Manager-in-training Jennifer Boulton “refaces” a DVD section, making sure the right boxes are in front of the right films at Family Video. Boulton started work at the Central Avenue establishment in November. Like most businesses in Columbus, the store pays employees more than the minimum wage, starting them at about $7 an hour. The Republic photo by Andrew Laker
Explaining the wage
WHAT IS IT:
The minimum wage is a minimum hourly, daily or monthly wage which, according to state or federal law, must be paid to employees or workers. The Fair Labor Standards Act establishes minimum wage, overtime pay, recordkeeping, and child-labor standards affecting full-time and part-time workers in the private sector and in federal, state and local governments. CURRENT MINIMUM WAGE
$5.15 per hour for covered nonexempt workers. Overtime pay at a rate of at least 1½ times the regular rates of pay is required after 40 hours of work in a workweek. A worker who receives tips is required to be paid $2.13 per hour if the amount plus tips equals at least $5.15. - Sources: U.S. Department of Labor; wikipedia.org
Workers making minimum wage often have more than one job or rely on public assistance as they struggle to pay rent, child care, health costs and car insurance. Many use charge cards to pay for gasoline and utility bills or ask for assistance from family members. Getting by at the state and federal minimum wage of $5.15 an hour is difficult. Before taxes, a person making minimum wage and working 40 hours a week earns $206. "You have to really pinch your pennies to make it," said Sarah Ross of Columbus. Ross works two jobs, both paying $7 to $8 and hour, and still has trouble paying all her bills. She is among those struggling to make ends meet but not counted in statistics on the number of workers making minimum wage. She hopes, however, that proposals to increase the minimum wage will have a ripple effect and boost her pay. Nationwide, 1.9 million workers make at or below the federal minimum wage, according to the U.S. Department of Labor. In Indiana, about 37,000 workers stand to gain if the minimum wage is increased. 10 years and counting State and federal lawmakers are debating the pros and cons of raising the minimum wage while low-wage earners and businesses await the outcome. The federal minimum wage has not been raised in 10 years, when President Bill Clinton, a Democrat, successfully convinced the GOP-controlled Congress to increase the wage from $4.75 to $5.15. Democrats, including House Speaker Nancy Pelosi, D-Calif., have made increasing the minimum wage one of their top priorities. A bill to raise the federal minimum wage from $5.15 to $7.25 over two years passed the House easily, but the addition of tax incentives for small business was need for passage in the Senate. The bill moves to a conference committee to resolve differences in the versions passed. Then the bill would await President Bush's signature to make it law. U.S. Sen. Evan Bayh, DInd.; U.S. Sen. Richard Lugar, R-Ind.; and U.S. Rep. Baron Hill, D-Ind., support an increase. U.S. Rep. Mike Pence, RInd., is against the proposal. Opponents' concerns include that an increase could hurt small businesses, hamper economic growth, increase consumer prices and raise unemployment. Others say that many of the minimumwage workers are teenagers living at home with their parents. Supporters say a raise for the country's low-wage earners is long overdue and would help the working poor make ends meet. On the state level, local lawmakers also are divided. "We must stop using Band-Aids such as minimum-wage increases that are disguised as solutions for ending poverty," said State Rep. Milo Smith, R-Columbus. State Sen. Greg Walker, R-Columbus, also has concerns about proposed increases. "The wage hikes either increase the competition for entry-level jobs, reduce the total number of minimumwage positions, or both," Walker said. State Rep. Dave Cheatham, D-North Vernon, supports the boost. "People need an adjustment in their wages every so often to keep up with inflation," Cheatham said. An Indiana House bill, which proposes to raise the state's standard to $7.50 in 2008, passed the House and is in the Senate. Local impact How much a minimum wage increase would affect the Columbus area is unclear. Some social service agencies fear an increase could cause employees to cut workers or benefits. Others see little impact because most businesses in Bartholomew County already pay above minimum wage. "We're very fortunate to have a fairly good economy that drives wages up," said Jack Hess, president of Columbus Area Chamber of Commerce. Whether Indiana passes an increase in the minimum wage, Hoosier workers would benefit from a national increase. Indiana and Kentucky are among 15 states that have the same $5.15 an hour rate as the federal level. Twenty-nine states and Washington, D.C., have state minimum wages higher than $5.15 an hour. Ohio's rate is $6.85 and Illinois' is $6.50 but increasing to $7.50 in July.