Minimum Wage Can Stand Some Maximizing...

[ValkyrieofHouston]

By Amy Chasanov

For a while it looked like minimum wage workers might finally be getting a long-overdue raise. Now it appears that a vote on a minimum wage increase may be held up by partisan politics. In the meantime, poor working families keep struggling to meet their most basic needs.

It's been seven years since Congress increased the minimum wage-the second longest period without a boost since the minimum wage was enacted in 1938. (During the last seven years, however, lawmakers have seen fit to give themselves six raises totaling $23,400.) Inflation has entirely eroded the 1996-97 increase. Today, a single parent with two children who works a minimum wage job earns only $10,700 a year -- far below the poverty line of $15,670.

Most Americans believe it's wrong that a parent can work fulltime and still live and labor in poverty. In a recent poll by the nonpartisan Pew Research Center, 77 percent of all Americans believe increasing the minimum wage is an important priority.

Sen. Edward Kennedy's (D-Mass.) Fair Minimum Wage Act of 2004 proposes increasing the minimum wage from $5.15 to $7.00. Some Republican leaders and employer-backed organizations have come up with a disingenuous twist to their opposition, saying they're against such an increase because it would harm the working poor. But would it help or hurt low-wage workers to put a few more dollars in their paychecks?

Fortunately, we don't have to rely on guesswork-we've got history to guide us. Let's look at what happened after the increase in the minimum wage that took effect in 1996 and 1997. Unemployment went down -- not up -- for workers across the boards, including those on the lowest rungs of the economic ladder. Wages and incomes increased for everyone -- and, once again, low-wage workers were among the winners.

This experience doesn't prove that raising the minimum wage caused the boom of the late 1990's, although it did help that low-wage workers had more to spend on the necessities of life, pumping more money into the economy. But the economy's good fortunes from 1996 through 2000 do suggest that raising the minimum wage isn't the job killer than some conservatives claim.

And Sen. Kennedy's proposal would have less impact on the entire economy than the 1996-97 raise. Yes, his proposed increase from $5.15 to $7.00 is larger in dollar terms than the 1996-97 increase, from $4.25 to $5.15. However, it would help a smaller number of workers -- 7.4 million versus the last increase that helped 9.9 million workers. Because it would affect a smaller number of workers, it would have a smaller effect on the overall economy.

Opponents frequently argue that the minimum wage is poorly targeted, helping primarily teenagers and middle-income families who don't need it. Not true. While the minimum wage is not perfectly targeted, it is one of the best policy tools available to lift low-income families out of poverty. Of those who directly benefited from the 1996-97 increase, 70 percent were adults (20 and older). The benefits flowed primarily to the bottom of the income scale, with 35 percent of the income gains going to the poorest 20 percent of working households. Those same groups would benefit under the proposed increase.

Another common myth is that employers will fire (or refuse to hire) low-wage workers. But look back to the last increase - and see that similar predictions never materialized. And while employers' costs may increase, these costs can be offset by other benefits. The reason is simple: people aren't widgets and increases in wage rates can have positive effects on worker behavior. For example, Business Week reports that Costco pays its employees significantly higher wages and benefits than its major competitor, Wal-Mart, but Costco boasts lower employee turnover, lower recruitment costs, lower training costs, and higher profits per employee.

Opponents have recently argued that it's "classist" to believe that entry-level and low-wage workers cannot get a raise without a minimum wage increase.

Unfortunately, recent research shows that for some low-wage workers-particularly women, minorities, and the least-educated-the minimum wage affects not just their current earnings, but also their lifetime earnings potential. A nontrivial fraction of workers spend significant portions of their first 10 post-school, working years in jobs paying at or near minimum wage, so their current and future wages are intricately linked to the minimum wage.

While many Congressional Republicans may oppose an increase to $7, they are likely to offer an alternative. Be wary of the "sweeteners"-like corporate tax breaks or state opt-out provisions-that might be offered to appease the business community.

The 1996-97 minimum wage increase was part of the "Small Business Job Protection Act of 1996" that included an estimated $16 billion in corporate tax relief over 10 years. A minimum wage proposal during the 2000 presidential election cycle included an estimated $123 billion in tax reductions over 10 years, almost 11 times the value of the proposed minimum wage increase over that same time period.

Now is the time to raise the minimum wage, but we cannot afford further corporate tax breaks given the budget deficit and outrageously high corporate profits. Nor should we let states opt out of a minimum wage increase. Allowing such a loophole would erode the minimum wage floor, eventually rendering a federal minimum wage meaningless and leaving the incomes of millions of low-wage workers at risk.

It's time to give low-wage workers a raise without giving away the store to the special interests who want to hold the needy hostage to the greedy.

Amy Chasanov is deputy policy director of the Economic Policy Institute.
<a target=_blank class=ftalternatingbarlinklarge href="http://www.epinet.org/content.cfm/webfeatures_viewpoints_minimum_wage_maximizing">Click here for
Link</a>

 

[Mean MrMustard]

The minimum wage should NOT be raised.

In fact, it should be abolished.

 

[dullard]

I see no reason the minimum wage cannot have COLAs.

I believe one person working full time should be able to live in their community (in poverty conditions) without governmental help. In many cases, that requires a minium wage increase. Raise minimum wage and slash welfare. It is just the correct thing to do.

 

[jlmadyson]

Country is due a minimum wage increase imho, especially in light of the ever increasing cost of energy. Overall, I believe it would provide a boost to the economy although I?m not so certain it would help to reduce the welfare/entitlements all that much.

 

[raildogg]

Who will raise the minimum wage? The employer or will the government push down this new wage increase?

This isn't natural, this isn't going with the flow of the market. You are forcing something on an employer that is not possible without some consequences. The consequences can be unemployment, shortening of hours or both. If you're willing to live with the consequences, then go ahead and raise it.

But if this raise in the minimum wage law is pushed down, then it will affect all industries and have consequences that we cannnot know until that happens. We can assume that many small companies simply would not make it and many large companies would have no choice but to lay off some workers.

Has the overall productivity been increased through all these years? Has the productivity, vs inflation and general expansion of the economoy increased? If it can support these newer minimum wages, then you can consider it. The more you have, the more an employee can have.

 

[catnap1972]

Originally posted by: dullard
I see no reason the minimum wage cannot have COLAs.

I believe one person working full time should be able to live in their community (in poverty conditions) without governmental help. In many cases, that requires a minium wage increase. Raise minimum wage and slash welfare. It is just the correct thing to do.

Fat chance that'll happen...the people on the bottom of the ladder are already disposable liabilities that many in power want to be rid of.

 

[dmcowen674]

Originally posted by: Donny Baker
The minimum wage should NOT be raised.

In fact, it should be abolished.

Of course it should be abolished, that would instantly finish the Republican agenda to get all Americans working at the same $2.96 hr rate as China and India.

/thread

 

[raildogg]

Welfare is a way for the government to keep some members of our society down. That may have been the original goal of it. They supposedly provide housing for little or no money and generally try to help that person. They do take that money from the taxpayer, without his or her consent and use it to do whatever they wish.

Welfare encourages people to be lazy. It encourages people to break the law or go around the law. Like politicians and officials who keep some of that money for themselves instead of it going to the really needy. You may say that the people receiving these "benefits" are keeping themselves down. That is true in a way, but they have grown up in the system, or that system has finally broken them down to where they just give up. If you eliminate the system, the people would have no choice but to better themselves even more.

Plus, welfare is a way for the government to expand and forcefully use the taxpayer money to do whatever they wish. It is really not about the people who are needed, in my opinion. The government wants to keep them down and encourage more people to join in it. This is evident everywhere. They do encourage people to get on welfare. It is a cycle.

Then you have the welfare recipients who influence their friends, family and others to get on the system and quit their job in order receive the benefits or the full benefits. This is a cycle.

 

[dullard]

Originally posted by: catnap1972
Fat chance that'll happen...the people on the bottom of the ladder are already disposable liabilities that many in power want to be rid of.

Most jobs that pay minimum DON'T have the ability to get rid of them. How would a fast food company earn money after firing the servers? Yes, studies show that usually there is a small cut in employment. But that is usually a minimal harm to the poor compared to the great gain.

Since many forms of welfare go to the working poor and are income related, welfare spending is automatically cut with minimum wage increases (think of the EIC for example). No politicians need to do anything to welfare and it is automatically cut.

I had a father-in-law who owns a small record/CD/stereo store. He would complain and complain about minimum wage increases hurting his store. But each time his business boomed after the increase. Why? It is true his costs went up ~5%. But his customer's had ~20% more available cash to spend. You have to take the whole picture in when discussing this issue.

 

[smack Down]

Originally posted by: raildogg
Who will raise the minimum wage? The employer or will the government push down this new wage increase?

This isn't natural, this isn't going with the flow of the market. You are forcing something on an employer that is not possible without some consequences. The consequences can be unemployment, shortening of hours or both. If you're willing to live with the consequences, then go ahead and raise it.

But if this raise in the minimum wage law is pushed down, then it will affect all industries and have consequences that we cannnot know until that happens. We can assume that many small companies simply would not make it and many large companies would have no choice but to lay off some workers.

Has the overall productivity been increased through all these years? Has the productivity, vs inflation and general expansion of the economoy increased? If it can support these newer minimum wages, then you can consider it. The more you have, the more an employee can have.

lol the world is going to come to an end if people are paid 7 dollars an hour.

 

[ValkyrieofHouston]

Originally posted by: raildogg
Welfare is a way for the government to keep some members of our society down. That may have been the original goal of it. They supposedly provide housing for little or no money and generally try to help that person. They do take that money from the taxpayer, without his or her consent and use it to do whatever they wish.

Welfare encourages people to be lazy. It encourages people to break the law or go around the law. Like politicians and officials who keep some of that money for themselves instead of it going to the really needy. You may say that the people receiving these "benefits" are keeping themselves down. That is true in a way, but they have grown up in the system, or that system has finally broken them down to where they just give up. If you eliminate the system, the people would have no choice but to better themselves even more.

Plus, welfare is a way for the government to expand and forcefully use the taxpayer money to do whatever they wish. It is really not about the people who are needed, in my opinion. The government wants to keep them down and encourage more people to join in it. This is evident everywhere. They do encourage people to get on welfare. It is a cycle.

Then you have the welfare recipients who influence their friends, family and others to get on the system and quit their job in order receive the benefits or the full benefits. This is a cycle.

This is just BS....

Obviously you have never experienced what alot of the people who are in the situation of having to go on welfare are in. Yes, I agree the system has its flaws, and there are some who abuse it. But for the most part there are people who are in dire need of the help by the welfare system. Not all who get on it, stay on it. My brother and his family are an example of that.

 

[BoberFett]

As an employer, why would you bother keeping a minimum wage employee after minimum wage increases?

Minimum wage for illegals never goes up.

 

[raildogg]

Originally posted by: smack Down

Originally posted by: raildogg
Who will raise the minimum wage? The employer or will the government push down this new wage increase?

This isn't natural, this isn't going with the flow of the market. You are forcing something on an employer that is not possible without some consequences. The consequences can be unemployment, shortening of hours or both. If you're willing to live with the consequences, then go ahead and raise it.

But if this raise in the minimum wage law is pushed down, then it will affect all industries and have consequences that we cannnot know until that happens. We can assume that many small companies simply would not make it and many large companies would have no choice but to lay off some workers.

Has the overall productivity been increased through all these years? Has the productivity, vs inflation and general expansion of the economoy increased? If it can support these newer minimum wages, then you can consider it. The more you have, the more an employee can have.

lol the world is going to come to an end if people are paid 7 dollars an hour.

If you look at this issue without emotional attachment, that increas of about $2.00 is enough influence the whole country in a way that you have have expected. It is not really about about those $2, it is can the employer really afford that? Does the market flow go with this increase or go against it? If you are forcing an employer to change the way he runs his business according to you, then you have to pay the consequences.

If the employer goes out of business as a result of this, the government should give him all the benefits he needs because they are the ones that drove him out in the first place.

This is emotional thinking on my part, or is it?

In fact, when a lot of people are layed off as a result of this increase, the government will give them some kind of benefits or another if they apply and qualify for them. Therefore, they would have been better off had the minimum wage increase not gone through in the first place. Plus, going from a minimum wage of $5 or so immediately to $7 is an extremely radical jump.

 

[dullard]

Originally posted by: raildogg
In fact, when a lot of people are layed off as a result of this increase, the government will give them some kind of benefits or another if they apply and qualify for them. Therefore, they would have been better off had the minimum wage increase not gone through in the first place.

You keep harping on this idea. The facts are clear, in the past, minimum wage increases lead to (A) a small employment decrease or (B) a small employment increase. Either way, the effect is so small it is almost not worth considering. So why harp on it?

 

[raildogg]

Originally posted by: ValkyrieofHouston

Originally posted by: raildogg
Welfare is a way for the government to keep some members of our society down. That may have been the original goal of it. They supposedly provide housing for little or no money and generally try to help that person. They do take that money from the taxpayer, without his or her consent and use it to do whatever they wish.

Welfare encourages people to be lazy. It encourages people to break the law or go around the law. Like politicians and officials who keep some of that money for themselves instead of it going to the really needy. You may say that the people receiving these "benefits" are keeping themselves down. That is true in a way, but they have grown up in the system, or that system has finally broken them down to where they just give up. If you eliminate the system, the people would have no choice but to better themselves even more.

Plus, welfare is a way for the government to expand and forcefully use the taxpayer money to do whatever they wish. It is really not about the people who are needed, in my opinion. The government wants to keep them down and encourage more people to join in it. This is evident everywhere. They do encourage people to get on welfare. It is a cycle.

Then you have the welfare recipients who influence their friends, family and others to get on the system and quit their job in order receive the benefits or the full benefits. This is a cycle.

This is just BS....

Obviously you have never experienced what alot of the people who are in the situation of having to go on welfare are in. Yes, I agree the system has its flaws, and there are some who abuse it. But for the most part there are people who are in dire need of the help by the welfare system. Not all who get on it, stay on it. My brother and his family are an example of that.

What did I say so differently than what you have said? I mentioned that there are really needy people and that they are in the system because they are needy. How they became needy is another thing. You will agree that people influence other people, especially family members. I am glad to see you agreeing that the system does have faults and that people abuse it. I never said that some people do not need it.

The main point is that are the people running it competent? Do they really run the program efficiently? Why do I ask this question when the fact is that all government programs are as inefficient as possible to create a better public image.

Do you consider public housing as part of the welfare system?

Yes, some people do get out, but that number is still not as powerful as the people who don't and therefore, influence others to join in. This is very true among some members of our society. It gets passed down from one person to another. They discourage employment and they discourage productivity.

 

[ValkyrieofHouston]

Analysis report of effects on mininum wage increase... not as bleak as you would think. http://www.uvm.edu/~vlrs/doc/min_wage.htm

 

[raildogg]

Originally posted by: dullard

Originally posted by: raildogg
In fact, when a lot of people are layed off as a result of this increase, the government will give them some kind of benefits or another if they apply and qualify for them. Therefore, they would have been better off had the minimum wage increase not gone through in the first place.

You keep harping on this idea. The facts are clear, in the past, minimum wage increases lead to (A) a small employment decrease or (B) a small employment increase. Either way, the effect is so small it is almost not worth considering. So why harp on it?

Where do you get these facts from? Are they even facts?

The effect is small only to the employee but not to the employer. If an employer only wants to hire a person to do only one thing, one specific relatively easy thing for $4 an hour, he cannot because of this new law. That person will be unemployed, would he not?

Some people who are unemployed will take a job that pays slightly below the minimum wage. There are trade-offs. Would you rather be unemployed or work for a job that pays below market prices? This is assuming there are no benefits from the government.

Wages can be increased but forcefully increasing them by government policy is a way that I'm not too comfortable with.

 

[Whoozyerdaddy]

I have no idea why so many people get so riled up about this issue. Seriously... how many people outside of high school students earn minimum wage? Even when I was in high school I made more than minimum wage. I'm not sure that you could even find a job that paid only the minimum here. Box shops (Wal-Mart/Home Depot/Etc...) here start at about $2/hr over minimum ($9+/hr). Good grief, if you get through your 30 day probationary period at McDonalds you make $9.50/hr.

Maybe I've just been in Alaska too long. Minimum wage here is $7.25/hr. If I put an ad in the paper for $7.25 I'd receive exactly ZERO responses. At $9/hr I might get some high school kids or a college student looking for some extra cash.

So somebody please tell me... WTH difference does it make to anybody if you raise the minimum wage another quarter an hour?

 

[Vic]

When do small business owners get a guaranteed minimum wage?

 

[ValkyrieofHouston]

Originally posted by: raildogg

Originally posted by: ValkyrieofHouston

Originally posted by: raildogg
Welfare is a way for the government to keep some members of our society down. That may have been the original goal of it. They supposedly provide housing for little or no money and generally try to help that person. They do take that money from the taxpayer, without his or her consent and use it to do whatever they wish.

Welfare encourages people to be lazy. It encourages people to break the law or go around the law. Like politicians and officials who keep some of that money for themselves instead of it going to the really needy. You may say that the people receiving these "benefits" are keeping themselves down. That is true in a way, but they have grown up in the system, or that system has finally broken them down to where they just give up. If you eliminate the system, the people would have no choice but to better themselves even more.

Plus, welfare is a way for the government to expand and forcefully use the taxpayer money to do whatever they wish. It is really not about the people who are needed, in my opinion. The government wants to keep them down and encourage more people to join in it. This is evident everywhere. They do encourage people to get on welfare. It is a cycle.

Then you have the welfare recipients who influence their friends, family and others to get on the system and quit their job in order receive the benefits or the full benefits. This is a cycle.

This is just BS....

Obviously you have never experienced what alot of the people who are in the situation of having to go on welfare are in. Yes, I agree the system has its flaws, and there are some who abuse it. But for the most part there are people who are in dire need of the help by the welfare system. Not all who get on it, stay on it. My brother and his family are an example of that.

What did I say so differently than what you have said? I mentioned that there are really needy people and that they are in the system because they are needy. How they became needy is another thing. You will agree that people influence other people, especially family members. I am glad to see you agreeing that the system does have faults and that people abuse it. I never said that some people do not need it.

The main point is that are the people running it competent? Do they really run the program efficiently? Why do I ask this question when the fact is that all government programs are as inefficient as possible to create a better public image.

Do you consider public housing as part of the welfare system?

Yes, some people do get out, but that number is still not as powerful as the people who don't and therefore, influence others to join in. This is very true among some members of our society. It gets passed down from one person to another. They discourage employment and they discourage productivity.

Actually it is not as easy as all that to get onto welfare. They have made significant changes to the system and there are alot of hoops and red tape that one has to go through to get the help needed. This is also true of those in need of disability. My brother and his family have had to lean on the welfare system a few times. He suffers from minimal brain dysfunction and Osgood slaters disease (a brittle bone disease), his wife has mild mental retardation. The two of them have three children. Both try very hard to survive and barely get by raising their 3 children. As a family we do what we can when we can. He has lost numerous jobs where he has been worked nearly to death. 14 hours at a time if not longer and his health suffered. He got paid very little. She worked and still works at minimum wage. They live in a rat infested, crime ridden area and cannot afford to live anywhere else. He is very prideful and hates to be on welfare and feels guilty when he even takes the welfare food stamps. There are some new apartments that are being built by HUD and they went to see if they could qualify to live there. This is new government housing and the area is very nice, the apartments are beautiful, but they were told they make too much money!!! WTF! That was the most ludicrous thing I ever heard of...
They have been through alot, he has even tried to get on disability, which I really feel he and his wife need to be on. But they have been denied twice. Even though they have documented evidence of their mental disabilities, but because they are capable of at least working like "dogs" at a minimum wage level... well you know the rest of the story. Now his wife has just found out that her cancer has re-occurred, the doctor thinks it has been brought on by stress. They do not have health insurance.

Yes, I agree with you our system is really F**ked up... for those who are really in need of it.

 

[Vic]

Originally posted by: Whoozyerdaddy
I have no idea why so many people get so riled up about this issue. Seriously... how many people outside of high school students earn minimum wage? Even when I was in high school I made more than minimum wage. I'm not sure that you could even find a job that paid only the minimum here. Box shops (Wal-Mart/Home Depot/Etc...) here start at about $2/hr over minimum ($9+/hr). Good grief, if you get through your 30 day probationary period at McDonalds you make $9.50/hr.

Maybe I've just been in Alaska too long. Minimum wage here is $7.25/hr. If I put an ad in the paper for $7.25 I'd receive exactly ZERO responses. At $9/hr I might get some high school kids or a college student looking for some extra cash.

So somebody please tell me... WTH difference does it make to anybody if you raise the minimum wage another quarter an hour?

It doesn't make any difference. The minimum wage is a feel-good issue with no real substance. Something for politicians and political action groups to rally the troops with. In reality, wages are controlled by the marketplace.

Do you know who the only people actually making minimum wage are in American besides a few high school kids? Restaurant servers with tip income and straight-commission salespeople who don't make any sales.

 

[dullard]

Originally posted by: raildogg
Where do you get these facts from? Are they even facts?

I post nothing but verifiable facts (unlike many other posters).
[*]From the original post, scroll up and actually read it:
"Fortunately, we don't have to rely on guesswork-we've got history to guide us. Let's look at what happened after the increase in the minimum wage that took effect in 1996 and 1997. Unemployment went down -- not up -- for workers across the boards, including those on the lowest rungs of the economic ladder. Wages and incomes increased for everyone -- and, once again, low-wage workers were among the winners."

[*]From ValkyrieofHouston's link
"Card and Krueger compared unemployment and wages in New Jersey and Pennsylvania. In that comparison they focused on the fast food industry (the leading employers of low wage earners and an industry that enforces the minimum wage). The Comparison of New Jersey and Pennsylvania indicated, "employment actually expanded in New Jersey relative to Pennsylvania, where the minimum wage was constant" (Card and Krueger 1995, p. 66). In additional studies that they conducted using data from other states Card and Krueger actually found a positive correlation between a higher minimum wage and employment.
...

Most studies have found that the entire net effect of an increase in minimum wage results in a slight decrease in employment. A 10 percent increase would most likely lead to only a 1 percent reduction in employment."

Basically what I posted. If you want, I can post more studies. Sometimes, there is a slight increase in unemployment, sometimes a slight decrease. Even then, 1% fewer jobs is a minor hit compared to the 10% gain in income for the jobs that are there. Some people working three jobs, can afford to live on just two jobs of higher wages. That frees up jobs for that 1% who are fired.

Inflation adjusted minimum wage graph.

 

[dullard]

Originally posted by: Vic
Do you know who the only people actually making minimum wage are in American besides a few high school kids? Restaurant servers with tip income and straight-commission salespeople who don't make any sales.

Hah! Many locations pay minimum or near minimum wage. My hometown has very few jobs above $6 an hour now. That includes restaurants, gas stations, grocery stores, retail stores, etc. Just because you might not live in an area that pays minimum doesn't mean those places don't exist.

70% of those on minimum wage are NOT teens or kids.

 

[Genx87]

So somebody please tell me... WTH difference does it make to anybody if you raise the minimum wage another quarter an hour?

So when the next election comes around they can pander this point.
Minimum wage has its purposes but lets be honest, unless you are brain dead or a highschool student the chances of you working for minimum wage is small. And if you dont want to move along to the next job. McDonalds even pays well above minimum wage. If you cant function at McDonalds you probably have serious issues that raising the min wage wont begin to fix.

 

[Genx87]

Originally posted by: dullard

Originally posted by: Vic
Do you know who the only people actually making minimum wage are in American besides a few high school kids? Restaurant servers with tip income and straight-commission salespeople who don't make any sales.

Hah! Many locations pay minimum or near minimum wage. My hometown has very few jobs above $6 an hour now. That includes restaurants, gas stations, grocery stores, retail stores, etc. Just because you might not live in an area that pays minimum doesn't mean those places don't exist.

70% of those on minimum wage are NOT teens or kids.

Where is your hometown?