You’d also be able to collect taxes now from people since illegals are not paying taxes and sending the money back to their countries. Businesses will be able to get tax deductions for paying someone $1/hr. The American making $1/hr will most likely spend that money in America and continue to add to the ecomomy.
I am a small business owner and I can assure you that a minimum wage increase will NOT benefit anyone except the politicians.
- First, the income of those earning minimum wage will go up their purchasing power will not. It is no coincidence that inflation increased dramatically in conjunction with the current round of minimum wage increases. Additionally, blue collar workers, those who are more likely to be the primary household income earners, will see decreased purchasing power because they will have to pay increased prices for goods without a commensurate increase in their pay. – Second – The increase will cost jobs. I work for a family business that provides about 250 jobs working in restaurants. Some of those jobs are at minimum wage and many of them are not. A number of employees that started at minimum wage now earn $40,000, $50,000, or even $60,000 plus per year. The reason we can pay those wages is because we are not forced to pay inflated wages to new employees who waste three weeks of our time and money only to find out that they are lazy, dishonest, or only got a job because Mom said they had to. I can tell you that we are working very hard just to pay the bills and an additional increse as suggested by
barack Obame WILL force us to close the doors. WE will go bankrupt.
Third – Many politicians KNOW that minimum wage increases cost jobs because they hurt small business. NOT the large corporations that have overpaid CEO’s, but guys like me who work 70-80 hours a week, sacrifice time with our kids and families, and live under a great deal of stress trying to figure out how to deal with rising cost pressures so that well be able to pay the bills next month. YET, those politicians will support the increase because they know it’s popular with blue collars workers who have been brainwashed by their unions into thinking it increases their standard of living when it actually decreases it for the reasons stated above AND because (and no politician ever mentions this) IT GENERATES MORE TAX REVENUE FOR THE VERY POLITICIANS SUPPORTING IT.
it’s the dollar. we are not on the gold standard anymore. we are on the minimum wage standard. raise the minimum wage, see your purchasing power decline.
$9.00 an hour? Even $20 I find it hard to hold on to the american dream. The 2.5 % increase every year less then the cost of living. With the increase in utilities and fuel cost ect.. I seem to be robbing peter to pay paul. Mean while the big corporations spend billions on sporting events. Like Nascar which I like watching but give me a break. The salaries and bonuses and stock options are making me sick. And year after year I fall further behind by .5%. Do the math….5% times every year you are on the job. The utilities are getting there 3%…
Most employers already pay around $9.00hr to start. When I left college in 1993 I was offered a $9hr job in the wharehouse of a local grocery store. Raising the minimum wage will not allow for coropations to rip off their customers and employees. This will stop a lot of greed!!!
First, why are wages increasing? Let me think, oh, cost of materials increase, federal taxes, import taxes, export taxes, it is mostly about government taking more money. In the end, everything we buy cost more so we need more to just buy what we used to.
Why must we have taxes. To promote supporting those who have learned they will get supported because for some reason, they are owed or can not do it for themselves.
Put in perspective. I want a number 1 combo at some fast food place. The cost is always about one dollar under minimum wage. So in 2009, it will be $6.25 versus 5.50 right now. In the future, it will still be one dollar under the current minimum wage of the time.
And one more thing…for everyone who mentions “those CEO’s that make millions,” how many CEO’s out there make that much? In 2003 there were around 5,679,500 small firms with employees in the US, according to census data. You really think many of those owners make millions? No, but you cling to this idea that business owners are rich, evil people who are out to exploit the innocent workers. You point to a few examples and make that out to be the norm. That’s just not reality…
My family owns a business, and I can tell you that an increase in minimum wage would be a disaster. For one, if you raise minimum wage, you have to raise the salary of most of your employees (the higher paid employees will want to make more than a new higher). We have around 80 employees and it would cost us over $200,000 a year.
What I find amusing is that some of the people who complain about companies going overseas also say we should raise minimum wage (Obama comes to mind…). Why do you think companies go overseas?!?! It is too expensive to do business in the US. And let me tell you, we aren’t sitting on millions of dollars while our employees make minimum wage.
At the end of the day, people who criticize business for the minimum wage debate have no idea how hard most businesses work to stay competitive. But please, raise our taxes and minimum wage and then wonder where all the jobs go.
Your suggestion that raising the minimum wage will inject more consumer spending into the economy demonstrates a very limited understanding of business. The additional money spent by employers on increased wages will come from one of three places.
1) When possible employers will raise prices. To the extent that this happens, any increase in spending will be eaten up by inflation.
2) Some employers, including my company, will attempt to reduce the number of employees in order to limit the impact on costs. We are in the process of eliminating our weaker employees to become more efficient. Cutting staff to balance wage increases does not increase disposable income. My company’s goal is eliminate 3/4ths of the cost increase by trimming staff and raising prices to cover the balance.
3) Other companies will eliminate full-time positions in favor of using more part time staff. The biggesst savings here is in terms of eliminating benefits like retirement and health coverage. Employers who choose this option may actually increase the amount of money available for spending, but I cannot believe that anyone would look at this as a benefit to our society.
Raising the minimum wage will only harm those workers more, as businesses will not hire or keep employees they cannot afford. This is particularly true for small businesses, which will suffer terribly. People who think all business owners just sit on a magical pot of cash are fools. Many of these small business owners are just normal every day people trying to make a living. This whole class warfare thing is rather silly, as society will always have it’s tiers, whether people like it or not.
The issue of poverty is a very complex one in that it’s not just economic but cultural as well. I would have to agree when people say education and improving skills is the key to escaping it. However poverty is also a tricky animal to deal with because many poor people have problems that prevent them from obtaining said education. Not everyone who fails to earn a high school diploma willingly dropped out, nor are they always stupid people. Instead of offering doles and minimum wages why not spend the tax money on programs where people can gain skills of value to society.
I had to leave my home at 18, due to a hostile and negligent home environment. I been fighting tooth and nail to obtain my GED,earn money to obtain what I need to learn to drive, and all the while enduring the scathing opinion of people who think all poor people are poor by choice and choose to stay that way. I would prefer the pure capitalism, at least then I could get a job instead of struggling to find one because employers can’t afford them.
This bizarre pseudo-socialism thing we have going on really isn’t working. If the government is really so compelled to hand out anything, provide skills and education. Doles keep poor people poor and high minimum wages put them out of jobs.
Just offering the opinion of someone living in poverty, who doesn’t believe socialism or any of it’s relatives to be the cure for our economic woes. Poor people who think this is the way to go are just being deluded by a pie in the sky, they to look at reality or else they’ll never escape the cycle.
there should be 2 types of minimum wage 1 should be school age and 1 should be for the person trying to make a living on minimum wage. school kids do not need to make as much as an adult. this would help (not cure) some problems with teens and drugs
Minimum wage jobs were always for teens.
Being Canadian, I had one for 5 years back in the 80s at 2.65 for student rate and then 3.00 for adult rate. It helped while trying to get an education. The Canadian minimum rate is over 10.00 now. Their economy is stronger than the U.S. I am a U.S. resident. Not having an increase in over 10 years is an outrage! The CEO’s have had a 400% increase in that time. Rah,rah for them… look where we are now in the U.S. Don’t blame minimum wage workers for your financial woes!! Oh I know, I have seen the toy industry be shaken up by the wage increase in China. The poor CEOs can’t do that room addition on their 7th 10 bedroom house. Poor them!!! 
Stanford’s Professor Lawrence Lau demonstrated in 1993 that the four factors which lead to all of real economic growth are:
paid jobs
improving worker knowledge
better worker health
more capital per worker.
nowhere in his list do i find political ideas like “minimum wage” or “livable wage” — you find those in the panderings of politicians and the maunderings of Marxists, not in serious economic growth literature.
If people want higher wages, they should get an education. Not wait for the government to give it to them.
Posted By larry, Houston,tx: September 5, 2008 2:30 pm
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Honestly, what’s with you guys who think people are supposed to achieve things on their own? Don’t you know that we need the government to help us live our lives and protect us from those greedy corporations and evil rich people? Are you crazy?
Many of the comments suggest that the minimum wage should be high enough for people to live on.
Since when was the minimum wage intended to be high enough for people to live on?
If people want to earn more money then they have choices: They can choose to go out and find a higher paying job. If they don’t qualify for those jobs, then they can choose to improve their skills and/or education.
As for entrepreneurs “sharing” their wealth: MOST entrepreneurs are NOT Warren Buffett. And even if they are up there with him, so what? They take all the risk. Their wage workers take none. They are ENTITLED to whatever wealth they get.
If their workers have a problem with that, then the workers should take a risk. It might pay off big time. It might not. That’s the way free enterprise works.
At least a few people on this board seem to “get” the issue with minimum wage. Those of you with a clue, ever thought about running for office? This nation could use a few people with common sense and even the most basic understanding of economics.
The minimum wage debate is a great opportunity to discuss unintended consequences as well as the questionable practice of making decision based on emotions rather than facts and analysis. The last
# I saw was that 91% of minimum wage earners are not primary wage earners for their family. Teenagers are the typical worker here, and the primary beneficaries of higher minimum wages are well-to-do suburban families. They live tend to live in prosperous areas where demand for non-skilled labor is not very sensitive to price. And yes, unemployment rises, and we encourage dropouts amongst the populations that would really benefit from more education. If you want to help low income working families, there are better ways that increasing minimum wage.
When will people learn that government intervention in economic processes distorts the system and causes problems? Especially when the intervention is politically motivated? Look at the most recent example: Fannie May and Freddie Mac. The government butted in to force these companies to revise lending standards downwards in order to accomodate more loans to the favored minority groups of the day. The group responded, took out the loans, drove up housing prices by their demand, bought more at higher prices, could not support their loans, defaulted, and the result is massive loan guarantees and another massive debt picked up by the taxpayers. As for raising the minimum wage: even liberal democrats ought to understand that when you make something more expensive, less gets bought. Job numbers are in a freefall, corporate profits (which fund jobs) are down, and politicians want to make labor more expensive! INSANITY! Plus, do you really want to raise minimum wage so people can be more comfortable on minimum wages? Minimum wage jobs have traditionally been for youngsters and entry level people, a stepping-stone to learning and getting more skills, and the low wages serve as an incentive to gain more marketable skills. Liberals act as if minimum wage is a viable career choice. This is likely because it covers up the failures of the National Education Association to produce employable high school graduates. The NEA (in bed with the Democrats) is seen as less culpable if the minimum wage is high. Get rid ov government control of schools and you would not have so many people having to contend for minimum wage jobs, and the problem would be mitigated.
Do you not see how it doesnt matter or not if minimum wage is increased?? If it is raised it doesnt matter because the price of everything in return will increase to take up for the loss of money. You raise minimum wage everything else becomes more expensive to..
All Costs Are Passed On To The End Consumer. Margins Must Be Maintained For Reinvestment and Maintenance Of The Company. Attempt To Run A Business And This Will Become Painfully Evident.
Emotional Decision Making Reaps Unintended Consequences.
Minimum Wage Is A Farce.
Mandated Morality Never Works.
The biggest opponents of minimum wage increases will be big box retailers who are notorious for selling loads of cheap imported goods and offering meager wages and benefits. Personally, I’d like to see more of those companies disappear, they are using outdated business models that have no place in our economy. Inability to pay your employees a reasonable wage is a sign of poor management and a weak business plan. We need to stop using the poor to subsidize corporate America’s B Team.
The argument about job-training is also a lie, we still live in the age of NAFTA. Job-training just turns minimum wage workers into over-trained minimum wage workers. This problem will require a social solution, namely getting people over their fear of corporate behemoths and spurring a new age of entrepreneurship.
I don’t think that anyone here is against people making a respectable wage to live on. This is not an us -vs- them issue or Democrat -vs- Republican issue. It is about the best policy to get people up the economic ladder. The simple question is if you eliminate thousands of jobs from the economy are these people going to be better off? Of course not. You are going to eliminate the least skilled from the workforce. (higher skilled workers will get those fewer higher paying jobs). A previous poster stated an important point, how are they going to improve without the experience of working a job, even if it is minimum wage. You just have delegated a whole new group of people to the welfare rolls.
When the minimum wage is increased we ALL lose. The minimum wage earner faces job loss, business owners and corporations face lower margins and increased costs with no increase in productivity, and everyone is faced with higher prices. How does that benefit anyone? Remeber, the minimum wage is a floor, you cannot legally earn less. Whether that number is $5 or $50 you are still at the bottom of the barrell. Rather than raising the floor, raise the ceiling. Offer training and education to help people take advantage of opportunities that pay more money.
I agree and disagree with some of the previous comments.
1) Addressing the lack of jobs offered once the wage goes up: part of this is simply the way we operate our free market system. Whoever has the lowest price, lowest overhead, and largest profit margin takes home the bacon. Raise any one of those, and you must lower another. However, since gas prices are making it a lot more expensive to import goods and materials to make things and offer services, why not purchase US-made materials? That would lower your materials cost via lower transportation costs.
2) I agree that minimum wage should be set to the lowest amount it takes to live comfortably (three meals a day, maintain good hygiene, decent home security). You cannot make a living on $7.25 an hour unless you have someone else supporting you, which I can understand. But for those like me who aren’t given full time hours–even being paid $10.00 an hour wouldn’t support a basic standard of living. I don’t have someone else to support me, and I work hard for what dollars I earn.
3) That said, I would support a minimum wage increase with this caveat: please make sensible spending classes mandatory in school, with the pretext of training our young people to be responsible citizens and spenders/savers. Just like the basic bookkeeping classes they used to offer in high school that taught you about balancing a checkbook, buying a house, purchasing insurance, and other basic things that need to be understood before being given the power of the purse.
4) I understand that the free market means that demand sets the wage levels for various skills. Some jobs necessitate more skill than others. Some offer more risk than others. That is fine. However, the current wage gap is very, very large, and that troubles me. For the college students struggling to put themselves through school on $14,000 a year versus the technology and law gurus making literally millions a year? I can understand the need to pay off college debt, but after that, I can’t imagine why people would need to live with such an expensive lifestyle that they must continue making millions to keep it up. What happens if you lose your job, or your pay? Then you lose the lifestyle. Why not live moderately, and save your money for retirement, or donate to those who work hard but circumstantially cannot make the same amount you do?
That last is simply my opinion. I’m not criticizing those who work hard for their large bank accounts, but rather, please imagine what it’s like to be on the other end of the pay scale, working just as hard as you do.
I am paid $10 per hour to make sandwiches that sell for $5 apiece, so I must make and sell AT LEAST TWO sandwiches per hour or I will lose my job. If my wage increases to $15 per hour and my sandwiches still sell for $5 apiece, I’d better figure out how to make and sell AT LEAST THREE sandwiches per hour to keep my job. Has Congress ever shared with us any of its wisdom on how to make and sell more sandwiches per hour?
One thing I haven’t seen mentioned is the simple economic fact that price floors (the minimum wage is nothing more than a price floor on the price of labor) only work when they’re set ABOVE the market-clearing rate. What that means in (semi-) plain English is that a minimum wage is only effective when it’s set above the going rate for labor. I’ve worked ONE minimum wage job in my life, and that was Federal Work-Study in college; why only one? Because the “going rate” where I grew up was higher than the minimum wage. But when the minimum wage went up, lots of people back home lost their jobs because the jump priced them out of a job because the small businesses that the local economy depended on could not support the higher wages.
Something to remember about tying the minimum wage to inflation is that raising the minimum wage contributes to inflation (through higher costs being passed along to consumers). So if we do tie the MW to inflation by law, all we’ve done is create a self-perpetuating cycle that, judging by the current state of entitlement programs in the US, would never be fixed because of party politics and class warfare.
When the minimum wage was first introduced it was suppose to be at a level someone could live on. Hence the wording minimum wage.
As housing and car prices are now more than ten times what they were in 1960’s when the minimum wage was $1.25, minimum wage today should be at least $12.50 to $20.00 an hour.
We can not finance our national debt with people only making like $6.50 an hour. For that we need a minimum wage of about $25.00 an hour.
How about the Feds doing something that would really help America and push the minimum wage to $25 an hour. Instead of spending ten times that to bail out the investors who brought those bad loans Fannie and Freddie made.
And lets have a maximum wage which is ten times the minimum wage. After all we are now a socialist government.
Increasing the minimum wage is not about pushing small entrepreneurs out of business. It is about giving up a little bit of their extra wealth to the people who earned it for the business in the first place, so that they can manage to live above the poverty line.
The minimum wage is just that, minimum. One can’t live on it or support a family. The minimum wage should be based on the cost of living- thus a living wage. The low minimum wage simply subsidizes the lifestyles of the higher classes in America.
I like the people that argue that it would be difficult to live on minimum wage, as if there is some force keeping them in that job and stopping them from making more. If you can’t live on the amount of money you make, doesn’t it make more sense to get a better paying job than to force all employers to raise salaries? Wouldn’t you rather earn the raise than force your employer to provide it? Shouldn’t people have enough pride to work their way to a higher paying position than complain that the government should require them to get more?
The proponents of minimum wage only see the short term solution, that a person will get an immediate increase in income. They fail to see that this increase has to come from somewhere. People like to think that businesses are hoarding money, not wanting to pay employees, but the business environment is too competative for that. Higher minimum wage increases labor costs, so that companies fire employees and increase costs of their products. The same people that complain about a low minimum wage complain about losing jobs overseas. When we artifically inflate our wages here, where do you think a business will find labor at a reasonable price?
Federal minimum wage hikes in 2007 and this July were the prime causes of the declining summer job market—and sharp increase in the unemployment rate—for teenagers. According to research from the University of California, every 10% increase in the minimum wage results in an 8.4% decrease in employment for high school dropouts and young black adult and teenagers.
Since the federal minimum wage was increased in 2007, over 230,000 teen jobs have disappeared from the United States workforce according to our analysis of the Current Population Survey data.
A summer job for a teen is much more than a paycheck; it’s a chance to gain important skills and learn the ‘invisible curriculum’ that comes from having a job, answering to a boss, and dealing with co-workers. Unfortunately many teens didn’t have that opportunity this summer, thanks to legislators who supported job-killing minimum wage hikes.
Indexing the minimum wage to inflation would be a catastrophe. This would virtually guarantee a wage price spiral that would result in what we experienced in the 70’s. Low growth and high unemployment. Good old stagflation. Now tell me how that would benefit the minimum wage earner? The very few that would be left working would have a lower standard of living. Anyone go to a super market lately? Notice all of the automated checkout lines? When the price of labor is mandated by the government, companies will employ fewer people or automate. Last I checked most companies do not pay their people a higher wage level at the expense of making a profit. Unless your one of the Big Three automakers. Where you can even can get full pay for NOT working. Now there is an easy lesson on how to lose 45 billion a year. Let’s turn a variable cost into fixed cost. That way when we sell less cars we can bleed billions. Brilliant. That is exactly what you are going to do to business if you mandate a wage and tie it to inflation. It does not take an MBA to figure that out.
Increases in minimum wage are a bad idea. I own a small business, a pizza shop, and I can tell you two things. First, I have had no choice but to cut hours and hire fewer employees. There simply is no extra money to go around. This is a basic tenant of economics: raise the price of something and you will decrease its demand….period. Second, I compete in an industry that is ravaged by mom and pop shops that already pay under the table AND pay under minimum wage. The govt is driving legitimate businesses out of the market and decreasing the amount of taxes they collect twice: fewer paid employees AND no sales tax from companies that close down. Let the market determine the going rate!
For all the people who say it shouldn’t be raised, that people need to work harder to be rewarded with more money, that it will force small businesses to go under – I would like to see you live off the minimum wage. I live in a relatively small city, yet it is almost impossible to live here on even $10 an hour. Housing costs,gas to get to & from work (only a few select areas have access to public transportation, & medical expenses are mandatory, while groceries and clothing can only be budgeted so much even with discount & thrift stores.
Its time to stop taking care of those who do not try to contribute to society. This will help curb the rate of inflation. As far as minimum wages, government can raise it as high as they want, but as a student of business and economics, I know that the higher costs will have to be covered somehow. It’s not just about small companies closing, the large companies will just cut hours and negate the effects of the minimum wage hike.
What always amazes me is that people seem to belive that all buisneses have a unlimited pot of money that they just won’t share. If you raise the minimum wage it won’t be possible for some buisneses to stay in buisness.
This argument has proliferated for years. San Francisco instituted a “living wage” system in 2004. The city oddly enough remains despite the anti minimum wage gangs who opposed it. Reference: http://www.irle.berkeley.edu/research/livingwage/sf_jun99.pdf
Raising the minimum wage right now is a bad idea. Compaines are hurting; im a college student who works full time my job pays me 10.50 and hour if the minimum wage goes up it hurts me becasue i will not get a raise and their are alot of people that i work with that are in a good place finacialy. But if the bar gets raised then it will end up hurting them the time to raise the minimum wage is when the economy is is strong. A Recession is not the time to get a pay rasie just be thankful that you have a job.
For every person complaining about a raise in the minimum wage: I would like to see each and every one of you take a minimum wage paying job and support yourself/your family, then see what your opinions are. $7.25/hour is still nothing. See how far that goes to pay housing, electricity and food.
No–like Congress, it’s SPENDING that’s out of control, not earnings. When the drive-thru lane at KFC has more customers in it than the bank down the street, you could say there’s a problem. When households have more than 1 TV, multiple cell phones, and a freezer and pantry stuffed to the gills with every conceivable kind of convenience food, you could say there’s a problem. When these same people can somehow afford to SMOKE, DRINK BEER, PLAY THE LOTTERY, AND MULTIPLE KIDS AND PETS, there’s a problem.
It’s OUTGO, not income. People of all economic stripes need to learn to live below their means. Congress could be an example by doing it themselves and not shutting up about it. As for inflation, there’s three ways to handle it:
1. Buy a cheaper item
2. Make it yourself
3. Do without
The much larger problem in this country is the utter lack of ability to just say NO. This is what got us in the housing mess, and the credit mess in general. We ALL can’t have EVERYTHING!
Things that work well often do not get the attention they deserve. This is the case with capitalism.
The economic system of capitalism integrates well with our country’s system of government with freedom being the foundation of both. Most people attribute the economic success of our country to our style of government but this is only correct when our government does not hinder capitalism.
When capitalism is allowed to function without constraint, some miraculous things occur. Capitalism does not ever discriminate on the basis of race, religion, ethnic background, or sexual orientation. It is a civil rights dream. However, capitalism does discriminate against laziness, poor planning, under education, and poor motivation very severally.
Credit capitalism with the almost infinite conveniences that we take for granted every day. The cost of personal computers has declined while their capabilities have increased dramatically (no government program to thank there). Capitalism determines the value of my 10 year old Ford pickup truck and my before tax paycheck amount.
Capitalism works better than any government program ever could by automatically setting values of products, services and wages. In the case for wages, when a labor shortage exists and capitalism is permitted to work, wages will rise for the job description that the labor shortage exists and the labor shortage will be addressed.
No government could effectively plan how wages should be set for all the jobs within the economy. If it were, it would have to take an infinite amount of information into consideration such as future demands for job types. This is something that capitalism does automatically with no one person in control. Capitalism simply reflects the will of the consumer and places true power in the hands of the individual.
Things like labor unions and the government mandated minimum wage are insults to the collective intelligence of capitalism. By artificially increasing the wage for a job type, the job holder is denied the natural and honest information as to what their labor it truly worth. Capitalism is trying to tell us that there is an abundance of labor in certain sectors and that the people that target those jobs need to seek jobs that are more in demand if they desire a higher income. The minimum wage distorts that message and is a detriment to those people it is intended to help.
Government is never smarter than capitalism.
Why don’t we decrease the minimum wage. That would really put the screws to the little guy. That way no one can complain that China only has to pay it’s employee’s a dollar a day.
What is scary is that the government is saying that unemployment is at 6.1%, however the poll on CNN.com (Quickvote: How do you feel about your job? — http://money.cnn.com/POLLSERVER/results/41710.html) shows that 13% of the population indicate that “I don’t have a job.” The truth from the poll is more telling than the government figures. The unemployment rate in this country is roughly at 13%, not 6%.
As far as minimum wage, raising a persons wages (minimum wage or otherwise) will either impact the cost of producing a product or service and thus it’s price, or it can reduce the profits of the company, or both. In a competitive market, companies do not want to raise the prices of their goods because consumers will just switch to alternate, similar products (economics 101, price elasticity), so that means the companies need to take a hit in their profits.
Corporate greed makes companies scream and complain about raising wages, because it hurts their margins and therefore hurts their investors dividends. Ethically, the wages should be raised to allow people affordable living wages that keep up with inflation. Those wages will end up going back into our local communities, schools and churches, bringing all of our standard of living up, not just fattening the pocketbooks of wealthy investors. I say go ahead and raise the minimum wage and tie it to inflation, and get that money back into the hands of the communities, not the off-shore resorts where the wealthy spend their vacations.
An increase from $7.25 to $9.50 per hour at 40 hours per week at 52 weeks per year is an increase of $4,680 per entry level working individual a year. Off the cuff this sounds spectacular in bringing so many out of debt, out of poverty, but unfortunately out of work. This increase would cost the U.S. businesses, based on 308 million population and 4% as the fully employed census, near 692 billion dollars in labor costs. We all know that labor costs are a businesses largest outlay of cost. Imagine then the amount of lost jobs and even larger required productivity to the remaining work force to keep the U.S. ahead of rest of the world. Productivity requirements today are stressing the work force at unheard of levels and the U.S. has one of the highest productivity levels in the world today. Now, consider all of the small businesses with such a huge increase in labor costs and required productivity, they will effectively be put out of business. The U.S. was predominantly built off of the small business growth structure. Are we then to say that we no longer increase livelihood and the potential to follow the American dream because we want to make the U.S. more flat in the pay scale we have. I say education is the key, not minimum wage increases.
Do the people making minimum wage never receive raises? Most of the people here don’t think so. I guess that is what being a poor person is like, just being stuck at minimum wage forever.
Michael, I would challenge you to look at the number of people that were on welfare compared to 1966 to now, and then correlate it to the number of children born out of wedlock. I can promise you that you would see a resemblance. I worked at Wal-Mart, and my wife works at another grocery store in town, and we have found that 95% of the welfare receiving people(ie foodstamps) have 4
+ kids, and continue to have more so they can get more government assistance. Talk about a drain from the states budget. But you don’t hear about this ever, because you can’t bash on the poor people because that would be politically incorrect, sorry.
I would also like to point out that I have NEVER made minimum wage. Even at 16 with my first job.(No, sorry guys, mommy and daddy didn’t help me get that job) I worked hard, I became a manager of a multi-million dollar store at 18. I was younger than ever single person that worked under me. So yes, you get where you want to, but the only person stopping you is you.
Any employee who thinks the minimum wage is too low can always punish their employer by quitting without notice to organize their own business and compete against their former employer. It happens all the time. To provide the greatest good for our economy, you should leave your job in California, Michigan or New York and open your new business in rural Mississippi, where the federal minimum wage really makes a difference.
Folks, there are a lot of interrelated issues here.
First, we need to have a clear look & list of situations & policies that existed in the past & what the results were. Then we need to understand _why_ the policies taken worked or didn’t work.
We have to be aware that a certain wage, whatever you call it, is going to be below, at or above the poverty line of _a specific area_, not all areas. $7/hr may let a _single_ person with few expenses (rent, utilities, transport, food, necessities) struggle in one area, survive in another and thrive in yet another. Where the person lives & the costs of that area affect this ability. Job skills and experience, ignoring age of the worker, should be tied to their pay.Whether a potential worker is give the real opportunity to gain these skills &apply them is more important than their marital/birth status. I think min wage should go to min skill jobs, after that the wage should rise with the skills required of the job or documented time at the skill. People should be able to move up the skill, job & pay level to the point that they can support a family comfortably and have enough to retire on.
If the person is willing to work, to increase their skill level then they should be paid for it. This was part of the American Dream. Advance through hard work, remember?
It should be up to the employer perhaps with gov assistance to continually train their workers to be able to continue up the learning curve if the worker can’t on their own due to finances or time. If the worker has no interests or is not otherwise motivated, then they can stop at their achieved level and deal with that result.
To the question of How to gain skills when not given a chance? Sometimes the jobs _aren’t_ there to allow a person to learn new skills. Sometimes there’s no one to go to in order to learn the skills. In those cases it may be time to move, or to seek out through other educational channels and employment groups those that can teach the skills, provide internships, etc. It comes down to If you want it, Search for it, if you don’t know how, Find out how.
Another issue affecting min wage is immigration. Legal and illegal. I am _not_ saying immigration is wrong. But I _am_ saying that if a company does not search within our shores for a citizen that is able to do the job _at a fair price_ with fair benefits, before giving it to a non-citizen (including outsourcing to other countries), that the company should be penalized in some financial way for not doing so. The Penalty could be used to train workers either locally or elsewhere in the country.
The stance that Americans aren’t willing to do the hard work is wrong. That that is why companies can’t find highly skilled workers is only partially true. If the companies reinvest in their current workers, have their older, higher level workers give back to the company in the form of training younger, newer workers there wouldn’t be a shortage, real or imagined.
But it shouldn’t come down to “it’s too expensive to hire locally”.
It just shouldn’t.
I haven’t read all the posts here…but one thing I haven’t seen mentioned related to the poverty issue is the problem of having children out of wedlock. Something like 4 out of 10 children today are born out of wedlock. We all know having kids out of wedlock is a financial disaster, although it seems few are willing to speak out against it publicly for fear of being labeled cruel or mean spirited.
One poster mentioned that the minimum wage he made in 1966 had much more purchasing power than it does today. That may be true. But it’s also true that having kids out of wedlock in 1966 was fairly rare.
If we reduce the out of wedlock birth rate, we won’t have as many desperate people with no skills forced to take crappy jobs in the first place.
Wouldn’t raising the minimum wage just add to the very complicated economic issues that we are already facing. Isn’t one of the major causes of inflation, as well as the definition, the rising of the general level of prices. Once businesses raise their minimum wage, the prices that they charge to their customer will go up causing the wage hike to be worthless to people who make minimum wage. It doesn’t work to get paid more to pay more and have the government make more off of what you have labored so hard to earn.
The minimum wage has to support those that receive it. There are places in this country that can not get workers because expenses can not be covered by pay.
What a lot of people on the conservative side of the fence seem to forget about is that overall business profits have increased significantly in the past several years. Worker productivity has gone up every year, as well. Compensation, however, has not kept up with these increases in productivity or company profitability. So apparently, just because one increases one’s value to the company does not at all mean the company will increase one’s salary. In such cases, someone has to step in and make sure the “trickle down effect” is actually working. Oddly enough, the very nomenclature seems to indicate that the plan is to keep all the wealth in the hands of a few and to throw the peons a scrap every now and then.
The next time we raise the minimum wage, we should reward the people with high school diplomas only. Let’s give our students a reward for staying in school and getting that degree. Anyone without a high school degree or GED would stay at the lower rate. This would improve the availability of summer jobs for students as they would be less expensive to hire. When they graduate, they would be more experienced and be more valuable to the employer and get the graduate raise and be retained. We really need to use the minimum wage to motivate students to complete school and graduate.
Tie raises on Congressional Salaries to raises on the Minimum Wage. Poverty would be eliminated in America in a decade.
It would be devastating. As already mentioned in another persons comment, the better trained employees making more than minimum wage would then expect and/or demand an increase to maintain a pay seperation from new hires. We would have no choice but to cut jobs. Better to keep it lower and allow for raises based on tenure and talent!
Perhaps minimum wage should just be tacked to the inflation measures. One more small increase to help catch up to living costs, and then an automatic system tied to inflation increases on a yearly basis. Anyone else here tried to buy a car or house while working for current minimum wage? Of course not; it’s not possible.
Let me start by saying WTF? (remember the movie risky business?)
Anonymous, with all due respect. There is no “type” of inflation. Wages NEVER keep up with inflation. Inflation eats away at your purchasing power. Why would any business in their right mind give you a raise that would exceed what they could profit from selling their product? If you find I company that would do that, I suggest you send in your resume. Unfortunately you would be unemployed before long, because they would be out of business.
Anytime you want to talk economics I would gladly accomodate you. Because quite frankly so few people understand something that has such a profound effect on their everyday life it scares the hell out of me!!
Why is there a lot of merit in increasing the minimum wage? The argument that workers receiving higher wages will stimulate the economy is missing the obvious: For every extra dollar a business must pay its employees, it is a dollar fewer for itself or its owner to spend. Government policies such as this merely moves money around, with no net contribution to the economy.
Now about the high unemployment rate of teens. It is easy to for the author to brush off as a small percentage of the labor force. But consider this: Plenty of minimum wage studies have overwhelmingly shown that youth suffers the most, especially African American males. Guess which group of people most disproportionally represent the prison population?
http://www.house.gov/jec/cost-gov/regs/minimum/50years.htm
Speaking of African Americans, there was actually a time in American when blacks were employed at a higher rate than whites. As one of the great thinkers of our days, Thomas Sowell, points out, it was before 1931 when the first minimum wage law was enacted.
The 90’s started off with a tax increase followed a few years later with an increase to the minimum wage. From ‘94 on, things were pretty good.
My opinion is that this is because of the economic multiplier. The economic mulitplier for those at the lower end of the wealth spectrum is significantly higher than that of those at the higher end (i.e. incremental increases in income of less wealthy individuals lead to more economic activity than incremental increases in income of more wealthy individuals). (One could argue this is why the minimum wage increases in the early 90’s were more effective in stimulating the economy than the tax cuts in the mid 80’s and early 00’s.)
All that said, I think we need to let the economy absorb the most recent increases before adding to them.
When your minimum wage is a poverty wage, you’ll have poverty, which drags down communities. Schools, neighborhoods, and municipalities suffer with poverty. So it makes no sense to keep the lowest wages at or under the poverty wage level.
It also makes no sense to allow companies like WalMart to keep a large percentage of their employees under teh poverty line, because that drives up taxes: we pay for the services, food stamps, and other supplements for those under the poverty line.
We need to carry a big stick with trade, stop trading with China and other non-democratic countries on the same basis as we do England, and peg the minimum wage to just above the poverty level. Shame on us for allowing the deepening of poverty in America.
Finally, this article assumes that summer unemployment among teens is tied to a rise in the minimum wage. Yet the economy is tanking, and overall unemployment just jumped to over 6%. This has nothing to do with WalMart having to pay a buck an hour more and everything to do with reckless deregulation, huge federal and personal debt, and the erosion of the manufacturing base of the US economy in favor of artificially less expensive producers like China.
Perhaps we should freeze wages (and remove anything resembling a performance incentive) for everyone–accountants, cashiers, executives, mechanics, and nurses. I mean, if wage inflation fuels general inflation, then anyone getting a raise is bad, right? If those at the bottom of the food chain don’t need any more to get by, then neither do those at the top. Continuing to sacrifice the working and middle classes for those at the top will keep us on course for the Greater Depression.
I own a small business that may possibly be closed because of higher minimum wages so my 10 employees won’t have to worry about it because they will be unemployed.
This is a HOT debate topic …
We’re a very wealthy country. If we can afford to pay some people $1 million per year salaries (and we do, for this is the IRS-deductible limit), we can and should pay a living wage of about $10 per hour to the hard-working men and women at the bottom of the ladder. This is only 2% of the one-million dollar earner. After all, they make our abundant lifestyle possible. In order to move to a just society, we need to spread it around to all citizens and share the wealth better than we do.
The minimum wage is absolutely necessary. I have seen some comments here to the affect of equating minimum wage with “working welfare”. This is ridiculous. We are supposedly the richest country in the world and as such take care of our own. If we did away with the minimum wage what would keep the corporations in this country from reducing wages to levels more comparable to those paid in “developing” countries such as China? I don’t think anyone would argue that we should lower our standards to keep up in the global marketplace. So why would we pull the floor out from under the bottom rung of our workforce? I agree that small businesses can’t always afford to pay higher wages, but Mcdonalds and Wal Mart etc. certainly can. Perhaps tax cuts for small businesses and tax hikes for mega corporations coupled with a gradual minimum wage increase could help ameliorate this double edged sword.
Lets get rid of the Min wage rule and let the cut throating begin.
Fast food worker get paid $5.00 per hour and I say I work for $3.00 per hour. bye-bye $5.00 per hour worker.
Where will it stop?
Corporate America would love to see the minimum wage decreased. More money for already obscene executive compensation you know. For the peon workforce it would be let them eat cake.”
Our government should not dictate to a business how valuable an employee is. The free market will make that determination. BTW, most people who make minimum wage don’t continue to make that wage. They go to school, develop skills therefore they become more valuable and their wages increase accordingly.
Obama, why be a piker, raise the minimum to $25.00 per hour so everyone can live well. What? That would hurt the economy by inflating costs of business? Exactly, and if you ever ran a businees or had to make a payroll, you’d understand that happens when you take it to $9.00.
Two years ago I was working for minimum wage in New Jersey. My fellow workers and I were excited because our state was one of the few that decided to raise the minimum wage instead of waiting for the federal government to act. The first issue we encountered; the workers who had more responsibility and made slightly more than minimum wage were now making more than before, but the same as the lowest tier employees. They demanded a raise above the new minimum wage…long story short we worked harder with fewer employees to keep our company solvent.
I read a comment referencing the “living wage” and how it will reduce crime. When the young people (who are most likely to work for minimum wage and also be involved in crime) who used to work for minimum wage, now have no jobs, won’t they turn to crime because they now have no alternative?
Tim Monroe, the type of inflation i referred to is the one caused by a wage-price spiral – not oil prices. The middle class is not affected as here their wages keep up with inflation (as the inflation is caused by their wage increases, they’re always one step ahead, and will keep their purschase power in real terms). But it’s obviously bad for anyone holding significant savings, i.e. the rich, as the purchase power of savings will be eroded. The mess we’re in is caused by middle class wages not keeping up w inflation. In the long run that must lead to economic contraction. Though this contraction was long postponed by liquidation of savings and expansion of debt, both of which factors have now reached their limits. The morons lending to morons bit, was just the last stretch in this endgame. This has been building for over 2 decades. The recession ahead will be at least as bad as the 70’s I’m afraid. And it will be the result of the dislocations built up by over 2 decades of dodging and postponing recessions.
It’s amazing to read the comments on this site. People need to understand that labor, like all costs, must be borne by someone. If you artificially raise the cost of something, you will get less of it. It is basic economics.
How anyone can advocate having the government set wages levels for private businesses is beyond me.
The reality is that regardless of where minimum wage is next year, jobs will continue to go to cheaper labor overseas. The upper level of American corporations only care about filling their pockets and blaming others for any mistakes that could happen. My friend is looking for ways to cut 1000 jobs by christmas so he could get a nice raise plus bonus. This country needs a stable minimum wage growth. it’s gonna get very expensive to live in America regardless of where you live. It will be only a matter of time before more people die because they cannot afford health insurance.
We sometimes forget the positive externalities of a higher minimum wage. Quite aside from the moral force of the argument in favor of a living wage, enough to support a family in dignity, there are many ways the rich and society actually benefit from a higher minimum wage, such as lower crime, and even a small increase in income leading to a small increase in the health of the poor, means society pays less later on over the course of that person’s less costly and more productive life.
These and other positive externalities of a higher minimum wage are often neglected.
Plus, we’re not going to succeed globally as a nation competing based on low cost. This is an expensive country to live in, and many can’t get to work without a car (unlike other countries). Pass a living wage min of $10+inflation, and focus on what’s really important: which is to have a workforce and a top-notch education system which can make and globally sell high value-added products and services.
Absolutely! If you want to wreck the economy, the best way to start is by imposing a tax (increased wages) on the creators of jobs!
Minimum wage earners need to work harder and work smarter (gain skills to make themselves more valuable to their employers). Showing up to work is not valuable in and of itself, but doing something to increase profits, cut costs, manufacture a good in a cost-effective manner, etc. are valuable traits. Companies will compensate value – if not, they will lose it.
People may say that I am just a stuck-up snob making six figures, but they may not realize that I also work 60+ hour weeks under tremendous stress.
Several people have mentioned about eliminating minimum wage. In many ways, we have. If you don’t want to pay minimum wage, you can hire illegal immigrents. Simply raising minimum wage will not fix our economic problems. Our economic problems are far too complex and intermingled with other social problems that liberals refuse to address because of political correctness. Raising the minimum wage will help the economy as much as a bandaid will help an amputation.
Inflation is only bad for the rich because they can afford it? So your saying that inflation is good for the middle class because they can’t afford it? Inflation has the biggest negative effect on the poor and middle class, not the rich, they have plenty of money. Case in point the recent increase in the price of gasoline. It is the largest hidden tax that people pay and would eventually stagnate the economy and result in larger job losses. Did you remember the 70’s? It was not a fun time. The core of the mess that we are currently in is quite frankly the result of morons lending to morons. There were plenty to go around on both sides of the equation.
I am 19, and I have never been in favor of increasing minimum wage even though I was bussing tables last summer , and the increase of minimum wage helped me out. Now, I am a waiter so I make $2.13 per hour plus tips so minimum wage increase does not affect me directly. I agree that the higher you make wages the less workers a small business can hirer. I have noticed that in the restaraunt I work in we have fewer bussers and food runners this summer than we did last summer before the minimum wage hike. Even thoguh we are just as busy.
“The minimum wage was never meant to be a living wage. It was designed to be a “starting wage” to wet (sic) the appetite of a new worker. To show him how money works and to provide a stimulus for increased skill. More skill = more money. Working at the McDonald’s cash register is not supposed to be a lifetime position.”
I saw a few comments along these lines.
I don’t think anyone is expecting a life of luxury working 40 hours a week at minimum wage. But you’d better tbe able to survive on it if you want to have a labor force that can fill service jobs.
At $7.25 an hour and 40 hours per week, that’s $290 a week and probably somewhere between $14,500 and $15,000 a year. Maybe $1,200 a month goes further in some parts of the country, but I’d have a hard time supporting myself on that around here, let alone if I was responsible for anyone else. If you need someone working 80+ hours a week to keep a family above water financially, that’s not a good situation and doesn’t leave much slack time for people to learn new skills and try to get ahead, or to save money. Especially when you consider that most entry-level jobs don’t provide health insurance, which is a huge expense if you have to get it on your own.
If minimum wage is barely getting you by, and you can’t get a higher job because you’re not skilled enough, and you can’t get better skills because you have to spend your time working to survive… what are you supposed to do, exactly?
In theory, the free market will work this out, and everyone will get paid what they’re worth. In practice, it doesn’t always work that way, and there are barriers that often prevent individual workers from changing jobs or relocating to seek better pay, especially if it’s only a small increase in pay.
“If people want higher wages, they should get an education. Not wait for the government to give it to them.”
Education costs went up about 400% over 20 years. Many people can’t afford an education anymore because they work for minimum wage.
Maybe we should impose a maximum wage to keep the thieves on Wall Street at bay.
This a joke. The GOP likes to blame the job loss on the minimun wage. What they did not tell that because of higher cost cause by higher gas,food and everything else. They have to cut back. Labor is the area that save the most. Wake up GOP your fail policies cause this mess
What about those of us who are on a fix income? Will SS go up by the same percentage? At the rate it’s going we’ll soon be below MW!
Is the minimum wage a form of welfare? Worker-Welfare: Paying paople a wage they would not ordinarily get based on how employers value there skill. Does raising min wage make the US less competitive in the world-wide economy? Should wages be based on skill level or do we “enable” people not to increase their skills by paying them more anyway? Most families need two incomes to provide the lifestyle they desire. Two min wage incomes IS over the poverty level, isn’t it?
Minimum wages need to go up significantly. This goes to the core of the mess we’re currently in. The US economy manages to keep up, but at the price of cripling its middle class. And without a strong middle class, there can be no sustainable economic growth. Wages need to move higher. And yes, this will lead to a wage-price spiral just like in the 70’s. But in the end that’s bad only for the rich. And the rich can afford to take a hit.
If anyone in Washington knew anything about economics the answer is obvious. It is really not rocket science. When you have rent controland allow landlords to only charge up to a certain price for rent there will be less apartments available to rent. Consequently when you increase wages there will be less workers hired. You have created an imbalance in the market that would otherwise find equilibrium. Hence, many people would have made a wage higher than the current minimum wage anyway (and did)depending on the supply and demand of labor. So the answer is yes, a minimum wage increase does increase unemployment and this effect accelerates during a slowing economy. We se proof of than in the employment numbers, especially the youth unemployment.
I love the comments from those that say if a business can not support these minimum wage increases than its not a good business. These people obviously have never owned a small business. I own one and this is what I’m doing. i’m automating and laying off workers so my payroll stays the same. Yes, those that remain will have more money but the net to the economy is a wash. This is what many of my colleges are also doing. Everyone is niave to believe that evry worker participates in the increase. If you think what I’m doing is an isolated case then walk into any Walmart, Lowes or grocery store and count the number of cashiers. Self check outs have eliminated those jobs which were typically minimum wage paid. Ask all those who lost their job if the minimum wage increase helped them.
Some years back, I was working a retail job making $4.75 an hour. When minimum wage went to $5.15 an hour, so did what I make. That $0.50 over was wiped out. That happens to a lot of people, not just those on or near minimum, but many workers won’t see much more than 3% added to their salaries. Rather than raise minimum wage, keep it where it is and mandate cost of living raises every year. The truly sad thing is that people on and near minimum are not any better off after an increase. Witrh the increase comes higher costs of living and even more paid to taxes. When it’s all said and done, the people are lucky to be at the same level. We need to help people, but there has got to be a better way.
I’m 29 and own a franchise sandwich shop. It’s ridiculous to pay 15-17 year old part time employees this kind of wage. The result is I hire less kids, and have to get more out of the ones we have. That means there is less consumer dollars out there to spend by those critical customers of many businesses. The minimum wage is fine for those working full time, but there needs to be an hour limitation and age provisions.
minimum wage should be twelve dollars an hour period no debate.
if you do not agree you probably are making well over that and should think can i live on the current minimum wage,or even what it is being proposed to raise to next year.
Well, Craig, if s small business owner knows those facts already, why does he have to have a minimum wage to increase to force him to make the increase? why can’t he just do it himself without the push of the minimum wage increase?
The thing about minimum wage is that it is not designed to support a family. It is designed for high school and college kids, and not to mention the fact of businesses that would pay dirt cheap labor for jobs that deserve many times more.
What do you define “living wages” as? Is it paying for a house that you can’t afford, a car payment you can’t afford,an suv you can’t afford to fill up? Because most people at the minimum wage level are doing that.
I am just not sure why minimum wage raised, but guess what? my pay rate didnt go up, so it hurts me as well. 14-15 year olds that get a job do not need to make 7.25 an hour. they dont save it anyways, and they dont really need that money until there older and have real bills. If we continue to raise the minimum wage, prices go up, jobs will get cut even more, and thats hurts me as well for being in the middle class, wonder when my raise will go up?
Business owners and managers are always quick to blame increases for the minimum wage as the reason for a business downturn. I think they should also look to how they compensate themselves for any shortfalls in profits. If a business concern ahs to worry about hiring someone at $7.25 pr hr. Then they really don’t have much of business anyway.
I’ve read the comments above. Yes it puts more money in the pockets of the lower class for a month or two, until everything else raises to pay for the increase. Did My wages go up too.NO. And I still have to pay the increases.
which is dragging me down. What do I do get a 3rd or 4th job on the week ends to help make ends meet.
Hmm, who knows.. I was reading this part of the story:::
then it’s certainly fair to wonder if small businesses are able to withstand what would turn out to be a nearly 85% increase in the minimum wage in a span of just five years.
hmm.. look at the price of gas has gone up over 100 % with in four years
since bush got re-elected into office.
seems to me people of this era don’t seem to mind so much about higher prices.. take a good look around you lately.. we had serious real gas shortages in the early to mid 70’s.
lines and all.. but the price didn’t sky rocket.. like it has of today..
i think it went up about .25 cents something like that.. today we go up by .50cent and 1.00 per gallon.. and no one seems to give a rats butt.
also look at how the price of a home went up.. even with falling real estate
prices.. if you do a look back five years there still way over 120% price increase of what they were selling for.. so this should give people something to really take a good look at
and think about whare we’ve been going.. we think we were going some whare.. yah.. i’d say in to finanical ruin.
I’m far to the left on just about every issue, but oppose minimum wage hikes. Maybe I drank the KoolAid, but my economics professor convinced me last semester that raising minimum wages above the natural wage minimums determined by the market is bad for the most underprivileged people in society. It may help a few people, but it will hurt primarily the very poor and very young workers. If someone is willing to take a job for very low pay, you can bet they need it. And if we make those jobs too expensive for employers to afford, the very poor and young will earn nothing and will have no chance to gain the work experience they need to move up to higher paying jobs.
I oppose the minimum wage precisely because of my liberal leanings. It mystifies me that the Republicans consistently get this one right and the Democrats keep getting it wrong.
If people want higher wages, they should get an education. Not wait for the government to give it to them.
If you want to improve the cost of living. Nationalize oil and Gas companies (it is a national resource afterall). Turn them into nonprofit companies with mandates for R&D and let the Billion dollar profits go back into the economy via lower prices at the pump and lower production costs.
If Ronald Reagan had left the minimum wage laws alone, we would not have this problem. The minimum wage was pegged to inflation until he stopped it. I don’t understand how people can survive on $10.00 an hour, much less $7.25, or whatever ridiculous rate we pay now. I have read that, just to keep up with inflation, minimum wage should be at least $11.00 an hour. We seem to think in this country that we shouldn’t have to pay the real cost of anything, and that people (not me, of course)should cheerfully scrape by on wages that don’t come close to providing decent housing, much less food, health care, clothing, or a vechicle. the Social darwinists have been in control for far too long.
The notion that a government mandated wage can somehow supplant the wage rate determined in the marketplace for labor without impacting the employment or unemployment rate is naive in the extreme. Why not just make the minimum wage $50 per hour so that everyone would earn six figures. Poverty would simply disappear, wouldn’t it?
Numerous studies, most notably by the Economic Policy Institute, have shown increases in minimum wage not only don’t increase unemployment, but that employment typically INCREASES after a minimum wage increase. The reason is simple. People on minimum wage typically spend all of any increase almost immediately on their day to day needs, thus putting this money almost immediately in the cash registers of local businesses, which are then more able to maintain or even increase their hiring. I have personally seen the effects of substantial minimum wage increases in Oregon. The usual conservative arguments against the increases were trotted out, and as usual, employment promptly went UP shortly after the increases went into effect.
The liberals in this country are either dumb or they simply do not care about small business. Having the Federal Goverenment tinker with the Minimum Wage is about as helpful as a two-story outhouse. Let the labor market decide what the minimum should be.
I am laughing at the people on this post who suggested eliminating the minimum wage thinking it’s best for the economy. You are fools. We need to put money into the pockets of the working class to stimulate this economy, not take even more of it away from them. Anyone who makes such a comment as to take away the minimum wage has obviously never tried to survive off of it and is living with their head shoved up their arse.
We need to get over our infatuation with labor being the root of all evil. To me, anyone on the payroll is labor. Why do CEO’s and other corporate execs continue to receive pay raises, including stock options and expense accounts, while the company loses business and share price. I was brought up to believe failure does not warrant reward.
We,the tax payers,have given millions of dollars to the airlines since the Reagan Era and disbanding of PATCO. Where do we stand today? Less services at a higher cost. What a shame.
Increasing minimum wage is long over due. It’s time for redistibution of wealth in our nation!!
Posted By Tom,Des Moines,IA.:
September 5, 2008 1:57 pm
Wake up, Tom. The minimum wage favors high earners with skills that support the complex technical infrastructures required by modern business at the cost of those who do not have the skills to overcome the minimum wage threshold. If you are unable to produce $8.00 + overhead + profit / hour, then setting the minimum wage at $8.00 will take away your job EVERY TIME. Also, if there’s an alternative that results in less cost to the employer, then setting the minimum wage at $8.00 will take away your job EVERY TIME. It’s like gravity – you can jump and remain airborne for a little while,
I am a small business owner. We are now in a hiring freeze in anticipation of the increase in minimum wage that will begin next year. If it increases to the amount that Mr. Obama proposes, we will begin to lay off employees. Yes, the remaining employees will have to work harder to take up the load, but since I suspect that there will be less jobs available overall due to the increased minimum wage, they will not have any available alternatives to work elsewhere. If taxes go up for small business ownwers, this effect will be multiplied. Why is it that Americans are always so willing to believe in the Democratic mantra of getting something for nothing?
This country’s growth over the past 20 years has shown in Corporations’ bottomlines and CEO’s pockets, but not in the most important sector of the economy, The citizens of this country. While many people are losing their jobs, CEOs are continually making millions and millions of dollars and when they lose their jobs, they receive large severances. While people are losing their homes and struggling to get through each day, there are people that are completely unaffected and are the ones that are in charge of this country. Public Office workers, CEOs, School Administrators at the high school and collegiate level. This country should focus on normalizing salaries’ at the top of this country and increasing the mininum wage for people across the country. The pace of this increase must be done at a slow incremental pace to allow business to adjust. With the cost of housing in some areas of this country, mininum wage at its current rate is not enough to make a living. And that is enough of an argument just in that. Mininum wage should allow you to have a housing, food on the table and the mininum of bills paid. This is what should be debated. How much does it does cost a year to attain just the bear essentials of living today in America with kids and without.
I’m not sure why no one understands that higher wages mean higher taxes to the employer and ultimately higher costs for products and services no matter where you live. A business of any kind must cover its operating costs to break even.
If it wants to grow, then it must charge more than those costs to do so. It really is very basic.
Higher minimum wages just mean higher costs across the board.
You can compare it with how oil has affected the economy. Oil up equals prices up. Labor up equals prices up. Its a wash.
If you want to improve the cost of living. Nationalize oil and Gas companies (it is a national resource afterall). Turn them into nonprofit companies with mandates for R&D and let the Billion dollar profits go back into the economy via lower prices at the pump and lower production costs.
Things cost more only because someone somewhere decides to charge more. It’s a snowball effect.
But then again, what do I know? I’m just a dumb old guy who lives in this great country.
We need to get over our infatuation with labor being the root of all evil. To me, anyone on the payroll is labor. Why do CEO’s and other corporate execs continue to receive pay raises, including stock options and expense accounts, while the company loses business and share price. I was brought up to believe failure does not warrant reward.
We,the tax payers,have given millions of dollars to the airlines since the Reagan Era and disbanding of PATCO. Where do we stand today? Less services at a higher cost. What a shame.
Increasing minimum wage is long over due. It’s time for redistibution of wealth in our nation!!
Raising minimum wage will not help the majority of working class Americans. Those employers who want to hire people for less than minumum wage have been using illegal immigrents for years. Those Americans who are working at minimum wage are usually teenagers, part-time workers, such as college students or people wanting additional income to their day jobs, or unskilled workers who are unable to find better work.
the debate about minimum wage has gone on long enough. if the single moms out there would get a real job with the education that they have and stop working at McDonalds or Walmart then there would not be a problem. how can you support your family if you do nothing to further your career in todays society?
Posted By Josh, San Angelo, Tx: September 5, 2008 12:42 pm
You mean, the high-school drop outs who were taught abstinence only, but (oops) didn’t listen? So they are supposed to take that (lack of) education and get a job in Risk Management at Citigroup?
You know, that just might work, they can’t possibly do a worse job than the current crop of bankers out there.
The “minimum wage” was, remains and will always be $0.00 in spite of whatever those who were never exposed to an elementary class in macroeconomics may wish it to be.
For a business owner, labor is but one more resource. If making a capital investment is more cost effective than paying for the alternate labor, the business owner will go for the less expensive alternative – or her competitors will close her business.
What happened when the cost of an automated credit card transaction over a gas pump became lower than the alternative minimum wage of the gas station attendant? Gas attention attendants are an endangered species.
What happened when the cost of paying the ticket agents remained higher than issuing electronic airline tickets? Most tickets are electronic, self-issued by customers.
What happened when the cost of bank tellers became higher than electronic banking? Most banking is electronic.
What happened when McDonalds found out that risking the possibility of a customer serving herself double drinks was economically less costly than paying someone to serve the drinks? They moved the drink dispenser to the customer area.
What happened when the UAW negotiated higher wages? The automakers invested in capital improvements that exploded productivity and drastically lowered the labor required.
Government can’t control wages any more than they can control climate.
No. The minimum wage increase will cause all wages to increase, as well as inflation. If other wages don’t rise, then the middle class will suffer. Small businesses and coporations will raise their prices in order to pass on the costs of operation to consumers.
Apparently we need to spend more on education, especially in ecnomics. How people still think raising the minimum wage improves purchasing power is beyond me. If you give everyone $1million, nothing happens expect prices increase by $1 million. Do people really think companies and small business will just “absorb” the wage increase at the expense of owners and shareholders? Earnings would go down, stock markets would crash, pensions would be lost, but magically we’d better off. Great logic commies.
I am a member of a labor union and I feel strongly that businesses in this country must set wages that allow their employees to purchase basic services with. Could any of us do that on minimum wage? Looking for a job that pays more is easier said than done. In many communities that means relocating away from their families. That said, I think it is much more important to provide medical and dental plans before increasing minimum wage. Any proposed increase would be swallowed up by a single medical or dental bill. Find a way to provide health care for all before raising minimum wage I say.
WHAT ABOUT THE PEOPLE ABOVE MINIMUM WAGES.AFTER YOU INCREASE THE PRICES AND FIGURE IN THE AMOUNT LESS THAN THEY WERE ABOVE MINIMUM WAGE IT IS A PAY CUT FOR US.
Here are two different takes: Minimum wage laws are violation of private property rights. No one has a right to my labor but me. If I sell my labor to another person for $1.00 an hour, then so be it. No one, not even the government, should be able to tell me at what price to sell my labor in the free market. The government only wants to further control the interaction of individuals in the free market through minimum wage laws, regulation and subsidies.
Minimum wage laws are also a price floor limit on how low a product (labor) can be purchased. If the price floor is set above the equilibrium price, you will have a surplus in the supply of labor. The laws of market economics are irrefutable, no matter how hard the State tries to control them. That is why Communism and Socialism all eventually fail. Even Keynesian and neo-classical economists get this wrong. Only when we get the government (state) out of our lives, will we be able to fully realize our potential as free-living human beings.
A consumer-driven economy feeds on the wages paid to middle-class workers, on the availability of disposable income. If we impoverish our workers, the consumer economy will become sluggish, and, eventually, depressed. As much to the point, if we allow wages to become depressed, we dill do the same to the American standard of living.
We need to find a balance between the economic and moral sides of this issue. If we compete on a dollar-for-dollar basis with workers at a much lower standard of living then our own, competitiveness demands that we lower our standard ot living to match our competitors’, or that our competitors raise their standard of living to match ours. This leaves us three options: to compete without conditions, lowering our standard of living to match the meanest of our competitors; to impose tariffs to protect our markets from products based on peasant labor; to negotiate labor and environmental standards into the terms of our trade agreements.
The minimum wage debate has to be addressed in the context of the decision on what to do about trade. If we compete dollar-for-dollar with the world’s poorest, the minimum wage must be abolished, and the middle class with it. As a middle-class American worker, I object to the lowering of the American standard of living in the name of competition.
Reaching agreements that raise the standard of living (and attendant wage costs) in our competitor countries is a long and difficult proposition. Tariffs are a valid tactic to impose a choice on our competitors: access to American markets in exchange for decent treatment of their labor force. Absent such considerations, it will be better for us to raise tariffs, inhibit imports, and keep American money circulating within the American economy.
You can’t address the minimum-wage question in a vacuum. To compete with the impoverished, we must impoverish our own workers. Knowing that, we must decide where our priorities lie.
Get an education, learn life skills, take your lumps, work hard and chances are you won’t have to worry about subsisting on minimum wage.
Wealth redistribution in any government controlled form is fundamentally wrong. Prices will go up, forcing others to bear the burden of paying these increased wages and businesses will go under. Gee – why don’t we raise the cap gains rate too and kill another part of our economy!
Working as the controller for a University that budgets everything, including student wages, means that if the minimum wage went up we would not increase the budget so we could hire more students. We would simply be hiring fewer students with the same dollars. Simply do the math. Same budget, fewer employees. Increasing the minimum wage is not the aswerer. Either that or exclude college students from the increase.
Absolutely not!!!
Where did the idea come from that any job, no matter how menial, has to pay sufficient wages for a person to live on, much less support a family? Only the Liberals can love that idea. I suppose next, we’ll be debating what should be the “necessary” or “fair” standard of living that EVERYONE is ENTITLED to. Give me a break!
Minimum wage rates have clearly not kept pace with inflation over the decades but at the same time there has been a major change in the US economy. Back in the day that our economy was “production based” at olt more Americans worked in factories and most could even afford to buy the goods they produced. Today many, if not most of these production jobs have been moved overseas leaving two groups of people who can’t afford the goods. Those groups are 1) the workers who produce the goods and 2) the workers in America that would have had good factory jobs but now end up working in low paying service jobs.
To make matters worse, the low wages paid in the foreign factories provide a lower standard of living than the working in those low paying service jobs in the US. This encourages legal and illegal immigration, increasing the labor supply and depressing wages.
Minimum wages are essentially a hidden tax levied on employers in an attempt to reduce poverty and all the related ills that go with it. The problem is that in our “world economy” this doesn’t work very well. Since business has no incentive to address poverty the only force strong enough to take it on is the government. Rather than using the hidden tax and failing policy of minimum wages, we should allow our government to develop programs that actually work, and be enlightened enough about our own self interest to fund those programs with overt taxes.
The minimum wage was never meant to be a living wage. It was designed to be a “starting wage” to wet the appetite of a new worker. To show him how money works and to provide a stimulus for increased skill. More skill = more money. Working at the McDonald’s cash register is not supposed to be a lifetime position.
Simple
No Min Wage, cheaper costs for products.
FORCED Min Wage, higher costs for products.
In the end it comes down to, does the company pass the savings to the consumer or take the profits.
Another consideration for the Wage/Economy debate is ..
Are we reaping the rewards of sending jobs overseas for cheaper labor? More money going out less coming in and the overseas markets not buying US products.
I hire workers overseas for cheap. They dont make enough to buy my product, but I’m looking towards the U.S. consumer buying my product, but they can’t since they no longer make the money they would if I employed them.
The increase in the minimum wage scheduled for next year should be allowed to work its way through the system before scheduling more increases to see the effects on both workers and businesses. While there are arguments on both sides of the issue, the moral one supersedes them all. A full-time permanent job should be compensated at a level to afford the worker a minimum living standard that includes a reasonable ability to pay for food,shelter and the associated services to attain those items. The dependence of government programs to supplement the income derived from minimum wage jobs is a built in subsidy to business under our current system. In addition, the elephant in the room, healthcare, is not even factored into those numbers. If employer health insurance is not included in the compensation package, healthcare is virtually unattainable for these workers. The argument can be made that some of the money saved on government wage subsidies might be used to facilitate the development of a program of widely available guaranteed healthcare coverage if wages from private sector jobs can close the gap. A subsidy is a subsidy whether it is to enhance wages or access to medical care.
Henery Ford had the right idea about ensureing employees could afford the product thye made. Today we see a greater seperation between the very rich and the working class. In fact what now have a new class “THE WORKING POOR” They waor hard and are the driving force to keeep produtivity up, but they do not earn enough to be able to enjoy the fruits of their labor. These are tohe people working for the minimum wage. We must give them enough to live on or the states will have to spend even more money to support socail programs to provide for the poor and needy. If they had a job that paid enough they would not require such aid.
Fifteen years ago Republicans argued that increasing the minimum wage would result in inflation and higher unemployment. The actual results were the longest non inflationary economic expansion is our history and the creation of 22 million new jobs. In the 10 years that the minimum wage did not rise, wage stagnation, rising inflation and sub par job creation has occured. It appears that economics is not the Republicans strong suit.
Have you seen the U.S. Department of Labor History of Federal Minimum Wage Rates Under the Fair Labor Standards Act, 1938 – 2007 Chart??
http://www.dol.gov/ESA/minwage/chart.htm
- we have dropped the ball for a couple of decades from 1981-1990 and than again from 1997-2007 where there were no increases at all. Minimum wage is so far behind inflation that it is no longer funny. From 1938 to 1968 minimum wage increased, during the thirty year period over 600%. From 1968 thru 2008 minimum wage icreased in a Forty years period a mere 400% and that is with the recent increases. I believe the economy is paying for this discrepancy now and if the gap between high salary income and low wage continues to our country will suffer. It’s common sense. The wealth of a nation is measured by the prosperity of it’s citizens.
Who in the world gets minimum wage. I haven’t recieved the minimum since I was 15. No one should make the minimum. It usually means that you’re not a valued employee. I started at McDonalds at 16 and within two months I was making above the minimum. No matter how high minimum wage goes you have to look at yourself and realize that if your boss could legally pay you less he would. I’m proud to say that if the minimum wage went to $1 tomorrow nothing would change in my life because my employer honors me more than that.
I do not buy the argument that boosting the minimum wage to, for example, $9.50/hour will boost the economy via increased consumer spending. Someone making under $10/hr. will not have much left over for discretionary spending.
Why, when talking about raising minimum Wage, do the politicians mention that it hurts those making minimum wage, as they can afford less, because stores, farms, trucking companies, etc. all raise their prices to cover the wage increase…
Also, I agree, we should get rid off, or at the least greatly reduce the FEDERAL minimum wage…
Let the states set it and even local governments… As some one mentioned, CA has a much larger cost of living then some place like Ness City, KS… Even look within a state, the SE Michigan region cost a lot more to live then the U.P. (Upper Peninsula for the rest of the country.)
There is no reason that they should all make the same wage/hr…
Once we accomplish that, then the states and local governments should index it to the cost of living, not inflation… The difference is that spikes will not have as great of an impact on the wages as quickly… allowing for small business to plan and slow raise prices and wages together…
Having said that… a part of those changes needs to be protections for the workers… Anyone lowering wages also needs to lower prices proportionately… And have sever fines for those who do not…
the other thing that should be included is minimum benefits, things like retirement (401(k)/pensions), private health care insurance levels, paid time off, etc. that will help to provide for employees as a part of that wage trade-off…
That will protect the workers from the small number of greedy employers out there…
As always the key to life is balance, between labor and management, federal, state and local governments, republican and democrat ideas, etc. there is usually truth in both sides, we just need to see where it is and work for the greater good of the country…
Eliminate the minimum wage completely. If I am willing to pay $2/hr for someone to mow my lawn, and someone is willing to mow my lawn for $2/hr, what’s the problem? The worker values the $2 more than he values the time needed to earn it, and if there are no other alternatives for his skill set, then society benefits. If the worker is not satisfied with the $2, then he will go develop skills to qualify him for another job. Incentives are aligned. This is the free market in action.
Businesses are still going to need labor at minimum wage levels to perform their business function. But, the increases in costs will end up just like all other increases in cost – past on to the next buyer of the goods and/or services. It will get to a level that foreign businesses will get another cost advantage over the american businesses and the overseas “lost jobs” problem will continue to get worse. I think that is the area of real concern to me and that should also be the concern of the politicians.
The minimum wage debate is completely tied to the illegal immigration debate which no one ever seems to mention. I haven’t seen a non-hispanic working at a fast food place in years. If you raise the minimum wage, you also have to control illegal immigration, otherwise the same exact number of american kids will still be unemployed and the mexican workers will be busy funneling their $9.50 back to their families across the border.
Minimum wage is not intended to be a living wage. People should work to develop skills through education to progress to jobs paying higher than minimum wage. Raise the minimum wage to 9.50 and the incentive to develop skills for a better job decreases. We incent the bottom rung to stay where they’re at.
Minimum wage jobs are primarily held by teenagers and other temporary workers. Show me a teenager working at McDonald’s who provides $20,000/yr value ($9.50/hr.) Businesses should not subsidize these entry level employees.
There are plenty of workers in other countries who are willing to work for less. Raise the minimum wage and watch the jobs continue to migrate outside our borders. True, we can’t hire someone in India to make us a sub sandwich for dinner tonight, but the factory workers will demand higher wages if entry level workers are paid higher wages. We are not “entitled” to the living standard of today. We must create value to earn it.
Business doesn’t invest because it has a surplus of cash. It invests because there is an opportunity to make money. The idea that the lower end of jobs market needs to make less to create jobs is silly.
The minimum wage should stay consistent with inflation. I don’t understand why people making minimum wage complain about the minimum living standards they have. If you are not educated enough or continue to have children you can’t afford – then find a way to cut your own costs! That’s how business and the world works.
Yes, it should be increased until you can afford a decent living on minimum wage. And it should be indexed to inflation so we don’t have to keep having this debate. Any employers who pay minimum wage are a bunch of cheapskates.
All you have to do is raise minimum wage to $150 per hour and EVERYONE will be RICH!!!………Or are people with NO skills paid basically what they are worth?
This is my favorite economics topic.
The minimum wage should be $100,000 per year. I just can’t understand how anyone with a family can get by on anything less. I don’t care if a person is willing to work for less, they should not have the freedom to value their own labor. The government, as we all know, is much smarter at knowing what is best for me than I am of knowing what is best for me. Robert Reich is especially smart so he definitely knows more than what millions of stupid self-interested people in a free market, deciding on their own, would tell us. With higher wages, people will have more money to spend, and the economy will grow like a weed. Just think, we might even get a better economy than Switzerland and New Zealand. Wouldn’t that be great! If $9 per hour is a better minimum wage than $5 per hour, $100,000 per year is a whole lot better than just a measly $9 per hour. Who can feed a family on $9 an hour? That’s not even enough to pay my sub-prime mortgage!
The minimum wage should be raised, a person cannot live in America on the current rate. I like the idea of the increase being based on raises to the rest of the work force as mentioned in another comment. If CEOs and the other white collar workers get raises so should the little people who are doing the lesser jobs that allow the businesses to grow. For too long business has said it can’t afford to pay a higher wage and yet they continue to raise salaries for the white collar workforce, particularly the top levels.
If the minimun was was so great for the economy why not raise to $20 per hour. We should eliminate and let free markets prevail.
What some who have not taken an economics course recently might not know/forgotten, is that when you increase the minimum wage you are not only increasing the wage of the lowest wage earners and the wage increase is not an isolated incident that has no externalities.
If you have 3 employees working for you, one at minimum wage, a second at $5 above minimum wage, and a third at $10 above minimum wage you can see that if you raise minimum wage $2/hour, both the 2nd and the 3rd worker now are not valued as much as they were in comparison to the minimum wage earner. What do you think has to happen to the wages of the 2nd and 3rd worker? They have to go up of course. (Would you work for just $3 more / hour than a minimum wage earner if you previously had earned $5/hour more? I highly doubt it).
When wages (all wages) go up as a result of a minimum wage increase do you think that the company is just going to absorb that cost? Of course not, they are in business to profit. Now that their cost of manufacturing/producing has gone up they will increase the price of their goods to the consumer. Now the consumer is spending more on the same good while earning more … that’s called inflation. So you might think you are better off but in reality there are consequences that the general populace doesn’t grasp as they only have their eyes on making a few more dollars/hour for the same amount of work. Go figure …
Btw, you are crazy if you think it will only affect small businesses, it affects ALL wages to some extent.
The effect is probably neutral at worst. Minimum income workers pay little or no taxes, and spend all of their net pay. Since they spend most of their money at big box stores, fast food stores and personal service shops, the extra money will just cycle back to those businesses that would be affected by the higher labor costs. There are very few small businesses left in this country that would be adversely affected by the higher minimum since most are already paying more than that now.
7 US states currently have minimum wages that are higher than $7.25. 5 of those 7 including the top two(Washinton and Oregon) have unemployment rates that are lower than the US average. When the minimum wage was raised in Oregon to $7.80 and Washington to $7.93 it did not hurt the economy. The twisted logic that a minimum wage hurts the economy is an argument for slavery. Jobs are not good jobs if the people who work them cannot afford to eat. Has the United States become so desperate and impoverished that we are trying to protect and create jobs the trap people in poverty? Have we fallen so far? Fallen so far that we want the sweat shops to move here from Bangladesh so that our unskilled and impoverished workforce can find jobs? I think it’s depressing… pitiful that there is debate in our country about saving slave wage jobs. We should focus on creating good jobs, training our workers…. we are a wealthy nation… Unless this country has fallen further than I’m aware of we don’t need $5 per hour jobs. We are better than this.
State unemployment rates:
http://www.bls.gov/web/laumstrk.htm
State minimum wages:
http://www.statemaster.com/graph/lab_us_sta_min_wag_min_wag_lev_lev-minimum-wages-wage-levels-level
The minimum wage should NOT be increased further. Entry level pay should provide opportunity for advancement, to earn your way to a better life. Usually entry level positions are in service businesses and filled by high schoolers, seniors (or others) with no motivation for advancement.Increases to the minimum wage are pased along to customers: grocery stores etc to those that can least afford the increase
the debate about minimum wage has gone on long enough. if the single moms out there would get a real job with the education that they have and stop working at McDonalds or Walmart then there would not be a problem. how can you support your family if you do nothing to further your career in todays society?
minimum wage increases will kill the labor market. The key is to educate the labor force and not to subdisize people’ standard of living.
Riccardo
At the very least, federal minimum wage should be adjusted with inflation numbers, perhaps on an annual basis. But the federal government should not hike the minimum wage too high too fast. It should leave that option to individual states, where the cost of living varies significantly. NY and CA should probably increase their minimum wage to $12/hr, while MS and KY would be fine with the federal minum wage.
The need for a minimum wage law indicates there is a flaw in the system. If a person can not live on full time work, one would expect the person to go find work that will support him(her).
In our system, this is not easy. While a lot of people just work cash and keep quiet about it, the actual, legal, proper, requirements for self employment are very burdensome. While some people can do it, a large swath of people are dependent on wages. Wages that are forced down by a global economy coupled with an ability of consumers to refuse to pay higher prices.
A system where people work full time but can not support themselves is not workable in the long run. If a job is not worth paying someone a living wage to do, then do it yourself. Don’t want to pay 10$ for a sub? Make your own sandwich. Can’t pay 100$/mo for landscape maintenance? Mow your own lawn. Clean your own house, wash your own windows, fix your own car, . . . you get the idea.
And if a small business owner can not make a living unless he(she) can get someone to live a substandard lifestyle to subsidize it, then that person is NOT actually making that business work, but only stealing.
All of the arguments here for why wages should be allowed to go as low as business can drive them would hold for bringing back Slavery. A lot of things are financially successful that are socially and morally reprehensible. Dealing drugs, robbing banks, trading corn futures. Why don’t we allow them all?
Oh yeah, we already do on Wall Street.
The only thing minimum wage laws do is outlaw low wage jobs. At best, in a higher wage environment, such laws do nothing. At worst, they cut off the bottom rungs of the employment ladder, hurting those weakest positioned economically. Supply and demand laws apply to labor, and though this fact can be ignored, its effects can’t be evaded.
I’m not an economist, but I can’t see where every job having a predescribed “living wage” would have anything but a detrimental effect on the economy. Who determines what this living wage will be? What if companies can’t afford this living wage for every job, do they eliminate those jobs and push the responsibilities on this who are making the living wage? With unemployment above 6% the last thing this economy needs is government mandated living wages.
I am a 57 year-old educator. At age 15, I started working for Safeway checking groceries at near the minimum wage, $1.60 per hour. Since then, the price of everything except electronics has increased by a factor of 10 to 15. To have the same purchasing power as I did in 1966, the minimum wage would need to be between $18.00 and $20.00 per hour. No wonder poverty is on an exponential curve.
Obviously, present business models cannot instantly absorb an abrupt increase to $18.00 per hour, but it still needs to happen, gradually. What the business people forget is that we are a consumer-driven society. When a large segment of the population does poorly, businesses are less successful. Most new businesses go bankrupt, yes. But much of this is attributable to the lack of disposible income in the pockets of more and more of our citizens.
I employ mostly teens at my fast food franchise. Teens work ethic is not worth the current increase let alone any further increases. Most teens don’t appreciate a dollar to begin with, giving them more money will not stimulate the economy..it will drive small business owners under. Quality of service declines, sales decline etc. Go ahead Barack, raise it again, and watch the economy completely collapse…won’t you be proud that you were the first black president that bankrupted the country
As a small business owner, I cannot afford to “absorb” wage increases each year. I either have to raise my prices, if the market will bear it, or I will have to cut expenses. If the government forces me to pay my 5 employees $2.00 more per hour, that extra $20,000 per year is going to come from somewhere —- either from my customers in the form of higher prices, or from letting one of my employees go.
What this and most minimum wage articles do not talk about is the relationship of a lot of unionized jobs to the minimum wage. That is, a lot of non minimum wage jobs are indexed to the minimum wage, so an increase in the minimum wage is not just impacting the small business owner hiring part time employees.
Min. Wage should be ELIMINATED! With the increase you can expect to pay more at the grocery store, gas station, and restaurants! In effect it is providing pay cuts to the majority of the workforce (those not on min. wage) as it brings their salaries closer to the min. wage. Be prepared for serious inflation, unemployment, and closing of small businesses! The majority of workers on min. wage are not providing for themselves anyway (mom and dad are), only a small minority are!
I am a small business owner. I have several contracts with the state. If the minium wage goes to $9.50, with payroll taxes on top of this amount, the state will need to increase what they reemburse for services. It’s an upward spiral that costs everyone.
I’m mostly in the camp that believes higher minimum wages lead to unintended consequences and or acts as a band aid that does not solve the underlying problem.
Just about every country with high minimum wages has higher unemployment and lower labor force participation rates. Some people with low skill levels will simply be priced out of the labor market, and will become “discouraged workers”, and thus, won’t show up in the unemployment statistics.
I live in California, a high minimum wage state (currently $8 per hour). However, that doesn’t even come close to making up for the high cost of living here…namely high housing costs. But that is not a problem that can be fixed with a higher minimum wage. They don’t build enough housing here…which is why costs are so high. So as long as there’s a housing shortage, a minimum wage really just drives inflation higher and doesn’t solve the underlying problem (in this case.. a housing shortage).
I am not totally against minimum wages…but not anywhere near the level Obama proposes. Let higher cost states set higher minimum wages, and have a relatively low Federal minimum wage, so that lower cost states keep their minimum wages lower.
I also agree that we should send the illegal immigrants home. We would have less income inequality if we did so and would not have so many people willing to work for such low pay, not to mention less drain on public services.
Furthermore, if we want to boost the incomes of low income folks, a better way to do it is through the Earned Income Tax Credit…which could be expanded.
If the minimum wage is increased to $ 9.50 / hr I’ll close my business, retire, and lay off all my employees. It’s just not worth staying open.
They are ways to combat a minimum wage increase. When minimunwage goes up the tax limit on companies is also adjusted/
Companies can offer more traditional part time jobs. If we got universal healthcare, companies would not have to spend money on insurance for their
workers.
Just some ways to combat a wage spike.
The federal minimum wage should very rarely change. States (or even cities) are much better positioned to gauge and set an appropriate minimum wage based on factors existing at the state level. If the minumum wage in your state is too low, talk to the state government, not the federal government.
Increase minimum wage. A person working 40 hours a week must have a living wage. On the present minimum wage you cannot live. Also allow companies to implement internal training jobs, with certified training programs (apprenticeships) that are lower than minimum wage during the training phase. It works in Switzerland, where the minimum wage is approx. $ 14/hr with such a training program. Result: low unemployment and little poverty.
Kurt Lieber, Houston, TX
As a small business owner, minimum wage only works when you don’t think about a global workforce. For example, my customers only are willing to pay $10 for an item. I can produce it in the US with current minimum wage labor for $6 or I can produce the same quality product in Mexico and ship it in for $0.50. My customers don’t care and are not willing to pay the extra for US labor. So if minimum wage did go up to $9.50 and I was forced to use american labor I would have to close my business since I couldn’t pass the cost to my customers. So you would see more small business closing or moving offshore since they can’t take an increase in labor cost that fast.
Minumum wage only works when you can’t get the same job done globally for pennies.
Maybe there is not a constant connection between the minimum wage and unemployment. In a growing economy minimum wage increases might allow the bottom income jobs to not fall as far behind. In a shrinking economy, higher minimum wages might slow job growth and delay economic recovery.
The problem with the minimum wage is that it never goes down like higher wages in other sectors of the economy. Once raised it cannot be renegotiated like auto union wages, airline employee wages, service sector wages to reflect changing economic conditions. That means in the long run, higher minimum wages tend to be inflationary over the long term because they raise the base amount all other wage sectors are based on.
Sure…go ahead and raise the min. wage to over $9 per hour…but be VERY prepared to pay $10 for a small turkey sub at Quiznos and don’t even think your a high school student will find a job before he graduates college.
Yes, it should be increased. We must build a high-income economy, not a cheap-labor one.
Obama probably has it right at $9.50, which is half of the US average income of $19 per hour. He is also right that it should be indexed, but it should probably be indexed to half of the average US income, not the inflation rate. This is Robert Reich’s proposal, and it makes sense: when executives get huge raises, the guys at the bottom automatically get a ‘raise’ the following year. This is a powerful incentive for people to work. We need to spread the wealth; one of the causes of the Great Depression was inequal distribution of income and wealth. We are headed that way right now. Let’s fix it.
The minimum wage is $11 in New Zealand; I spent a lot of time there last year. It works; they have no poverty.
It would also be helpful if we reduce immigration, especially of illegals.
Look it up. Unemployment has risen after every minimum wage increase. And why is the government in the business of telling companies what they have to pay employees anyway? Whatever happened to the rights of an employer to pay what he thinks is a fair wage for the work performed and local employment conditions? If he underpays for the market he will get the lessor employees, if he pays the going rate or higher he will attract the better workers.
If you are a small business with 3 hourly workers, and you have to spend maybe $2 more per hour on 80 hours of work, you are only talking about $160. I would like to make the argument that a small business owner making $7680 less a year at the expense of 3 employees having an easier time paying bills, saving, etc would be worth it. This does not consider the fact that better paid, happier employees tend to be more productive which offsets the increase in pay. Its time America tried to build the economony from the ground up, not by giving rich people and corporations more money.
I am a 16 year old residing in the state of New York and I work a minimum wage job at Mcdonald’s. I believe that the work tha we do there is way harder than sitting on our bottoms answering phones all day and making way higher pay. I know my job might not take much skill except for rapidness maybe but we work too hard for $7.15 an hour. We stand on our feet for hours on end with no break unless we are working a 6 hour shift or more. Even then the break is only 30 minutes and given when you have about 4 and half hours left on your shift. Minimum wage is oo low for anyone’s LABOR. I didn’t say time, I said labor. Some jobs require your time and maybe a little labor paying you high wages while minimum wage paying jobs work you way harder and pay you way less!!! Someone needs to do something about this!!