Senate Assistant Minority Leader Grant Burgoyne (D, Boise) speaks at the Idaho Capitol on April 6, 2021. Burgoyne proposed a bill that would raise Idaho’s minimum wage in January, but it has not received a full hearing. (Otto Kitsinger for Idaho Capital Sun)
“How much money do you make?”
This question has historically been considered impolite to ask one another, but with the cost of living rapidly rising in Idaho, it’s become a relevant one. How much money are Idahoans making, and more importantly, is it enough?
Even though the cost of living has been increasing over the years, Idaho’s minimum wage in comparison has not changed since 2009, when it increased from $6.55 to $7.25 to match the federal minimum wage.
To combat this imbalance, state Sen. Grant Burgoyne, D-Boise, on Jan. 22 introduced Senate Bill 1028, which would raise the minimum wage in Idaho from $7.25 to $15 by July 2023. According to the U.S. Bureau of Labor Statistics, there were 9,000 Idahoans making at or below the federal minimum wage in 2019, which is roughly 1.7% of the total number of workers.
“I wanted a fairly rapid increase in three moves to get us to $15 an hour,” Burgoyne said in an interview. “I think that the $7.25 an hour minimum wage, if it had kept up with inflation, would be considerably more than $15 an hour. So I think it’s long overdue.”
As of Jan. 1, Idaho is one of 16 states that has a minimum wage requirement that is the same as the federal minimum wage, according to the Department of Labor. On the other hand, there are 29 states, plus Washington, D.C., that have a minimum wage higher than the federal minimum wage, ranging up to $15 per hour. The remaining five states do not have a minimum wage requirement.
With proposals to increase the federal minimum wage failing to survive in Congress, it remains up to state and local governments to decide how much people should be guaranteed to make for an hour of work.
Burgoyne has faced his own uphill battle in Idaho. He hasn’t even been given a full hearing for the bill in the Senate State Affairs Committee, where the proposal has languished since January.
“I’m a Democrat, and we are in the minority in the Idaho legislature, so we often don’t have the votes to pass the legislation that we want,” Burgoyne said. “But we have a voice, and we have to speak. We have to speak as effectively and as often as we can to make our point, in the belief that someday these things will get traction.”
Burgoyne said Idaho’s current rate is not a livable wage, and that a good economy is not sustainable if workers are not making livable wages.
“As home prices and apartment rent has been going through the roof and the cost of living going up, … if the minimum wage isn’t going up with it, that creates a real problem,” Burgoyne said. “If we have more people making better wages, we’re going to generate more consumer demand, more economic activity, a stronger economy and we’re going to generate more tax revenue for local and state government, so that we can keep up with the population growth and improve the lives of our citizens.”
‘It was really tough deciding to go back to work’
Burgoyne’s bill also proposed an increase in the wages of tipped workers from $3.35 to $7.50 by 2023 — which has not changed in Idaho since 2007. This is relevant today, as restaurants have been among the top industries most impacted by the pandemic.
John Henry Hanson, 35, of Boise, was one of many residents and service industry workers laid off during the pandemic. The Boise restaurant he was working at had to furlough many of its employees.
Even though Hanson applied to numerous places, he didn’t work for nearly three months and collected unemployment during this time.
“It was really tough deciding to go back to work,” Hanson said. “I didn’t want to be exposed (to the coronavirus) as a frontline worker, especially because I was making as much money or more (on unemployment) than I was before.”
Hanson said he was relieved to hear of the proposal to increase the tipped minimum wage, but he believes these two minimum wages should actually be the same.
“Maybe I’m biased, but we should raise the baseline wage for bartenders and servers,” Hanson said. “We work hard, we don’t get raises or health benefits, and (earning) $30,000 a year is not outrageous. I think this pandemic has especially shown how important restaurants and bars are to the public, yet we are treated as less than humans. Keeping (the minimum wages) different maintains a negative stigma against industry jobs.”
Now Hanson works three jobs, seven days a week, to pay his bills — his rent alone is $1,000 per month. Even though he was hesitant to go back to work, he didn’t want to rely on unemployment benefits for too long, for fear of missing the opportunity to re-enter the job force.
Now he bartends at Diablo & Sons Saloon and he is a baker for Diablo & Sons, Bittercreek Alehouse and eventually Red Feather when they reopen. He also helps his father with various construction projects.
“People keep talking about wanting things to get back to the way they were before,” Hanson said. “I think that’s a terrible idea, because things weren’t good before. I hope we use this pandemic to realize our mistakes and work to make things better.”
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‘The best way to think about it — we all have to pay rent’
Kyle Brookman, a Boise State University economics lecturer, said raising the minimum wage is not only necessary, it’s practical.
“If you take the current minimum wage at $7.25 an hour, and you assume someone works eight hours a day, five days a week, and 52 weeks a year — with no vacation or sick days — they’re making $15,000 a year,” Brookman said. “Is that enough? Is that even over the poverty line?”
According to the office of the Assistant Secretary for Planning and Evaluation, the poverty guideline for a one-person family/household in 2020 is $12,760. That means someone who makes minimum wage is just barely over the poverty line.
Putting this another way, if someone were to make minimum wage, working eight hours a day and five days a week, they would make $1,247 each month. According to Business Insider, the median rent in Idaho as of June 2019 was $1,238.
“This is one of the biggest reasons why this topic is tricky, because the cost of living changes everywhere and varies so much through our state, but I think this is the best way to think about it — we all have to pay rent,” Brookman said. “Even if you’re in rural Idaho or some metropolitan area, it’s still going to be a substantial part of your income. You’re not going to have a lot of disposable income leftover, if any at all. It’s hard to imagine anyone could really make a good living off of that or a fair living, especially if you have a family.”
Brookman compared the emergency funding from the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, to Burgoyne’s minimum wage proposal, as another way to view the issue.
When the CARES Act was enacted in 2020 due the pandemic, the government decided to send eligible citizens who were on unemployment and receiving other benefits an extra $600 per week to “provide valuable support to American workers and their families during this challenging time,” then-Secretary of Labor Eugene Scalia said in a news release.
“Last year a lot of people lost their jobs because of COVID-19 and there was a lot of unemployment,” Brookman said. “So the (government) instituted an unemployment benefit of $600 per week, but that’s what a $15 (minimum wage) would give you. The idea was that this emergency funding is for people to essentially just get by, so why is that so crazy as a base wage?”
Gov. Little: ‘The bureaucracy would be more than we can handle’
On the other hand, Idaho Gov. Brad Little told reporters last month that he is skeptical of the effectiveness that raising the minimum wage would have for the economy.
“There’s pretty good evidence, particularly if there’s a steep increase in minimum wage, that some people get laid off and those are the people that need the starting wage to build up to a to a living wage,” Little said.
Little believes that this is meant to be a minimum starting wage, which only applies to a certain number of people, and these individuals need to get a job to begin with before they can move in an upward, economic trajectory.
“What I want is a rising wage rate for everybody, … but the problem with any federal mandate is what’s applicable in one community is not applicable in the other,” Little said. “That’s the problem with a minimum wage — you could have it vary around the state, but the bureaucracy would be more than we can handle.”
Little admitted that he is supportive of increased wages, particularly given the rising cost of housing and living in Idaho right now. However, he stated that with less than 1% of Idahoans earning the minimum wage, he simply does not believe that the solution lies within this debate.
Economist: $15 is more than inflation warrants
Anne Walker, a Boise State economics lecturer, was hesitant to explicitly give an opinion on the matter, although she was clearly skeptical of Burgoyne’s proposal.
“Even economists that are heavily in favor of raising the minimum wage, everyone sort of admits that it’s not a very targeted or effective tool for reducing inequality or poverty, because it really does affect so few people — 1% of all workers is not a whole lot,” Walker said.
However, Walker acknowledged that the percentage of people affected by Burgoyne’s bill is actually higher than 1%, because raising the minimum wage would also impact individuals whose incomes are currently between $7.25 and $15.
But in response, Walker also pointed out that even if the minimum wage had continued to rise along with inflation since 2009, it would still only be at $8.85 today.
“I was surprised that (this number) wasn’t higher,” Walker said. “However, it does put into perspective that $15 is more than doubling the amount, even though it’s spaced out over two to three years. I think the bigger the increase of minimum wage in relativity to inflation, the more likely it is to have some negative effects. $15 is a lot today, and it’s probably still going to be a good bit more than overall inflation would warrant, even two years from now.”
Simply put, Walker does not think $15 is a good place to start, particularly with the pandemic still raging on and within such a rural state.
“I will say as much — if it is going to be raised, the fact that it hasn’t kept up with inflation is probably the best argument,” Walker said. “But a more modest increase would probably be a good compromise and mitigate some of the potential negative effects.”
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