Making Welfare Work
And Making Work Pay

Despite a hobbled economy and the budget pressures that follow in its wake, two developments last month have concretely improved the fortunes of New York’s working poor and those on welfare: a hike in the minimum hourly wage for workers and an increase in the amount of cash assistance made available to welfare recipients.

While many observers view these developments as overdue, they still note there's a long way to go before the footholds of those on the lowest rungs of mobility are secure enough for a push upwards. The state's minimum wage rose from $7.15 to the new nationwide minimum wage of $7.25 per hour on July 24. And beginning July 1, many welfare recipients will receive a $30-per-month increase in cash assistance – the first jump in the public assistance grant in 19 years – bringing the monthly allotment for a family of four from $307 to $345.
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As a full-time office cleaner scraping to support his wife and two children on a wage of $8.50 per hour, Danny Mercedes, 36, has a hard time imaging how someone can do the same thing at the newly increased minimum wage of $7.25.

To cover the cost of living in their Bronx apartment, Mercedes’ family of four shares space with another family. They also pinch pennies by purchasing food staples like rice and milk on a bi-weekly rather than weekly schedule, preparing meals with cheaper items like plantains and oatmeal to make the money go farther. And he finds himself using shampoo for all purposes in the shower, rather than buying more soap.

If the Mercedes family is on that kind of margin, soap is even more of a luxury for those facing still tighter budgets. Even earning $1.25 above the minimum wage, Mercedes' gross salary of $17,000 per year is still 23 percent less than the federal poverty standard of $22,050 for a family of four.

the increase "puts more money in people's pockets, but it still leaves people very poor," says Liz Accles, a senior policy analyst at the Federation of Protestant Welfare Agencies. Like other poverty advocates, however, Accles credits the governor with pushing for the increase during a time of mounting budget deficits.

Mercedes and his co-workers at the Con Edison power plant in downtown Manhattan say they started organizing this year after a promised pay increase from their employer, the contractor Nelson Services Systems, Inc., was late in coming. Today, they are hopeful that they will eventually unionize their colleagues under the SEIU 32BJ property services union, where commercial cleaners make an average of $21 an hour – providing a salary of $42,000 per year – to hoist them out of poverty.

When state officials recently discussed the minimum wage increase and related issues, they emphasized how commonplace it is for workers to be cheated out of the legal minimum. During a press conference organized by the Department of Labor on July 27, Deputy Commissioner Terri Gerstein announced the recovery of $10.5 million in lost wages for more than 10,000 workers statewide.

“The workers that we talk to day-to-day are working on the lowest-paid system,” says Maritere Arce, director of the Bureau of Immigrant Workers’ Rights. “They should be receiving the minimum wage increase, but in reality they are working for much less than that.”

Arce says immigrant workers who are underpaid often don't even report wage violations, either because they're fearful that the department will share information about their immigration status with other agencies, or because the logistics of their work lives prevent them from communicating effectively with enforcers working 9-to-5.