Posted on 02/01/2021 6:00:06 AM PST by Red Badger
Progressive lawmakers this week formally launched an effort to hike the US minimum wage, introducing legislation to gradually raise it from $7.25 to $15 an hour.
The proposed increase is much larger than those in the recent past, but supporters argue it is warranted because it has been more than a decade since the wage was lifted, and the current minimum wage is too little for life in the United States.
First enacted by Congress in 1938 as part of the Fair Labor Standards Act, the wage has been amended several times, most recently in 2007, when Congress voted to lift it gradually from $5.15 to $7.25 an hour.
Since that time, several states and local governments have raised the minimum wage to $15 an hour or to other levels both higher and lower.
Of the 50 states, 21 currently honor the federal level of $7.25, while the remaining states have a higher minimum.
Twenty-five states currently prohibit cities and counties from setting a higher local wage than the state level, according to Resourceful Compliance, which tracks labor law.
Under legislation introduced by Democrats in the House and Senate, the minimum wage would rise to $9.50 an hour three months after the law is enacted, and then to $15 in four intervals over a five-year period.
The proposal also raises base pay for waiters and other employees who rely on tips, and directs the US labor secretary to annually calculate the median hourly wage of all employees.
In years where the median increases, the federal minimum wage would be raised by the same percentage.
Economists have long debated whether the economic lift from boosting workers' purchasing power more than offsets the added wage burden on businesses. There is no consensus on the matter.
"There has been a debate for years," said Gregory Daco, Oxford Economics' chief US economist, noting that some studies have shown it can cause job losses, while others have not.
Even the same study can be interpreted differently.
Critics of the higher wage point to a finding in a 2019 Congressional Budget Office report that said lifting the level to $15 an hour would result in 1.3 million workers losing their jobs.
But defenders of the measure noted that the same report said the proposal would lift 1.3 million people out of poverty and boost wages for as many as 27 million more workers, arguing these benefits more than counter the lost jobs.
There is no consensus regarding the effects, as shown in Seattle, which in 2014 became the first major US city to adopt a $15 minimum wage.
A 2018 study from the University of Washington said the policy reduced total payroll in low-income jobs, with wages rising by three percent but hours dropping by six to seven percent.
But a 2017 study by the University of California, Berkeley found the policy increased wages in the food services industry with no employment loss.
Howard Wright, the chief executive of the Seattle Hospitality Group and the co-author of the 2014 measure, said he largely discounts the conflicting appraisals of the Seattle policy.
"Our economy has been booming so strongly until Covid," said Wright.
Could.
Google Milton Friedman. Minimum wage hikes are job killers. Period.
It is not the 1960s so lets stop pretending we need a minimum wage and that Unions are looking out for the working man. Lets stop pretending RATS are not socialists and looking to the freaks in Hollywood and in the music industry for guidance on how to behave. There was a time around the 50’s and 60’s when we told them how to behave. Was it Shangri-La, no. But real men were expected to work. People knew the difference between a man and women. Women could chose to work or not instead of being forced to work in order to afford a house. White Privilege meant a 40-50 for work week and the occasional Friday night fish fry. Two weeks off per year with seven holiday days off. Later my dad actually got 7 sick days per year, but you really had to be sick. White privilege meant you worked the other 48 weeks to pay bills and feed your family. You raised your kids not the schools. Daycare was not nearly as common. You went to Temple on Friday or Church on Sunday, most kids had to go to some sort of Temple or Church School once a week. I was just a kid but I do not recall any hatred for gays, blacks or hispanics. They were kind of an anomaly in my town. But the ones we did know were just another kid in our group. Were there bad people, absolutely, there always will be. But my entire, totally white Christian school sat in the school cafeteria and watch the MLK funeral. I did not really know who he was and did not understand why even some of the white male teachers were crying. There were no Jim Crow laws where I lived. There was racism, there always will be. The sixties were a great time to be young. Will kids today say that about the 2020’s?
Here is a good perspective from Thomas Sowell: http://www.mediaaccess.hu/userspace/pdf_files/Minimum%20Wage%20Exploitation.pdf
But the cost of most goods and services has gone down since 2009. Really, the only services whose prices have gone up faster than wages since 2009 have been medical care, college tuition and textbooks, and child care. Housing and food have also gone up, but slower than wages.
In other words, the only goods and services whose prices have actually increased since the late 90s have been those in markets with the most government interference. Everything else—basically, everything that is actually subject to a free market—is the same price or cheaper than it was in 2009.
“Minimum wage” is a misnomer. Unless the government is going to guarantee employment, the actual minimum wage is always zero. All “minimum wage” laws accomplish is make it illegal to outlaw paid work for those whose labor is worth less than an arbitrary hourly rate.
I would imagine a substantial number of illegals have no interest in amnesty, and even fewer will if there is a $15 federal minimum wage. They do fine, by their standards, selling their labor on the black market with no taxes and no minimum wage, and will do even better when that black market explodes due to the increased minimum wage. So they’re expected to give that up in exchange for what? To avoid the minor risk of being deported? And compete for $15/hour jobs when they have no skills and don’t speak English?
Those who entered after the Reagan era, and been here since 1990....probably speak English and have some skills acquired. But like you say...once legal, you pay taxes and social security, along with healthcare costs.
I know in the urban areas of Virginia...they take home a serious amount of pay on landscaping jobs.
Your comparison about a new 1970s car to today’s price is not an apples to apples comparison. Consider how different they are in features, electronics, safety features (air bags?), mandated fuel efficiency, steel vs plastic, etc. All added cost. There are other factors beyond the cost to build ... including the fact that getting people to borrow in order to “own” a car increases car sticker prices. Also, dollar devaluation over time means that it takes more dollars to buy the same thing, all other factors unchanged.
But consider this in your thinking about whether $15/hr is the right number, or should the minimum wage be changed at all:
Current federal $7.25/hr = in place since 2009 or 2010. I did the following calculation:
Minimum Wage Valued in 2020 dollars
2010 ($7.25/hr) = 2020 ($8.59)
1976 ($2.30/hr) = 2020 ($10.45)
1968 ($1.60/hr) = 2020 ($11.89)
1956 ($1.00/hr) = 2020 ($9.50)
1938 ($0.25/hr) = 2020 ($4.58).
It interesting on how low the 1938 adjusted minimum wage was. Using that number as a benchmark, Today’s minimum wage earners being overpaid!?!?!?! And they may be eligible for all sorts of welfare benefits that are not figured into their wages!!! Guess what will happen to the income thresholds for welfare benefits after the minimum wage increases?
Also, the average price of a gallon of gas in 1938 was $0.20/gal; in 2010 = $2.79/gal; in 2020 = $2.25/gal.
Therefore,
1938 (1 gal/min wage) = 0.80
2010 (1 gal / min wage) = 0.38
2020 (1 gal / min wage) = 0.31.
IOW, in 1938 it took 0.8 of 1 hour minimum wage labor to buy a gallon of gas. In 2020 it only took 0.31 hr. Hence, for this one commodity upon that people consume and powers the economy, it looks like the minimum wage earner has done quite well.
The bottom line is that increasing the minimum wage will benefit only the giverment. A bigger financial issues are the continuing devaluation of US currency, excessive US borrowing, and upcoming national debt crisis. Arguing $15/hr with people is useless, they aren’t interested ...it’s ignorance and high emotion. After it passes, and all the bad things happen in the economy as predicted, no one will be accountable, ...there will be further efforts to get the giverment to fix the problem that the givernment created and continues to perpetuate.
I’m going to have to bow to your clearly superior mathematics. Neither art or math were subjects I was at all comfortable with. Especially math. I did get along well with time speed distance calculations, which as a pilot are necessary survival skills.
That said, the unintended consequences of a change in the minimum wage make it worth not tinkering with in my opinion.
There is no inherent reason why low-skilled or high-risk employees are any less employable than high-skilled, low-risk employees. Someone who is five times as valuable to an employer is no more or less employable than someone who is one-fifth as valuable, when the pay differences reflect their differences in benefits to the employer.
This is more than a theoretical point. Historically, lower skill levels did not prevent black males from having labor force participation rates higher than that of white males for every US Census from 1890 through 1930. Since then, the general growth of wage-fixing arrangements: minimum wage laws, labor unions, civil service pay scales, etc. has reversed that and made more and more blacks unemployable despite their rising levels of education and skills: absolutely and relative to whites.
In short, no one is employable or unemployable absolutely, but only relative to a given pay scale.
Good morning Wita -
No magic to the numbers. My short analysis helps show that all the noise, tears, and emotion has displaced history and facts to determine whether the MW should be adjusted and to what level. The first fact is that federal givernment monetary policy devalues currency. Therefore, as long as the givernment devalues currency, a fixed MW shall be devalued. It’s great theater and far easier to get in front of the cameras, shed fake tears and telling everyone how great you are for helping those struggling MW people, rather than deal with the destructive monetary policy of the feral givernment.
Therefore, the first question is - to what level does one adjust the MW that has been fixed for the last 12 years? And the second question is, since a MW working family is eligible for all sorts of feral givernment prizes (like Earned Income Child Credit, rent assist, food stamps ... renamed to “SNAP”, as in Suckers Need A Prize) should the MW be calculated based on all those additional payments?
The table I provided shows that the answer to the first question is that it depends on the MW starting year is used to calculate. In every case, not one came to $15.00, a number the table shows proves the $15.00 was pulled out of someone’s donkey. What was most surprising to me, is that if one goes back to 1938 when the ever generous FDR had the MW first set at 0.25/hr, calculating the rate of inflation from that point ... MW workers are ahead far ahead of inflation. And since there were no givernment prizes in 1938 like the ones available today, certain MW workers today are making even more. So until the current MW floats down to the 1938 baseline, our country would be well served to not raise the MW, and instead focus on getting rid of monetary policy that is built on devaluation. Of course, my opinion would never get anyone elected because it is easier for givernment to give away prizes that makes people temporarily feel good - believing the givernment really cares for them. One of FDR’s lasting legacies.
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