Monday, 19 June 2006

Minimum Wage Must Go Up

If there is any issue that Democrats ought to be able to unite behind without ambiguity, and know that they have a clear huge majority of Americans with them, it has to be insistence on an increase in the minimum wage. Libertarian and Republican arguments exist in opposition to the minimum wage, and I'm not opposed to their being aired and limited exceptions to a new reasonable minimum wage be part of new legislation, but it's a huge failure for the Democrats that they cannot succeed in getting this most fundamental requirement that the American worker be treated humanely written into law. Because unambiguously, paying an adult trying to support a family $5.15 an hour for full time permanent work is inhumane.

One exception I might allow, would be that temporary jobs could pay as little as $6 an hour, to allow for summer jobs for high schoolers, or retirees (such as campground managers). But the law should explicitly prohibit replacement of permanent positions with sequential temporary positions as a means of skirting the minimum wage increase. Courts should provide quick judicial review of such claims, and human judges should be able to quickly discern cases in which a corporation is misrepresenting a job as temporary.

A $9 minimum wage is a modest demand, and industries which rely on cheaper labor must adjust, because they are disrespecting their workers in paying the current minimum wage. $9 ia a large enough shift from the current obscene $5.15, that a phase in over 2 to 4 years is tolerable. Alternatively we could go with Senator Kennedy's proposal for now, and insist on another step later when Democrats control one or both branches of Congress.

I think the only reason Democrats are not strongly enough pushing this issue, is that it is not front and center for the establishment Democrats. Most of these Democrats in higher offices are affluent and sufficiently removed from poverty to be susceptible to the arguments from their libertarian leaning colleagues. They should get a clue. This issue plays well with the rank and file, including many cultural conservatives who left the party for Reagan in the eighties. Lots of these folks are just aching to come back now that the Republican elite has been exposed themselves as the aloof and privileged lot that they are. We don't need elitist Democrats focusing on cultural issues and ignoring the poor.

You will hear the argument that most of the minimum wage jobs are going to people looking for supplemental income who don't rely on it for their living. Whether it is most or some, it is obscene that anyone living in poverty is working full time. Listen to Dan's story. If the law causes two supplemental jobs held by people not relying on them to disappear for every one full time worker that it provides with a living wage, that is a clear net gain.

Others will talk of the inevitable siphoning of American jobs to outsourcing overseas. Yes this is a problem and raising the minimum wage will exacerbate it, but solutions must be found to put all Americans to work who are willing and able to work at a wage which will support them and boost the economy. Raising the minimum wage fixes a clear injustice and is easily understood. Outsourcing is already a problem which needs its own solutions. Keeping a minimum wage which has only been adjusted (and quite inadequately) for inflation since sometime in the seventies is quite simply immoral. The inflation-adjusted value of the minimum wage is 26% lower in 2004 than it was in 1979, and there are real questions whether a minimum raise hike even causes a loss in jobs.

Do the right thing - call your representatives in Washington.


Current state of minimum wage across the country

Boston Globe article

Center for American Progress article


I see now that Ezra Klein posted about this last week.

He references this graph:
Which convinces me that my $9 suggestion is too high - I really ought to research before I post a guess such as that. It looks like Kennedy's proposal was right on the mark.

In spite of its clumsiness, my article drew a lot of good discussion over at Watchblog.

Unfortunately the Senate couldn't muster the will to do the right thing yesterday, and yet this vote suggests that they DID pass it (Required for Majority 1/2; Amendment agreed to) - but then later it was withdrawn?. What's going on here? The CNN article attests to the 52-46 vote in favor of the amendment, and yet says
sixty votes were required because the plan was proposed as an amendment to an unrelated defense bill.

So 80% of Americans want it, and Republican Senators Chafee, Lugar, Collins, Snowe, Coleman, Specter, DeWine, and Warner joined a solid Democratic caucus to give this a majority, but presumably because the majority party controls the agenda, it can only be appended to an unrelated bill causing it to need 60% to pass. Sounds like minority rule to me.


Anonymous said...

First of all, it is an economic proven fact that raising minimum wage hurts lower income workers (who it claims to help) and hurts the economy (which hurts everyone). There is absolutely no debate about this among economists. The wave of "outsourcing" is caused by other countries not having such a price floor and anyone who would promote a scientifically proven bad economic policy is brain dead, or so biased he refuses to see the truth. Such uninformed policies are, at their true heart, class envy based marxism and his theories have been proven to be bad policy not only in theory but in practice (USSR, CUBA, China).

Walker said...

Show me where such a fact is proven. No debate among economists? You must have proof then that there are no economists at Economic Policy Institute which I referenced in my article. Outsourcing occurs because the cost of labor is less in other countries, irrespective of what minimum wage policies might be in place. Much as I insist that the minimum wage is a necessary floor to insist on humane treatment of employees, I have to agree that market forces ultimately drive the cost of labor - there's no way that a country where the cost of living is a fraction of ours could institute a minimum wage high enough for outsourcing not to be a problem. But go ahead and call me brain dead if you want.

Internet Esquire said...

Quite surprisingly, libertarian economist Steve Landsburg convincingly argues that the minimum wage is not the big job killer that most economists believe it to be. Nonetheless, an expansion of the Earned Income Tax Credit would be a much more effective and equitable way of helping the working poor than raising the minimum wage.

In terms of fighting poverty, the EITC is highly effective because it puts more actual money into the hands of the working poor whereas the minimum wage is simply a huge off-the-books tax that redistributes wealth from employers to minimum wage employees. The EITC also reduces entitlement spending, provides a boost to the local economy from the bottom up, and increases labor force participation.

Over two thirds of those who work for minimum wage are not living in poverty. In striking contrast, most of the working poor make a substantial amount of money more than the minium wageand and but for the EITC would be living in poverty and would need to apply for food stamps and other entitlement programs.

Walker said...

Internet esquire,

I appreciated your comment, and can easily believe that the EITC adjustment may be a far better mechanism for helping the working poor, though I must ask "Why not both?"

The point of my own post is that increasing the minimum wage is clearly an issue where the Democrats have huge majority support in the population at large, and it's easy to understand, which unfortunately cannot be said for your EITC proposal.

Thanks again for commenting.

Anonymous said...

Minimum wage, illegal immigrant workers, and outsourcing jobs are all intertwined. Labor costs are typically the highest cost of production. Businesses will try to substitute a high labor cost with a lower labor cost to increase profitability. "Minimum Wage Must Go Up" is a hollow statement unless you address the loopholes in the system to get around the government mandated wage.

RJ_Moore said...

With all due respect, to the economists of the world, there aim is not to pay a living wage, but to maximize profits at any cost.

The argument for a living wage is not in any economic domain, simply because increasing costs is taught to be a guaranteed demise to any economic venture.

The argument for a living wage is found in constitutional law, as every citizen of any country owns that country, and all of it's assets, and by this virtuous right, is guaranteed the benefit of the use of the assets of the country in which they reside and hold a right to citizenship.

A minimum cost of living wage is a consitutional right of every citizen of any country.

A government of any country is law, and the benefit of government is the obligation of every public service member, aka. every public servant.

When a public servant fails to maintain a minimum wage sufficient to the cost of living, which happens to vary by region, that public servant does commit a breach of trust, if only by failing to refer a citizen to an appropriate office in government occupied by another public servant.

Whenever a public servant fails to perform the duty of public service, an offence against the administration of government is committed. I am digressing from the minimum cost of living wage issue.

It is a consitutional obligation of every government of every country to ensure every occupation provides compensation equal to or greater than the cost of living.