Child poverty rates are highest in states that have not raised the minimum wage

Of the 20 states that have not raised their minimum wages above the federal standard of $7.25 an hour, 16 have more than 12% of their children living in poverty, according to an analysis of wage and poverty data by States Newsroom. Anti-poverty advocates say it’s a sign that lawmakers urgently need to enhance the federal minimum wage and do more to facilitate struggling families.

Congress had an opportunity to achieve the latter by expanding the child tax credit before the end of the year, but lawmakers no agreement was reached with Republicans to include it in the omnibus spending package. The expansion, part of the American Rescue Plan, provided qualifying families with as much as $3,600 in monthly installments and is credited with raising 3.7 million children have been lifted out of poverty at least temporarily.

Raising the minimum wage would not lead to such a quick and drastic improvement, but by 2019 Congressional Budget Office analysis found that increasing the amount to $15 an hour would lift more than 500,000 children out of poverty. And the Economic Policy Institute estimated in 2021 that if Congress passes a $15 minimum wage enhance by 2025, up to 3.7 million people would not have to live in poverty, including 1.3 million children.

Ben Zipperer, an economist at the Economic Policy Institute, said there is a powerful link between the minimum wage and poverty.

“It’s not a 1-to-1 link, but there is a pretty strong link,” said Zipperer, who specializes in minimum wages, inequality and low-wage labor markets. “The main determinants of poverty in this country are whether and how much you work, that is, whether you have a job during the year and how many hours per week or week you work in that job. …And then the third one [determinant] is how much you were paid per hour at your job. If you are paid relatively low, the minimum wage affects it.”

Congress last raised the minimum wage in 2009, but 30 states They currently require employers to pay more than the federal standard, according to the National Conference of State Legislatures. Many municipalities have also adopted living wage laws for city and county employees.

Twenty-seven statesincluding New Jersey, Florida, California AND Missouriraise the minimum wage in their state in 2023, after legislation is passed or approved by voters ballot measures that gradually enhance the state minimum wage over several years or tie it to inflation. Washington ($15.74), California ($15.50) and Massachusetts ($15) will have some of the highest state minimum wages in 2023, although the high cost of living in these states moderates the impact on poverty rates.

In Missouri, where the minimum wage will be $12 next year, in 2018 analysis of the Economic Policy Institute found that Proposition B, the vote to raise wages, would raise the wages of 677,000 people in Missouri.

States whose legislatures have not raised the minimum wage above the federal quota of $7.25 an hour include Mississippi, Louisiana, Georgia, Oklahoma, Tennessee, Kentucky, North Carolina and South Carolina. All have child poverty rates of 20% or more According to U.S. Census data analyzed by 24/7 Wall Street, a financial news website. Mississippi has the highest child poverty rate in the United States at 27.6%, and Louisiana has 26.3%.

Zipperer said many states with low minimum wages are concentrated in the U.S. South for a reason. He pointed to the political agreements concluded by legislators leave the black workers labor rights gains in the 1930s that were made to the benefit of Southern Democrats.

“This legacy of racism plagued the early years of the national minimum wage and labor laws in general in the United States, and while it was somewhat improved and overcome thanks to the civil rights movement, there are parallels to the situation today, where there are many places in the South where there is no wage minimum wage or has a very low minimum wage and therefore follows federal standards that Congress has refused to raise for the last 13 years,” he said.

He added: “This type of decline in the value of the cost-of-living-adjusted minimum wage disproportionately harms the people who receive the lowest wages in the American economy, and because of our sexist and racist labor market: women and people of color.”

In Louisiana, for example, 64% of women of color earn less than $15 an hour, while 58% of black workers and 50% of Latinas also earn less than $15 an hour, the study found Oxfam’s Americaanalysis of US census data.

The results of this disparity can be seen in an analysis of Louisianans’ living standards data conducted by the Center for American Progress’s Talk Poverty project. This found: :

• In 2019, 19% of Louisiana residents had incomes below the poverty level.
• In 2019, 20% of working-age women and 29% of Black Louisianans lived below the poverty line.
• During the 2017–2018 school year, Louisiana ranked 42nd in the nation in high school graduation rates and 45th in college degree attainment.
• In 2018, 20% of youthful people aged 18 to 24 without secondary education were neither in education nor in work.
• From 2017 to 2019, 15.3% of Louisiana households were food insecure.

Peter Robins-Brown, executive director of Louisiana Progress, said several factors contribute to the number of Louisianans living in poverty. Louisiana has not prioritized allocating funds to programs providing economic relief, focused its tax reform on benefits to the wealthy and businesses and has a particularly unfair criminal justice system that punishes the destitute, he said.

“Social services in Louisiana are largely underfunded, which makes it easier for generational poverty to perpetuate,” Robins-Brown said.

The state is also supportive owners’ rights for the rights of tenants and residents of southern parts of the state who have to live with the most stern weather disasters high premiums on homeowners insurance, which further contributes to economic inequality, Robins-Brown explained.

Although Louisiana Governor John Bel Edwards is a Democrat and has expressed support for raising the minimum wageboth houses of the Louisiana Legislature are controlled by Republicans. Louisiana is one of 24 states without a process for citizens to submit voting initiatives and electoral referenda.

“Both the House and Senate committees that deal with labor issues are a low priority for Republicans and Democrats because industry interests tend to predetermine the outcomes of these committees,” Robins-Brown said.

For these reasons, Robins-Brown argues that Louisiana residents are dependent on the federal government to take action to raise the minimum wage. He said his organization supports expanding the child tax credit because it is a powerful tool for reducing child poverty.

The last congress lost to enhance the minimum wage in 2021, when it was proposed as part of a larger pandemic relief package. Fifty Senate Republicans and seven Senate Democrats voted against raising the minimum wage to $15 by 2025. Excluding the Child Tax Credit expansion from Congress’ omnibus bill is another missed opportunity to reduce child poverty.

“The Child Tax Credit reduced poverty tremendously during the recent expansion of this program, and unfortunately this was temporary,” Zipperer said. “But I think it’s very clear evidence that, to some extent, we actually can eliminate a significant portion of poverty in this country. To do this, you just need to defeat the political opposition.”