate that should allow a person to be able to live above the poverty line and afford the necessities (housing, food, transportation) but in actuality, it is decided by Congress, and is influenced on the economy or other business interests.
Currently, if a person works full-time, 40 hours a week, at the minimum wage they will be set to make $15,080 in one year. The poverty line, and to qualify for aid, is $12,000 a year so it sounds like one person working minimum wage can at the least hold themselves above the poverty line, right?
However, per the Institute for Research on Poverty, the poverty line is calculated against a threshold set to three times the amount of a food diet in 1963, adjusted for inflation annually. It does not calculate for anything else besides that. Clothing, housing, transportation, out of pocket medical costs are not taken into account in the calculations. Being above the poverty line means that you can eat a diet from 1963.
So with all that said about minimum wage, how does it fare against the livable wage in Oklahoma? Livable wage is calculated based on the typical expenses one could expect to pay a year in a specific location. MIT set up a “Livable Wage Calculator” (livingwage.mit. edu) where you can go and type in a state then pick a specific county in that state. For the sake of this article, the estimations used were for Oklahoma County. If you live in Oklahoma County by yourself the livable wage, which considers not only diet, but also housing, transportation, medical costs, is estimated to be $9.87. If a person works fulltime for a year at the livable wage, they are set to make $20,384, a whole $5,304 more than if working at minimum wage. To put it simply, how can one be expected to live and support oneself outside of the basic necessities? For single parents with a child, the gap is even more pronounced.
For a single parent with one child, their livable wage is $20.73. That is a full $13.48 higher than minimum wage. These estimates are only for the local area, nationwide of course this will vary.
Many low-income families, especially those working minimum wage, rely on government aid and assistance to live. However, getting approved for government aid is extremely hard. To get approved for aid one must make less than $12,000 a year and again a full-time minimum wage worker will make $15,080 a year. The poverty line is around 15 percent give or take a year, which seems a great number for how many live in the United States, but as Professor Tara Hall put it, “It’s not most aren’t struggling, its most don’t qualify.” Only the truly destitute qualify for aid, but those who work need aid if they do not make a lot of money even at full-time jobs.
Studies show that many who actually qualify don’t apply simply because of the social stigma behind requiring assistance.
Is the nation due for wage reform? Should the poverty line be recalculated for a more modern time? Does the government need to reevaluate its criteria for assistance? These are questions we must answer. It isn’t 1963 anymore.