President Obama suggested increasing the minimum wage to $9 an hour. There is no guarantee that the Congress will approve this request once it is officially made by the White House. The US minimum wage was $1.60 in 1968 while it is currently $7.25 , almost five times as much. So why is president Obama and so many others concerned about raising it some more? I am sure that all of you realize that what counts is not the nominal wage but the real one. This simply means that the $1.60 of 1968 is equivalent to $10.53 in 2012 dollars. So as you can see the minimum wage in the US has been declining over the years instead of either increasing or ,at a minimum, maintain its purchasing power. The following is a short article by Ralph Nader that speaks to the issue of minimum wage and where it should be.
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Published on Saturday, February 16, 2013 by
How could Barack Obama say, in his State of the Union speech,
“let’s declare that in the wealthiest nation on earth no one who works
full-time should have to live in poverty, and raise the federal minimum
wage to $9.00 an hour”?Nine Bucks an Hour? A Call for a Living Wage at $10.50 or More
Back in 2008, Obama campaigned to have a $9.50 per hour minimum wage by 2011. Now he’s settling for $9.00 by 2015! Going backward into the future is the price that poverty groups and labor unions are paying by giving Mr. Obama a free ride last year on this moral imperative. How can leaders of poverty groups and unions accept this back-of-the-hand response to the plight of thirty million workers who make less today than what workers made 45 years ago in 1968, inflation adjusted?
But, of course, the poverty groups and labor unions chose not to mobilize some of the thirty million workers who grow our food, serve, clean up and fix things for us to push for a meaningful increase in the minimum wage before Election Day.
It gets worse. The Obama White House demanded “message discipline” by all Democratic candidates. That meant if Obama wasn’t talking about raising the minimum wage to catch up with 1968, none of the other federal candidates for Congress should embarrass the President by speaking out, including Elizabeth Warren, of all people, who was running for the U.S. Senate from Massachusetts.
Catching up with a 1968 federal minimum wage of $10.50, inflation adjusted, should be a winnable goal this year. Once the media starts regularly reporting on the human consequences of unlivable wages, and once the entry of more and more of the thirty million workers to marches, rallies and town meetings grows, neither the Republicans nor the Blue Dog Democrats will be able to stop this drive.
It didn’t matter that the U.S. had the lowest minimum wage of any major western country (Australia is over $15, France over $11, and the province of Ontario in Canada is $10.25 – all of these countries also have health insurance for all).
It didn’t matter that several cities and 19 states plus the District of Columbia have higher minimums, though the highest – Washington state – reaches only to $9.19.
It didn’t matter that two-thirds of low-wage workers in our country work for large corporations such as Walmart and McDonald’s, whose top CEOs make an average of $10 million a year plus benefits. Nor did it matter that these corporations that operate in Western Europe, like Walmart, are required to pay workers there much more than they are paying Americans in the United States where these companies got their start.
Haven’t you noticed how few workers there are in the “big box” chain stores compared to years ago? Well, one Walmart worker today does the work of two Walmart workers in 1968. That is called a doubling of worker productivity. Yet, many of today’s Walmart workers, earning less than $10.50 an hour, and are making significantly less than their counterparts made in 1968.
Nobel-Prize-winning economist Joseph Stiglitz, told me that minimum wage policy relates intimately to child poverty. Single moms with children on a shrinking real minimum wage “translates to child poverty” and is “creating another generation” of impoverished people.
The arguments for a higher minimum wage, at least to reach the level of 1968, are moral, political and economic. James Downie writing in The Washington Post provided five reasons to raise the minimum wage: “1) it will help the economy; 2) it reduces poverty and inequality; 3) it reduces the ‘wage gap’ for women and minorities; 4) indexing the minimum wage is, well, common sense; and 5) it’s consistent with American values.”
Downie gives historical perspective on just how far our economic expectations have slid when he quotes Theodore Roosevelt at the 1912 Progressive Party convention:
“We stand for a living wage…enough to secure the elements of a normal standard of living – a standard high enough to make morality possible, to provide for education and recreation, to care for immature members of the family, to maintain the family during periods of sickness, and to permit a reasonable saving for our old age.”
In the ensuing 100 years, worker productivity has increased about twentyfold. Why then are not most workers sharing in the economic benefits of this productivity? With other worker advocates, we chose to demonstrate on Feb. 12, 2013 before the headquarters of the U.S. Chamber of Commerce whose business coalition opposes increases in the minimum wage while its members report record profits and boss pay. And before the headquarters of the large labor federation – the AFL-CIO – we urged well-paid union leaders to devote more of their power and resources on Congress and the White House to lift up the minimum wage for those they like to call their “brothers and sisters,” from the ranks of the working poor.
The last time – 2007 – a higher minimum wage law was passed under the prodding of the late Senator Edward Kennedy, nearly 1,000 business owners and executives, including Costco CEO Jim Sinegal, the U.S. Women’s Chamber of Commerce CEO Margot Dorfman (two thirds of low-income workers are women), and small business owners from all 50 states signed a “Business for a Fair Minimum Wage” statement.
It read: “[H]igher wages benefit business by increasing consumer purchasing power, reducing costly employee turnover, raising productivity, and improving product quality, customer satisfaction and company reputation.”
Listen to those words, Walmart! You badly need to improve your reputation, given your recent major missteps.
Catching up with a 1968 federal minimum wage of $10.50, inflation adjusted, should be a winnable goal this year. Once the media starts regularly reporting on the human consequences of unlivable wages, and once the entry of more and more of the thirty million workers to marches, rallies and town meetings grows, neither the Republicans nor the Blue Dog Democrats will be able to stop this drive. Congressional districts all have many such workers in their districts and polls show 70 percent popular support for raising the minimum wage. That includes millions of workers who call themselves conservatives.
The April Congressional recess – the first two weeks of the month – will be the first opportunity to show up where it counts – at the town meetings held by senators and representatives back home. Filling those seats usually requires two to three hundred local voters. If workers rally, by the time the lawmakers go back to Congress, they’ll have a strong wind to their back to face down the lobbies for greed and power, who have money, but don’t have votes.
Check out our website timeforaraise.org and join this long overdue initiative.
12 comments:
Raising the minimum wage is counter productive. Many jobs that pay minimum wage are jobs for teens like super markets and clothing stores. Obviously raising the minimum wage will increase the money we have in our pockets but that money will go away when the stores increase their prices for their goods. someone has to pay those salaries and its the owners of the stores. this is why it is difficult to pass a higher minimum wage. but i disagree with the fact that the Obama administration wanted to have a higher minimum wage in his last term than what he is shooting for now. if anything with the adjusted inflation he should be going for a higher one.
I would like to start by saying I believe this article is incredibly opinionated. It seems much of the authors argument are based upon his values rather than statistics. That being said I was not aware that the real minimum wage is lower than it was in 1968. I believe that an increase in minimum wage will ultimately lead to an increase in prices as well as a loss of job opportunities for teens and young adults. Employers will have to raise their prices and be more selective in the hiring process as it will be more beneficial to employ someone with previous experience.
Ideally it would be great for congress to agree to setting a minimum wage that is at least equivalent to what it was in 1968, inflation adjusted. Honestly I don't think that this would happen because even if we understood that the real value would be the same, the nominal is what a majority of people judge. I don't think a change from $7.25 to $10.50 is likely to to be agreed upon in congress. Personally I think that the minimum wage would be raise because of the poverty issue in our country. Also as it states in the article, putting more money into the pockets of Americans would increase spending and hopefully benefit our economy that is growing at such a slow rate.
As mentioned in class and in the article, Obama feels that no person should be working full time and be considered poor; however I feel that if the minimum wage was to increase, then more people would be left without jobs. This is because many companies like to hire labor for as minimal cost as possible even if they aren't fully qualified, and if the wages increase then they wont be able to afford to pay the same amount of people, and in turn, people will be laid off or switched for someone with more experience. I don't feel that this will generate spending and if it does, it will be very minimal.
While I do support the idea of raising minimum wage, I feel this article is biased. It basically overlooks the economic problems and the unemployment that could result from an increase in minimum wage. If businesses can't afford to pay their employees then the business will suffer and many people will be out of work. I also feel that mentioning that shrinking minimum wages directly relates to child poverty is pandering and a desperate attempt to play on the reader's emotions. I understand that originally Obama wanted to raise the minimum wage to $9.50/hour by 2011, but I believe that if we can pull off the raise to $9.00/hour, we will be on the right track to assisting those workers who are living in poverty while still working full time.
Raising the minimum wage seems to be favorable and i agree that it should be set higher so that full-time minimum wage employees can live comfortably without being considered living in poverty. It astonishes me that our minimum wage is currently lower than it was in 1968, inflation adjusted. However, I don't believe congress will agree with raising it as high as $10.50 immediately. Such a drastic change may cause our economy to be unstable. But nonetheless, the minimum wage should at least raise to $9.00 an hour because it will stimulate economic growth by allowing workers to consume more and it will give full-time workers greater conditions to live by.
Raising the minimum wage has both its benefits and downfalls. If the suggested $9 a hour is passed, it can do a multitude of things to our economy. Politically, Obama seems to care for the people and would like to bring up the average salary of someone who is living by the poverty line. He believes someone who works full time should not be " poor". I believe the minimum wage should all depend on the region in which you reside in. The cost of living is New York is much higher than the cost in say Texas. By raising the minimum wage for the people of New York this will make a nice difference for income if all other things in our economy remain the same. A bad thing that can occur if minimum wages are raised, is the price of goods will rise. The amount to support the employees will have become higher, so the product price must go up in order for any type of business to profit. If prices do not go up they could cut hours for the removal of insurance and force full time workers who get benefits, to become on the line part time workers with none. Dealing with raising minimum wage, people might benefit in the short run looking at average annual salary raising thinking how much more money they will potentially make but not fully looking into the future and how one small change causes ripple effects.
If we raise minimum wage I think it will force more people into unemployment. Businesses will not have enough to pay all of its workers and will have to let them go. It will also raise the price of living because if the businesses have to pay the employees more they will have to increase the price of their goods or services. This will also make the employers more selective in who they are hiring and will limit job opportunities for the younger people trying to enter the workforce. I don’t think this will boost the economy at all because there will be less people in the workforce and the prices will rise which will make people save their money instead of spend it.
Let’s face it; minimum wage is beneficiary only for employers and owners of a big business. If the minimum wage is kept at $7.25 an hour employers can hire more people for less and still get decent profits. CEO’s don’t care about the people on the bottom and how they do their living! It’s all about the profit for them and their businesses. On the other hand, what do we expect in terms of income for certain jobs are not really adequate to the task we are preforming on the job. Don’t get me wrong I’m all for increasing minimum wage for those that are working for that much but if you are working at McDonalds flipping burgers I don’t think this is $10 job. There are people working in constriction that have trade skills to preform jobs and are working for $10. Nonetheless, increasing minimum wage will help the economy to some extant. Individuals will have more disposable income on their hands and their well being will improve some-how. Then there is another detail that should be added to the article. Just recently I’ve read an article in Wall Street Journal that was about increasing minimum wage. The interesting aspect of that article was that if Federal Government will increase minimum wage then not only those working for minimum wage will get the rise but also all union employees will get a rise as well.
Raising the minimum wage would not benefit anyone besides the people who are making it. If the country were to raise it $7.25 this would cause some smaller businesses to fire more people because they can't afford to have as many workers and would force people into unemployment thus raising it. Raising minimum would also cause businesses to raise their prices on goods which would increase the price of living affecting everyone who is not making minimum wage. This would not do anything for the economy besides hurt it in my eyes and we cannot afford to have the price of living or cause more unemployment.
Raising minimum wage seems like a good idea on the surface,there are a lot of perks that come with raising the minimum wage amount from $7.25 to $9 per hour; this would encourage more persons to actively look for work because this would be an incentive, as well as the overall living standards would hopefully increase slightly of Americans. However, there would definite disadvantages to this, small business would lay off workers because they wouldn't be able to pay the $9 and hour wage which in turn would increase the number of people that are unemployed, it would decrease the benefits offered by employers because they would have to make up the loss in profit and it would increase the number of unskilled workers in the labor force.
Raising the minimum wage has both and positive effect. If congress were to rase the minimum wage it would be able to keep up with inflation, and people would have more money in their pockets. Unfortunately this isn't good for small business. Where are they going to find the extra money to be able to pay their employees at that rate. An increase of $1.75 may not seem like much but once you count it for each employee the number can become significantly larger.
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