GOP Bets Big on Minimum Wage Canaries

by Pa Rock

Citizen Journalist

This week four states are pulling back unemployment benefits in an attempt to force more people to return to minimum wage (or even sub-minimum wage) jobs.  Those four, all controlled by Republican governors and Republican state legislatures are Alaska, Iowa, Missouri, and, of course, Mississippi.  One internet news site this morning described the four as the "canaries in the coal mine" who are testing the theory that reducing benefits - dropping the extra $300 per month from the federal government - will increase employment and not backfire by driving up the already high levels of poverty.  As many as twenty-five GOP-led states are either in the process of making this change, or at least contemplating it.

But Alaska, Iowa, Missouri, and Mississippi are doing it now.   Their poor folk can get their butts back to flipping burgers and scrubbing toilets right now - or they can go hungry!

The "World Population Review" defines poverty as "not having enough income to meet basic needs."  It states that people who live in poverty struggle to keep a roof over their heads, put food on the table, and even purchase basic items like clothing, shoes, and hygiene products.  Adequate medical care is also often less readily available to persons mired in poverty.

According to the "World Population Review," Mississippi has the highest rate of poverty in the entire nation.  Nearly one-in-five residents of Mississippi (19.75%) live below the federal poverty level.  Most states have a minimum wage, but Mississippi does not - which means that the federal minimum wage of $7.25 an hour prevails in the state.  Mississippi will be returning money to the federal government that its citizens need in order help employers fill positions that are chronically underpaid.

Iowa also has a minimum wage of $7.25 an hour but it's rate of poverty is considerably less than Mississippi.  The "World Population Review" states that the poverty rate in Iowa is 10.99 percent.   One factor in the disparity between the rates of poverty in Mississippi and Iowa is in educational opportunities.  A personal finance site on the internet, "Wallethub," rated states' by educaiton based on eighteen criteria.  Mississippi ranked 49th, and Iowa came in much higher at twenty-nine.  Clearly fewer Iowans are forced into taking minimum wage positions than are residents of Mississippi, a factor which causes employers to pay above minimum wage.  And conversely, fewer employers in Mississippi have to face the pressure of an educated workforce that could find jobs elsewhere.

Missouri's new minimum wage for 2021 is $10.30 and the state has a poverty level of 13.13 percent.   Missouri's educational ranking by "Wallethub" is thirty-one.  Alaska has a new minimum wage of $10.34 and a poverty level of 10.62 percent.  That state's educational ranking is twenty-eight.

It used to be that the government spoke grandly of attacking poverty, but now that focus seems to have shifted more toward simply attacking the poor.  Forcing more people to work more hours for less money ultimately increases poverty and results in fewer consumers with disposable income, a situation which negatively impacts the economy.  And when people are hungry, or in danger of losing their homes, or in need of basic supplies, alternative strategies for survival often emerge.

But all of that is somewhere off in the future.  Right now we are just dealing with canaries.