The Department of Labor reports that Indiana is one of twenty states that will not be increasing their minimum wage in the new year. Beginning Jan. 1, 2024, our neighbors to the east, west and north will all raise the required hourly pay rate for employees. Ohio’s minimum wage will jump to $10.45; Michigan’s will increase to $10.33; Illinois will raise its minimum wage to $14 hourly – all while Indiana holds steady at $7.25. The last increase for Indiana took place in 2009 when the hourly rate was raised just 70 cents per hour, up from $6.55.
Back in 2009, The Black Eyed Peas, Lady Gaga and Flo Rida topped the music charts. The average cost of a gallon of gas was $2.62; now it is $3.50. “Transformers,” “Harry Potter,” “Twilight” and “Avatar” were some of the year’s biggest films. Barack Obama had just been inaugurated as president at the top of the year, and the average rent was around $800. The average rent in 2023 in Indiana is about $1,100 per month. Obviously, times—and costs – have changed.
More than a decade later, states like Texas, Idaho and Kentucky are also holding steady at $7.25 while other states like Louisiana, Tennessee and South Carolina do not have a state minimum wage at all.
The argument can be made that most people in the state already make more than minimum wage, so changing that figure will not have a big impact. About 1% of workers, which is about 3 million people in the U.S., make minimum wage or less. Yes, some people make less than minimum wage. Though it is a small percentage, a change in pay for this group of people would have a major impact on our economy. According to American Progress, a nonpartisan policy institute, “A more than $5,000 increase in annual wages for the lowest-paid workers would make a tangible difference in their lives and go a long way to helping them afford the necessities.”
As food, gas, utilities, and housing prices increase, the time is long overdue for wages to do the same. “Although price hikes are easing, the cost of groceries, rent, and other goods and services remains higher than prior to the pandemic,” according to CBS News. Indiana experienced one of the highest rent spikes in the country, yet wages for some of the state’s most vital workers remain low.
For tipped employees, like restaurant servers, the minimum wage sits at $2.13 per hour, the same as it was for my very first job as a waitress at the now non-existent Glendale Mall. Back then, I only needed to earn enough money to shop at the Gap around the corner. Families living on this rate now need much more.
The choice to maintain the current minimum wage only serves to widen the ever-growing gap between the haves and have nots.
At a rate of $7.25 per hour, working 40 hours per week and 52 weeks per year, an individual would take home $15,080. This amount is more than $50,000 less than the average household income for the state. According to MIT’s Living Wage Calculator, a single adult in Indiana would need to make $15.78 per hour, a little more than twice the current minimum, to cover the expected household expenses.
Salaries have gone up for people at the top, namely corporate CEO’s, whose pay has increased nearly 400% since 1978, according to the Economic Policy Institute. In the same time period, workers’ salaries increased just 18%.
Over the holidays, there were numerous toy drives, coat drives and food giveaways. Churches, sports teams, community leaders and organizers pooled their philanthropic efforts to help families in need have an enjoyable holiday season. Unfortunately, this is only a temporary solution to a much bigger problem. I am sure the recipients of the donations were appreciative, but how much more appreciative would our neighbors be of being able to afford their own meals and gifts?
If hourly workers can barely afford the rent, or if people cannot afford food, the ultimate answer is not temporary rent relief or more visits to the food pantry, it’s paying people a living wage.
