A Minimum Wage That Doesn’t Cover the Minimum Costs

Georgia’s minimum wage is $5.15, but for most employment in Georgia, the federal minimum wage of $7.25 applies due to the Fair Labor Standards Act (FLSA).[1,2]  This wage is even lower if one is considered a tipped employee, decreasing the number to $2.13.[3] This is also possible due to the fact that Georgia does not currently have any legislation concerning paying employees less than the standard minimum wage.[Ibid] A low minimum wage is unfortunately a commonality among southern states and is considered a historical condition constructed by Southern businesses and political leaders. By maintaining low wages, they maintain cheap labor to attract business, a strategy utilized since the Civil War.[4] Unfortunately, Georgia sets itself apart. 

The living wage gap is the difference between what one makes and how much it takes to live “comfortably,” and is calculated using living wage, average housing prices, childcare, and healthcare costs.[5] It was reported in 2023 by Statista that Georgia’s living wage gap came in at $10.47. This living wage gap was not only the highest in the United States but was calculated based on single people with no children, meaning this gap is wider for households of any larger size.[6] Wyoming is the only other state in the U.S. that has a minimum wage below $7.25.[7]

If one is covered by the FLSA and their employer is not paying them the minimum wage, they are entitled to file a complaint with any Wage and Hour Office which will then be investigated by the Wage and Hour division (WHD). In contrast, if the state’s minimum wage applies to a worker and their employer is not paying them the correct amount, they can file a private lawsuit, displaying a lack of commitment to worker’s rights. 

In the 2023 legislative session, two separate House Bills addressing Georgia’s Minimum Wage were introduced, HB 245, which would have allowed local governments to raise their minimum wages, and HB 241, which would have increased the state minimum wage to $15.[8,9,10] Both bills never got past being assigned to the House Industry and Labor Committee.[Ibid] In the 2024 legislative session, there was one bill introduced concerning the minimum age wage, HB 1507, which proposed raising the state minimum wage from $5.15 to $8.00.[11] This bill also never got past being assigned to the House Industry and Labor Committee.[Ibid] Georgia is also reported to have no future enacted increases according to the National Conference of State Legislatures.[12] The last time Georgia’s minimum wage saw an increase was in 2009 when the federal minimum wage was increased from $6.55.[13] Since 2009 there has been a 43.46 percent increase in Core Inflation, which omits food and energy from their calculations.[14] This means there is about an $8,692.59 difference in the purchasing power of $20,000.[Ibid] 

It is no secret that Georgia, as well as most of the nation, is currently in a housing crisis. There is a bit of the chicken or the egg situation here, one cause of Georgia’s housing crisis may be the obscenely low minimum wage or Georgia’s minimum wage may be exacerbating the already present crisis, my personal opinion is that both of these scenarios have and are occurring. In 2021, it was reported that renters would have to earn 3 times the minimum wage to be able to afford a typical two-bedroom home without having to spend more than 30 percent of their income.[15] This number increases to five times for metro Atlanta.[Ibid] This means that for a Georgian to rent a standard two-bedroom, they must earn $19.42 an hour, $12.17 more than the current rate.[Ibid]

The obvious answer to this issue of too low of a minimum wage is to simply raise it and tie it to inflation to ensure that it continues to sustain comfortable living for all Georgians. It is said that after adjusting for inflation and filling Georgia’s living wage gap, the minimum wage should be set at at least $17.72 an hour.[16] Much of the opposition to an increase in the minimum wage cite its costliness to private employers and the state, as well as its potential to not only increase inflation but accelerate its increase. What opposition may fail to consider, is how much money the state would be saving in decreasing the necessity for public safety net programs by increasing the minimum wage. Experts of the UC Berkeley Labor Center reported that over half of Georgia families are enrolled in at least one safety net program which costs the state $4.7 billion annually.[17] The federal Raise the Wage Act is set to increase the federal minimum wage to $15 by 2025.[18] If carried through by Georgia, this increase would translate into an extreme release of pressure from Georgia’s safety net programs, and free up state resources.[19]

I would also be remiss if I did not point out that Georgia is currently not in a struggle for monetary resources, seeing as we currently have a close to $11 billion cash surplus that has yet to be allocated.[20] I believe it is of the utmost importance that we as a state unilaterally raise our minimum wage to at least $15, and tie this newly increased minimum wage to the inflation rate. This is imperative not only for our future growth as a state but for the livelihood of millions of Georgians.