Things were looking better for Patricia Morgan this year.
Hired as a telemarketer at $7 an hour six months ago, Morgan, a North Salt Lake resident, was finally able to offer some hope of a steady paycheck to her two children.
Then, earlier this month, she lost her job.
Now, like thousands of other Utahns, Morgan is scrambling to find work, even it if means accepting a minimum wage job.
But trying to support yourself — much less a family — on the federal minimum wage can lead to a bleak financial picture.
"You can't live off $5.15 an hour," said Morgan, a single mother. "You can't live off $7 an hour. It's horrible out here. You guys don't even know."
In fact, a full-time minimum wage worker will bring in less than $11,000 a year, about $4,000 below the 2003 federal poverty threshold for a family of three, according to the U.S. Department of Health and Human Services.
When Morgan is not looking for a new job, her worries turn toward her children. For instance, she is wondering how she will come up with money to buy a birthday present for her 3-year-old son.
"I bought him a little scooter at a yard sale for two bucks," she said. "I'm going to go buy a can of spray paint and paint it and make it look like it's new. That's horrible, but he's my boy."
This week Morgan was evicted from her apartment. She plans on staying with a girlfriend in Magna until she can find a new place.
Before losing her job, Morgan had to supplement her earnings with federal housing assistance, Medicaid and food stamps to make ends meet. Now she's counting on state financial assistance to support her kids.
"It's a double-edged sword," said Richard Maxfield, an independent job-training consultant and former chairman of the Utah State Board of Education. "You raise the wages, you eliminate some jobs. If you don't raise the wages, you've got social service costs skyrocketing. The largest users of social services are the working poor, not the deadbeats."
The federal minimum wage was first enacted in 1938 at 25 cents an hour. Since then, the wage has been raised 19 times. The last increase was in 1997, when the level was set at $5.15.
Nationally, about 2.2 million people, or 3 percent of the hourly paid work force, make at or below minimum wage. Most of those workers can be found in retail trades, like eating and drinking establishments.
Proposed legislation introduced earlier this year in Congress would once again boost the minimum wage, this time to $6.65 per hour, in a two-step process.
Proponents of a higher minimum wage say the increase is long overdue.
Kate Brinkerhoff, manager of Pretzel Time at the ZCMI Center in downtown Salt Lake City, said her three employees deserve an increase. And she believes the federal minimum wage should be indexed for inflation, an idea shared by some economists.
"Let's take the minimum wage up in a series of steps to something closer to $6 an hour and then tie it to inflation and get the politics out of the issue," said Jeff Thredgold, an economic consultant to Salt Lake-based Zions Bank. "There are relatively few people in this country that actually make minimum wage."
Mark Knold, senior economist for the Utah Department of Workforce Services, said if the 1991 minimum wage —$4.25 an hour — was indexed for inflation using the Consumer Price Index, today's minimum wage would amount to $5.61 an hour, 46 cents higher than the current wage.
Assuming a 32 percent increase in the cost of living over the next 10 years, a $5.61 wage, if tied to inflation, would increase to $7.41 by 2013.
But because the minimum wage is not indexed for inflation, its real value has continued to erode, according to the Economic Policy Institute, a think tank based in Washington, D.C. In 2001, the value of the minimum wage was 21.4 percent less than in 1979 (in 2001 dollars).
That falling value places a heavy burden on minimum-wage workers, who on average contribute 54 percent of their family's weekly earnings, a 2003 report by the institute said.
"The earning power of the minimum wage has been significantly watered down and means less today than what it did back when it was initiated," said state Sen. Ed Mayne, D-West Valley, who is president of the Utah AFL-CIO. "It was more of the living wage at the time and not a minimum wage."
But opponents of a minimum wage hike argue that lower-skilled employees ultimately will be hurt by any increase.
The U.S. Chamber of Commerce opposes efforts to raise the minimum wage, saying such an action would predominantly benefit those who are not heads of households.
In addition, "labor intensive industries such as restaurants, grocery stores and department stores suffer substantial negative impacts from minimum wage hikes," a statement by the U.S. Chamber said.
Lars Lefgren, a labor economist and professor at Brigham Young University, said that, in theory, if the wage is increased, it creates an incentive for firms to do away with unskilled labor.
"The empirical work on it is actually really mixed," Lefgren said. "It's actually pretty hard to find an effect."
Lefgren said a large increase, say to $10 an hour, would have severe negative effects on employment. A $1.50 raise probably would not have a big effect on the economy, he said.
"The downside is the employment of low-skilled people may drop by half a percentage point," Lefgren said. "To me it probably means that my Wendy's spicy chicken sandwich might be three cents or five cents more expensive."
E-mail: danderton@desnews.com