Minimum Living

minimum wage graphic

Jackie Smithers recently got a raise. She used to make $5.33 an hour at the public library in Louisville, Ky., Now she's getting $6.77. CBS News Sunday Morning Correspondent Martha Teichner reports.

Now add it up. At 35 hours a week, there is no overtime. After eight years on the job, she earns a little more than $12,000 a year. Smithers is like more than 11 million other Americans - paid at or just above the minimum wage, struggling just to get by even though she's working full time.

Does she ever worry about emergencies?

"No, I don't want to think far ahead," Smithers said with a laugh. "We're living from day to day, so we don't speak emergencies into existence."

Louisville is not all about the glitz and glamour and wealth of the Kentucky Derby. It's also about Smithers in a car borrowed for the day because she does not have one of her own, and Smithers worrying about whether she can afford to take home chicken as a treat for her three kids and their cousins, instead of giving them bologna sandwiches for dinner.

That's the picture that explains why Louisville is one of 80 cities targeted by a nationwide movement called The Living Wage Campaign.

Since 1994, 50 cities have passed living wage ordinances. Unions and community groups in Louisville are demanding that the city and any contractor doing more than $100,000 a year worth of business with the city phase in a wage of $14.50 an hour. Smithers would make more than double what she does now.

A living wage and the minimum wage are not the same thing. The minimum wage was set by the federal government most recently in 1996, at $5.15 an hour. The plain fact is that in the United States today, it's just about impossible to live on the minimum wage.

But when it was signed into law in 1938, the minimum wage was intended to be a living wage. Amazing as it sounds now, at 25 cents an hour, it was supposed to be high enough to maintain "the minimum standard of living necessary for health, efficiency, and general well-being of workers." But it was not meant to be so high that it would result in "substantially curtailing employment," exactly what businessmen complained would happen.

President Franklin Roosevelt, on the radio in one of his Fireside Chats, scoffed at that notion, saying: "Do not let any calamity-howling executive with an income of $1,000 a day, who has been turning his employees over to the government relief rolls in order to preserve his company's undistributed reserves, tell you that a wage of $11 a week is going to have a disastrous effect on all American industry."

Successive presidents have upped the minimum wage 19 times. Richard Nixon called it "a matter of justice." But by the time Ronald Reagan took office, he was calling it an injustice, the cause, in his opinion, of "more misery and unemployment than anything since the Great Depression."

President Reagan refused to raise the minimum wage, and Federal Reserve Chairman Alan Greenspn recently told a congressional committee he'd like to get rid of it, saying, "I'm not in favor of cutting anybody's earnings or preventing them from rising, but I am against them losing their jobs because of artificial government intervention, which is essentially what the minimum wage is."

Even former President Bill Clinton, who raised the minimum wage from $4.25 to its current $5.15, acknowledged that Roosevelt's notion of the minimum wage as a living wage is dead.

A bill introduced by Sen. Ted Kennedy, D-Mass., to raise the minimum wage again - to $6.65 an hour - is expected to reach the Senate floor this month.

Who makes $6.65 an hour or less? Looking at the Labor Department statistics, we discovered we're talking about nearly 14 million people. There are more women than men. The vast number, contrary to popular belief, are older than 20 and white, often with a high school diploma or less.

About two-thirds of the $600 a month Smithers takes home from her job at the library goes just to keep the electricity on. And then there's everything else: her rent, the water and phone bills, food, transportation, her kids' expenses. The total is more than double what she makes. Smithers gets some money from her son's father. She has applied for food stamps and, finally, after resisting for a long time, she applied for the medical disability money her daughter is eligible for: $530 per month.

Why was that hard for her?

"Pride. Pride. Just my own personal pride," Smithers said. "It felt like a handout, and I knew that I could do it. But truth being, which was reality, was that I was not able to take care of my three children on the money I make."

Barbara Ehrenreich averaged $7 an hour. Her experiences are documented in her new book, "Nickel and Dimed".

Buy "Nickel and Dimed"
"I left my life as a journalist. I left my home, and I went into three different American cities and attempted to support myself on the wages I could earn as an entry level worker," Ehrenreich said. "I worked as a waitress, a hotel housekeeper, a maid with a cleaning service, a nursing home aide and finally a Walmart associate. What I found is that it was not really possible."

Delores Burnett doesn't need a book to tell her that. Her solution: three, sometimes four jobs. At 7 a.m., she begins job No. 1, in the housekeeping department at th Omni Hotel in New Orleans' French Quarter. After 14 years there, she makes $7.22 an hour. Job No. 2: Cleaning offices at night for $5.15 an hour.

One job is not enough to support herself and help her daughter raise six children on a minimum wage job. So, on her day off, Delores Burnett takes two buses and a streetcar all the way across town to New Orleans' fancy Garden District, where she cleans a private home.

"When you work for less than you can live on, so that other people can be more comfortable, you're making a donation to those other people," Ehrenreich said. "Those of us who are in that upper middle class, which is where I normally am, really are the beneficiaries of all this involuntary philanthropy."

That's a sensitive subject in New Orleans, a city whose life blood is its multi-billion dollar tourism and convention business. The very survival of its hospitality industry is dependent on low-wage workers - tens of thousands of them, which brings us back to the living wage campaign.

For five years, local unions and a coalition of community groups called Acorn have been fighting to raise the minimum wage in New Orleans to a dollar above the federal level -just the city, not the outlying areas. A demonstration at city hall a couple of weeks ago may have been small, but the issue is a huge hot potato.

"The city government, the hotel industries, the tourist industries, all of those people are banded together to fight this," asid Beulah La Bostrie, 79, the state president of Acorn. "The restaurant organizations are putting up big money to promote what they want."

There are 1,300 restaurants in New Orleans that employ 54,000 people. Restaurant groups joined other business interests in getting the state legislature to pass a law making it illegal for New Orleans to raise its minimum wage, although the issue is set to go on the ballot anyway in February.

"When you raise those pay levels," said Jim Funk, CEO of the Louisiana Restaurant Association, "it impacts everybody and it just really decreases employment."

The battle lines haven't changed since Rossevelt's day.

Speaking as mayor of New Orleans and as the newly elected president of the U.S. Conference of Mayors, Marc Morial thinks the answer is to raise the minimum wage at the federal level.

"The best is a strong federal minimum wage law, which periodically increases," he said. "The best way to do economic legislation is to do it at the national level, because then it's uniform then, there's no, quote, excuses from anyone about having to pay more if you're here than you do over there."

And Beulah La Bostrie: "We believe that the poor has a right in this the richest country in the world to earn a decent living, to be treated with some dignity ... We believe that with our whole heart, then we get beat down, but we get back up and go back to work."

And Delores Burnett: "I'm hoping that one day that people will take an interest in the job that we're doing ad begin to realize that we do a job in order to keep the hotels running, because without housekeepers, you cannot sell rooms."

The kinds of jobs Burnett has spent a lifetime of early mornings getting to on time aren't going away. The questions remain: Who will do them? And for how much?

©MMI, CBS Worldwide Inc. All Rights Reserved