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Screwing the Poor: Medicaid Expansions and the Minimum Wage

— Crossposted from Democratic Convention Watch

We know two things that would greatly help the poor are a Medicaid  expansion in all states and a raising of the minimum wage. Of course,  single payer would be a better thing for legitimately raising all boats,  but that's another post.

When one has a low paying job, often  there are no sick days. Which matters because people come to work sick,  as they cannot afford to lose the income. This is bad because diseases  are often shared. For non-communicable diseases like diabetes and heart  disease, there is no coverage for medical care, and it's just  disastrous. Higher wages would enable the afflicted to afford co-pays  and medications. Some amount of coverage would help to keep those  co-pays lower. 

This doesn't even touch the point that when people  are paid very low wages, the taxpayers making higher wages subsidize  costs associated with those workers and their families. Multiple studies  have been done which show that Walmart workers disproportionately receive SNAP funds,  plus their kids often qualify for SChip. Don't get me wrong, I'm  personally glad to help support people in need with my tax dollars, I  just think employers should pay a living wage so that tax dollars could  flow to other things, like education.

More after the jump.


In Florida, Rick Scott finally came around to supporting the Medicaid  expansion. It's a good deal for all the states who take it as the  expansion is funded 90% by the Feds. But at the time of this writing,  the state house and senate are looking at overriding his choice. There's  an interesting study from the Florida Center for Fiscal and Economic  Policy. (Whole report here.)  It shows how the rejection of the Medicaid expansion not only hurts  workers, but also ends up costing employers of low wage workers MORE  than if Medicaid was expanded.

Now let's talk about minimum wage  and workers. We all know that President Obama recommended raising the  minimum wage from $7.25 to $9.00. The Democrats in Congress want $10.10.  What you may not know is that these raises, while a step in the right  direction, leave out two groups of people, one of which is much more  fragile than the overall pool of minimum wage workers.

The first  group is tip-earners, mostly waiters and waitresses. Currently, their  hourly wage is $2.13. While there are differences from state to state,  and within certain cities, the idea of Federal legislation is that the  waitpeople should make enough tips to raise their hourly wage to at  least $7.25. This doesn't usually happen. First, often tips are pooled,  with some portion being accorded to busboys (who do make minimum wage),  sometimes the kitchen staff, and sometimes front of the house (like  hosts/hostesses) and even management. Starbucks, for example, was successfully sued  ($14 million) for tips going to managers. Wherever the tips go, taxes  are deducted from the waitperson's intake, even if they don't get to  keep it. In addition, a lot of times, waitpeople work hours before/after  the restaurant is serving, to do side work. There are no tips in those  hours. In a lot of places, if a customer puts the tip on a credit card  slip, taxes are deducted directly before the money goes to the  waitperson.

The proposed legislation would raise tip-earning  minimum wage to 70% of the full minimum wage. This would help, but there  needs to be more fairness in the tip system overall.

The  worst-affected group, however, is that of the disabled. There are  approximately 420,000 Americans with major disabilities who work for a  sub-minimum wage in sheltered workplaces. The original intent, when the  program was established in 1938 was a good one: pay a little money to  the disabled to teach them a skill, so that they could be able to find  real employment. Sadly, currently only 5% of the sheltered workshop  employees end up getting out, the rest remain, being paid several cents  an hour. An example of these types of employers is Goodwill, which pays 20 cents per hour. Full report here. Here's another take:

  In addition to the segregation and poverty engendered by sheltered   workplaces, many advocates say workers with disabilities often face   exploitation. In 2009, Iowa shut down a “bunkhouse”--essentially,   a shed--where 60 men with disabilities employed by the meat processor   Henry Turkey Services were forced to sleep. The bunkhouse was unheated,   poorly insulated and infested with cockroaches. The company deducted   $10,000 a week from the paychecks of the workers housed in the   bunkhouse.

 Aside from the deplorable housing conditions, the 60  workers with  disabilities were paid only $0.41 an hour to work  alongside abled  workers who were earning between $9 and $12 an hour.

41 cents and hour, times 40 hours a week times 52 weeks is an annual wage of $852.80. Before payroll taxes. In 1938 the average annual salary was $1,700,  so $850 was doable. Back then, one could get a house for about $6,000  dollars and a car for well under a grand. Things have changed: wages for  the disabled in sheltered workshops has not.

So what does this  all mean? As we move forward with the discussions of minimum wage and  the expansion of health care, we need to remember those who truly need  our voices. We need to raise wages for ALL, and insure health coverage  for ALL. 

You know what's next: call your reps. Tell your friends. Only public pressure will make a difference.

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