Minimum-wage hike the wrong way to lift working poor

posted at 12:01 pm on February 14, 2013 by Ed Morrissey

And yes, that matters, not just for humanitarian and spiritual reasons, but also for social accord and cooperation.  A truly healthy society would have the working class within a dignified living standard, and even the poor able to access essentials such as food, shelter, and health care.  Fortunately, while we aren’t perfect, the standard of living for the poor in the US rivals that of the working and middle classes in some other Western nations, and has for decades.  While poverty has increased in the six years since the Great Recession began, a not-unexpected outcome, part of that has been an issue with definition; the Census Bureau focuses on income level rather than purchasing power, which has increased steadily across all income levels.  The problem during this era has been chronic unemployment and an expanding class of hopelessness that has lowered wage competition, rather than some kind of exploitation of the poor by the wealthy.

That’s why Barack Obama’s call to raise the minimum wage in Tuesday’s State of the Union speech seemed like such a non-sequitur.  At least the last time this subject arose, we had enjoyed several years of job-market expansion and increased competition.  With businesses laboring under ever-increasing costs (thanks to ObamaCare and expanded federal regulation on energy), this seems like the worst time to propose hiking costs by 24%.  As I argue in my new column for The Fiscal Times, it had the opposite effect of its intent the last time we tried it — and young workers are still paying for that policy to this day:

And that’s the big problem with these proposals.  They don’t make people more valuable on the job market, especially those with no experience or proven skills.  Minimum wage hikes make it more difficult for them to find jobs, especially in the short run.  The raise proposed by Obama would increase just the straight wage cost for a business by 24 percent in its entry-level positions (and probably in other positions near that level), which businesses would have to absorb in one of two ways.  Either they raise prices without providing consumers with a commensurate increase in product or service value, or they have to reduce staff to cover the increase.  The former is inflationary and harms their competitive edge, while the latter gives businesses less flexibility to take risks, especially on new hires. Forced to pay a higher cost for employees, businesses will stick with experience rather than look to younger workers entering the workforce.

Consider what happened when Congress last passed a minimum-wage increase in 2007.  At that time, overall unemployment was 4.7 percent and the job market favored workers.  Among those between 16 and 19 years of age, the jobless rate was 15.3 percent, on the lower end of the range seen during the previous four years, the highest rate of which had been 19.0 percent in June 2003 during the previous recession.

By July 2008, overall unemployment had jumped to 5.8 percent due to the then-moderate recession that had begun in December 2007, but youth unemployment rocketed upward by more than five full points to 20.7 percent.  As the wage floor stepped upward to its present level by July 2009, the youth unemployment rate rose to 24.3 percent.  And while the overall unemployment rate has declined from 9.5 percent at that time to 7.9 percent now (albeit with a plummeting workforce masking the true nature of chronic unemployment), youth unemployment remains at nearly the same level as in July 2009, at 23.4 percent.

Why has this been the case?  When forced to pay more for labor, businesses will insist on getting more value for their money – experience and proven skills, even in entry-level positions.  Younger workers never get a good chance to earn their stripes.  That has long-term implications for their ability to earn in the future, as well as the social costs of high unemployment and restlessness of youth.

The long-term social implications of that huge increase in youth unemployment will reverberate for decades.  Even the short-term implications mean more cost for law enforcement, government subsidies, and a decline in investment power for the parental generation as it has to shift capital from retirement investment and risk into adult-child support.

The Wall Street Journal calls a minimum-wage hike the wrong approach. If government wants to intervene on behalf of the working poor, it should work through the tax mechanisms already in place, such as the EITC:

Republicans have supported this tax credit because eligibility is based on working and earning income. Democrats hail the EITC because it’s refundable, meaning that a low-wage family without any tax liability nevertheless can file a tax return and get a check from the government. In a state such as New York, a single parent raising two children on the minimum wage would see their annual wage of $15,080 jump to $21,886 with the EITC, for an effective hourly wage of $10.52.

Compared with the EITC, government-mandated minimum wage increases have major flaws. One is targeting: According to the Census Bureau, 60% of people living below the poverty line didn’t work last year. They don’t need a raise; they need a job, period. And among those who do work and earn the minimum wage, researchers at Cornell and American University have found that the vast majority live in households above the poverty line.

This partially explains why numerous studies have found no relationship between a higher minimum wage and lower poverty rates—because, unlike the EITC, the benefits generally aren’t accruing to those in poverty.

Another reason a higher minimum wage doesn’t reduce poverty rates is that a hike in hourly pay doesn’t necessarily translate to an annual income bump. If employers faced with suddenly higher labor costs reduce hours or employment, take-home pay will decline. Economists writing in the Journal of Human Resources in 2005 found that to be the case, with the “losers” from a higher minimum wage—who moved closer to the poverty line after the policy was passed—outnumbering the winners.

Not only that, but like most regulation and government intervention, it disproportionally hits small businesses.  Large businesses can absorb regulatory costs more easily through economies of scale, while small businesses have to make more significant cuts or price increases — both of which make them less competitive against the very CEOs against whose salaries Obama railed in the SOTU address.  CBS interviewed one such businessman in Texas about what a minimum-wage hike would do to his restaurant:

At Cafe Joey’s Italian Restaurant in Aubrey, Texas, owner Joe Picca is not OK with the president’s proposal to increase the minimum wage.

“Right now, we’re barely making ends meet as things stand right now,” he says.

Picca has 13 employees at his restaurant; five of them earn minimum wage. Picca says the higher costs would be crippling.

“I have actually a couple of choices — two choices,” Picca says. One is to close down. The other choice is to increase prices.”

But even if the minimum wage is raised to $9, the income of a family of four with one worker would still be nearly $5,000 under the poverty line of $23,550 — although federal tax credits would ultimately bring the family slightly above that level.

So how do we lift the working poor in public policy?  As a hiring manager for more than a decade for entry-level positions, I’ve seen what works:

I spent 15 years hiring people into entry-level office positions for call centers, positions that usually paid above the minimum wage but reliant on it as a compensation basis.  When the economy was slack and investors discouraged, I would have a flood of applicants for every open position, including on one occasion an unemployed man with a doctoral degree, and an unemployed college professor on another.

There was no competitive pressure to raise the entry-level wage, and my employees didn’t get wanderlust at the wage they were being paid.  Most importantly, I never had to take a flier on an inexperienced but impressive applicant, thanks to the volume of more experienced candidates who were practically bursting through the door.

Read my conclusion at TFT for the answer, but in a nutshell, it’s this: there is no better program for lifting the living standards of the working poor than a properly regulated free-market economy that encourages investment and reduces the cost of entry, for labor and investors alike.  What we have had for nearly four years of Obamanomics and the Obama recovery is nearly the antithesis, and it’s reducing rather than raising living standards.

Update: I should have linked to the study done by David Neumark which underscores my points:

A higher minimum wage will likely reduce employment among the very low-wage, low-skilled workers that minimum wage proponents are trying to help. A large body of research illustrates the disemployment effects of minimum wage.

Moreover, even if many workers affected by a higher minimum wage would see increased wages and suffer neither reductions in employment nor hours, minimum wages may do little or nothing to help poor and low-income families. Minimum wage laws mandate high wages for low-wage workers, rather than higher earnings for low-income families. But low-wage work and low family income are quite distinct, because many minimum wage workers are in higher-income families, and many poor families have no workers.

Mandating higher wages for low-wage workers in high-income families, such as teenagers from well off families working a summer job, does nothing to help poor and low-income families. Indeed, if the job losses from a higher minimum wage are borne by minimum wage workers in poor, low-income families, minimum wages can have unintended harmful distributional effects — possibly increasing the number of poor or low-income families. Reflecting these issues, research fails to establish that higher minimum wages help poor or low-income families.

More at the link.


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Minimum-wage hike the wrong way to lift working poor

Yet they fall for it…every single time.

cozmo on February 14, 2013 at 12:02 PM

Obama acted stupidly..
Again.

Electrongod on February 14, 2013 at 12:04 PM

Do it! Everyone knows that employers are rolling in extra money and just don’t want to pay their employees a good wage. In fact, this is another way to force the rich to pay their fair share. ™

The Rogue Tomato on February 14, 2013 at 12:06 PM

Not if they don’t realize it. It is the right plan. He knows what to say.

tomas on February 14, 2013 at 12:06 PM

With the insane amount of goodies available for free on funemployment, and absent the requirement to work at least occasionally to continue drawing welfare, I am constantly amazed at some people’s willingness to apply for minimum-wage positions. Don’t they have a community to organize?

Archivarix on February 14, 2013 at 12:07 PM

Electrongod on February 14, 2013 at 12:04 PM

0bama acted smart, to further impoverish the stupid and make them dependent on the government him for their very existence.

cozmo on February 14, 2013 at 12:07 PM

The scary part is, this is 0′s best plan.

Bmore on February 14, 2013 at 12:07 PM

Bmore on February 14, 2013 at 12:07 PM

Its been his plan all along.

cozmo on February 14, 2013 at 12:08 PM

Obama is always a malicious propagandist dummy.

Schadenfreude on February 14, 2013 at 12:09 PM

Electrongod on February 14, 2013 at 12:04 PM

+1

cmsinaz on February 14, 2013 at 12:09 PM

Never assume good intentions from Obama. His destructive plan proceeds, apace.

May all who brung/kept him, and theirs, be utterly destroyed by him. YOU deserve NO less.

Schadenfreude on February 14, 2013 at 12:10 PM

Household income, wages, purchasing power are all wayyy down, adjusted for inflation, over the past 3 decades. Even the minimum wage was the equivalent of $10 an hour in the 80s. As per usual here, nothing in this blog post has any correlation with reality. Cute, though. See how far the “you filthy masses are already overpaid!” Message goes in 2014. Might be enough to overcome the gerrymandering!

Rainsford on February 14, 2013 at 12:11 PM

Never assume good intentions from Obama. His destructive plan proceeds, apace.

May all who brung/kept him, and theirs, be utterly destroyed by him. YOU deserve NO less.

Schadenfreude on February 14, 2013 at 12:10 PM

THIS

cmsinaz on February 14, 2013 at 12:12 PM

Minimum-wage hike the wrong way to lift working poor

Makes sense because the Obama Campaign isn’t trying to lift the working poor. They want people to give up.

forest on February 14, 2013 at 12:12 PM

Considering that PlaceboCare has turned 29 into the new 40 (in more ways than one), it’s not at all surprising that Teh SCOAMT wants to raise the minimum wage so that the suddenly-part-timers don’t have to try to find a second job to maintain their level of income.

Steve Eggleston on February 14, 2013 at 12:12 PM

What part of the Constitution authorizes the setting of a minimum wage?

That is a question never asked by the Democrats and rarely o by the GOP. They both seem to think they can do whatever they can cobble together a majority to support.

Charlemagne on February 14, 2013 at 12:13 PM

forest on February 14, 2013 at 12:12 PM

ding ding ding

this is why i love HA…the crew is bloody spot on!

cmsinaz on February 14, 2013 at 12:13 PM

I am watching my friend as he tries to guide his ex-wife’s son toward adulthood. He is working at a Little Ceasar’s Pizza that keeps his hours under 25/week Their policy won’t allow him to work for a competing pizza place. He got a second job at a carwash that also limits his hours. The scheduling is crazy stuff but the kid is getting a lesson.

DanMan on February 14, 2013 at 12:13 PM

This is such a no-brainer. But we are living now in the era of the Wedge Issue, and this is a big one that Obama obviously plans to use mostly to bludgeon Republicans in 2014.

At Cafe Joey’s Italian Restaurant in Aubrey, Texas, owner Joe Picca is not OK with the president’s proposal to increase the minimum wage.

“Right now, we’re barely making ends meet as things stand right now,” he says.

Picca has 13 employees at his restaurant; five of them earn minimum wage. Picca says the higher costs would be crippling.

I would almost 100% guarantee that all five of those employees are Hispanic. Even if one of them loses his job, the other four will thank the Democrats for giving them a raise, and hate republicans even more for voting against it.

What’s the average wage for an unskilled worker in Mexico right now? $3 an hour? How many more will flock to America if they can make $9 an hour, and who will they vote for?

rockmom on February 14, 2013 at 12:14 PM

It sounds good to the low-info voter.

Game over.

Ben Hur on February 14, 2013 at 12:14 PM

Years ago, I laid out why minimum- and prevailing-wage laws hurt the very people they’re supposed to help: If they have any effect on wages, they will also increase unemployment. The people who benefit most from those laws are the union workers who thereby eliminate potential competition.

The Monster on February 14, 2013 at 12:15 PM

Minimum wages don’t mean jack if there are no jobs to go with them. Even National Progressive Radio sounded skeptical when reporting this today.

RobertE on February 14, 2013 at 12:15 PM

And yes, that matters . . .

. . . and the fact that you begin with this speaks volumes about your readership.

lostmotherland on February 14, 2013 at 12:18 PM

Oh, and guess what else happens when 25% of teenagers are unemployed? They have no money to spend at the mall, the movie theater, the fast food place, the concert hall. And we wonder why the malls have turned into ghost towns and concert venues are struggling.

My daughter turns 16 in May and desperately wants a job this summer so she can have some money to buy the extra stuff I won’t buy for her, concert tickets, etc. She has no skills that are worth $9 an hour. So chances are she will be home all summer, doing nothing and spending nothing.

rockmom on February 14, 2013 at 12:18 PM

President Platitude really does not care about facts. I mean, he really does not care.

pat on February 14, 2013 at 12:18 PM

Next stop: 12% Funemployment™.

RoadRunner on February 14, 2013 at 12:19 PM

Too high of a minimum wage builds complacency. If people have to no reason to ascend for bettering themselves they won’t thus complacency sets in thus diminishing the drive in most.

I’ve come to understand “man will do that which is least required of him/ her to survive” but for a few who strive look around and you’ll see what I mean.

theblacksheepwasright on February 14, 2013 at 12:20 PM

But it sounds like such a good idea so you know it is the right thing to do.

Evil corporations are making too much money anyway, and they’re corporationy, and corporations are and are not people at the same time. And my cat was eaten by a corporation.

/Michael Moore
/Janeane Garfalo
/Matt Daaaaaaaaaaaaymohhhhhhhhhn
/Mr Ed

CorporatePiggy on February 14, 2013 at 12:20 PM

ooohhhh noooooo

2/3 of folks on minimiun wage are women and the majority are african-american those evil racist sexist gop won’t let us raise the wage
=lsm

cmsinaz on February 14, 2013 at 12:24 PM

So how do we lift the working poor in public policy?

Not our problem. They have to lift themselves. Dem and Repub policymakers can care or pretend to care all they want, if it makes them feel better about themselves. Life’s tough. Put on a cup and hit it.

Christien on February 14, 2013 at 12:25 PM

We are watching the documentary 2016 unfold as we sit here and post. He does not care, we must be punished. He doesn’t care if the military weakens. He does not care if iran and north korea nuke it up because he wants to lessen our nucleur capabilities. he does not care about us or the economy.

crosshugger on February 14, 2013 at 12:31 PM

Minimum-wage hike the wrong way to lift working poor

headline: Ed Morrisey
.

Makes sense because the Obama Campaign isn’t trying to lift the working poor. They want people to give up.

forest on February 14, 2013 at 12:12 PM

.
ding ding ding

this is why i love HA…the crew is bloody spot on!

cmsinaz on February 14, 2013 at 12:13 PM

.
Dittos.

But all attempts to convince poor people what is really going on, only gets the messenger HURT, one way or another.

listens2glenn on February 14, 2013 at 12:33 PM

Minimum-wage hike the wrong way to lift working poor

.
Well, maybe it will be enough to offset the millions of illegals already here, and more that will follow- who will further enslave the fate of the working poor.

/EOE

FlaMurph on February 14, 2013 at 12:34 PM

We’re all gonna be millionaires!!!!!!!

Little Boomer on February 14, 2013 at 12:34 PM

there is no better program for lifting the living standards of the working poor than a properly regulated free-market economy that encourages investment and reduces the cost of entry, for labor and investors alike.

Well, that’s just crazy talk, Ed.

BacaDog on February 14, 2013 at 12:34 PM

Household income, wages, purchasing power are all wayyy down, adjusted for inflation, over the past 3 decades. Even the minimum wage was the equivalent of $10 an hour in the 80s. As per usual here, nothing in this blog post has any correlation with reality. Cute, though. See how far the “you filthy masses are already overpaid!” Message goes in 2014. Might be enough to overcome the gerrymandering!

Rainsford on February 14, 2013 at 12:11 PM

Yes, because Ed’s message in this post was totally “you filthy masses are already overpaid!”

How about “if people are worth $9 an hour employers will pay them that much, if they’re not they won’t have a job at all.” How is it compassionate to impose a policy that results in 25% of people under the age of 20 to be unemployed?

And how about an energy policy that gets gas prices back down uner $3 a gallon so the low-wage workers aren’t putting their entire paycheck in their cars? It’s government policy as much as anything that is reducing purchasing power.

rockmom on February 14, 2013 at 12:36 PM

The truly ironic bit is that the new minimum wage would cause a full time employee with no dependants to be no longer eligible for the expanded medicaid under obamacare. Get the raise, then be on the hook for premiums and out of pocket expenses for insurance that they can’t afford to use.

rw on February 14, 2013 at 12:37 PM

Don’t forget obamas new universal free per-school plan….Not gonna cost a dime….

sandee on February 14, 2013 at 12:38 PM

. . . and the fact that you begin with this speaks volumes about your readership.

lostmotherland on February 14, 2013 at 12:18 PM

Most of whom are educated/enlightened individuals…you on the other hand are a mental midget. No wonder the motherland is lost.

Schadenfreude on February 14, 2013 at 12:38 PM

OOPS, pre-school not per-school, clumsy fingers…

sandee on February 14, 2013 at 12:38 PM

President Obama’s call for a raise in the minimum wage has nothing to do with alleviating the plight of the poor and everything to do with establishing an advantage in advance of the midterm elections. Republicans will naturally oppose a minimum wage hike because doing so makes no sense given current economic conditions. Democrats will support a hike in the minimum wage because then they can then accuse Republicans of waging a war on the poor. It’s about laying the groundwork for re-taking the House.

Please note all progressive Left economic policies are covertly aimed at taking, maintaining, advancing, and perpetuating their hold on power. Any benefits derived from various federal government programs and policies by any substantial portion of the American public are purely incidental. In fact, prosperity and its resultant positive effects on business expansion and employment reduce the number of people comprising the growing entitlement class, which is now completely dependent upon and invested in the continuation of Democratic policies; therefore, sustained private sector economic expansion is counter to progressive interests, and thus must be dampened and discouraged whenever practicable.

Republicans will, of course, play the role assigned to them by responding ineffectually to heated class war rhetoric. Bobby Jindal will give a speech decrying the GOP’s image as a the rich man’s party. Paul Ryan will give a clear-headed, fact-based presentation on why it’s a bad idea, which will be seen and heard by no one not a Republican. John McCain will plead for more bipartisanship. Marco Rubio will talk up his working-class, immigrant roots. Karl Rove will blame the Tea Party. It will occur to none of them to publicly question the motives of the White House for bringing it up in the first place, or to drive home the magnitude of the disaster coming our way.

troyriser_gopftw on February 14, 2013 at 12:41 PM

You want to help the working poor? then stop printing money. Every dollar printed collcetively reduces the purchasing power of that dollar. so if your name in Ben Burnyankme and you print $40 billion new dollars a month, then you reduce collectively the money that each citizens owns by the $40 billion. What this means to the poor working guy at $7.50/hr is that his $7.50/hr purchases less and less the more Burnyankme prints. Poor people get screwed the hardest by loose monetary policy. its like a defacto tax on all of us, but hits poor people harder.

paulsur on February 14, 2013 at 12:44 PM

Sorry, can’t help it for the lead pic. Boobs.

You can thank me later, or not.

I want my country back — yes, the USA
…willing to fight, and win, the ways and means are stirring soup.

It’s all funny until someone puts out an eye.

mickytx on February 14, 2013 at 12:44 PM

When some Democrat introduces the bill in the House to raise the minimum wage, I can’t wait to see what part of the Constitution is cited as authority, as is now required.
Probably the “General Welfare” clause. It will be interesting to have a statistic, after a few years where the ‘cite the clause’ rule has been in effect, to count the number of new laws that did NOT cite ‘General Welfare’ as the authority. Probably a very short list.

John_W on February 14, 2013 at 12:45 PM

Zerohedge flashback:

In Entitlement America, The Head Of A Household Of Four Making Minimum Wage Has More Disposable Income Than A Family Making $60,000 A Year

Fallon on February 14, 2013 at 12:52 PM

And yes, that matters . . .
. . . and the fact that you begin with this speaks volumes about your readership.

lostmotherland on February 14, 2013 at 12:18 PM

And that this is your sole contribution to the conversation speaks volumes about you.

Would you care to comment on the subject of the thread ?
It was a topic in the SOTU.

Jabberwock on February 14, 2013 at 12:58 PM

. . . and the fact that you begin with this speaks volumes about your readership.

lostmotherland on February 14, 2013 at 12:18 PM

.
The fact that you would post such a comment, speaks volumes about your “lack”.

listens2glenn on February 14, 2013 at 12:59 PM

Never assume good intentions from Obama. …

Schadenfreude on February 14, 2013 at 12:10 PM

Never assume honesty either. This has nothing to do with the poor and everything to do with union contracts indexed to the minimum wage. And the Republicans will fall for it again, arguing against the poor as the lefties reward their goons.

Fenris on February 14, 2013 at 1:00 PM

You want to help the working poor? Fine, educate them in basic economics. Eliminate hourly minimum wages and implement piece work, like what they do for “Starving Student” painters and movers. Management gives the customer a quote to do a job in X amount of time, then hires a small crew that can do the work but only in a much longer time than X. And don’t pay them for transit time between jobs, when they are not performing work.

When the workers get their paychecks and find out they earned far less than minimum wage–before taxes–they’ll get the message and decide to sink or swim.

Christien on February 14, 2013 at 1:02 PM

Artificial increases in wages consequently result in higher prices of the related goods, so nobody comes out ahead anyway
Then the goods won’t be sold to customers at the necessary levels to keep the employees on the staff, so one or more of them…ends up with no job, and therefore no wage.

22044 on February 14, 2013 at 1:06 PM

All I want is my taxes cut so I get my old wages back! THAT is how you raise the minimum wage you son of a monkey-fornicating tribal and head-chopping barbarian! RAARGH!

/sofreakingangryitsnotevenfunny

MelonCollie on February 14, 2013 at 1:12 PM

But it sounds so good to the thumbsucking leeches. Got to get Dem control of the house ya know.

fogw on February 14, 2013 at 1:12 PM

Why has this been the case? When forced to pay more for labor, businesses will insist on getting more value for their money – experience and proven skills, even in entry-level positions.

But even if the minimum wage is raised to $9, the income of a family of four with one worker would still be nearly $5,000 under the poverty line of $23,550

So this still keeps the working poor in poverty. Furthermore the recession hurt young workers not the minimum wage. When more experienced workers will work for minimum wage they get the jobs no surprise.

Raising the minimum wage to $9/hour is reasonable. Fact is few jobs can be moved anywhere that pay this amount. You can not have someone else do the job as they would make even more. But raising the wage might just get some off welfare into the job force.

Steveangell on February 14, 2013 at 1:12 PM

Artificial increases in wages consequently result in higher prices of the related goods, so nobody comes out ahead anyway
Then the goods won’t be sold to customers at the necessary levels to keep the employees on the staff, so one or more of them…ends up with no job, and therefore no wage.

22044 on February 14, 2013 at 1:06 PM

BINGO! Perzactly correct!

Katfish on February 14, 2013 at 1:14 PM

Raising the minimum wage will cause employers to hire less and demand more of their employees. I have worked enough part-time minimum wage type jobs in the last 50 years and seen firsthand the result

kemojr on February 14, 2013 at 1:19 PM

If Obama truly believes raising the minimum wage is important to raising the standard of living in the U.S., why not raise it dramatically?

What would be wrong with raising it to $100 an hour?

That would bring the lowest-paid full-time employee in America to a salary of $4,000 a week, or $208,000 a year.

Just think of how that would raise the tax base. It would solve the deficit problem Obama has created in no time at all, right?

nazo311 on February 14, 2013 at 1:19 PM

Yep. Raising the minimum wage simply raises the first rung of the economic ladder out of reach of people looking for that first job.

Nothing creates poverty like increasing minimum wages and the Democrats must create as much poverty as possible so they can be seen as “fighting” it. If they got rid of poverty, there would be nothing to “fight”.

crosspatch on February 14, 2013 at 1:21 PM

Singapore’s economy is booming and unemployment is <5? Guess what? They have fewer regulations and have eliminated the minimum wage.

Why isn't anyone in the GOP talking about eliminating the minimum wage? Does not one member of congress have any guts to state the conservative case against the minimum wage?

Why does the GOP always have to accept the premise of the left?

nazo311 on February 14, 2013 at 1:22 PM

BINGO! Perzactly correct!

Katfish on February 14, 2013 at 1:14 PM

Thanks! :)

22044 on February 14, 2013 at 1:23 PM

Obama cares about the poor?

Really?

And charity begins at home.

So…why are his relatives living in cardboard shacks or in heavily subsidized substandard public housing?

Or in public housing in general?

Even Obama and his direct family are still living in pubic housing.

If he really cared about the poor…

coldwarrior on February 14, 2013 at 1:23 PM

See how far the “you filthy masses are already overpaid!” Message goes in 2014. Might be enough to overcome the gerrymandering!

Rainsford on February 14, 2013 at 12:11 PM

Wish they would raise the minimum wage to $9/hr, just to watch how many more people hit the unemployment lines. Then you’d be whining over that.

It’s not sustainable dummy without massive layoffs. People are in business to make money. They don’t have the luxury of throwing it away like the government. They run out of money, they’re finished. Government runs out of money, they print and borrow more.

The Obama Seal of Approval, on any policy, plan or idea, is a sign of coming failure. It’s a proven fact. $6 trillion wasted and still counting.

fogw on February 14, 2013 at 1:25 PM

The Employment-Population Ratio peaked at 64.7% in April 2000.

Then the combined effects of the Dot Com Bust and the 9/11/2001 attacks dropped that ratio down to 62.0% in September 2003.

Then the effects of the 2003 Bush Tax Cuts turned the economy around and employment was back up to 63.4% in December 2006.

Then the Democrats took control of the House and Senate on January 3, 2007 and on January 5, 2007 introduced a bill to raise the minimum wage three times in three years.

That bill was eventually passed as a rider to troop funding (the U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 2007), and the minimum wage was raised three times in three years, from $5.15 per hour to $7.25 per hour (a more than 40% increase in 3 years).

1) Up $0.70 to $5.85 per hour on 2007-07-24,
2) up $0.70 to $6.55 per hour on 2008-07-24,
3) up $0.70 to $7.25 per hour on 2009-07-24.

And the Employment-Population Ratio dropped to:
62.9% in July 2007,
62.2% in July 2008,
59.3% in July 2009, and
finally settled to around 58.7% and has been at or below 58.7% for more than three years. There has been NO RECOVERY in employment under Obama.

Now they want to raise the minimum wage by $1.75 to $9.00 per hour … a more than 24% increase, or a nearly 75% increase from where it was when employment was 63.4% of our civilian non-institutional population age 16+. I don’t think the Republicans in the House will pass that, but if the Dems manage to push this through somehow, you can bet that the Employment-Population Ratio will drop even further.

ITguy on February 14, 2013 at 1:34 PM

fogw on February 14, 2013 at 1:25 PM

Better yet, bring back indentured servitude rather than this wage slavery charade. People should start at the bottom and work their way up, just like gramps did.

Christien on February 14, 2013 at 1:36 PM

How about “if people are worth $9 an hour employers will pay them that much, if they’re not they won’t have a job at all.” How is it compassionate to impose a policy that results in 25% of people under the age of 20 to be unemployed?

And how about an energy policy that gets gas prices back down uner $3 a gallon so the low-wage workers aren’t putting their entire paycheck in their cars? It’s government policy as much as anything that is reducing purchasing power.

rockmom on February 14, 2013 at 12:36 PM

Nothing about Obama is compassionate. Obama is responsible for the 25%. Heck 15% of all Americans that want a job can not find one under this mad man.

The minimum wage has nothing to do with it. The minimum wage is really only a portion of the cost of an employee. The other cost involved are often more than $9/hour. They have gone drastically higher under Obama thus the 15% unemployment.

Minimum wage workers are almost all part time jobs. With Obamacare this will be even more so.

But the simple fact is these jobs will mostly still exist if they pay $9/hour. They are not jobs than can be moved they are mostly jobs at farms, restaurants and stores. Some are factory jobs but those have already mostly moved or been replaced by robots.

Steveangell on February 14, 2013 at 1:39 PM

Nice to see MJ weighing in on the really important stuff.

Go find a ditch to die in.
lostmotherland on December 21, 2012 at 6:49 PM

Bmore on February 14, 2013 at 1:41 PM

Kos kids. Lol!

Bmore on February 14, 2013 at 1:41 PM

ITguy on February 14, 2013 at 1:34 PM

Thanks for breaking down the numbers. Here’s an idea: since discouraged workers who dropped out of the workforce aren’t counted as unemployed, don’t count them as part of the population, either. If those unemployed people don’t count as unemployed, then those people shouldn’t count as part of the population, either.

What do you say?

Christien on February 14, 2013 at 1:43 PM

Minimum wage hikes hurt the working poor. I have seen this in Illinois.

I worked for a cross dock shipping operation. The jobs were above minumum wage. The hike hit and all of sudden, without any raise whatsoever, all the jobs were now minimum wage…the new minimum wage equaled their old wage.

And now, everything gets more expensive as the higher wage costs are transferred to customers. The people whose wages were raised now pay more for goods so the raise was limited benefit. The people who had been above minimum wage but were now minimum wage LOST buying power.

sgmstv on February 14, 2013 at 1:50 PM

People won’t be able to live on $9.50 per hour any more than the current minimum wage. At the risk of aging myself, when my generation entered the workforce, businesses and trades offered apprenticeships or internships. There were more skilled workers because you received on-the-job training. Then you worked yourself up the ladder, and your pay was based on your skill level. Win/win for both employee and employer. Also much better than paying $10k to $15k for some two-year certificate that is worthless because you lack experience in your chosen field on top of paying off the student loan.

lea on February 14, 2013 at 1:56 PM

Yes, the poor have it better here than many other places, and yes, they even live better today, by some standards, than the wealthy of the past. But poverty is and always will be a relative measure (why we’ll never be rid of it, and why this is always the wrong problem to focus on).

Raising the minimum wage doesn’t require an upward shift of all wages relative to it, even putting aside the cutting of hours and positions, while at the same time it doesn’t prevent the upward shift of relative costs. So these jobs not only become more expensive and scarce, but the hourly jobs above the minimum are pushed closer to the floor. Relative poverty increases, and not just for those who would have had minimum-wage jobs. It takes time for the readjustment such that these workers regain that lost ground, but I’m not sure all do.

VerbumSap on February 14, 2013 at 1:58 PM

It’s all messaging: Republicans will be painted as the party that wants to protect tax breaks for millionares while resisting small wage increases for the lowest paid workers in America. In response, we’ll get a 40 page white paper that nobody will read and 20 minute speeches that nobody will listen to.

Remember the message, because that’s what he’s aiming at.

jdp629 on February 14, 2013 at 1:58 PM

If those unemployed people don’t count as unemployed, then those people shouldn’t count as part of the population, either.

What do you say?

Christien on February 14, 2013 at 1:43 PM

Your idea is already part of the official “unemployment” numbers:

“unemployment %” = (Workforce – employed) / (Workforce)

Discouraged workers are not considered part of the “Workforce”, so when large numbers “leave the Workforce”, both the top number and the bottom number get smaller, but because of the way that formula works, the unemployment % can appear to go DOWN, even when the #employed also goes DOWN (you would think that less employed would mean more unemployed, but if they shrink the workforce that get masked).

That is why I prefer the Employment-population ratio… it is purely the #employed / #potentially employable (the civilian non-institutional population age 16+). There’s less room for a “fudge-factor” in that ratio.

ITguy on February 14, 2013 at 1:58 PM

What do you care how high unemployment goes if you’re not held responsible for it?

If someone could promise food and gas prices would be frozen at the current prices i’d be for 9/hour.

Wagthatdog on February 14, 2013 at 1:59 PM

[ITguy on February 14, 2013 at 1:34 PM]

Nice summary of information. Thanks.

It’s like a dog chasing his tail, the way politicians run around ‘properly regulating’ the economy with their “Do Something!” logic for fixing the unintended consequences of their last “Do Something!” Minimum wage is just one of dozens of ‘properly regulating’ the economy Congress has cooking on their burners.

And actually this minimum wage thing has little to do with regulating the economy. It has to do with expanding entitlements. The defense that it is about the economy is just a smokescreen.

Dusty on February 14, 2013 at 2:00 PM

millionaires

jdp629 on February 14, 2013 at 2:00 PM

When forced to pay more for labor, businesses will insist on getting more value for their money – experience and proven skills, even in entry-level positions. Younger workers never get a good chance to earn their stripes. That has long-term implications for their ability to earn in the future, as well as the social costs of high unemployment and restlessness of youth.

Speaking of which (linked from Drudge)

AURORA, Colo. (CBS4) – A school principal said no white children were allowed at an after-school tutoring program, and now some parents call it discrimination.

The principal at Mission Viejo Elementary in Aurora sent a letter telling parents the program is only for students of color. Parents CBS4 talked with said they were shocked to see, in this day and age, what they consider to be segregation.

The school now says that it’s all just a big misunderstanding. My eye!

And it is important. Because the unemployment rate among minorities is higher than among whites. This situtation will only get worse with a hike in the minimum wage. So to have a school perpetuate the idea that miniority students should be treated differently from white students is offensive on many different levels. Frankly, I think that principal should be fired for stupidity if not his that fact he is clearly a racist.

Happy Nomad on February 14, 2013 at 2:15 PM

Here’s an idea: since discouraged workers who dropped out of the workforce aren’t counted as unemployed, don’t count them as part of the population, either. If those unemployed people don’t count as unemployed, then those people shouldn’t count as part of the population, either.

What do you say?

Christien on February 14, 2013 at 1:43 PM

I say count them as 3/5ths of a person. There is Constitutional precedent, it waters down the census numbers in areas with a high concentration of parasites (i.e. the takers), and it probably better represents what they actually contribute to society.

/

Happy Nomad on February 14, 2013 at 2:20 PM

Ummm, last I checked, Hispanics approve of a higher minimum wage, so we really have no choice in the matter….the minimum wage must be raised. Otherwise, you hate Hispanic grandmas who are barely getting by.

xblade on February 14, 2013 at 2:32 PM

The people whose wages were raised now pay more for goods so the raise was limited benefit. The people who had been above minimum wage but were now minimum wage LOST buying power.

Its a snowball effect, especially with union wages. When the minimum wage increases, so, too, do union wages. Thanks to our union contract, I will get my pay bumped up if the minimum wage goes up.

Just about everyone will lose buying power as the costs of goods and services will go up with the cost of paying for the minimum wage increase. That, and more people will be added to the ranks of the under and un employed.

hawkeye54 on February 14, 2013 at 2:52 PM

There he goes again, tossing out the skittles. Nevermind that we all know it won’t do squat for the poor or the economy, he’s still campaigning and setting the Rs up for a bashing in the lsm.

Kissmygrits on February 14, 2013 at 3:03 PM

ITguy on February 14, 2013 at 1:58 PM

Very good! Now, try crunching these tops and bottoms: #employed/population-discouraged workers.

These people really don’t count, after all, so why include them as part of our population?

Christien on February 14, 2013 at 3:26 PM

There he goes again, tossing out the skittles. Nevermind that we all know it won’t do squat for the poor or the economy, he’s still campaigning and setting the Rs up for a bashing in the lsm.

Kissmygrits on February 14, 2013 at 3:03 PM

Some GOP Senator should put forth a bill raising the minimum wage to $19/hr. Force a vote on it, and when the Democrats balk or mock the bill, paint the Democrats as the party of the hateful, greedy “rich,” etc.

visions on February 14, 2013 at 3:27 PM

Some GOP Senator should put forth a bill raising the minimum wage to $19/hr. Force a vote on it, and when the Democrats balk or mock the bill, paint the Democrats as the party of the hateful, greedy “rich,” etc.

Make it $100/hr.

The Monster on February 14, 2013 at 3:44 PM

Very good! Now, try crunching these tops and bottoms: #employed/population-discouraged workers.

These people really don’t count, after all, so why include them as part of our population?

Christien on February 14, 2013 at 3:26 PM

Everyone “counts” (i.e. everyone “matters”).

The people left out of the Employment-population ratio are those who:
1) Are military (noncivilian)
2) Are instutionalized (i.e., in jail, etc.)
3) Are under age 16 and not legally allowed to work.

The Employment-population ratio is a good reflection of how “employed” our population is.

It’s not a good thing for hundreds of thousands of people to be more discouraged now than they were six years ago when the balance of power tipped from Republican to Democrat.

For 12 straight years (144 straight months), Republicans held majority control of Washington, D.C. and the average Employment-population ratio was 63.3%. Bush and the Congressional Republicans actually finished slightly above average at 63.4% in December 2006.

Then the Democrats took majority control, and over the last 6 years, 1 month (73 straight months), Democrats have held majority control of Washington, D.C. and the average Employment-population ratio has been 60.0%, but we haven’t been above that average since February 2009. The average over the Obama administration has been 58.7%, but we haven’t been above that average since August 2009. The worst month under Bush was better than the best month under Obama.

Your proposal would make hundreds of thousands of people leaving the workforce seem like a good thing, but it’s not… it means lower tax revenues and higher government outlays.

So no, I’m not in favor of your suggestion.

ITguy on February 14, 2013 at 3:47 PM

Nearly 1/3 of all State Governors have established a minimum wage higher than the Federal level. It will not affect farm labor, after school or the self employed and all the exceptions that currently exist. It may abolish the State Laws of 10 states that have their minimum wage pegged to the consumer price index.

My point is that this is an example of a hastily put together poorly thought out plan that was put forth to benefit only the POUS.

jpcpt03 on February 14, 2013 at 3:52 PM

why not raise it dramatically?

What would be wrong with raising it to $100 an hour?

That would bring the lowest-paid full-time employee in America to a salary of $4,000 a week, or $208,000 a year.

Just think of how that would raise the tax base. It would solve the deficit problem Obama has created in no time at all, right?

nazo311 on February 14, 2013 at 1:19 PM

*presuming* you’re on board with the complete idiocy of raising the min wage eh?

I bet those $40 BigMacs will be yummy eh? (for those who could actually afford one)

Katfish on February 14, 2013 at 3:52 PM

ITguy on February 14, 2013 at 3:47 PM

I was just brainstorming ways for Obots to cook the books more consistently. And I was approaching it from a linguistic and logical perspective. Namely, if some people who are in fact unemployed (discouraged) are not “unemployed” merely because they aren’t counted as such, then to be consistent, one would necessarily have to subtract those same people from the population, because they are not “people” either, even though they in fact are people. Sorry, but one cannot have it both ways.

IOW, everyone goes along with the accounting gimmick of falsely excluding actual unemployed people from UE figures, so they damned well better not count those people as people in their gimmick accounting. Just imagine the optics of vanishing all those non-persons from the books overnight.

Just for sh!ts and giggles, did you crunch those numbers?

Christien on February 14, 2013 at 4:03 PM

Raising the minimum wage will just drive more good paying jobs offshore the way the government has driven most of our manufacturing offshore except for the defense sector where the government is in cahoots with the unions.

woodNfish on February 14, 2013 at 4:11 PM

“Minimum-wage hike the wrong way to lift working poor”

I think that’s the point of the proposal – and the goal.
Since when have Dems ever REALLY wanted to uplift the poor. A disastrous minimum wage hike is a Democrat two-for. It creates more unemployed government dependents (ie; Dem voters) and allows the Dems to continue their disingenuous campaign on behalf of the downtrodden.

JasperBallbaggins on February 14, 2013 at 4:16 PM

*presuming* you’re on board with the complete idiocy of raising the min wage eh?

I bet those $40 BigMacs will be yummy eh? (for those who could actually afford one)

Katfish on February 14, 2013 at 3:52 PM

You are exactly right. If O wants to raise it to $9/hr, why not $100/hr or $200/hr?

nazo311 on February 14, 2013 at 4:43 PM

Since when have Dems ever REALLY wanted to uplift the poor. A disastrous minimum wage hike is a Democrat two-for. It creates more unemployed government dependents (ie; Dem voters) and allows the Dems to continue their disingenuous campaign on behalf of the downtrodden.

Quite so. With a deliberately indoctrinated low info voting base who fail to see the disingenuity of the the dems and are content in living as perpetual government dependents as long as the benefits keep coming.

hawkeye54 on February 14, 2013 at 4:52 PM

See how far the “you filthy masses are already overpaid!” Message goes in 2014. Might be enough to overcome the gerrymandering!

Rainsford on February 14, 2013 at 12:11 PM

Of course that is not the argument, now is it? Fu ck off.

CW on February 14, 2013 at 5:57 PM

It’s not the “wrong way” it’s “not a way.” If something is the wrong way to do something, you can still get it done. That is not the case here. Raising the minimum wage will not result in lifting the working poor. At all. It will result in them being unemployed.

besser tot als rot on February 14, 2013 at 6:01 PM

And yes, that matters . . .

. . . and the fact that you begin with this speaks volumes about your readership. I am one of those readers.

lostmotherland on February 14, 2013 at 12:18 PM

Edited for accuracy.

Del Dolemonte on February 14, 2013 at 6:20 PM

No matter what they raise it to, by definition, it will always be the minimum wage.

What was it when it started? $1.75 or something? What good has it done? It’s still the minimum wage. Make it $150. an hour, and by then end of the week, it will still be the minimum wage.

Unions of every shape and size will have meetings across this nation, and they will demand new contracts saying “We don’t work for the minimum wage!” And teachers, doctors, trash collectors, lawyers and politicians will all raise their salaries.

Instead of a dollar menu at McDonald’s, we’ll have the $20. menu. And some idiots will still say “We need to raise it to $200. an hour.

JellyToast on February 14, 2013 at 6:43 PM

lostmotherland

…what prison camp…were you a guard at?

KOOLAID2 on February 14, 2013 at 8:05 PM

You can’t make sloth’s anything but poor, because poor is the very definition of their character. No amount of transfer payments are going to change their little black reprobate hearts.

tom daschle concerned on February 14, 2013 at 8:25 PM

Thomas Sowell has written definitively on the subject.

The admin knows this too. but it is a win win for them.
They sound compassionate about lifting the poor and they get to crush small business, get more folks dependent on gub’ment and cause more economic strife what’s is it that they don’t love about this crazy move??.

esnap on February 16, 2013 at 1:27 AM