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A Nation Engaged: Will the bump in minimum wage raise people out of poverty?




In this July 21, 2015 photo, workers hold a rally in Los Angeles in support of the Los Angeles County Board of Supervisors' proposed minimum wage ordinance. On March 26, California legislators and labor unions reached an agreement that will take the state's minimum wage from $10 to $15 an hour.
In this July 21, 2015 photo, workers hold a rally in Los Angeles in support of the Los Angeles County Board of Supervisors' proposed minimum wage ordinance. On March 26, California legislators and labor unions reached an agreement that will take the state's minimum wage from $10 to $15 an hour.
Nick Ut/AP

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One way to create that opportunity is through wage growth and, here in California, there's been a lot of focus on raising the minimum wage.

Take Two found one local worker who makes just a little more than minimum wage. She shared her story: 

 
Last year, LA's city council voted to gradually increase that basic pay level until it hits $15 an hour in the year 2020. About a year later, the county and the state voted to do the same thing. Now, both presidential candidates say they want a higher national minimum wage.
 

But does raising the minimum wage lift people out of poverty?

KPCC's Ben Bergman looked into the question and spoke to Take Two's A Martinez.

(Questions and answers have been edited for brevity and clarity.)

Ben, you have been talking to minimum wage workers all week. What have you heard?

I wanted to talk to workers in two cities where the minimum wage is already higher than it is in LA. In July, the wage went up to $10.50 for most businesses in LA County. Just a year ago, the California minimum wage was $9 an hour: then it went up to 10 dollars in January. But in the little town of Seatac Washington, right outside Seattle, the wage is $15.24. So I called up an airport worker there to find out how her life has changed.

"Usually, I used to do two jobs to even live in the area I live. Now, I do one job, and it's enough for me." 
-Habiba Ali

So what did workers say they're doing with the extra money? 

Well, not much. I asked one: Do you eat more, or take vacations? She laughed and said 'absolutely not.' She said she makes just enough to get through school and pay the bills. I asked another what he uses the extra money for, and he said paying the rent because he said yes, his wage has been going up, but so has his rent. I asked 'well, what about when wages goes up again?' He expects his rent to go up again.

Have there been any studies about Seattle's higher minimum wage and whether it's helping reduce income inequality?

Yes, the University of Washington has studied this, and they found a lot of good things have been happening in Seattle. Wages have been going up, employment has been rising, And the local economy has been strong, but the study said all these things happened in spite of the wage increase, not because of it. That's because Seattle's economy has gotten a big boost from Amazon and other tech companies.

The study also found workers were working fewer hours. So for some, they might be making the same as before, but working less. The study found only a minuscule increase in wages could be attributed to the law — about $5 a week.

 What lessons can we take away as far as LA is concerned?

It's important to note that a $13 wage in Seattle, or a $15 one, does not mean the same as in Los Angeles, let alone the poorer areas of the state where this will apply to in the coming years. 

The median income in LA is about $56,000. In Seattle, it's over 80 thousand. So the minimum wage will go further here, but a lot of our costs are similar to Seattle's. In fact, you would need to make at least $33 an hour to afford to average the house in LA.

Press the blue play button above to hear the full interview.