INDIVISIBLE Lambertville NJ / New Hope PA

Category: Money/Spending

  • Income Inequality and The Bare Minimum: Is a $15/hour Minimum Wage Enough?

    Contributed by Deb Kline.

    One of the major platforms that progressives have pushed well before President Biden took office is increasing the minimum wage to $15/hour. Many were disappointed to see the wage hike jettisoned from the American Rescue Plan, a victim of the need to get the package through budget reconciliation and avoid a GOP filibuster.  On April 27, however, the Biden-Harris administration signed an executive order that will give raises to up to 390,000 workers by establishing a $15/hour minimum wage for all federal contractors, with the requirement that all federal agencies must include the higher wage in new contract offerings by Jan. 30 of 2022.

    Realistically speaking, is $15/hour enough? In New Jersey, where Governor Murphy signed a legislation incrementally increasing the minimum wage from $8.25 in 2019 to $15 in 2024, the cost of living is roughly 21 percent higher than the average nationally. A living wage for a single adult with no children is $16.20, compared to the current minimum of $11 according to MIT research. 

    In Pennsylvania, minimum wage is the same as the current federally-set minimum at $7.25/hour. While Governor Wolfe has proposed increases in his 2021 budget address, that would only be by .50 cents per year until 2027! The current living wage in the state for a single adult with no children is $13.39 according to MIT. 

    Further, a 2020 National Low Income Housing Coalition analysis showed that workers earning $15 an hour can afford a two-bedroom apartment in just four states: Arkansas, Kentucky, Mississippi and West Virginia.

    What is unconscionable is that the numbers at the top end of wage earners are staggering, 719 billionaires held more wealth than 160 million Americans: $4.56 TRILLION vs $1.01 trillion. For these upper earners, the pandemic was a boon as U.S. billionaire pandemic wealth increased by $1.6 Trillion, or 55%, representing one-third of gains over the last 31 years.

    The pushback against increasing the minimum wage has been and continues to be that a higher minimum means jobs will be lost, so the claims about the gains in livability are offset by the loss of jobs. In fact, even the Congressional Budget Office as recently as this year has published such a statement: 

    Congressional Budget Office: How would increasing the minimum wage affect employment? Raising the minimum wage would increase the cost of employing low-wage workers. As a result, some employers would employ fewer workers than they would have under a lower minimum wage. However, for certain workers or in certain circumstances, employment could increase.

    Changes in employment would be seen in the number of jobless, not just unemployed, workers. Jobless workers include those who have dropped out of the labor force (for example, because they believe no jobs are available for them) as well as those who are searching for work.

    Yet, a September 2019 report by the Federal Reserve Bank of New York that found the minimum wage hike in New York State had no immediate discernible effect on job loss, and research published earlier this year suggests that raising the minimum wage by just $1 could lead to a drop in suicide rates. 

    There is also a claim that corporations will do just fine if the minimum wage is mandated at $15, but it’s the small, “Main Street” businesses that will be most adversely affected. While many smaller businesses struggle with what increases will mean for them, i.e. layoffs, higher prices, some economists say that a minor increase in prices may not be detrimental to the business and accounted for by overall inflation. In addition, a higher wage could mean less turnover – something that’s extremely costly to any business –  and a better, happier worker. 

    The initial thinking about the impact of a higher minimum wage on job loss seems to have shifted, according to economist David Cooper, senior analyst at the Economic Policy Institute. After studying some of the states that had mandated a higher minimum wage, Cooper says “economists generally think that the minimum wage’s impact on jobs is fairly small to the point where it’s probably going to be economically not that meaningful on the grand scheme of things.”

    Research from the Fiscal Policy Institute examined three years of small business activity in states that increased the minimum wage above federal standards as well as states that did not. These were some of the researchers’ findings:

    • From 1998 to 2001, the number of small business establishments grew at a rate of 3.1% in states with higher minimum wages, compared with a rate of 1.6% in states with lower minimum wages.
    • Employment grew 1.5% more quickly in states with higher minimum wages.
    • Annual payroll and average payroll per worker increased more quickly in states with higher minimum wages.

    Moreover, additional research published in the Journal of Economic Issues found that minimum wage hikes did not correlate with an increase in small business failures. That research even suggested the opposite is true.

    Arguments against raising the minimum wage appear to dissipate under closer scrutiny, and provide little to no excuse for maintaining a class of working poor in one of the richest countries on the planet. It’s a fact that the poor pay more. In addition, in many cases, those making minimum wage or even higher are subsidized by taxpayer-funded programs such as SNAP, which is also a continual target for those against supporting any government programs aimed at helping those in need (DO YOU HEAR ME GOP?). 

    So, is a $15 minimum wage too much or barely enough? Is it enough to cover uncovered healthcare expenses? Or childcare for one child in NJ where there’s an average cost of $1000/month? Or rent in Philadelphia at $1,652 /month? To cover energy, food, transportation, maintenance and other costs typical for a household? 

    Nope. It’s not enough, but it’s a start. 

    Call to Action: 

    • Call your Senators to support S.53 and Representatives to support HR.603, the Raise the Wage Act of 2021.
    • Support companies that pay a higher than minimum wage. (CAVEAT: check for other practices that may offset the positives. An app called BUYCOTT, enables you to check products and companies for the good, bad and ugly). 

    Sources: 

  • Trump Banks on His Political Capital

    Contributed by Amara Willey.

    You may have noticed another Donald Trump-related drama unfolding earlier this month. When he presented the GOP with a cease and desist order not to use his name in fundraising efforts, the GOP flatly refused to follow it. This may have seemed like just another stunt of his, but let’s follow the money.

    Before we do that, though, there’s another related story. The Republicans have been actively blaming the mainstream media for trying to divide the party, an idea that CNN reporters vehemently refuted and pointed to many examples of how Republican congress members had criticized the former president.

    In a Washington Post opinion piece published at the end of November, columnist Jennifer Rubin declared that the Republican party had split in two, based not on policy differences, but rather on values and character.

    Senator Rob Portman (R-Ohio) explained that Sen. Mitch McConnell (R-Kentucky) and former President Trump differed very little on policy though since McConnell’s speech condemning Trump after the impeachment hearing, the enmity has been evident. “It’s not a policy debate. This is a personality issue.“

    Portman continued, “It has the potential to hurt the party. It’s already making it more divided. But let’s get back to the policies. That’s where we agree, that’s where the American people want us to focus.”

    Still a number of Republicans have attempted to discredit that idea. For example, former ambassador to the United Nations and current Director of the Save America PAC, Nikki Haley claimed in a Fox News interview that the wedge in the GOP was entirely in the imagination of the media. She said, “The liberal media… Wants to stoke a nonstop Republican Civil War.“

    Haley continued to dissemble, suggesting that perhaps the former president’s actions following the election “were not his finest.”

    This is where the money part comes in. After Donald Trump‘s cease and desist letter to the GOP, the party and the former president had an almost immediate rapprochement. Trump explained that his letter had to do with not wanting those people who had voted for his impeachment to be supported by GOP money connected with his name. Coincidentally, the Republican national committee announced several days later moving a large donor fundraising event to Trump’s Mar A Lago property.

    Trump has been encouraging his supporters to give directly to the Save America PAC, headed by the previously mentioned Nikki Haley, instead of donating to the GOP. He has made it clear that he intends to fund primary challenges for those Congress members who denounced him.

    Vox suggested that the former president may have more than political revenge in mind. And blaming the media for divisions in the GOP may be just another Trump diversionary tactic.

    Whether Trump chooses to follow a path of revenge or not, there is another potential benefit he could reap from funneling money away from the GOP. The Save America PAC is a type of political committee that has relatively few restrictions on what it can do with donations. We have already seen that much of the $31.5 million raised just after the election was not used to fund legal challenges or help with the Georgia runoff‘s, as had been purported, but instead was being funneled into other uses, like paying down campaign debt.

    “If you were going to direct a lot of money from a political committee to yourself, this is the way to do it,“ Jordan Libowitz, communications director for Citizens for Responsibility and Ethics in Washington (CREW), told Vox in an interview earlier this month.

    Trump can use money from the PAC to hold events at his hotels, fund travel, or pay for “consulting fees.“

    “There aren’t a lot of restrictions on travel expenses, so he can rent his own plane for himself and pay himself to fly around the country,“ Lebowitz said. “He can pay Ivanka and the rest of his family very large amounts as consultants for the PAC. He can rent office space for himself.“ 

    Meanwhile, McConnell has made it clear that he will continue to back his fellow incumbent senators, despite Trump’s stated desire to punish some of them. McConnell still influences the use of the Senate Leadership Fund.

    Sources:

  • Garden State Politics

    Contributed by Deb Kline.

    It’s Budget time in the Garden State! The unofficial start of the NJ Budget season is upon us, traditionally kicked off by the Governor’s annual budget address held on or before the fourth Tuesday in February. What does NJ plan to do with approximately $40million it generates in tax revenues? With the pandemic cutting sharply into tax revenues and demanding new expenditures, will there be enough? Can one person have any influence over how the money is spent – or not?  A good summary of some of the major issues facing this year’s legislature and budget can be found in this NJ Spotlight piece by John Reitmayer, who writes on the budget. 

    Our friends at the New Jersey Policy Perspective (NJPP) want us to be informed about the process and where we can have an impact. You can read NJPP’s Budget 101 guide here. In addition, here’s where citizens can potentially affect how our dollars are spent:  

    • While the governor is preparing the budget proposal, residents can contact the governor’s office to voice support for specific programs or initiatives that rely on state funding. 
    • You can also contact the governor’s office later in the budget process to voice support for or opposition to potential programs at risk of being cut or line-item vetoed.
    • During the Legislature’s budget hearings, one of the best ways for residents to ensure their voices are heard is to testify at one of three public hearings offered by the Senate and Assembly budget committees. These hearings are often held across the state, with one meeting in each region of New Jersey: North, Central, and South. Anyone who signs up to testify can give comments. 
    • Writing, calling, and emailing legislators, including your own representative as well as those serving on the budget committees, with concerns or questions regarding a particular program or initiative is another way to ensure your voice is heard.
    • During the month of June, legislators negotiate the final budget within their caucuses and with the governor’s office. This when advocates are the most active, lobbying and otherwise engaging legislators and the general public. This is a great opportunity to tap into your local advocacy organizations and meet with legislators about items in the budget that are of concern to you. 

    Run for office in Hunterdon County – Anyone interested in running for an office at the County level in Hunterdon must have their petition into the County Clerk’s office by 4 pm Monday, April 5, 2021 to appear on the June Primary Election ballot. 100 signatures are required on the petition, which can be found here. Board of Commissioners anyone? Contact Mary Melfi for more information on this and other offices at the municipal or school board level.

  • ILNH and Money

    ILNH and Money

    Contributed by Elycia Lerman.

    It’s hard to believe that ILNH is ending our fourth year as an organization – time flies when you’re trying to save democracy!  It seems like a good time to provide some insight into our financials.  Admittedly, it’s a bit of a boring topic, and even with my very witty personality it may not be an exciting read. However, for all those who help us keep the (virtual) lights on through donations and fundraising activities, we owe you our gratitude and an accounting.  

    Each year we forecast a budget based on what our goals are for the year. What types of programming we will support and provide and what kind of fundraisers we think we can execute. These discussions happen in the individual groups like Civil Rights, Environment, GOTV, etc and within the Leadership Team and the Board. There are overhead costs for our liability, our Board & Officers’ insurance and our technology infrastructure (Quickbooks, Zoom, Wix, etc).  We also budget for legal & accounting professional support, we had large payments here when we filed for our 501c4 status and when we transitioned from Excel to Quickbooks for our accounting. In addition to programming, other expenses include equipment (we own an overhead projector and portable sound system), facility rentals, and supplies. 

    Our revenue is split between donations and merchandise sales. You can see the split in the table below, and note that donations are the larger portion. Our 2019 Holiday Jam was not the merchandise sales event that we had hoped, and we still have a bunch of inventory that we would like to sell at a discount – stay tuned. In 2018 we partnered with two other groups, Rise Up Doylestown to do a musical holiday fundraiser and in 2019 we partnered with the ACME for the Raise Hell fundraiser, both were a big success.  

    In our first year of operation, we were able to create a cushion of finances that enabled us to survive 2020.  Sometimes luck plays to your advantage.  In 2018 and 2019 we pretty much broke even on our revenue and expenses. In 2020 however, our expenses are running about  $2,000 more than income.  We are still in an ‘okay’ position for 2021 with respect to our fixed costs for insurance and technology infrastructure, but we will have to think about different ways to raise funds.  

    Recently there was a survey to all ILNH Indivizzies to get input on what they see for the future of our organization. We will take this input into our budgeting conversations in the next month as we prepare for our 2021 budget. If anyone has questions on the financials or would like to work with the finance team,  please reach out to me, ElyciaLerman@yahoo.com.

    Figure 1

    ILNH 
    2017 2018 2019  2020* 2021
    Budgeted Total Revenue $17,000 $14,200 $17,000 $14,500 ??
    Expense $15,000 $19,700 $19,800 $16,600 ??
    Actual Total Revenue $16,049 $16,332 $11,454 $4,324
    Merch Sales $3,357 $6,971 $2,131 $1,430
    Expense $10,631 $16,895 $11,232 $6,238
    YTD Oct 2020

  • A Measure of Value: Labor Day,  Unions and Minimum Wage

    Contributed by Sarah Gold.

    It’s Labor Day! You may have seen the bumper stickers – Unions: The Folks Who Brought You the Weekend. Historically, unions have pushed for safer working conditions and better pay. This has had real life impacts: union workers have a $1.24 per hour wage premium compared to non-union workers. The wage premium is even higher for Black and Hispanic workers: $2.60 and $3.44, respectively. 

    Despite of the importance of unions, however, union membership has dropped significantly over the last several decades, from about 20% in the early 1980s to just over 10% today, in part due to states adopting “right to work” laws that permit workers to work in unionized workplaces without paying union dues, weakening union strength.

    Simultaneously, the real value of the minimum wage has decreased over time. In 1960, the minimum wage was worth 46% of the national median wage for full-time workers. Today, it’s worth about a third of the median wage. More concretely, in 1960, when the minimum wage was adopted, it was worth $8.65 in today’s dollars while today’s federal minimum wage is $7.25. 

    While some states and municipalities have raised their minimum wages, there is currently no state in which a full-time minimum wage worker can afford to rent a two-bedroom apartment; childcare costs are similarly daunting and cost nearly as much as in-state college tuition. The minimum wage is not a living wage (try this activity from the New York Times and see if you could live on the minimum wage).

    The federal minimum wage has not been increased in over a decade. Biden and Harris are committed to raising the federal minimum wage to $15 an hour and encouraging and incentivizing unionization and collective bargaining. Beyond simply raising the minimum wage, the Biden-Harris Administration would also expand eligibility to include workers who are currently excluded from minimum wage laws (like farmworkers and domestic workers), addressing the systemic racism currently embedded in our minimum wage laws.