The federal minimum wage is rising to $5.85 this week, up from $5.15. The change is part of a plan to give minimum-wage workers an additional 70 cent boost each summer until 2009, when the minimum wage will be $7.50, or about $15,000 a year before taxes and without taking time off.
The poverty level in the us is around $10,210 a year.
The effect that a minimum wage increase will have on the economy is hotly debated. Some say it will cost jobs and raise prices, others say that it won’t. We’ll find out.
Federal Minimum Wage Rising This Week [Washington Post]
(Photo:GrooverFW)
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@roothorick: You make $6.95 an hour at WalMart? You’re getting screwed. I know several WM employees, some brand new, making $7.75 an hour and we’re in lil ole poor Mississippi where the cost of living isn’t high.
@STEVIED Hey, has it occurred to you at all that the prices of consumer goods are currently being dragged up by more than in increase in minimum wage?
Things like transportation costs have gone up dramatically with rising gas prices. I’ve been noticing the price of things like meat and fresh produce going up dramatically as gas prices rise. But then, it sounds like you haven’t eaten a meal at home in years, so you wouldn’t know what’s happening to the prices in the supermarket, now would you?
You’re whining about an increase in minimum wage, an increase in your fast food, the fact that your favorite restaurant is raising prices to pay employees a competitive salary that must be above minimum wage to begin with, so he can compete with the chain down the streeet. That is called capitalism. Survival of the fittest. Competition. How much is going into his pocket if he has to raise the price of each entree to pay people $1.50 an hour more? Minimum wage went up from $5.15 an hour to $5.85 an hour, not to $6.65 an hour. So either he was paying them under the table and less than the federal minimum wage, or he’s not very good at running his business. Perhaps a better chef to offset the chain?
You’re whining about the hamburger chains on the highway offering $8.50 an hour and now $9.50 an hour to try to lure employees. Perhaps you do math in an alternate dimension. But $9.50 an hour is WELL above minimum wage and in most states, you can still get federal energy assistance on that kind of wage, especially if you have a family to support, or you don’t have 15 roommates to offset the price of fuel oil in winter. Has it occurred to you that they’re paying so much over minimum wage because otherwise, they couldn’t even get high school drop outs to work under such conditions? In a fast food place, one second you’re emptying the garbage bins, the next second you’re unclogging the toilet the local kids threw every tube of toilet paper down and the next second you’re making someone’s burger. And you’re still making less than a janitor at the NY Times or the Pentagon. You’re even making less than most garbage men start at.
You can whine about the increase all you want. But you have to pay employees that don’t live with mom and dad enough to afford the insurance on the van they’re living in. Which is just about what people who make minimum wage can afford to live in.
But Stevie, think. Have you looked at your electric bill lately? Look at the rise in price per kilowatt hour that we’ve all been hit with as gas costs rise. Eat at home for once, so you can see what groceries cost anymore. Don’t go on about the sale items, those are loss leaders. They’re sold below cost to get people into the supermarket and buy other necessities that will make a profit for the store.
One last thing… If the minimum wage increasing for the first time in ten years is the reason for ALL inflation, then why has there been any inflation in the last ten years?
Your reasoning is faulty.
finally, the minimum wage will catch up somewhat to inflation!
Why is that black & white thinking is used instead of analog arguments – a
I have no idea why the above posted. Sorry about that. The point I was going to make was “Why do people use the argument that supporting a higher minimum wage is akin to socialism?” Even in socialism, one benefits from receiving an education, it’s just not a monetary benefit. A doctor wouldn’t have to engage in the brutal physical labor of a farmhand, for example. I think the problem is one of status. We have confused the amount of personal wealth with the quality of the person. If you aren’t wealthy, then nothing else you accomplish has merit. Therefore, some people want others to be as poor as possible if that situation leads to them becoming marginally more wealthy. The whole idea of business as a vehicle to wealth didn’t seem to become widespread until the last 40 or 50 years. In the great olden times, owning a business was a way to subsist, and if you got wealthy, you were part of a very small minority. People who bullied their way into wealth were seen as, for lack of a better word, tacky. Gordon Gecko was a parody, people! A clever slap at the disgusting profiteering of the 80′s. For the record, I see myself as an FDR democrat. Government serves the people by providing what they cannot accomplish as individuals. It is there to counterbalance the power of business. It provides jobs in times of economic weakness, social services for those that can’t afford them, war time protection, and peace time prosperity. It doesn’t hire contractors, it punishes American companies that outsource, and it sure as hell doesn’t grant corporations the rights of the individual. I know that everyone has a different view of government, and that’s how it should be. It’s a construct, based on mutual agreement. It just disturbs me that it is moving in the direction of elites and peons with nothing in between.
So, give me a number. What is the amount that minimum wage needs to be? $10? $12? $15?
If minimum wage were $15, would people complain that it needs to be higher? Be honest.
Question for any economists: what if the minimum wage was directly tied to the housing market (both ownership and rental)? It seems the most basic expense is keeping a roof over one’s head, so would that translate into a “fair” minimum wage?
if minimum wage was $15 then i think that would be a start at making people happy. the reason i get paid so little is because my boss is allowed to pay me a low wage for hard work that he makes a killing from, and hes still uptight about ‘man hours’. ive worked a job at 15$ an hour and i had enough money to pay rent, day care, phone/cable/internet, buy groceries, gas, heat, water, and natural gas etc. and still have money to go out and do something fun. that stuff adds up and there is no way i could do it on $9 an hour without the help of my girlfriend.
it kind of sucks but there are people who are WAY worse off than me, so i try not to complain. i say just hike the minimum wage, dont make my time spent making a company more and more money seem so worthless. maybe minimum wage should be based on what a company makes in a year, with an absolute minimum of $6.85(ohio).
If I’m not wrong, most states’ minimum wage are already around the $7 mark. So this will in effect have little consequence.
@kditty:
There is your problem. You shouldnt be paying for daycare. You should be staying home with your kids while your husband works or he could stay home and you can work. But I guess you were irresponsible and had a kid you couldnt afford. Really it makes no sense to work 40 hours a week when 38 hours pays for daycare.
@skrom: Nice bunch of assumptions there! So by your assessment, only the very rich should reproduce? Very democratic. Also, I believe kditty is male.
If childcare was subsidized this wouldn’t be a problem and people wouldn’t blame parents for being poor because they have to pay for childcare. Come on.
Nope, just those that are financially stable or willing to make sacrifices(cable, internet, “fun”).
Oh my God. Why is it the first solution of problems for half this country is to run to the government? Many people *would* have a problem at the disgusting notion of paying taxes so the government can take care of irresponsible people’s children.
Jesus Christ when did Consumerist become a socialist haven?
While it is true most jobs pay more than the minimum wage, if you wanted make a change that would address the income of the lower wage worker it would be to get rid of the income tax on income under $20,000.
The lost income could be made up by not only raising the taxes on wealthy, but also by actually going after them and collect the taxes. Close the loopholes and make corporations actually pay their due. Why has it seem to become taboo to suggest that the rich, who get enjoy the sweetest fruits of living in America, not pay for it?
If you make $15,000 a year and the government takes $1500 off the top, a fifty cents increase in your hourly rate really doesn’t mean much.
… and the McJobbers rejoyce!
I used to work in one back in college, I wish I was paid $7.50 and hour.
@nan: Awesome Mr. Yuk avatar!
@wickedwaltz:
“The lost income could be made up by not only raising the taxes on wealthy, but also by actually going after them and collect the taxes.”
The wealthy already do pay taxes, and a considerable chunk of taxes at that. The ones who would be hurt most by an action such as this would be those in the 21,000 to 100,000 range, who would wind up footing more of the bill. Unfortunately, ‘wealthy’ is an elusive thing to define. To many, someone is wealthy if that person has more money and things than they do. How do you define ‘wealthy’ to make them pay more than their fair share? How is it more fair to charge someone 30%+ of their income, because you consider them ‘wealthy’?
“Close the loopholes and make corporations actually pay their due. Why has it seem to become taboo to suggest that the rich, who get enjoy the sweetest fruits of living in America, not pay for it?”
Despite what everyone is told, corporations do not pay taxes, they simply collect them. Any tax ‘paid’ by a corporation has come from an individual, whether it is payroll tax, the embedded tax, or any of the other taxes out there.
Wouldn’t the simpler solution be for people to take responsibility for their actions? Not to sound heartless (I have a heart, it’s just very cold), but perhaps people should look at their lives and why they are where they are. If you can’t afford to have a child at this moment, maybe you shouldn’t. Instead, wait until you are more financially stable. If you’re a college kid working your way through school (as I did), make sacrifices. You’re going to college for an education, not to live the MTV Springbreak life. Live without cable, get an aerial antenna if you must have television. Don’t buy/rent movies, go to the library. Make a few minor sacrifices now to live better tomorrow.
The problem with this country is we have too many grasshoppers and not enough ants.
@ihatemylife:
I don’t know where you’re living bub, but nearly everything in north Florida is 10-15% more expensive than it was a year ago.
Great. Now let’s watch the inflation that results from the mandatory 11% raises. Doesn’t anyone realize that this money has to come from somewhere?
Every time the min wage rises anywhere, the resulting backlash is always people screaming about inflation and higher prices and always proves to be false. The truth is giving these people a nominal raise will not go into savings, they will go back into the economy, which in the end, strengthens it. The economy is successful when there is a constant flow of money so the rich people are more of a hinder to it by hoarding money than the poorest who spend it.
@rocnrule:
Yup. That is probably one of the most asinine comments I have ever seen. All rich people have huge money bins with dollar signs on top, just like Scrooge McDuck, where they hoard their money, and occasionally swim through it. Sure.
They don’t possibly reinvest that money in ventures that will make them more money, with the side benefit of helping those in whom they invested. Nope, couldn’t possibly do things like that. That would do a lot more for the economy than impulse spending, so there’s no way they could do that.
@vladthepaler: Of course. It comes from money trees that companies own!
I just know that in the 1890s, there was no minumum wage in the US. In the 1950s there was. I know which decade I’d rather have lived in.
$5.85 an hour that sucks
here in Ontario, Canada, minimum wage is $8.00/hr.
and is currently in progress of possibly being raised to $10.00/hr.
as of this moment $1.00 CDN = $0.95 USD
so $8.00/hour CDN = $7.64/hour USD
@markwm:
You’re right, however most rich people invest in rich companies, who in turn invest in bigger companies, and aside from the taxes, very little of that trickles down to the rest of us. Sure some people with wealth do share, but the majority try to keep the money/power amongst themselves. Raising the minimum wage forces those people to share, and it may hurt ma and pa stores, but they generally have few employees. The fact remains, economies do not suffer in the end.
@lorddave: When you say irresponsible do you mean irresponsible because they had sex or irresponsible because they didn’t go to the trouble to have an abortion?
@rocnrule:
The very fact that those businesses that are invested in exist helps the economy. Those businesses have to have employees, they produce consumable goods or services, and despite your statement, they do a lot for development in their communities. Just because they don’t hold a Ted Turner-style press conference every time they make a donation, that does not mean they do not.
Also, the economy is not a zero-sum game. Person A having money does not automatically mean Person B will not. Therefore, a rich person being rich does not mean a poor person cannot have money.
Raising the minimum wage does not ‘force the rich to share’, it artificially manipulates
the economy. While there has been no definitive evidence presented that mandatory minimum wage increases affect the economy on a macro level, little attention is given to the micro-economic level, where it can and does have a grave impact.
Let’s look at it from a different perspective. I own Widgets Inc. My competitor down the street, Doodads Unlimited, offers generally the same product I offer, only at a higher price. I do great business, but he does terribly. He then gets the idea to lobby the city to set a mandatory minimum price for widgets. I now have to sell my widgets at the same price DU does. My customers now incur the higher prices, which they have to cover somehow, more than likely by passing it on to _their_ customers. This can cause loss of employees, freeze on hiring, slowing of business growth, etc. The results of this may not be immediately evident, because it’s difficult to quantify a decrease in growth of business, or a loss of potential jobs.
Now, how is that any different than a minimum wage? Labor is a service offered, a product. By mandating a minimum for that product, it is going to have an effect on the economy. The only real difference between a widget and labor is that an emotional spin can be put on labor. You can show faces and say things like, “Ralph works two minimum wage jobs just to support his family of 6. Ralph, how do you do it?” and then get Ralph’s response that tugs at the heart strings. Unfortunately, as sad as Ralph’s plight may be, that should have no bearing on what he is paid. The quality and quantity of his work should determine that. Ralph’s life decisions are the only things that have a bearing on his situation, and he needs to reassess them, not expect his employer to do it just because he needs it.
@Jesse in Japan:
It’s not a binary situation where you can say, “Have sex and have a child or not have sex and not have a child.” To say that the option is either to not have sex or to have an abortion is a willful misrepresentation of the situation and overlooks a myriad of options: birth control, adoption, family support…
I can’t speak for LordDave, but I would say the irresponsibility comes from having a child that cannot readily be supported. To expect someone else to provide the means of support is irresponsibility. To support the child to the best of your means once it is here is a sign of responsibility. Knowing that you cannot raise the child properly and putting it up for adoption is a sign of responsibility.
Birth control is not 100% effective, but it has a higher effective rate than is evidenced by the number of children born into situations where they cannot be supported, and birth control is definitely cheaper than raising a child. It just comes down to personal responsibility and accountability.
As I said in my previous post, business is not there to pay a person what he needs to survive. It is there to survive in and of itself. Part of this survival involves a symbiotic relationship in which a person provides his or her time in exchange for money. Both parties must find this equitable for it to occur. If a person of sound mind and body takes a job for minimum wage, he is agreeing that his time and skill set is worth the bare minimum legally allowable to be paid. The truth of the matter may be that his time and skills are actually worth less than this, but the business cannot legally pay him his actual worth. This is all totally independent from what the person may need to sustain himself and his family. In this case, the person needs to improve his skill set to make his time more valuable.
It’s not going to cost anybody jobs. Economically, the real minimum wage is around $7, thought that’s not the law. Congress could raise it to $7.25 tomorrow and nothing would happen to the job market.
Why is it that when congress mandates an increase in cigarette prices (through taxes), everyone gushes about how great it is that said price increase will discourage smoking, and when congress mandates an increase in fuel prices (through taxes and mandated additives), everyone gushes about how great it is that said price increase will discourage people from buying polluting SUVs, but when congress mandates an increase in labor prices (through the minimum wage), everyone rushes to their keyboard to dismissively sneer that this won’t result in fewer hirings, more firings, or any other reduction in the consumption of labor?
Are we to believe that people care about the cost of their cigarettes and their gasoline, but turn a blind eye to the cost of their employees?
@markwm:
I have to agree on this one – I am 28 and have been having sex now for ummm well for a while. And I use proper birth control methods – why, because I cannot afford a child right now. I would love to have a child, in fact my g/f and I have discussed having 2 or 3 but no more. But right now we are both working 2 jobs to pay off debts incurred when we were stupid and putting money away. This is called being responsible.
With that said – I still believe that the minimum wage is all that separates us from Mexico. You want proof that the markets can’t be trusted to do the right thing – Levi’s moved there operations to Mexico and have reduced cost nearly 48% – the saving passed to US consumers – We now pay more for Levis.
Or how about Outsourcing – jobs that should go to young workers or those needing jobs at an entry level position are outsourced to overseas markets where they can pay reduced rates for labor – saving to US consumers – nill! The result is a loss of American Jobs and hurts us in the end. Why because fewer jobs = less consumer confidence. That makes the market sluggish.