Posted on 07/05/2009 8:55:02 PM PDT by Steelfish
JULY 6, 2009
Minimum-Wage Increase Comes at a Bad Time for Weakened Job Market
By KRIS MAHER
The federal minimum wage goes up this month just as job losses are sending new alarms about the economy, giving traction to perennial fears that higher wages will hurt job creation.
In the past, minimum-wage increases have done little to dent job creation. And pouring more money into people's pockets -- especially low-wage workers who are likely to spend the increase to meet living costs -- would normally boost the economy.
But these aren't normal times.
"It's tough timing," said John Silva, chief economist at Wells Fargo, who expects low-skilled workers and teenagers will be hit hardest. "You're going to have a very negative response. In a recession like this, companies don't have the pricing power to pass on those costs."
History, in this case, isn't a reliable predictor, he says, because the current economic slump is much deeper than during previous times.
The job market remains weak; figures released last week show the June unemployment rate hit 9.5%. Consumer confidence, consistently low, retreated in June, translating into weak traffic at restaurants, car washes and hotels, all places that rely heavily on minimum-wage workers.
The impact of the higher minimum wage will resonate even beyond that group of earners and industries. Economists say there are 2.8 million workers earning between the current federal minimum wage of $6.55 an hour and the new minimum wage of $7.25 an hour, which takes effect on July 24 and has had no signs of delay from legislators.
But some estimates figure an additional seven million workers are affected because their wages are tied to the minimum and will go up accordingly.
(Excerpt) Read more at online.wsj.com ...
Are we having fun yet?
Oh, I would say something, but my fingers are sore from another thread.
parsy, who is duct-taping his own mouth
The purpose has nothing to do with the minimum wage.It is an increase for all union contracts linked to the "minimum wage"
No problemo, just hire fewer minimum wage employees to complete the same amount of work.
But we were told...!
Bwaaahahahahaha!
The only problem with the minimum wage is that it isn’t $960/hr.
It needs to be that high for a part time worker to make $1,000,000.00/year
Anyone who knows anything about economics knows that minimum wage laws have the reverse effect long term. Sad most Americans kow nothing about economics.
I’m a firm supporter of a minimum wage. I just think it should be what the market will bear and set by employers.
Elections have consequences.
There’s never a good time for a minimum wage hike.
It just pushes more and more inexperienced people out of the job market.
And just like California, when you spend and increase the burden on business when the economy is good, when it slows down, and it always does, things get much worse than it otherwise would have been. But no, Democrats have to milk the upside for all its worth so that when things slow down everyone ends up bankrupt... And even then they use that to justify more of the same making things worse yet again...
Stupid on steroids...
Just "pouring" money into people's pockets? How ridiculous. The money is being stolen out of the wage payer's pocket.
We have idiots running our country.
Only teenagers make minimum wage. Therefore the whole debate is a waste of time.
YEP....my husband’s 401K was frozen, his pay was frozen, and next, probably a salary DECREASE, and LESS benefits, and who know what’s going to happen to the company, itself...but, hey, ho...let’s INCREASE the minimum wage!!!
Uh....did you forget your sarcasm tag??? In the Northwest minimum wage is what is called “living wage”....in other words the goal is to make it so that people can LIVE, with FAMILIES ON MINIMUM Wages. It steals jobs FROM teenagers.
Considering this downturn in the economy and upturn in unemployment began shortly after they passed their minimum wage increase, am I the only one to think they may be related?
How’s that hope and change working for you?
It’s not doing much for me.
Your husband is lucky.
I was 19 years at one of the 789 Chrysler Dealers who lost their franchise.
No franchise, no warranty claims, no need for factory trained technicians any longer.
The minimum wage bill (and many related measures on the state level) is just one of many policies increasing labor costs. For example, Colorado and Ohio have minimum wage laws that peg wage increases to the CPI. The cumulative effect of policies that increase the cost of labor will be substantial. The rats do not have to worry because it is difficult to measure the impact of these policies.
Here is my list of the policies increasing the cost of labor:
- Minimum wage bills
- Lily Ledbetter law (will likely reduce not increase wages)
- Comparative worth legislation
- Card check
- Davis Bacon union mandates
- New ergonomics workplace rules
- Employer shake downs by the EEOC
- New payroll taxes for health care coverage
- New health care coverage mandates
“Minimum Wage Increase Comes At A Bad Time”
This is such hypocrisy.
Each month 80,000 brand NEW, low skilled, LEGAL immigrants enter the USA workforce.
Not only does the Wall Street Journal vigorously support that policy, the WSJ demands Amnesty for ALL low skill ILLEGAL workers.
Then, the Wall Street Journal viciously attacks Conservatives who seek to lower immigration numbers or who oppose Amnesty.
Now, the WSJ is worried about the minimum wage?
Gimme a break.
Massive immigration - both legal and illegal - has crushed wages, benefits, and working conditions for EVERY low skill job in America.
HA....lucky? Well, temporarily....until he loses his job...probably by years end. It’s an economy thing....as I know YOU well know....good luck.
Agree!
This is the dumbest post I’ve read in quite some time.
ding ding ding! What is sad is that so few politcally active conservatives know this, imagine how few “regular folk” realize this. The “regular folk” are quite knowledgable about the “greedy corporate CEO” but literally ignorant about unions.
Some people are going to discover the minimum wage is $0/hour this month. Many businesses have been trying to soften the blow by cutting hours instead of employees. That can only go so far before you have to drop some employees so those who remain can earn enough.
If you have specific criticisms, I'll be glad to answer them.
The RATS raised minimum wage and extended unemployment benefits at the same time. They know perfectly well that the increased minimum wage drives up unemployment. The unemployed are beholden to their Democrat benefactors for the government largess.
But it also has the benefit of driving up many union contracts, where wages are tied to a multiple of the minimum wage.
And that is the real reason Democrats keep pushing for a higher minimum wage -- to boost union wages...and union dues...and, thus, union political contributions.
You obviously haven't read mine.
Pay attention.
I have an obnoxious neighbor who never misses an opportunity to point out the “good” the libs do by way of legislation they push and get approved. When the latest forced increase in minimum wage was working it’s way through the process he would crow about how much it would help the “little guy”. No amount of explanation highlighting how forcing increased salaries on employers would mean less employees seemed to get through to this programmed dolt.
The other day, after the jobs report was released and we learned the unemployment rate went to 9.5%, I asked him if he now understood that forcing higher wages on employers only results in less people being hired, especially in tough economic times, he refused to acknowledge the error of in libthink and made the following, truly stunning statement. “he said “It is better for 100 people to have jobs at $8.50 per hour (example) then for 200 to have jobs at $7.50 per hour. When I asked him what about the 100 with no jobs, he said they could go on welfare and/or collect unemployment.
I did not carry on the conversation with this individual because it was more then obvious he was simply not capable of understanding how an economy and the businesses that make it work operate.
No, that’s okay. You clearly aren’t bright enough to carry on an intelligent conversation. I’m not going to bother to waste either of our time.
This is an excellent time to raise the minimum wage, which is scheduled to go from $6.55 to $7.25 on July 24th. It will increase unemployment, and the higher the percentage of unemployment, the more likely it is that at least some of the 69.5 million fools who voted for the Socialist Obama will begin to see the light.
Price and wage controls never work. Every socialist or communist country in history has tried them, and they always fail. Those who think wage and price controls work are also fans of socialized medicine, Obama’s plan to ruin the best medical care in the world, which still exists right here in the U.S.
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