The minimum wage bill is a job killer

[Hippo_Tron]

The GOP is absolutely right that raising the minimum wage will cause businesses to employ fewer people.

Except it won't matter, because once we raise the minimum wage people won't need second and third jobs to support their families.

[papau]

1. Study after stufy shows a minimum wage bill is NOT a job killer - the few jobs

killed, if they exist, are too few to be counted, while income to those that MUST spend it creates more jobs.

At worse it is a wash as to jobs, and more likely it will make the economy grow.

[Hippo_Tron]

4. There's a lot of other factors in play there

But there is certainly a possibility that could happen in the long run.

[Viva_La_Revolution]

10. poppycock

It's never happened in the history of wage increases.

[depakid]

15. It sure didn't happen in Oregon

despite all of the dire predictions.

We're now indexed to the rate of inflation and have one of the highest minimums in the nation.

And you know what- there are more disgusting fast food outlets than ever- and new ones are going up all the time. In that respect, it's too bad that wage hikes haven't had that effect!

:hi: Viva!

[Viva_La_Revolution]

21. J!

We've missed you!

ok, ok... I'VE missed hanging out with you. :) Hope the weather is treating you alright.

[depakid]

25. Weather?

[Viva_La_Revolution]

26. I hear that!

feels like I'm back in freakin Colorado!

What's up with that?!

[JerseygirlCT]

23. Yes. nt

[originalpckelly]

32. I think this was a sarcastic joke. As in people wouldn't need to work...

2 or 3 jobs because they'll be able to better live off of one. Hence, it's a job killer, but not in a bad way.

[WhaTHellsgoingonhere]

53. NYT: "a real-life laboratory for the debate.."

January 11, 2007

For $7.93 an Hour, It’s Worth a Trip Across a State Line
By TIMOTHY EGAN

LIBERTY LAKE, Wash., Jan. 9 — Just eight miles separate this town on the Washington side of the state border from Post Falls on the Idaho side. But the towns are nearly $3 an hour apart in the required minimum wage. Washington pays the highest in the nation, just under $8 an hour, and Idaho has among the lowest, matching 21 states that have not raised the hourly wage beyond the federal minimum of $5.15.

Nearly a decade ago, when voters in Washington approved a measure that would give the state’s lowest-paid workers a raise nearly every year, many business leaders predicted that small towns on this side of the state line would suffer.

But instead of shriveling up, small-business owners in Washington say they have prospered far beyond their expectations. In fact, as a significant increase in the national minimum wage heads toward law, businesses here at the dividing line between two economies — a real-life laboratory for the debate — have found that raising prices to compensate for higher wages does not necessarily lead to losses in jobs and profits.

Idaho teenagers cross the state line to work in fast-food restaurants in Washington, where the minimum wage is 54 percent higher. That has forced businesses in Idaho to raise their wages to compete.

Business owners say they have had to increase prices somewhat to keep up. But both states are among the nation’s leaders in the growth of jobs and personal income, suggesting that an increase in the minimum wage has not hurt the overall economy.

“We’re paying the highest wage we’ve ever had to pay, and our business is still up more than 11 percent over last year,” said Tom Singleton, who manages a Papa Murphy’s takeout pizza store here, with 13 employees.

His store is flooded with job applicants from Idaho, Mr. Singleton said. Like other business managers in Washington, he said he had less turnover because the jobs paid more.

By contrast, an Idaho restaurant owner, Rob Elder, said he paid more than the minimum wage because he could not find anyone to work for the Idaho minimum at his Post Falls restaurant, the Hot Rod Cafe.

“At $5.15 an hour, I get zero applicants — or maybe a guy with one leg who wouldn’t pass a drug test and wouldn’t show up on Saturday night because he wants to get drunk with his buddies,” Mr. Elder said.

For years, economists have debated the effect that raising the minimum wage would have on business. While the federal minimum wage has not gone up for 10 years, 29 states have raised their wage beyond the federal minimum.

These increases, according to critics like Brendan Flanagan of the National Restaurant Association, are a burden on the small, mostly family-run businesses in fast food and agriculture that employ workers at the lowest end of the pay scale.

“We see the political momentum for this,” said Mr. Flanagan, a vice president at the association, “but we cannot ignore what our members are telling us, which is that it will lead to job losses.”

But the state’s major business lobby, the Association of Washington Business, is no longer fighting the minimum-wage law, which is adjusted every year in line with the consumer price index.

“You don’t see us screaming out loud about this,” said Don Brunell, president of the trade group, which represents 6,300 members.

“It’s almost a no-brainer,” Mr. Brunell said, that the federal minimum should go higher. Association officials say they would like to see some flexibility for rural and small-town businesses, however.

Washington’s robust economy, which added nearly 90,000 jobs last year, is proof that even with the country’s highest minimum wage, “this is a great place to do business,” Mr. Brunell said.

During a recession five years ago, the same group had argued that Washington’s high minimum wage law would send businesses fleeing to Idaho. The group sent out a news release with a criticism of the law from John Fazzari, who owns a family-run pizza business in Clarkston, Wash., just minutes from the Idaho town of Lewiston.

But now Mr. Fazzari says business has never been better, and he has no desire to move to Idaho.

“To tell you the truth, my business is fantastic,” he said in an interview. “I’ve never done as much business in my life.”

Mr. Fazzari employs 42 people at his pizza parlor. New workers make the Washington minimum, $7.93 an hour, but veteran employees make more. To compensate for the required annual increase in the minimum wage, Mr. Fazzari said he raises prices slightly. But he said most customers barely notice.

He sells more pizza, he said, because he has a better product, and because his customers are loyal.

“If you look 10 years down the road, we will probably have no minimum wage jobs on this side of the border, and lots of higher-income jobs,” Mr. Fazzari said.

Job figures from both states tend to support his point. While Idaho leads the nation in new job growth, it has a far higher percentage of minimum-wage jobs than Washington. Minimum-wage positions make up just 2.4 percent of the jobs in Washington, while about 13 percent of the jobs in Idaho pay at or less than the proposed federal minimum wage, according to a study done for the state last year.

Part of the difference could be accounted for by a lower cost of living in Idaho and the higher percentage of technology, manufacturing and government jobs in Washington, economists say. Still, it is hard to find a teenager in Idaho who lives anywhere near Washington who is willing to work for $5.15 an hour.

“Are you kidding? There are so many jobs nearby that pay way more than minimum wage,” said Jennifer Stadtfeldt, who is 17 and lives in Coeur d’Alene, which is just a few minutes from Washington. She pointed out that Taco Bell, McDonald’s and other fast-food outlets in her town were posting signs trying to entice entry-level workers with a starting pay of $7 an hour.

The House today passed a bill increasing the minimum wage, and about 13 million workers would see a pay raise if the Senate and President Bush approve it. Mr. Bush has said he would approve the wage increase so long as concerns of small-business owners were taken into account; the Senate has not yet taken up the bill.

Several studies have concluded that modest changes in the minimum wage have little effect on employment. A study two months ago by an economist at Washington State University seemed to back the experience of Clarkston and other border towns in Washington. The economist, David Holland, said job loss was minimal when higher wages were forced on all businesses. About 97 percent of all minimum-wage workers were better off when wages went up, he wrote.

But other business groups argue that an increase would hurt consumers and workers at the low end.

In a survey released on the eve of the November elections — in which voters in six states considered raising their minimum wages — the National Restaurant Association said restaurants expected to raise their prices and eliminate some jobs if the voters approved the measures. The initiatives all passed.

Here on this border, business owners have found small ways to raise their prices, and customers say they have barely noticed.

“We used to have a coupon, $3 off on any family-size pizza, and we changed that to $2 off,” said Mr. Singleton, of Papa Murphy’s. “I haven’t heard a single complaint.”


http://www.nytimes.com/2007/01/11/us/11minimum.html?_r=1&oref=slogin&pagewanted=print

[bluewave]

2. Hehe, nice one. The logic behind this "less jobs" has been debunked

[Viva_La_Revolution]

3. both your statements are false

Do you think employers have extra people on the payroll now? It's not like there is magically going to be less work to do.

An extra $40 bucks a week is not going to enable you to quit your second job.

:shrug:

[Rosemary2205]

5. I doubt it will even amount to $40 a week.

(off a single job) most of these jobs are 20hrs a week or less.

[Viva_La_Revolution]

9. true...

I was being optimistic and going with the best case scenario.

[DainBramaged]

13. $40 is a tank of gas, a lot of bulk food, it goes a long way

when you are poor. I know.

[jedr]

8. agreed,

First , there are few places that pay minimum wage. Going rate for most "Mc jobs" in my area is over $6.00/hr. and I live in an rural rust belt town. Next , I listen to employers cry about $2.00 over two yrs but don't hear a word about their energy cost rising or insurance or other cost of business. The guy getting a few extra bucks in his pay check will spend it right at home. What goes round will come round. Never heard of a business going under form a rise in minimum wage,

[Hippo_Tron]

39. It's $5.15 an hour now, it will be raised to $7.50 I believe

40 hours per week is standard, not counting overtime, so 40 x 2.35 = $94 per week. Double that for families because it's likely both parents work making that $188. That is assuming neither parent works overtime.

I don't see where you get $40 bucks.

And if wages are raised businesses either have to raise prices or cut back on production which includes employees, at least until the economy changes, which some people are arguing (and I agree with this theory) that ultimately the minimum wage will drive up demand enough that employment will go back up.

[Viva_La_Revolution]

48. it doesn't get to $7.25 for 2 years

(you really should read up on the basics if you are going to argue against this)

60 days after the bill is signed, it goes to $5.85
one year later it goes to $6.55 and the year after that it hits $7.25.

.70 x 40 = $28 (less taxes, ss, etc of 15%) = $23.80 x 2 (if they are lucky enough to have two wage earners both working full time) = $47.60 per week

one year later (same family) would gain another $47.60 per week.

one year after that they would gain the final $47.60 per week

so, after 2 years and 60 days, one person would gain a total of $84 per week for every 40 hours (less taxes it is actually $71.40)




that aside - no employer is now paying more people than they need to. Production will actually need to INCREASE because that money will be spent by the families as opposed to sitting in some fat cat's bank account. The effect on the economy will be almost instantaneous.

[hfojvt]

54. I had a reply written to this foolishness

when I locked up my computer researching the Congressional Record. So forget it. You can check the Congressional Record yourself and they will refute most of the myths you are believing and promoting. Simply look at the 1990s when the minimum wage was increased. There never was a job loss. It simply is not a significant part of the cost of doing business or of the labor market, but it is a fairly large impact for the person getting a 16% raise.

[Jcrowley]

6. Hey I got an idea- Forget raising minimum wage

Lower rent/mortgage costs

Tax the crap out of anyone making 200,000 plus

Give everyone health care

by

Cutting the 800 billion per year Military War Profiteering Machine

which allows for

Creation of Government subsidized public infrastructure

Cutting folks transportation costs

allowing everyone

To live with less



Oh yeah and about those usurious bankers and Wall Street piranhas?

[SammyWinstonJack]

30. !

:thumbsup:

[WinkyDink]

7. That would be a first.

[OrwellwasRight]

11. That is what (free market) economists say because

that is what their supply and demand theory predicts.

However, never has an increase in the US minimum wage been linked to increased unemployment or a decline in the business cycle. So reality has disproved the economic theory.

Funny thing, though, the economists, instead of changing or even being willing to re-examine their theory always make up some excuse (e.g., we weren't able to detect the negative effect on jobs because the growth rate in the economy just happened to be high at the moment the wages increased so it covered up the effects).

All boils down to this: economics has as much faith in it as science, and free market economists are willing to ignore reality in order to maintain their belief in the free market.

[Kipper58]

19. There are only three kinds of economists -

Those who can count, and those who can't!

[OrwellwasRight]

24. ...

If only economists could laugh at themselves the way we can laugh at them.

:P

[lovuian]

20. People make more money they buy more things

People who can't buy anything economy goes into a Depression

Economics 101

[Hippo_Tron]

40. I don't think we're currently having much trouble on the demand side

Although if we keep the minimum wage the same as it is (which has been the case for the past 10 years) then we may have some trouble.

[bananas]

27. That's why it's not called a science. nt

[cosmik debris]

12. I find it amusing

That so many DUers are more versed in Republican talking points than in basic economics. Oh well....

[havocmom]

16. Excellent analysis!

:rofl:
Nail and hammer meet damn proper!

[oblivious]

42. I think almost everyone here aside from the OP thinks a higher minimum wage would help the economy

[Donald Ian Rankin]

52. Depends how much higher.

It is self evident that above a certain level, raising the minimum wage will harm the economy.

It is not self evident that the minimum wage is currently below that level, but there's fairly strong evidence that it is - the dire predictions that previous increases in it would appear to have been totally unfounded, for one thing.

The issue, I think, is not "should it be raised" but "how much should it be raised".

[William769]

14. If it's such a job killer

Why are States raising it on their own?

[havocmom]

17. Read the other day, workers from ID are commuting to WA which raised the wage

Hmmm, enough jobs that folks from poverty wage area can go and find work were the minumum was raised. Sounds like jobs were not destroyed there ;)

And putting a bit more cash in the hands of the lowest paid gets it out there IMMEDIATELY in circulation.

Woe, poor business owners who have to pay something closer to a living wage. Woe, poor well heeled have to cut loose with some of what they have been hoarding... Woe woe woe :sarcasm:

We ALL do a little better when we ALL do a little better. Giving the people at the bottom a little more gruel never destroys anything but the credibility of the guys at the top who spew lies to maintain their positions by exploiting others ;)

[Warren DeMontague]

18. Imagine how many "jobs" we could have if folks didn't have to pay employees AT ALL!

:crazy:

[Viva_La_Revolution]

22. ...

:spray:

You SO owe me a new keyboard.


:hi:

[originalpckelly]

28. People need to be able to stand up for themselves. If you don't like what you're being paid...

demand a raise or quit and look for another job. Of course, no one in America can live without a paycheck because we only spend, spend, spend. We have no one to blame other than ourselves. There will always be economic vultures waiting to screw us over, we have to teach people to have common sense.

I'll take whatever I can get, however, and right at this moment a raise in the minimum wage is the only way to practically take care of people, but we shouldn't forget about teaching people to say "fuck off" to bad employers.

[OrwellwasRight]

34. There was a need for a minimum wage and for

laws that protect workers trying to organize themselves way before Americans got the spend, spend, spend bug. I don't think what was causing poverty in the immigrant ghettoes in NYC, Chicago, and Boston during the industrial revolution was the spend, spend, spend mentality. They just wanted a place to live and a way to feed their families.

For example: http://www.kentlaw.edu/ilhs/pullpar.htm

Granted, impoverished Americans have more now than they did then, but it is still quite difficult to say "fuck off" to bad employers, especially if you have children to feed and no union to stand with you.

[originalpckelly]

36. No, I don't think it's a fair comparison. That was a time of transition...

a time when people were at a severe disadvantage because of the nature of the economy. It was so tyrannical, it had little freedom in that sense.

But we cannot escape our responsibilities as citizens of a republic. I think you will agree that an educated person is the best person to be in charge of their own welfare. Some asshole, a person's never met in their whole life, cannot possibly begin to understand that person's life.

The last ten years are the greatest example of why one cannot allow one's own fate to be controlled by a person one doesn't know. The Republicans were in charge of the government and had the ability to raise the minimum wage. After 1996, they didn't raise it. People placed the responsibility of getting a fair wage in the Republican's hands, and it didn't work out too well.

There will always be Republicans, and they will probably manage to get power back one day, hopefully, far far into the future. At that time, it will be their responsibility once again to raise the minimum wage, to get a living wage for everyone in America. They may very well neglect that responsibility as they did in the past.

However, if that responsibility had been in the hands of the workers themselves, the Republicans wouldn't have had the power to fuck them over. And the workers themselves would never have neglected their own welfare, unless they were not educated about the consequences of doing so.

It's common sense.

[OrwellwasRight]

49. I do disagree, however.

"However, if that responsibility had been in the hands of the workers themselves, the Republicans wouldn't have had the power to fuck them over. And the workers themselves would never have neglected their own welfare, unless they were not educated about the consequences of doing so.

It's common sense."

I think it is the responsibility of a society to ensure that if its members put in a fair day's work, they get a fair day's pay. That's it. Nothing complicated. And, just "common sense" as you say.

An employee never has as much bargaining power as an employer. There is always someone else who will fill the job. Not all of us are equally skilled, equally educated, or equally equipped to engage in negotiations with those whose only goal is to pay as little as possible to increase profits. And when employees do band together to equalize bargaining power (e.g., form a union) they are often harassed, disciplined, and even fired. So unions and employers are not even on a level playing field.

It's funny, Republicans are always saying they want fewer regulations and they want the market to decide, but do any of them wanted to live in countries where the economy works like that? I mean, who is clamoring to live in lawless states? No, the countries that people do dream about living in have lots of laws, regulations, and protections for the little guy (e.g., New Zealand, Australia, anywhere in Europe).

Oh, and it IS a fair comparison. Abused and poor workers, slum life, Gilded Age is exactly where we would be if there were no minimum wage.

[Virginia Dare]

46. The problem is employers spend billions...

on keeping unions out, and it's hard to tell employers to "fuck off" without solidarity, and of course thanks to Repuke rule, the laws have been skewed toward the employer for the last 12 years or more.

[lancer78]

29. There is one rule for the industrialist.....

Create the highest quality product possible, at the lowest cost possible, while paying the highest wages possible.

Henry Ford

[LostInAnomie]

37. That Henry Ford, a real champion of the working man, labor unions, Jews...

... and defunding the Nazis.

:sarcasm:

Philosophically, you would be hard pressed to find a much more disgusting American than Henry Ford.

Out of the three assertions made in that quote one of them will always lose out, and it ain't the first two.

[newyawker99]

43. Hi lancer78!!

Welcome to DU!! :toast:

[philosophie_en_rose]

31. Really? It seems that pumping more money into the economy is a good thing.

People that make the new minimum wage are still making less than a living wage. All of the new money will be pumped back into the economy at some point.

[WindRavenX]

33. This has been proven false

The minimum wage should be a living wage.

[aein]

35. Probably the best argument for the minimum wage is that people at 5.15 an hour are not being........

Probably the best argument for the minimum wage is that people at 5.15 an hour are not being paid at the efficient rate because there is a huge disparity in information and bargaining power. Perhaps their labor is really worth $7.50 an hour, but because for people at the bottom, who lacks in information and resources to find a fair wage for their labor, they are apt to take the any job they can find. Therefore , the minimum wage corrects and not distorts the market.

A lot of economic analysis is trying to figure what the point countervailing effects meet. For example, trying to figure at what salary rate the utility of leisure overcomes the utility of extra-purchasing power. Everybody agrees that a minimum wage rate of 100 dollars an hour is bad for the economic. But no one would disagree that there is something wrong with the market when a person is paid only a dollar an hour (in America/unless it is a charity gig).

[Ghost in the Machine]

38. Well, let's see here. I own a restaurant....

I have 2 grill cooks making $9.50/hr ... 1 cook making $8.75/hr and 1 cook making $8.00/hr.... 3 dishwashers making $7.00/hr and 3 waitresses making $2.50/hr plus tips....

No, I don't think the minimum wage increase is going to affect my business at all. Maybe some other places that don't believe in paying a decent wage might have a problem, but then again, they deserve it anyways if they can't pay someone what they're worth to work.

[Hippo_Tron]

41. Another good argument

[DainBramaged]

44. You underpay your cooks, a thankless miserable job

If you can't pay a cook as well as a skilled laborer, why would you claim they are well payed? Here where I live, they pay cashiers at the mall $8 an hour. And are these cooks legal or illegal workers?

[Ghost in the Machine]

57. Here in my part of the country, Southeast Tenn, they are considered

overpaid. Around here, good grill cooks are lucky to make $7.50/hr, real lucky if they make $8.00/hr. I couldn't believe some of the applications I got... salary expected? $6.50 - $7.00/hr ... they trip out when I tell them "hell, I pay my dishwashers $7.00/hr ... I'll start you at $8, and see how you do". I can tell in a day or 2 if they are a cook or not.... usually within a couple of hours, but I give the benefit of the doubt and a couple days to learn my menu, where stuff is, etc, etc.

Cooking is only a thankless job if you work for an unappreciative boss. I thank all of my employees every day for the job that they do. I wouldn't be in business without them. My restaurant is an old Huddle House building. It's set up the same way, just like a Waffle House. The cook is right there in front of everyone. I get loads of compliments on my cooks, and my cooks even make some good tips, too. When customers come up to the counter to give the cook a tip, you know something good is going on

The economy around here leaves a lot to be desired, as I live in a small, poor town surrounded by other small, poor towns. In a way, it works out because it keeps the cost of living low here too. Average rent, by my unprofessional guestimation, is about $400/month. I bought 12.5 acres, with 4 mobile homes on it.... for less than $75,000. I rent 3 of them out at $300/mo each. It covers the mortgage, plus pays my electric bill, internet, and phone bill, so I basically live for free.

Oh... all of my employees are legal. Small town country folk. I hire locals, buy supplies locally and spend my money locally. Several of my regular customers are business owners, and I in turn do business with them... from the guy who owns the local video rental store to the one who owns the local Piggly Wiggly (grocery store) to the guy who owns 2 gas stations.

PEACE!

Ghost

[DainBramaged]

58. I'm glad for your success, really, but it still tweaks me

A good cook is as important (to me) as a plumber, auto tech, or other skilled employee. And here where I live in NJ even thought the expenses are relatively double what you post, the pay for good cooks is $15-$18 an hour with benefits. Otherwise, there wouldn't be any good cooks around here.

[in_cog_ni_to]

45. "The minimum wage increase will do more harm to the poor than good."

Yep...that's exactly what some idiot repuke said on the House floor during the debate. Their logic, or lack thereof, is mind boggling! They use this argument every time there's a minimum wage increase and have always been WRONG. They need to keep their financial superiority over the peons. It makes them feel more POWERFUL.

[Ediacara]

47. You're being sarcastic right?

[Nikia]

50. Not this one or any others that have passed

There might be times that raising the minimum wage or raising it too much might kill jobs. Congress is conservative in passing minimum wage bills so it has and will not be. All labor is worth at least $7.50/hour. If a business owner cannot pay it, they do not deserve to be in business or at least not to hire help if they are small.
What many business owners seem to miss is that they impove their chances or hiring and retaining good employees if they pay higher wages. In some businesses, they can actually save money by paying higher wages.

[Deja Q]

51. They'll continue to offshore anyway, so it won't matter.

:apathetic:
:tinfoilhat:

it may or may not happen.

[Turtlebah]

55. America has always been a slave state

nothing has changed. It wont change.. not as long as the corporate mob control the politicians.
Notice there isn't anything democratic about a corporation. There is no democracy in this country, never was. As long as folks are happy to indulge in their own choice of escapism, whether it be booze/drugs, movies, sports, or religion, things will never change. We're a country of addicts.

[true_notes]

56. Military Pay Raise this Year?

20 Bucks for me. I work at Pizza Hut as a Delivery Guy for tips.

Welfare is not an option for me, but it must be nice :) .