AK follows national trend with minimum wage increase proposals

Last year a group of balloters from the Alaska Needs a Raise (ANR) campaign sought to get a minimum wage increase onto the ballot. In late June 2013 they received the okay to go ahead from Alaska Lt. Gov. Meade Treadwell, permitting them to collect the required 31,169 signatures to get the measure on the ballot. The initiative would increase minimum wage to $8.75 on Jan. 1, 2015, $9.75 on Jan. 1, 2016, and then, according to the ANR website, “adjust it by the change in the Anchorage Consumer Price Index (CPI), or one dollar over the federal minimum wage, whichever is greater, annually.”

The current minimum wage in the state of Alaska is $7.75. The federal minimum is $7.50, making Alaska above the average. While Alaska does have a higher cost of living, which could lead some to believe this offsets the higher than average minimum, we do not have state income tax. Add the dividend on top of that and it might seem like Alaska is stable enough that it doesn’t really need a statewide minimum wage increase.

Graphic by Jenna! Roosdett.
Graphic by Jenna! Roosdett.

So realistically is this something that Alaska really needs, or is it just following the national trend? The idea of a minimum wage increase has been sparking up all around the U.S. this past year and will become a major issue of discussion for 2014.

Let’s look at the numbers. A full-time (40 hours/week) person making $7.75 has an annual income of $16,120. According to the ANR campaign, this is $8,000 below the federal poverty threshold for a family of three in Alaska ($24,410) and more than $13,000 below the federal poverty threshold for a family of four ($29,940).

For students, however, this statistic is increased significantly due to many working only part time (20 hours/week). Because UAA is considered a non-traditional campus and, according to the National Center for Educational Statistics, over 43 percent of students are over the age of 25, it can be assumed that a large portion of this population is going to school, working, and trying to sustain a family. Working at $7.25 part time has an annual income of only $7,740; over $16,000 below the federal poverty threshold for a family of three and over $29,000 for a family of four.  Even adding in a hefty PFD doesn’t help those numbers.

So even though Alaska is indeed following the national trend, it is something that the state actually needs. While increasing the minimum wage to a single dollar every year isn’t going to bridge that drastic gap in one year or even five years, it will still allow for minimum wage workers to have some extra cushion room to support their families. Even for those without families, the extra income may decrease the need to take out as many student loans, decreasing the amount of loan money and interest they will have to pay off after graduation, and helping them out in the long run.

As of Nov. 10, 2013, the group has collected over 25,000 signatures. They still have five more months to garner the appropriate amount of signatures to get the minimum wage increase on the ballot. Judging by how many they have received so far, it wouldn’t be surprising at all if it made it on the ballot with plenty of signatures to spare.