At Least Someone's Getting A Raise: Minimum Wage Rises To $7.25
Great news, laid-off Wall Streeters, minimum wage work just a got bit more lucrative! As of yesterday, the new minimum wage is $7.25 per hour.
The law, which affects about 4.5 million workers among a labor force of 129 million, has prompted a debate over whether the mandate to boost wages will hurt or help the economy. Some labor analysts say it could put more financial strain on small businesses, forcing some to cut jobs. "The timing of this is not great in the middle of a recession," said John A. Challenger, chief executive of Challenger, Gray & Christmas, a Chicago-based outplacement firm. "Is it better to create more jobs at the lower rate or fewer jobs at the higher rate?"
Others, though, say the raise is badly needed to help low-wage earners, the majority of whom are adults, keep up with rising food, housing and fuel costs. They regard it as a stimulus that could help reduce the growing savings rate and increase consumer spending, which represents two-thirds of the gross domestic product.
The increase "could not have come at a better time," said Heidi Shierholz, an economist at the Economic Policy Institute. But even with it, she said, minimum-wage workers will be paid only $14,500 a year, well below the federal poverty line of $17,346 for a family consisting of an adult and two children.
So why is Congress raising the minimum wage during a recession? It wasn't intentional. Back in the halcyon days of 2007, when children and pets pre-qualified for mortgages and the economy was all apple pie with extra whipped cream, Congress agreed to raise the minimum wage over three years. In 2007 the minimum rose from $5.15 to $5.85; last year it rose to $6.55; this year's increase is the final step. Even with the boost, minimum wage workers still only make a paltry $14,500 each year.
Some Attack Timing of Minimum Wage Hike [The Washington Post]
(Photo: Tengaport)
Post a comment
Comments:
I wish I could get a raise. I wish I had the balls to ask my boss why I get paid only $9.50 an hour when the last assistant manager got paid $12.50. I'm even more qualified than he was.
*sighs*
See the spin. They say it equates to well below the poverty level for a wife and two children. Maybe if you make the minimum wage you should not have a wife and two children? If you do maybe the wife should work?
The $14500 figure is based on 40 hrs/week and 2 weeks vacation per year. I think if I was making minimum wage I'd put in more hours than that. Though I suppose there may be limitations such as being a single parent or the amount of hours your employer will give you.
Exactly. Minimum wage is for people with zero skills not a family man. That's why you are supposed to graduate from school. The only thing this does is increase the taxes they collect and decrease jobs over all.
If McDonalds (or whoever)only has $14/hr to pay for their help, now they don't have enough to pay for 2 workers thanks to the federal government dictating how much someone with zero skills is worth.
And now companies, who are stuck in the recession, will lay off more workers so they can stay afloat! Nice work!
@yesteraeon: I doubt many employers are giving overtime right now to minium wage employees. They probably will just schedule a little under fulltime and have them work part time. That would be the typical crap a company will pull. They also don't have to pay benifits. It also makes our fake UnEmployement numbers look great.
Minimum wage jobs arent just for people with "zero skills" who havent graduated school. Some people, such as myself, hold minimum wage jobs that pay for college.
And besides, jobs are hard to find. You have to take what you can get. You arent always going to have a $20/hr job waiting on you as soon as you graduate school.
@yesteraeon: And a lot of minimum wage earners are part time, so they work maybe 20 hours a week. It's a bullshit statisic, true
@Joe Lachiana: What makes you say zero skills? I've known people with college degrees who work minimum wage at Starbucks or whatever because they can't find something better. They DID graduate from school and now they have debt.
Seriously man, take your high horse attitude and shove it.
@SabreDC: The unemployment rate is already much higher for HS drop-outs and those without degrees. I think it is a least double.
I have to say I was shocked to learn on Who Wants to Be A Millionaire the other night that the minimum wage in America was only $6.55 and that it was raised to get to that level. I guess we're lucky minimum wage here is going up to $10 by the end of 2009.
@Stefanie Walsh: It really depends on the cost of living in your area. I live in Alabama and can hold down an apartment and all my utilities with some left over on $7.25 an hour, whereas someone in California couldn't do it with any less than say $10 an hour.
@Skankingmike: Forcing an increase CAN be bad because you are giving it to relatively unskilled workers for that position. As a worker's skills increase he will them be worth more to a employer and then have actually EARNED the wage increase.
The problem is not giving a raise it is forcing the raise on employees that may not generate the revenue to make it worthwhile to keep them.
When someone pays you minimum wage, what he's saying is "I'd like to pay you less, but I can't."
@Joe Lachiana: If you've seen the McMansion that's owned by the guy who owns 5 McD's in my area, you'd suspect he could pay his employees a bit more than minimum wage.
@frank64: Because no one could have had a spouse and family or a higher-paying job before having to work for minimum wage, could they? And as far as having two full-time working parents, check the average costs for daily child care. A friend of mine quit her job after she and her husband realised that they were spending a hundred dollars more on childcare than she made every month.
@frank64: The "spin" is because of the official number for poverty limits. A single person making $15,000 a year (as one would working 52 weeks a year, 40 hours a week, at $7.25 an hour) is still pretty damn impoverished, but it doesn't meet the federal guidelines.
@Joe Lachiana: Somehow, miraculously, there are companies that operate businesses similar to McDonald's and don't pay their employees minimum wage. In-N-Out burger - which is CHEAPER than McDonald's in terms of prices - starts their employees at $9.25.
@frank64: I have been with a company for over a year, learned every position, and been promoted so I have more responsibility over other employees. I'd say that is skilled at my job. I am worth more than an entry level person because I know how to do 6 of 6 positions instead of 1 or 2. Guess how much more I make? 0. When companies start rewarding skilled laborers I'd agree minimum wage should not go up.
@heart.shaped.rock: Then everyone should go get themselves 5 multi-million dollar businesses then. Not that easy is it?
I am sure getting to the point where you own 5 McDonald takes years of saving, taking risks and having some savvy. After earning this achievement I would expect to live relativity well. Otherwise why bother?
@youbastid: There are other examples too. I know Costco pay significantly more than BJ's and from what I remember seems to do real well profit wise. I think the employees are more productive.
The premium paid means that they get higher quality people - it is a choice. I think if you take away the choice, just legislated the higher rate for everyone the premium worker sees little value in the premium work- and thus a excellent employee becomes a normal one. Or gets promoted. Either higher minimum wage isn't the factor just the normal give and take between business and employees - the way is SHOULD be.
Raise your hand if you make minimum wage.
I have to wonder if this effects those paid less than minimum wage, like those in the service industry whose base pay is made up partially by the tips they earn. Does there wage go up as well, or are they stuck earning the very minimum wage with no raise and have to make up the rest through better tips?
@CharityCaecus: Most companies don't or shouldn't treat you like this. Leaving is the best option. How can you be promoted and there be NO wage increase? Your employer is making a mistake that will cost him quality employees.
@CharityCaecus: Interview around and see how much more you can get and what the conditions are like. If you think you want to stay where you are, ask for a raise and tell them for how much. If they whine tell them you already have better offers and see what they say. They'll use and underpay you for as long as you let them.
@Eldritch: I suspect your boss can smell your fear. Just ask politely. If you don't like the answer and/or your boss won't negotiate then start looking elsewhere.
@JulesNoctambule: plus now she saves on gas mone, meals away from home during working hours if she didn't pack a lunch and car insurance should drop if she isn't commuting anymore.
@youbastid: and actually i know one mcd's that pays a lot more than average - the one across the street from walt disney world pays usually about $2 more per hour than minimum wage because they are trying to compete with disney for employees. not that disney pays a lot, but the status on a resume is huge in the customer service world plus you get free entrance to the parks. mcd's has to provide incentive or no one would work there
I suggest reading an article called "What you need to know about the minimum wage"
Here's part of it:
An increase in the minimum wage will not benefit all low income workers. It will help only some of them at the expense of others. Why is this so? Well, economic law tells us that if the price of any good increases, people will want to buy less. This is true for gasoline. It is true for apples. It is true for iPods. It is also true for labor services.
@Joe Lachiana: All it takes to become a 'family man' is a borderline acceptable sperm count and a fertile place to put them - little to no skill needed. Unfortunately, many parents just don't have what it takes to get high paying jobs. I'm not saying the minimum wage should be raised to accommodate the breeding habits of employees (I'm against this), but it should be high enough for one person to be able to get by.
@Joe Lachiana: Walmart doesn't pay minimum wage but when I worked there there was a teacher with a masters degree and several other people held degrees in various things. Like three of them had associates degrees in networking.
@JulesNoctambule: It is not the norm-and people were making an argument for a "living wage" long before the recession. If you did not graduate from HS and go on to college or develop a skill(developing a skill may be the result of starting a minimum wage jog and advancing) you probably have made bad choices. I don't think you should be able to be guaranteed to be able to raise a family after making these choices. You want success to be a legal right and I think you have to earn it. You gave valid examples of why the wife wouldn't be able to work, but I have seen instances were the wife works a different shift part time(or full) has family babysit. I am not saying it works every time I am just saying it is possible to increase ones income and a family of 4 should not have one breadwinner making minimum wage.
The unemployment rate is around 5% for college grads and around 12% for less educated, so statics do kind of agree that is MUCH less likely you will have a problem if you are skilled.
I am not saying there is no one who didn't have a higher paying job and is now stuck with a lower paying job. I am saying the amount is not as high as you are suggesting. And if I am a PHD and work at a pizza joint I am still only worth whatever the going rate to make pizzas is. The owner should not have to pay me more because I am skilled somewhere else.
@skizsrodt: No. The minimum wage for jobs in which part of the income comes from tips (baristas, waiters, etc.) is $2.13 per hour. Hasn't gone up in about 15 years. Some employers may choose to raise those workers wages, but they probably won't. Why Congress hasn't focused on this minimum wage is beyond me.
$7.25? It's like $9.50 in Ontario right now with another increase to $10.25 coming march 31st 2010
@Cant_stop_the_rock: I make sub-minimum wage. But to be fair, I'm a short-order cook in a small town diner (my summer gig to help pay for books before next semester starts).
@utensil42: I worked as a server in an old Pizza Hut (as in the building was very, very old and falling apart). Despite the small town, tips + wages came out to almost $13/hour, and most servers don't report (get taxed on) all their tips. If I had worked in a bigger town/better establishment, I would have made much more.
Still half of where it realistically needs to be.
I know! When I was in high school stocking shelves at Whole Foods, quite a few of my co-workers had bachelor's degrees. Most were working towards even higher credentials. The "low-skilled" jobs (a term I find highly offensive, but I'll use it to amuse some of you) are perfect because they quite often offer really flexible hours.
On the other hand, the remainder of my co-workers never went to college and have worked in low-paying jobs all their lives.
@frank64: I think after you have been in the workforce long enough to get married and have two children you will have reached a level of skill which means even in a setback you will be worth more to SOMEONE than minimum wage. You should not be competing with HS kids as far as skill level by the time you have a family.
Most skilled people I know that have a setback are not affected by the minimum wage anyway because although they might make much less, they are still going to make more than that. If THEY were forced the increase wouldn't help them to much because they would be in deep trouble anyway.
The minimum wage was not set up to raise a family- simple as that.
@komodork:
Ontario, CANADA? How can you even begin to compare the two?
"Well, the minimum wage in Lithuania is..." Why does it matter?!
"BUT HEY the number is bigger on your pay stub so it's all good." Yes, but now there will be FEWER pay stubs, so what is good about that?? Companies forced to pay more money that they do not have will now lay people off - and guess who they will lay off? The employees at the bottom of the list. Cause ... effect.
@frank64: It's one adult and two kids, so single parent. Some (not all) end up in that category through no fault of their own. Situations change, and you can't return kids.
Yeah cause someone with no skills to do anything are worth $20/hr. A grade 4 education is all you need to see that this is crazy.
@Cant_stop_the_rock: I'm unemployed, and making minimum wage at a fraction of my previous salary is looking better all the time.
@skizsrodt: They're supposed to make at least min. wage after tips. For managers who don't ensure that, there will be no effect.
Which is pointless because stuff just goes up in price to accommodate such changes. BUT HEY the number is bigger on your pay stub so it's all good.