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President Obama’s push to increase the national minimum wage to $9.00 has stirred up plenty of conversations lately. This has been a very divisive issue over which party lines are clearly drawn. Politicians, news anchors, lobbyists, and economists have been debating the importance of the possible change that $1.75 could make here at home. Here in my home state of Ohio, the increase would be $1.30. But, what could that bit of money do elsewhere?

The World Bank found that in 2008 about 1.4 billion people in the developing world depended on a cost of living of less than $1.25 and set this amount as the definitive worldwide poverty line. Roughly one in every four inhabitants of any given developing country is estimated to fall under this category. While that number has been dropping steadily over the past decade, it is still a frighteningly high number. So, what can you get for $1.25?

In Kenya your $1.25 could buy you:
-2 0.33 liter bottles of Coca-cola
or
-2 loaves of bread
or
-1 liter of gasoline

But forget luxury items like a dozen eggs, that run at a market low of $1.44. And with the cheapest transportation available you’d better need no more than two buses to get where you’re going since they will cost you $0.50 each way, and that’s a day without any food cost at all. You may think that the American dollar would buy more abroad but it is important to remember that the $1.25 line used to mark poverty level is based on the purchase power parity, or the relative price that the same grouping of goods would cost in different markets. Even with this in mind, my $1.79 cup of coffee that I’m drinking now would be more than unattainable for a person living below the poverty level.

So, keep in mind that $1.25 can make a difference. Thankfully, the number of people living in poverty is decreasing each year. With great effort, we can keep that trend going.

– Kevin Sullivan

Source: NumbeoWorld Bank
Photo: 
Traditii Romania

Minimum Wage
In his State of the Union address, President Obama has called for a national increase in the minimum wage standard of the country. The President has proposed to raise the minimum wage to $9 from its current $7.25. The newly proposed amount would also have safeguards to account for inflation, which the current standard does not.

This demand comes at a time when the National Center for Law and Economic Justice supports that one in seven Americans lives in poverty, with one in sixteen Americans living in deep poverty. Poverty, of course, exacerbates tension and has been linked to decreased social mobility, increased rates of violence, and increased likelihood of being a young parent.

Addressing poverty, both at home and abroad, is a key, central way to better the standard of living for millions as the better able families are to support themselves, the more efficient the employee, the better the consumer, and the more stable the economy.

CNNMoney, however, has debunked the myth that raising the minimum wage in America is the only element necessary to raise a family out of poverty. For a family of four making  at least $9/hr., and while taking advantage of several key tax breaks, Tami Luhby of CNNMoney writes that the new rate would be barely enough to lift the family above the poverty line, and hardly enough to raise their standard of living by much in light of the US’s dependence on a tax code that has been decried as “broken” by many.

While raising the minimum wage would be a step in the right direction towards addressing poverty in the United States, advocates for economic justice argue that helping people find higher-paying jobs is another, more effective, means of fighting poverty.

– Nina Narang

Sources: NCLEJ, CNNMoney
Photo: Occupy