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Experts say Texas minimum wage of $7.25 an hour is not livable

A Texas A&M professor of economics said a livable wage in Texas is about $40,000 a year.

AUSTIN, Texas — For more than a decade, Texas's minimum wage has been $7.25. This is the same as the federal minimum wage. The thing is, it's been over a decade since the rate increased. 

Annika Olson, assistant director of policy research at the University of Texas, said 10 years ago she was making more than Texas' current minimum wage. 

"Ten years ago, I made, I mean, $8 an hour in Massachusetts," said Olson. "I was at a dining hall for $8 an hour 10 years ago, and the minimum wage in Texas is $7.25 in 2022."

Olson still can't believe it. 

"That is just, it's almost comical," she added. "That is so horrible."

She added that earning this wage in 2022 makes it difficult to make ends meet. 

"Gas is more expensive," added Olson. "The price of goods is going up. So, inflation is one piece of the problem."

But it's not just that. She said rising home prices are also part of the problem. A recent report shows in the Austin- Round Rock area, to afford a two-bedroom apartment without paying more than 30% of income on housing, one needs to be making at least $27.58 an hour. 

Texas A&M Professor of Economics Jim Lee said someone who works 40 hours a week and makes minimum wage only earns about $15,000 a year. 

"A livable wage, it's going to be close to $40,000," said Lee. "I mean, we used to talk about $35,000, that was last year. We need at least $40,000 to make a comfortable living."

Lee explains raising the minimum wage has both its pros and cons. 

"Texas is a pro-business state," added Lee. "You know, we like to take care of our, you know, small businesses, big and small. So that high minimum wage, at least in theory, will hurt small businesses."

However, it will help minimum wage workers. But, Lee added, many small businesses are paying above minimum wage. In efforts to attract more employees, small businesses are paying at higher rates, so not all could be affected. 

Both Olson and Lee agree the current minimum wage needs to be increased.

Other states like Colorado and Arizona have increased their wage to over $12 an hour. California currently has the highest rate at $15 an hour. 

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