Minorities, Children, and Minimum Wage

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The recent racist remarks from, now banned, Clippers owner Donald Sterling has surely sparked a controversy that highlights the issue of racism in our country. Once thought to have been dwindling, considering America has been making attempts at becoming a more accepting and tolerant nation, this reminded us all of how there are still those with unfair and morally debased judgments. The mindset says that black people, as well as other minorities, are inferior to white people.

These thoughts and beliefs aren’t only unique to Donald Sterling, however. Attitudes such as these cause inequalities all around us. One of these inequalities is pay and advancement in the workplace. A report by Maria Hudson and Gina Netto cite that “informal workplace practices can contribute to a lack of progression opportunities for workers on low pay,” and that “ethnicity plays a key role” in this. Is racial discrimination holding minorities down and limiting their potential for advancement, ultimately meaning lower income? That seems to be the case.

There is a wage gap, both by gender and race, that shows white men making more than everyone else. Median weekly earnings put out by the Bureau of Labor Statistics also reflect this, except for Asian men making slightly more than white men. This means that almost all minority groups make less money than white men. Near-poverty rates are highest for blacks at 6.3%, compared to whites and those from other races. I believe that raising the minimum wage will help lift minorities out of near-poverty levels and provide a better outlook and quality of life for the children of our nation.

According to the American Psychological Association, the measurement of socioeconomic status is based on one’s education, income, and occupation. The APA also provided how a low SES (socioeconomic status) can impact a child. These children tend to have lower academic achievement and progress throughout their childhood. They enter high school at 3.3 grade levels behind students who come from a high SES background. Their dropout rate is significantly higher at 16.7% than those with higher SES as well, which is only 3.2%. Dropouts expect to earn an average of $20,241 a year. They earn $10,386 less than those with a diploma, and a whopping $36,424 less than those with bachelor degrees according to a PBS report.

In addition to a lower income, those with lower SES also have a greater chance at having learning disabilities or other negative psychological outcomes than those with higher SES. This directly relates to academic achievement as well. Is any of this the child’s fault? Well, the APA links these factors to a mother’s SES. They are born into this by no choice of their own. These are sobering facts, and we must not assume that children from low SES families are not trying hard enough or lack motivation. It is reasonable to assume that this is a cycle that is hard to be broken with each generation entering into such a poor situation, pun intended.

I find it helpful to identify those that are considered low-income. Besides, my argument would be null and void if minorities aren’t linked with this socioeconomic demographic that I’ve outlined above. Although I’ve already proven that minorities make less in general, are they actually considered poor? Sadly, my instincts proved correct after reading statistics given by the National Center for Children in Poverty. 32% of white and Asian children live in low-income families, while 66% of black children do, and 64% of both Hispanic and American Indians do as well. The latter three groups double that of white and Asian families in this statistic. Though Asians are also considered a minority, they are clearly the exception. Black, Hispanic, and American Indian children all have a greater chance at suffering from the negative effects that go along with being in a low-income family.

By raising the minimum wage, a family’s SES will inherently raise as well. Although the only tangible part that will change is their income, this will still impact the areas that were mentioned before. A child’s psychological health and academic achievement will surely improve. Where do I draw this from? The same resources above from the American Psychological Association. The APA indicated that children have trouble achieving academic success and having good psychological health with a lower SES. A higher minimum wage should counter that, which will continue to improve the well-being for those children and the families they are in.

There is still a resistance to raising the minimum wage. The CBO reported back in February that there could be a potential 500,000 jobs lost by 2016 if the minimum wage is raised to $10.10. This is a good argument against raising the minimum wage, considering all demographics would be impacted by this significant job loss. It could also further hurt a minority’s chances at getting out of near-poverty levels. Unemployment rates would rise across the board, though, not only hurting minorities. However, contrasting this was a report done by EPI that claims raising the minimum wage would actually end up creating roughly 85,000 jobs. They outline their numbers in great detail with every state being represented in estimating the impact this could have. It’s tough to say which prediction is more accurate. However, if the one done by EPI is, this means that the unemployment rate should drop for everyone if more jobs are created. The Bureau of Labor Statistics shows the latest unemployment rates for whites, blacks, and hispanics as 5.3%, 11.6%, and 7.3%, respectively. Lowering all of these will benefit many low-income families, while hopefully helping the minority groups the most, considering their rates are the highest.

The impact from raising the minimum wage is both immediate and looking to our nation’s future. Does more money equate to a happier life? According to a research study by Betsey Stevenson and Justin Wolfers from the University of Michigan, the answer is yes. They find that there is a higher life satisfaction as income increases (notice Figure 1 on page 6). As an increase in minimum wage would obviously mean an increase in income, this means greater life satisfaction, or greater happiness. Though $10.10 an hour is not going to bump anyone to the upper-class, two people in a household working an average of 30 hours a week comes to about $31,000 a year in gross income. This is close to lower-middle class levels, which starts at $32,500 for a family of four. This is a good start to raise families, especially minorities, out of near-poverty levels.

The impact on our nation’s future is seen by taking kids out of the effects that come along with belonging in a low SES household. They would achieve greater academic achievement, which could result in attending college or receiving a higher paying entry-level job. This would also lower the dropout rate, as those in the lower-middle class for all races is 9%, a sharp decline from that of the lower-class. Finishing high school is part of the battle, considering the income for dropouts I mentioned earlier.

Assuming that raising the minimum wage solves all problems for low-income families is misleading and inaccurate. It would be naive of me to think that this is an end-all solution. Although this doesn’t provide the perfect answer, it is certainly a great place to start. Keeping the federal minimum wage at $7.25 isn’t helping, we know that much. This complex issue has many different areas that need to be addressed as soon as possible if we want to provide a happier life for many families, and a better future for kids that are stuck in such a dire situation. It should also begin to erase the inequalities that minorities are facing making such little money. We can’t force people to treat others equally, but we can give them a raise that can’t be blocked by those who are trying to hold minorities down. Raising the minimum wage will not only raise up more smiles on people’s faces, but will help children rise up and succeed in America as we know it.

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