The lowdown on the July 24 increase in the the federal minimum wage? It will be net positive for the U.S. economy. From the rhetoric of the supply side theorists --- the same people who advocated more than $1 trillion in 2001-2008 upper-income-favoring tax cuts that created the fewest jobs in any eight-year presidency since World War II --- increasing the minimum wage by 10.7 percent to $7.25 per hour will mark the end of the free enterprise system in the United States, or something close to it.
Higher minimum wage: Will the economy cease to exist?
Economic conservatives and supply side theorists say that thousands of small businesses will go out of business and millions of jobs will be lost if the minimum wage is raised.
Still, the critics counter that it's perfectly acceptable to pay the lowest-valued work categories sub-living wages because these are 'transitional jobs' that citizens hold for awhile, obtain new skills and experience, and then move on to other, higher-paying positions.
For many, minimum wage is their only wage
They reality is quite different: many citizens remain in minimum wage positions for long periods of time. And for some -- including those in the cleaning, hospitality, hairdressing, textile, social care, and retail sectors -- this is when their raise occurs: when the federal law says it must. For these citizens, the federal minimum wage increase is no inconsequential event.
Economic Analysis: Those who are concerned that the minimum wage is getting too high should digest this statistic: in real, inflation-adjusted terms, the new minimum wage will still be below the $9 per hour minimum wage of the late 1960s.
Further, despite three decades of increasing worker productivity -- including the super-productivity era of the Roaring 1990s -- the nation nevertheless saw fit to let the minimum wage decline, in real terms, from $9 per hour to $5. What's more, the nation thought the U.S. economy would be strengthened by an economy that generates less disposable income for lower-income workers! Talk about self-defeating policies. The nation is now bearing some the fruits of that deeply economically-flawed philosophy -- not the least of which is an economy where an increasing percentage of employees do not have incomes high enough to support adequate U.S. GDP growth. Thankfully, the higher minimum wage, and companion Obama administration economic policies, will help reverse that trend.
What's your view of the higher federal minimum wage? Let us know what you think.
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Reader Comments (Page 5 of 12)
7-17-2009 @ 5:21PM
harleydream19 said...
As far as the minimum wage goes, I call more for a Living Wage. $7.25 over 40 hrs isn't nearly enough to support a family. We need a living wage, not a minimum wage of at LEAST $15 an hour. Rents, Mortgages, Utility cost and the price of HEALTHY food keep going up. I can atest to the fact, that people on fixed incomes, struggle like you never could imagine. Not only do we need a living wage of $15 an hour, but we need a better scale to determine how much people on Social Security and various other programs should receive each year.
Can you imagine living your life on $786 a month; to cover everything from rent, food, utilities, prescriptions, cable and internet, doctor's fees, specialist fee's, scheduled hospital surgeries like pacemaker batteries? It doesn't take an advanced mathematician to figure out that $786 a month doesn't quite cut it.
Trickle down, or supply side economics only benefit the wealthy. It NEVER trickles down to your everyday American. It lines the pockets of the well to do, and the wealthy, and no one else. All this while the rest of us scratch and claw to keep us from falling behind the cracks. Plain and simple.
7-17-2009 @ 6:36PM
Victoria Newsome said...
I'm not understanding someone saying minimum wage isn't meant to get you by. This is what some people have to live on, minimum wage.Of course every business owner wants to be rich and that's fine but is it fair to have people work to make them rich and not even pay them enough to get an emergency car repair without being able to pay their rent? It's all about greed. A day's work is a day's work. Sure most people would rather work in an air conditioned office than a factory, a fast food place or clean other peoples homes but all are necessary. I have always believed that the government should redo the welfare program and now with this raise it would be an excellent time. Some people have depended on welfare for so long, it would be harder on them to make it working at a job. On welfare, they will get a check each month, food stamps and a medical card. Of course there's not enough money to pay rent so they qualify to live in hud or metropolitan houses rent free or almost rent free. Now, with making $290.00 per week (before taxes) that is not enough to get by if you are on your own or have a family. So... with that amount per week instead of taking their medical card and their food stamps just take the monthly welfare check. Don't even cut their food stamps they are getting. This way they have medical, food for their family to have balanced meals and maybe fruit at least 3 or 4 times a week. They will not only be paying taxes, they will be able to get their children a new outfit and a new coat once a year. Thrift stores and yardsales are great for childrens clothes. The government not having to pay out all these checks every month anymore could even be able to allot the family a set amount for each child for christmas and some shoes and school clothes once a year. Our government would be getting tax money and of couse the people would be putting their money into the economy each week. Add that to what the government no longer paying out each month to the people and it is a winning combination. There is a lot of money being paid out for child care to working women. Children are so much better off being raised by their mothers so why not give the mothers HALF of what the government pays for child care for them so they can stay home with their children? More savings for our government and more income for the household to be taxed. Also more jobs would be available for the dead beat dads that should be forced to work and support their children. I welcome your comments. Thank you. A helping grandmother.
7-17-2009 @ 5:26PM
linda burris said...
I ONLY HAVE ONE THING TO SAY AND THAT IS, IT'S NOT THE RATE OF PAY THATS SO BAD. IT'S THE FACT THAT MOST ARE PART TIME AND CAN'T GET ENOUGH HOURS DUE TO HOURLY CUTBACKS. I KNOW BECAUSE I'M LUCKY TO GET 20 HOURS A WEEK AND I MAKE 10.00 AN HOUR, TRY TO LIVE ON UNDER 40 HOURS A WEEK AND SEE HOW WELL YOU DO.
7-17-2009 @ 6:57PM
Hugo said...
You idiots in favor of a mandated minimum wage ask yourself this: why $7.25? If that is good, then isn't $10.00 better? Why not mandate $10.00 then? And think about it, isn't $15.00 better than $10.00; it should probably be $15.00 right? Or better yet, why don't we mandate that Everyone, regardless of education or skill or work ethic should earn $150,000 a year and work 20 hours a week with weekends off and 4 weeks paid vacation each year. I mean, honestly, why not? If we can mandate a minimum wage then why not mandate something really meaningful? Can you idiots see why any arbitrary minimum wage is equally illogical? Or are you just too greedy to say that everyone should earn $150,000 a year?
7-17-2009 @ 5:43PM
Luis R. Valle said...
Corporate Repukes, have never supported equitable pay for the workers. Durring the record proficts period 1969-2006, The USA has more millionires, today over 8.9 households (less then 10% of this countrys population) are worth a million or more. During this same period-to-today, the value of the dollar and its purchasing power went down, The Greedy Bastards, have tax loopholes to take advantage of, and on top of making more money they pay a much lower percentage of their gross earnings in taxes and love to cry about "job lost" and "the lost of comperitenes" every time someone brings up the subject of equitable pay. So much for the trickle down B__S___ theory argument of "the Varons" mind set. They like when the poor mases collective wealth (taxes) are used for colonisation and most resetlly to fund wars (instead of education and Social Well) that avance and /or support their interest and convince the strong arm enforcement class that they too can become part of the ruling class, what a buch of Crapp. Take your money, in the front of the deal and lets strike a balance betwen trickle-down and botton-up economics. Starting with this past elections, we have a President that may become a historical leader, who was elected to leed this country in that direction if not to that conclution. Even if only 50% of his goals work, that will be lightyears impruvement over the last (unacauntable) administration.
7-17-2009 @ 5:45PM
Hugo said...
Victoria Newsome- you are a simpleton. Where does all this money come from that you want to give away? Why do you or I, or anyone have a claim on someone else's money? Where in the constitution does it says the government will guarantee your success, or your income, or that life will be fair, or healthcare, or that your kids get new clothes? Are you kidding me? WHERE does the money come from?????? You are responsible for yourself and your family if you choose to have one. I am not responsible for you and neither is the government. I struggle to make a living every day. Where has responsibility gone, why do so many people feel they have a "right" to this or that? Why do so many people think they have a right to determine how someone else's earnings are spent or directed? This country is in serious trouble.
7-17-2009 @ 5:52PM
Cynthia Calloway said...
Ok first of all California is not the only state where minimum wage is $7.25, nor is the cost of living the highest in the U.S. Hawaii is. I live in Hawaii, make $7.00 ( as a server ) because I am laid off from my job where I was making $21.00 an hour. The basics here is that most employers can pay less than $9.00 an hour for any position, entry level or not. How can they do this one might ask? Because there is no competition here....they know you can't get in your car and drive to another state and get the same job at a higher wage. So the State Government lets employers pay whatever they want and the people here suffer. And they wonder why so many people are homeless and living on the beaches. I would say 1 person in every household is working 2 jobs to survive here. Most people here live 6-20 ( yes 20, sometimes more depending on the size of the house )in a household just to make the mortgage. But even rent is outrageous. A studio apartment in the halfway decent neighborhood is $1000 a month, not including utilities. So at $7.25 an hour, 40 hrs a week , after taxes and insurance, a person doesnt even make enough to pay the rent. People always say "oh you live in paradise". Funny, I didn't notice because I work 2 jobs and can't enjoy any of it. Some may ask, " why don't you just move?" Because it costs money to do that, and with barely making enough to survive, there isn't anything left to pay movers.
7-17-2009 @ 5:56PM
mdculp said...
It is amazing to read this crap. I have worked for minimum wage and it can be done. Sure you won't be able to buy a house or new cars and you might not have all the nice things you want but it can be done. Minimum wage jobs are supposed to be a stepping stone for unskilled workers. Work hard, learn new skills and you will make more.
I now work a full time job about 65 hours a week and have started a small business. I can tell you that small businesses are hurting right now. The average small business pays roughly 50%, give or take, in taxes. Raising the cost of labor will do one of two things, and maybe both. It will force small businesses to cut back on workers just to stay in business or it will cause them to have to increase the price they charge for their product or service. Thats just the nature of the beast. There is no way to avoid it because most small businesses operate on very tight margins.
One last thought. It's time to stop punishing people for working hard to better their lives. At some point people will just stop working hard just to have the government tax it away from them and give it to people that will not try to work.
7-17-2009 @ 6:00PM
Hugo said...
Oh, boo hoo Cynthia. So because you in Hawaii can't make it as a "server" (I guess it's someone else's fault you're not a Dr. or attorney), me in Texas have to subsidize your wages? Where does the money come from? Please educate yourself- nothing is "free", everything costs. You do not have a "right" to any specific wage. If you have to work 2 jobs, then decide to move and start over, or get education or learn a skill. Don't cry and expect others or the government (hint: government IS others) to make life "fair" for you. Loser
7-17-2009 @ 6:00PM
BABE said...
You know it's not just teens that are in these min wage jobs, it's people that sometimes, through no fault of their own, just circumstances, end up in them. I think the min wage is still way too low, why can't they crank it up to $9 that seems fair. How come no one is complaining about the politicians when they vote themselves a hefty wage increase but the poor min wage person is pratically prosecuted for just trying to make ends meet.
7-17-2009 @ 6:11PM
niceguy4you3 said...
wait a cotton picking minute here fiolks for someone who grew up on welfare and had no money will die poor and i mean me.... i lost my mom and dad and my faimly disowned me years ago... i lived on the streets and was happy at the time to get 3.90 min. wage when i got a job now that i lost my job because my old boss complained he could not live on 300,000 a year well i wish everyone walked a mile in my shoes i been surviving on min wage with no money in my back account no med insureance and people here think 7.25 is ok to live on i want everyone to try to live on 7.25 when your rent is 800 a month elictric is and gas and phone and food and how am i suppose to wash clothes ??????................for all you greedy owners and ceos go live in anouther county because i am sick of hearing i dont make any money when you live in a 500,000 house and i get to hear gunshots everynight and wonder if one will be for me i think the min wage should be 10 for every state across the board no questions asked and if the business seems to fail they the owners did somethinf wrong not the ones trying to help the economy by getting a job
7-17-2009 @ 6:13PM
Hugo said...
Babe, you bring up 2 seperate and unrelated topics. I agree with you on politicians and their wages. WE the voters should decide what they earn, WE are paying THEM. But the minimum wage should be market driven. It is in the private sector. Again, ask yourself if $9 is better than $7.25 then logically, wouldn't $12 be better still or $25? You may think a $25 min wage is silly, but why? It's better than $7.25, and anyway, there aren't any negative repurcussions to mandated min wages, right? Why are YOU so greedy. Demand a $25 minimum wage!!
7-17-2009 @ 6:18PM
Hugo said...
Hey NICEGUY: FU, why don't you go live in another country. We don't need more uneducated, crybaby losers here. Pick yourself up and take responsibilty for yourself and stop blaming other people for your life. You will always be a loser until YOU decide YOU are responsible for YOUR life. Nobody owes you a damn thing. I hate leeches like you.
7-17-2009 @ 6:24PM
Hugo said...
Oh wait NICEGUY. You are very poor, right? You must be useing a computer at the public library right? Or are you one of our countries many "poor" that own cel phones, a car, satellite tv, refrigerators, 20s on their car etc. You "poor" people, lol.
7-17-2009 @ 6:26PM
Dorie said...
I am sick of Obama Rah-Rah. I am sick of entitlement. I am sick of minimum wage cry babies. I lived on $6.50 an hour when I started working. I got a roommate, a second job on the weekend and I didn't buy what I couldn't pay cash for and I worked hard to get where I am. WAA WAA quick your crying and stop having kids, living with your significant other and expecting that the USA owes you a living. It is not your God given right to own a home, you earn it. It is not your right to work in the USA, it is a privilege. Stop blaming everyone else for your shortcomings and do something to change your life. All you out of work execs, I do feel for you. The blue collar workers seem to forget that it is the RICH people that own businesses and provide jobs. Without them, have fun living on welfare. Give me a stinking break.
7-17-2009 @ 6:29PM
Eddie said...
I own a Pizza Restaurant in a small town. Raising the minimum wage does nothing to help me or my business. Good help is har dto find these days and now I have to pay the below average workers more then they deserve. Now I have several pizza makers making over $10.00 an hour and that is because they earned their raises with hard work and loyalty to my restaurant. Forcing me to again give raises ( this is 3rd raise hike in 3 years) to those that don't deserve it doesn't help the economy at all. Now I the small business owner must either cut back jobs , raise my prices to compensate or just eat the cost.
It's a lose lose situation.......
7-17-2009 @ 6:33PM
Hugo said...
Right on Dorie except for one thing. There would be no welfare without rich people either. I own a business so I am rich. I work 7 days a week, employ 35 people, pay all kinds of taxes, don't take vacations and can't fix my house. I am rich in things that can't be bought, but I live on about $80,000 a year. Oh, and I take responsibilty for my family for health insurance to the tune of $7,000 a year. Yes, you crybaby entitlement losers, I am one of those evil rich guys.
7-17-2009 @ 6:36PM
ashley said...
the state with the highest min wage is washington and has been for awhile. I live here and make min wage. I have been with the same company for awhile and constantly take on new tasks but have never gotten a raise for any of it. I work hard every day and live at home because I can't afford to live on my own. Min wage wasn't meant to be a livable wage but when companies know they can get by on just the basic of pays they will. I live in a very small town that I doubt anyone on here has even heard of and the median wage for a place to rent is 750-1200 not including any utilities. If you want to buy a house the lowest your looking at is still 400,000. Only problem is the majority of jobs opening up are min wage jobs. We have on community college here with very few options. The nearest city is over 2hrs away. Makes it hard to continue your education when your barely making enough money to pay the most basic of bills. I was going to school and working part time making min wage but still was getting barely getting by and paying for school/books. Not everyone gets government assistants and even if you do it doesn't always pay for everything when your at a university. So to say people just need to get back to school it isn't that easy. I want to go back to school but I have to move away just to do so and that takes a lot of saving. I'm lucky to make 800 a month and I haven't had any insurance for at least 3years. You have no room to talk unless you have lived it. People try and those who don't get fired. Its not just teenagers making min wage. People with BA aren't getting paid what they are worth. Most people can't leave their jobs because they don't know if they will get hired anywhere else once they try to come back.
7-17-2009 @ 6:46PM
Donna said...
I started working in the early 1970's at minimum wage of $1.50 an hour. I was thrilled when it increased to $2.00. It never was $9.00 and I wonder how you came up with that amount. Thankfully I found a job that gradually paid quite a bit more than minimum but it still wasn't a fortune. You should recheck your facts before you write an article like this.
7-17-2009 @ 6:47PM
Luis R. Valle said...
Hugo, you sound like a bitter person who was slapted around and have grown into a little man that now thinks is his turn to turn the screw on any one you can...