A Living Wage

Abstract

The only effective way to eliminate poverty in the United States is to pay all workers a living wage, defined as one that would enable a worker to maintain an urban fam ily of four in health and decency. In 1972 that implied a minimum wage of 3.50 dollars per hour. Such a minimum wage would have important repercussions on the low wage industries and the workers they employ. The impact on busi ness firms can be eased by special tax and loan programs. The most important problems will arise from loss of jobs as the low wage industries adapt to the high minimum wage. A three-pronged program is called for: ( 1 ) full employment, (2) public service employment and (3) education and train ing. A sharply accelerated equal opportunity employment program will also be needed, because many low wage workers are Blacks, Latins and women. This program implies a re distribution of income in favor of the low wage worker that could be negated by wage increases for other workers, trigger ing price increases throughout the economy. Reduced income taxes for workers with annual incomes above 7,000 dollars and up to perhaps 15,000 dollars will be needed to overcome that effect. The net result would be an end to poverty and to many of its social evils.