More on the Minimum Wage
July 31st, 2006 | by Scott |Further assistance in getting a leg up in the world will ultimately be denied to the working poor, I’m afraid.
In a blatant election year move, Republican members of the House tacked on an estate tax rider to a bill that would increase the minumum wage from 5.15 to 7.25 over the next 3 years.
Now, with full knowledge that it will be defeated in the Senate, the GOP can lay claim to having voted for a minimum wage hike in the upcoming elections.
Couldn’t we have dealt with the minimum wage issue first, and then worried about giving Paris Hilton a 3 million dollar tax break? Oh wait, that 3 million will trickle down to her bodyguards.
We have gone the longest without raising the minimum wage since it was initiated in 1938.
And we are not talking about giving teenagers in their first jobs more money. Most of those affected are adults. And over a third of them are the sole bread winners in their families.
61% are women, many of them trying to raise families on their own.
And it’s the fiscally responsible thing to do. There is historical evidence that poverty and unemployment actually drops when the minimum wage is increased.
Here’s some more numbers from the Center for American Progress and Sojourners:
5.4 Million–NUMBER OF AMERICANS WHO HAVE FALLEN INTO POVERTY SINCE THE MARCH 2001 RECESSION.
5.15 per Hour–FEDERAL MINIMUM WAGE.
28.6 Percent–HOW MUCH THE INFLATION-ADJUSTED VALUE OF THE MINIMUM WAGE HAS ERODED SINCE 1979.
0–NUMBER OF TIMES THE MINIMUM WAGE HAS INCREASED SINCE 1997.
8–NUMBER OF TIMES THE CONGRESS HAS INCREASED ITS OWN PAY SINCE 1997.
31,600–HOW MUCH MORE A YEAR MEMBERS OF CONGRESS MAKE TODAY COMPARED TO 1997.
0–HOW MUCH MORE A YEAR PEOPLE EARNING MINIMUM WAGE EARN TODAY COMPARED TO 1997.
10,700–AMOUNT A PERSON MAKING MINIMUM WAGE WILL EARN IN A YEAR.
5,900–AMOUNT BELOW THE POVERTY LEVEL WORKING 40 HOURS A WEEK, 52 WEEKS A YEAR AT MINIMUM WAGE WILL LEAVE A FAMILY OF THREE.
7.3 Million–NUMBER OF WORKERS WHO WOULD BENEFIT FROM AN INCREASE IN THE MINIMUM WAGE.
11 Million–NUMBER OF JOBS ADDED TO THE ECONOMY IN THE FOUR YEARS AFTER THE LAST MINIMUM WAGE HIKE.
72%–PERCENTAGE OF MINIMUM WAGE WORKERS WHO WILL BENEFIT FROM AN INCREASE IN THE MINIMUM WAGE WHO ARE OVER THE AGE OF 20.
1.8 Million–NUMBER OF PARENTS WITH KIDS UNDER THE AGE OF 18 WHO WOULD BENEFIT FROM AN INCREASE IN THE MINIMUM WAGE.
$8.88–AMOUNT MINIMUM WAGE WOULD HAVE TO BE TODAY TO HAVE THE SAME PURCHASING POWER IT HAD IN 1968:
2.5 Years–AMOUNT OF HEALTH CARE FOR TWO CHILDREN WHICH COULD BE BOUGHT BY RAISING THE MINIMUM WAGE FROM $5.15 TO $7.25.
86%–PERCENTAGE OF AMERICANS WHO SUPPORT RAISING THE FEDERAL MINIMUM WAGE.
8 Responses to “More on the Minimum Wage”
By justin on Jul 31, 2006 | Reply
http://www.self-gov.org/cox02.html
http://www.ncpa.org/ba/ba270.html
There’s some links from economists as to why it actually hurts the poor to raise the minimum wage.
It appears that either side is probably using their own numbers, probably not arrived at in an unbiased manner, to promote their agenda.
I think its interesting that on one hand 5.4 million have gone into poverty since 01 (how many are still there?) but then we talk about how raising the minimum wage helped some people. It apparently didn’t help those who lost their jobs in that same time period.
Why not raise the minimum wage to 100 dollars an hour? Its because massive job loss will occur at that point and people will know its because of the minimum wage hike. The numbers are small with small hikes and many jobs are unaccounted for because most minimum wage workers work for small businesses that fly under the radar.
The thing is, all those good things would happen if businesses were welfare states and could run at a loss for forever and not go out of business. The reality is that resources have to be moved around when mandatory wage hikes occur. You keep your best people and let go those that aren’t worth the higher wage to keep the bottom line and keep the business going. Those that are let go are the least skilled, which are typically the poorest.
You can’t change supply and demand, and those are the things that set the market. When you force the wage up to an artificial level, it draws in people who won’t work for the lower wage. It creates more competition for those that are of lower skill. It causes employers to let go the least productive workers.
BTW, I noticed that CFAP and Sojourners didn’t mention how many people actually make minimum wage in this country. I believe its roughly 3 percent of wage earners. When you raise that up several dollars, those that are making more will likely keep their jobs, because the employers have all ready determined that their work is worth more than 5.15 without the government’s help but those that are making the minimum wage now will be let go. I just don’t see how its good.
By R-Liz on Jul 31, 2006 | Reply
Thanks for the thoughts.
Now, did you watch Oprah’s show on this last week? It gave a personal face, a personal voice, to this plight. I really, really appreciated it, and don’t think I will ever see this issue the same again.
By Scott on Aug 1, 2006 | Reply
I saw it last year when it first aired. Very eye-opening.
By Lachen on Aug 1, 2006 | Reply
I agree wth Justin on this one, Scott, though I do appreciate your perspective and actually WANTING to be a part of a tangible solution to American poverty, which is and will be always with us till Christ comes back and lifts us all out of the mire.
I seem to be among the 14% of us citizens here who see raising the minimum wage as a fradulent bpromise that leads us deeper into the cycle of poverty. The nanosecond employers have to pay more for their workers, prices increase. The cost of doing business increases. The cost of enefits (if indeed, any are offered) are sloughed off onto the worker. Basically, everything becomes mroe expensive in EXACT ratio with the increase in miniumu wage.
We can’t magically offer to pay people more money and expect that not to trickle down (is there a better phrase to describe that effect? “waterfall down”, maybe) or that the extra money spent on wages will not need to be made up in consumer prices and lack of benefits and other contributions made by an employer.
I just see it as a bit of getting us nowhere.
I suggest instead a MASSIVE (as in mind blowingly massive) reduction in TAXES across the board. From estate to personal income to inheritance to corporation to self-employment ( a BIG one for me, as unlike traditionally W-2′d employees who work till May to pay their taxes, my tax date is somewhere around August - it is insane).
If we KEPT what we made, we’d be able to not only be more stable financially ourselves but be able to have the funds to heed the call of the poor among us. And if we are employers, pay people more VOLUNTARILY, not because of Federal mandate, because we keep more of what we earn from the get-go.
But I do agree with the nonsense passive-agressive manner in which this bill was dealt. But I take issue with all those who would be affected by the estate tax rider being likened to Paris Hilton. Plenty of hardworking, every day, salt of the earth Americans are subject to an estate tax when they die. Everything they’ve worked a lifetime for is important to them to be able to pass on, generationally. They are not all promiscuous, overexposed, morally bereft heiresses.
Sometimes they look like my grandfather.
By justin on Aug 1, 2006 | Reply
Right, I think that’s important to note. The estate tax not only affects Paris Hiltons, it affects the owners of the Mom and Pop shop on the corner. Regardless of how much thier kids make, the business is taxed at 45% when they die. If its worth just 150 thousand dollars, who can afford to pay 70 grand with selling? All the sudden, the families livelyhood is gone, and maybe they end up in poverty?
This is why these things can’t be solved purely through emotion. We must look at the rational side and we can’t abandon capitalism because it is an explanation of why things happen the way they do.
By Scott on Aug 1, 2006 | Reply
Justin, those who disagree with you aren’t acting purely through emotion. I just can’t get on board with your passionate defense of capitalism. You seem to be as emotionally wed to it as those on the other side you criticize.
The Paris Hilton line was a joke. Go back to my thought. Couldn’t that issue have been dealt with at another time?
And there is evidence that minimum wage increases improves the economy.
But we will not agree. Let’s move on.
By Lachen on Aug 2, 2006 | Reply
I just realized I wrote something erroneously that really makes a difference. I didn’t mean to say I agree WITH the passive agressive way this bill is being handled. I meant to write that I agree with you, Scott, this bill is being handled passive agressively.
Passive-agressive in politics? Naaah….
By justin on Aug 2, 2006 | Reply
I disagree with the way they are going about it. Its sketch. All politics are.
I’m seriously considering writing in jesus for every office in the primaries and county wide elections thursday.