Minimum wage fight gains support, momentum

The fight to raise the minimum wage caught a big wave of momentum this week as President Barack Obama endorsed a pay increase after voters pledged support in two key elections.
Tribune News Service
Nov 10, 2013

 

The White House confirmed Thursday that Obama was backing an effort to increase the minimum wage to $10.10 an hour, which is higher than the $9-an-hour proposal he championed in his State of the Union address in February.

The announcement comes just days after voters in New Jersey approved a $1 increase in the state’s minimum wage to $8.25 an hour. And when all the votes are counted, residents of a suburban Washington town, SeaTac, likely pushed the minimum wage up to an eye-catching $15 an hour for about 6,500 men and women who work at or near Seattle-Tacoma International Airport.

Those results were expected to spur Obama to renew calls for a federal minimum wage hike. He did so Thursday by publicly supporting a proposal introduced this summer by Sen. Tom Harkin, D-Iowa, and Rep. George Miller, D-Calif., to raise the federal minimum wage to $10.10 per hour and index it to inflation. But the proposal is not expected to gain much traction in today’s divided Congress. And many Republicans feel it would kill job growth.

Campaigns are spreading across the country, as more workers find themselves in low-wage jobs coming out of the Great Recession. Of the 1.9 million jobs created during the recovery, 43 percent have been in the low-wage industries of retail, food services and employment services, according to a recent National Employment Law Project study.

This summer, thousands of fast food restaurant workers across the country dropped their spatulas and picked up signs calling for super-sized wage hikes.

Tyree Johnson, 45, stood outside a McDonald’s restaurant in downtown Chicago with a sign that read: “We are worth more.”

He makes $8.35 an hour, just 10 cents over the Illinois minimum wage.

Johnson has a room at a men’s hotel in downtown Chicago, which he pays for by cooking and cleaning at the fast food giant. He’s worked at McDonald’s for more than two decades.

It’s a check-to-check lifestyle, he said. But if the minimum wage were raised to $15 an hour, as he hopes, he could get an apartment and wouldn’t have to depend on his aunt for help, he said.

“The only times I’ve gotten a raise is when they increased the minimum wage,” he said.

New Jersey became the fourth state to raise its minimum wage this year after New York, Connecticut and California, buoying the hopes of supporters elsewhere.

But opponents like House Speaker John Boehner, R-Ohio, and the National Federation of Independent Business say an increase would only make it harder for small businesses to hire people.

“Small businesses clearly have been under financial pressure,” said Mark Zandi, chief economist at Moody’s Analytics. “They got hit in the recession hard and recovered more slowly than big companies and midsize companies. And the minimum wage will clearly hurt them more.”

Instead, Zandi thinks more changes could occur on the state level. Keep an eye on the Northeast and West Coast states, he said, where politics are more liberal and wages are higher.

An extra dollar or two increase in the federal minimum wage will have less of an impact — and therefore opposition — when workers in low-wage jobs are already making more than proposed increases.

By and large, voters support minimum wage increases. A Gallup poll in March found that seven in 10 Americans would vote for raising the minimum wage to $9 per hour.

Comments

DKS523

Sure! Raise the minimum wage. It will only cause companies to increase the costs of their products and who ends up paying for that? The consumer. The benefit would be felt short term until the price increases catch up to them. How about offering incentives to companies to hire people full time? Most of these low paying jobs are part time. OH but that's right... If a company hires full time, then they have to pay for insurance for that person. A good choice would be for the low paid workers to use their time off of their part time jobs and further their education so that they could get a good paying job.

Alan9074

Hi DKS,

So everyone should "go to college" and they'll then be able to "get a good paying job"? First of all, not everyone has the aptitude for this, and not just anyone can derive any benefit from attempting to learn highly-skilled trades. Getting “an education” very often sets them up for costly failure. Secondly, no amount of education can make up for an insane trade policy. I'm not implying a direct correlation, but I would remind you that when the Soviet Union collapsed, they had the highest number of PH.D's per capita than any other nation on earth. Their highly-educated workforce didn't save their economy or the living standards of its people.

Education is not a panacea, and you didn't say it was, but you sure sounded very close to that. Obviously, the United States has been hemorrhaging (good-paying) manufacturing jobs for decades. I'm sure you're well aware of this, and yet you still feel the need to denigrate the goals of these fast-food workers who would have otherwise taken those manufacturing jobs which have been moved to China, South Korea, Japan, India, Indonesia, Bangladesh, etc. You then go on to describe some aspect of economics (wage\consumer-prices) a then, by implication, say that what they're striving for is futile or wrong.

These people are not worth next-to-nothing, they have value, and this is well-evidenced by the profits that these company-owners currently enjoy.

DKS523

Alan, there are so many assumptions on your part. I did not imply any of the points that you said were behind my words. To make it simpler for you: If people are unhappy with their job, with the wages they are making, get an education or learn a new skill. That does not mean going back to school to get a business degree or doctorate. There are many courses available (many at MCC) that are manufactured based that will give a person the skills that they need for manufacturing, (example: blueprint reading, Quality Control, CNC lathes and mills, Tool and Die) where there is a big shortage now. You blame the companies and their owners. What about holding someone accountable for their own actions? Everyone has the option of quitting and going elsewhere. I am NOT degrading people who work in the fast food industry. I could not do what they do. I just can not give sympathy to someone who does not have the motivation to improve their own life IF they are unhappy about it!

Alan9074

I was harsh in my tone DKS, I'm sorry about that.

DKS523

No problem, Alan. I really admire you for saying sorry!

Vladtheimp

Of course Obama wants to raise the minimum wage - it's no skin off his back and he's already damaged the young people who voted for him by forcing them to subsidize the health care of the old, the sick, and those who simply chose not to purchase health insurance and he has caused them to lose opportunities for full time, 40 hour week jobs, and they still voted for him.

If raising the minimum wage is such a sound idea from an economic perspective, why be such a piker - why not raise it to, say, $25 per hour so they will have more disposable income and instead of getting an apartment, Tyree could buy a house. And that's the whole problem - how does cooking and cleaning at McDonalds for 20 years merit any particular dollar level of pay, and what economic theory or statistics say that $10.10 an hour is an appropriate level of pay, as opposed to the $15 Tyree wants or my $25?

The clear result will be fewer entry level jobs for teenagers, and more people added the the unemployment lines. Tyree will most likely qualify for health care under Medicaid, if he can find a doctor who will accept the Medicaid reimbursements and a hospital that will do the same.

Tri-cities realist

Well said. Let the barrage begin, by those who apparently don't understand economics. I asked a similar question on a previous post, although I believe I was even more generous $50/ hour, since who doesn't want a six figure income? I don't recall receiving any praise for my generosity. Perhaps you will have better luck.

unclejoe

In the context of a socialist democracy, an increase in the minimum wage to a point where the worker no longer qualifies for government assistance, does make sense.
Currently the state subsidizes these worker's wages through food stamps, housing assistance etc etc. Businesses have increased profits through this scheme by taking advantage of the low wage so putting the burden of the workers salary solely on them would seem logical........
Seems like a lot of the arguments against an increased minimum wage are from purists focusing on a society which exists in theory only; it is a socialist country like it or not, comrade.

Vladtheimp

unclejoe talking about a "socialist democracy" is like Karl Marx talking about a "Progressive Future" - in both cases ending up in a loss of liberty, giving control of your life over to your betters in the Communist hierarchy, and millions of deaths regardless of the minimum wage.

Uncle Joe indeed.

unclejoe

'Bloodlands: Europe Between Hitler and Stalin' should be required reading for anyone doubting the impact of the socialist state. Nonetheless, here we are and it ain't getting no better. Time for the tree of liberty to be nourished?

Wolverine49457

There was a time when mostly part time teens staffed the shifts and house or rent payments, health care and many other adult problems were not the concern of the typical fast food worker. Fast forward to a crappy economy version 20.2 and you have adults filling the shifts that are worth only minimum wage wanting to force a company to pay them as though the skills and aptitude/education required for the position warranted more money; I could support maybe a dollar (Maybe) but this $15.00 an hour is simply insane socialist Union babble. If you work hard and learn how to practically run the place coupled with a sound work ethic and good attitude you will likely become more valuable for your skills and knowledge and get a hansom raise someday, if your manager is a jerk and will not promote deserved workers complain to upper management and/or go somewhere else and guess what, you will join the ranks of all of the rest of us that found out after school life can be unfair; praise God for the experience and move on.

Lanivan

Let's make the minimum wage $10.10/hour, and, additionally, give low-wage workers who have worked a minimum of two years (in same company) some free company stock (where applicable). This would provide a powerful incentive to work hard for the benefit of the company, promote loyalty and less turn-over costs, and create a sense of ownership; they could benefit financially, and learn some important lessons in investing.

Win-win.

Vladtheimp

Let's let private employers and workers decide, in a free market, what wages will be paid for each job - and whether working for two years entitles a worker to free company stock?

Same issue as minimum wage - why limit to low wage employees? why two years instead of one year or three years? All are arbitrary mandates of government without reference to the economics of specific jobs and companies.

Lanivan

I see your point, but in regard to your question about low wage workers:

"Here’s an unhappy observation about the minimum wage: Congress last increased the rate in stages in 2007, topping it out at $7.25 an hour in 2009, or $15,080 a year.

That amount, when adjusted for inflation, is actually lower than what a minimum-wage worker earned in 1968 and is too meager to offer anyone the chance to climb out of poverty, let alone afford basic goods and services.

The past recession was brutal on jobs, household wealth and economic growth. But wages were hit hard, too. Real average hourly earnings have fallen below the level of 2009. Although wages often lag job growth after a recession, the pace of income gains this time around is far slower than in previous recoveries.
Low-Wage Bias

It’s also becoming clear that many Americans are being forced to take lower-paying jobs and that a low-wage bias is creeping into the economy, as Bloomberg economist Joseph Brusuelas recently put it. In many cases, minimum-wage work is all that’s available, which may explain why such workers are older and better-educated than they were three decades ago. In 2010, nearly 44 percent of minimum-wage workers had either attended or graduated from college, up from 25.2 percent in 1979."

http://www.bloomberg.com/news/20...

It is all about the explosion of the redistribution of wealth upward - I know how concerned you are about the concept of wealth redistribution.

Vladtheimp

I don't disagree with much of what you said, but you can't ignore that it is Obamacare that is driving millions into part time work - listen to the unions - that's what the have clearly said. And the redistribution of wealth under Obama has hurt everyone except Wall Street and his crony Capitalists.

Lanivan

You are ignoring the fact that the corporate trend towards part time jobs has been steadily increasing for over a decade. Obamacare makes a great excuse to cover up business practices going on for years.

One of the main reasons Corporate America resists a minimum wage increase is that it could then lead to a diminishing of the corporate welfare that has become the backbone of their wage/business policies - those workers now making such low wages that they can be subsidized by the government via SNAP, etc, just might end up being paid enough to get off the gov't dole.

A correction to your last statement: "And the [Republican obstruction] under Obama has hurt everyone except Wall Street and his Crony Capitalists".

Otherwise, I am in total agreement with the first nine words of your comment.

Vladtheimp

Oh, I forgot, all the economic devastation that has occurred since Obama was elected has nothing to do with Obama; all of the businesses that have converted employees from full to part time, and changed their policies on hiring full time employees as a result of Obamacare, had nothing to do with Obamacare, and through a Martian Mind Meld unknown outside of Star Trek, Republicans made Obama, Pelosi, Reid and Sebelius draft the law the way it is and write regulations that required additional employees to lose insurance. How ignorant of me.

Tri-cities realist

Why $10.10 per hour? Why not 15, 20, 25, or my personal favorite, $50 / hour minimum wage!!! After all, we are the U.S. of A! Doesn't everyone deserve a six figure income? Of course most rational people will agree that $50 / hour makes no sense, and as you work backward, you realize that any dollar amount is just arbitrary, and artificial.

Tri-cities realist

And I will ask yet again, what is the solution to the upward distribution of wealth? A downward redistribution? Is our economy a zero sum game, such that if the wealthy increase their wealth, then the poor will be made poorer? So many questions, hopefully someone will come along and help answer my questions.

 

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