Sunday, October 17, 2004
Copyright © Las Vegas Review-Journal

COULD YOU SURVIVE ON $10,712 a year?

That's what many workers paid the minimum wage in Nevada earn. A proposal to increase the minimum to $6.15 an hour is on the Nov. 2 ballot. But not everyone thinks the $1 an hour increase would benefit workers.

Viridiana, a minimum-wage worker, shops for groceries at the King Ranch Market on Decatur Boulevard. She finds it hard to pay for food and other essentials, and said she left her 3-year-old daughter with her parents in Mexico until she starts earning enough to support them both in Las Vegas. Photo by Clint Karlsen. Salena Martin of For Keeps Scrapbooking sees both sides of the minimum wage debate. As a small-business owner, she knows it's tough to keep expenses under control, but she also has two children in college who stay at home because they cannot afford an apartment with their minimum wage jobs. Photo by Ronda Churchill. Viridiana, who declined to give her last name for this story, takes classes in hopes of landing a better job at a Strip resort so she can afford to bring her 3-year-old daughter to Las Vegas. Photo by John Gurzinski. Shelley Barney refills stock paper at For Keeps Scrapbooking. Her employer, Salena Martin, pays more than the minimum wage and supports a proposal to increase the rate $1 an hour in Nevada. Photo by Ronda Churchill.

The 21-year-old woman has been living in Las Vegas for only three months, but she already has made her mind up about one thing.

A single parent cannot afford to support herself and a child on minimum wage in Las Vegas.

Viridiana, a divorced single mother who declined to give her last name, had to leave her 3-year-old girl with her parents in Tepic, Mexico, a city northwest of Guadalajara, because she could not support both herself and her child on the $5.15 per hour salary she earns as a motel housekeeper.

Advocates of a Nevada constitutional amendment to set the minimum wage higher than the federal government level say stories like Viridiana's demonstrate why it should be increased. But opponents argue that boosting the state's minimum wage to $6.15 an hour would make life harder for workers like Viridiana.

Viridiana, a legal immigrant who shares an apartment with a friend, however, said she needs to make more than $5.15 an hour.

"It's tough, because you cannot live on that kind of money," Viridiana said, speaking through an interpreter. "Everything is getting higher and higher. For one person, maybe ($5.15 an hour) is enough, but not for a family."

About 101,000 workers in Nevada make less than $6.15 an hour, and 51,000 are making minimum wage, according to the Economic Policy Institute. The institute obtained those numbers from the federal Bureau of Labor Statistics.

Viridiana is taking classes in hopes of landing a better job at one of the Strip resorts so she can get a better paying job and bring her daughter to Las Vegas. She could end up getting a better job before any minimum wage changes take effect in Nevada.

Even if voters support an increase in minimum wage through a state constitutional amendment on Nov. 2, it would not take effect until voters approve the measure again at the next general election two years from now. That means the lowest wages wouldn't rise until January 2007.

The issue, Question 6 on the Nov. 2 ballot, would increase the minimum wage by $1 to $6.15 for employers that do not provide health benefits. In future years, the proposed amendment would raise Nevada's minimum wage by the same amount the federal minimum wage is increased, or by an amount equal to increases in the cost of living as measured by the consumer price index, whichever is higher. The amount of the CPI adjustment could not exceed 3 percent in any one year.

Danny Thompson, executive secretary and treasurer of the Nevada AFL-CIO, was involved in the effort to get the minimum wage issue on the ballot even though the 165,000 union workers in Nevada make more than the minimum wage.

"The reason we did this, quite honestly, is to help the people at the bottom," Thompson said.

About 79 percent of the people who would benefit from an increase in the minimum wage are 20 years old or older, said Jeff Chapman, an economist with the Economic Policy Institute in Washington, D.C. He drew his information from the Bureau of Labor Statistics and the Census Bureau.

Supporters also say about one quarter of minimum wage earners are single parents. That statistic apparently comes from 2001 study of minimum wage workers in Oregon by the Oregon Center for Public Policy.

"This is about eating. This is not about buying a house," Thompson said. "People making minimum wage are bringing home about $157 a week. I spent more than that on dinner last night."

Steven Miller, policy director of the Nevada Policy Research Institute, however, believes raising the state's minimum wage would be bad for Nevada and its workers.

"Despite what they say, it's damaging to the unskilled worker, and it probably will be damaging to the state of Nevada's economy," said Miller, who learned workplace skills when he was a teenage grocery store worker in Winnemucca and who helped write the opposition statement for the ballot issue.

California and Oregon are the only states bordering Nevada that have established a minimum wage higher than the federal government's, the U.S. Labor Department reports. The minimum wage in California is $6.75 an hour, except in San Francisco, where the minimum wage is $8.50 for most employers. The minimum wage is $7.05 an hour in Oregon.

The Nevada proposal allows an exception for companies that have collective bargaining agreements, Miller said.

"It gives too much autonomous power to these union bosses when they are doing negotiations," he complained.

Gail Tuzzolo, campaign manager for the advocate group Give Nevada a Raise, said the provision Miller mentioned is designed to avoid conflicts with federal law on collective bargaining. However, she said the proposed amendment would make it illegal to pay less than minimum wage to employees, regardless of whether they have collective bargaining rights.

"What they do in effect is make it illegal to employ these people at the level that they actually return a benefit to the company," Miller said.

The minimum wage amendment also wouldn't apply to workers younger than 18 years old who are "employed by a nonprofit organization for after school or summer employment or as a trainee for a period not longer than 90 days."

Federal law already sets the minimum wage at $4.25 an hour for workers younger than 20 years old for the first 90 consecutive days of employment "as long as their work does not displace other workers."

Miller argued that higher minimum wage would cause employers to hire fewer but more skilled workers. He suggested, for example, that an employer who normally would hire minimum-wage workers to dig a ditch would hire an equipment operator to do the job if minimum wage is too high.

Tuzzolo, however, ridiculed that argument. Trenchers, who operate ditch-digging machines, make $31.45 or more per hour and get $13.50 in benefits under Operating Engineers contracts, she said. Even nonunion workers make more than $20 an hour, she said.

"At the rate they're working at, $5.15 a hour, they can make more money from welfare," Tuzzolo said.

Miller is not swayed. "Basically, they are trying to restrict the marketplace to get their members an edge. ... The great majority of people affected by this are not entirely supporting themselves, according to the studies I've seen."

Van Heffner, chief executive officer of the Nevada Restaurant Association and the Nevada Hotel & Lodging Association, also opposes the minimum wage increase.

National statistics from the federal government show 85 percent of the workers who would benefit from higher minimum wage are either second earnings, adults living alone or working parents.

Heffner said that in the hospitality industry, most workers are offered an opportunity to advance and earn more money within one year, he said. Many of those benefiting from a minimum wage increase also receive tip income, he said, an argument that Tuzzolo rejected.

Minimum wage workers include casino dealers, valet parking workers and food service workers, Heffner said. The average worker getting tips in Nevada earns $44,000 a year, he said.

Customers, including seniors on fixed incomes, will pay for the higher wages through higher prices, Heffner said.

Business people in Southern Nevada also have different views about the amendment.

Salena Martin, who owns For Keeps Scrapbooking, said she has a daughter and son who attend the University of Nevada, Las Vegas and work for minimum wage. They both live at home by necessity, she said.

"They cannot make enough money to even get an apartment," she said. "I know the minimum wage has to be reasonable so that people who have businesses can afford it."

At her shop, she starts workers at $6 an hour and has one making $7.50 an hour. By contrast, corporate retailers pay only minimum wage, she said.

But another business executive disagreed.

"If people don't have skills and they learn skills, they will move up automatically," said Bob Jankovics, manager of Nevada Telephone. "I don't think there should be any minimum wage. I think that people should be paid on what they can do." The Las Vegas Chamber of Commerce also opposes the measure.

"Our preference is that we have minimum wages increase through economic development, the creation of higher-paying jobs, rather than being mandated by government," said Christina Dugan, the chamber's government affairs director. The chamber also objects to having policy decisions put permanently into the constitution, which it considers as the blueprint for governing, and believes they are better dealt with through legislation, which can be more easily changed.

Miller also questioned the logic of the ballot measure.

"If passing a law is all that's required to make people prosperous, why not a $1,000 (an hour) increase?" Miller asked. "The people who are actually living below poverty levels have support services in the way of food stamps and all sorts of social-safety-net support. It comes to about $40,000 a year, really.

"In the long run, it's just a way of inflating the wages. It's part of the process of basically devaluing the money."

The U.S. Census Bureau reports that for 2003, Nevada's poverty rate was 10.9 percent. That puts Nevada about dead-center among the 50 states.

"The reason is Nevada has tried to be friendly to employers. What they are going to do is choke that off" with a higher minimum wage, Miller said.

Thompson disagreed. He counted 12 states that set a minimum wage higher than the federal government and said eight of those have higher job growth than the country on average.

"(Minimum wage workers) are going to spend it as soon as they get it, and they're going to spend it here," boosting the economy, Thompson said.

Polls conducted for the AFL-CIO and the Review-Journal on the minimum wage this year suggest most voters would support the increase.

"We polled Republicans, Democrats, independents, and the answer was the same. People support this, and it doesn't matter if you're Republican or Democrat," Thompson said.