Happy Labor Day? Not quite.
The League’s Labor Day report, Pay Falls for Low-Wage Men yet Women Still Far Behind, released today, looks at the growing income disparities in Michigan.
Under pressure by a ballot campaign to raise the minimum wage to $10.10 and to eventually bring tipped workers up to minimum wage, the Michigan Legislature in May voted to increase the wage to $9.25 in four steps. The first step, from $7.40 to $8.15 an hour, takes effect Monday, which is also Labor Day.
The new wage equals just $19,240 for full-time, year-round work, putting a family of three just at the poverty threshold, and a family of four about $4,300 below the poverty line. These families would likely qualify for food and other public assistance, even with the increased wage.
Back in 1979, the typical low-wage man in Michigan earned an inflation-adjusted wage of $17.23 per hour. Full-time year-round work at that wage was enough to allow him to support a wife and two children.
Low wages are a contributing factor to the persistence of a gender wage gap – which is the difference between men’s and women’s earnings, expressed as a percentage of male earnings. Over the past 35 years, the wages of men have dropped significantly (31% for low-wage men, and 16% for mid-wage men). At the same time, women’s wages have increased slightly (4% and 10%, respectively).
Despite dramatic wage losses for men and some gains for women, Michigan women earn just 74 cents for each dollar a man earns. The gap is even bigger for women of color: 67 cents for African American women, and 54 cents for Latinas.
The gender wage gap remains high in part because, despite higher educational attainment compared with men, women are overrepresented in the low-wage workforce.
A depressed minimum wage is also an important contributor to widening income inequality. In 1979, a man earning at the top 10% of the income distribution made only twice what a low-wage man made but by 2013, this income gap was nearly quadrupled.
On this Labor Day, let us call upon Gov. Snyder, the Michigan Legislature and Congress to do right by our working men and women and continue efforts to raise the minimum wage to at least $10.10 and eliminate the tipped wage. This would help us close the gender and income wage gaps and return to days of broad prosperity, when even low-wage families could live in relative economic security.
– Yannet Lathrop