Demo Congress Passes Minimum Wage Increase

[Nbadan]

80 Republican Congressmen stuck their fingers to their noses and voted with the Demos to increase the rate for the lowest wage workers...

House passes minimum wage increase
By JEANNINE AVERSA

What's the Minimum Wage Actually Worth?


WASHINGTON (AP) -- The Democratic-controlled House voted Wednesday to increase the federal minimum wage to $7.25 an hour, bringing America's lowest-paid workers a crucial step closer to their first raise in a decade.

The vote was 315-116, with more than 80 Republicans joining Democrats to pass it.

"You should not be relegated to poverty if you work hard and play by the rules," said House Majority Leader Steny Hoyer, D-Md.

The bill was the second measure passed since Democrats took control of the House, ending more than a decade of Republican rule.

The measure, which now goes to the Senate, would raise the federal wage floor by $2.10 from its current $5.15 an hour in three steps over 26 months.

The Senate is expected to move quickly - perhaps in the next few weeks - on a similar bill. Business groups and some Republican lawmakers, however, hope they will be able to get some business-friendly provisions into the Senate package.

The last increase was in 1997, when President Clinton successfully prodded the GOP-controlled Congress to enact the increase. Republicans declined to approve another raise for the six years in which they held majorities in the House and Senate and President Bush was in the White House.

Organized labor and other supporters pitched the bill as badly needed assistance for the working poor.

Business groups and other critics said it could lead to higher prices for goods and services, force small companies to pink-slip existing workers or hire fewer new ones, and crimp profits.

The White House issued a statement saying it opposed the bill because it "fails to provide relief to small businesses."

Senate Democratic leaders have already signaled they will accept changes designed to shield small businesses from adverse consequences of higher labor costs.

"This bill increases costs for mom-and-pop businesses," said Steve Chabot, R-Ohio, contending the legislation doesn't do anything to help offset that burden.

Many businesses want the pot sweetened, perhaps by faster depreciation or other tax breaks or letting small businesses band together to buy health insurance for their workers.

"In America we can either have maximum opportunity or we can have minimum wages. We cannot have both," said Rep. Jeb Hensarling, R-Texas.

The bill would raise the wage floor in three steps. It would go to $5.85 an hour 60 days after signed into law by the president, to $6.55 a year later and to $7.25 a year after that.

"For 10 years the lowest-paid Americans have been frozen out. They have been working at a federal poverty wage, not a federal minimum wage," said Rep. George Miller, D-Calif., author of the legislation.

Bush has said he supports a wage boost paired with "targeted tax and regulatory relief" to help businesses - which would have to pay for the higher labor costs - stay competitive.

The Labor Department says 479,000 workers paid by the hour earned exactly $5.15 in 2005, the most recent estimate available.

The federal minimum wage is like a national wage floor, though some people can be paid less under certain circumstances. States can set minimum wages above the federal level; more than two dozen states plus the District of Columbia do.

People who are paid the minimum wage tend to be young - under age 25 - never married, more likely to be women, minorities and part-timers, according to a recent analysis of 2005 data by the Labor Department.

If the federal wage does rise in 26 months to $7.25 an hour, about 5.6 million people - 4 percent of the work force - who make less than that would be directly affected, according to the Economic Policy Institute, a liberal leaning group. The group estimates that an additional 7.4 million workers would benefit indirectly as raising the floor would ripple through the work force.

Recent attempts to boost the federal minimum wage had failed when Republicans had control of Congress. But prospects changed after the Nov. 7 midterm elections put Democrats in charge in both the House and Senate.

MySA (http://hosted.ap.org/dynamic/stories/M/MINIMUM_WAGE?SITE=TXSAE&SECTION=POLITICS&TEMPLATE=DEFAULT)


As I've written before many times in this forum, raising the minimum wage will give consumers more money to spend, in turn creating more taxes and help lower the yearly spending deficit. I'm not too concerned about inflation, its gonna happen with or without a minimum wage increase, more important is that real wages, or what you take home after deductions, increases for working Americans.

[ChumpDumper]

Do-nothing assholes.

[Extra Stout]

Mexican illegal immigrants are thrilled -- now they get all the jobs that pay up to $7.25 an hour.

[SA210]

Great news!! :clap :clap :clap :clap

[johnsmith]

I really don't understand why one would be against this.

[turambar85]

I really don't understand why one would be against this.

Because many believe that companies such as Mcdonalds will hire less workers, or at least more skilled workers, since they will have a hard time justifying paying the local idiot over 7 bucks to flip 99 cent hamburgers. There are questions as to whether this will truly help the low-end workers or not. Also, if places such as Mcdonalds have to raise prices to comply, these same workers lose much of their increase in buying back the same products at higher prices, not to mention that some companies are also likely to scale down, or offer lesser benefits in return.

These are not necessarily my views, as I am undecided on the issue, but they are possible objections, and reasons why some people may have a problem with the increase.

[johnsmith]

Because many believe that companies such as Mcdonalds will hire less workers, or at least more skilled workers, since they will have a hard time justifying paying the local idiot over 7 bucks to flip 99 cent hamburgers. There are questions as to whether this will truly help the low-end workers or not. Also, if places such as Mcdonalds have to raise prices to comply, these same workers lose much of their increase in buying back the same products at higher prices, not to mention that some companies are also likely to scale down, or offer lesser benefits in return.

These are not necessarily my views, as I am undecided on the issue, but they are possible objections, and reasons why some people may have a problem with the increase.


First of all, I understand that those views aren't your own. So having said that, I thinkk those views are reaching a bit.

[turambar85]

First of all, I understand that those views aren't your own. So having said that, I thinkk those views are reaching a bit.

Perhaps so, but they are reasons why this is not a truly open and shut case, and a justification, somewhat, for those that voted against the bill.

[johnsmith]

My favorite part of the minimum wage increase is that they didn't vote it down and then turn around and give themselves a raise immediately.

I'm thinking about instituting that at my place of employment. All the people vote if they should get a raise or not.

I wonder if congress has ever voted against giving themselves a raise?

[Nbadan]

Raising the minimum wage doesn't hurt small businesses, that's a myth, in real world examples raising the wage for the lowest paid workers who are sure to spend the additional compensation, actually helped small businesses.

January 11, 2007 – NY Times
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

NY Times (http://www.nytimes.com/2007/01/11/us/11minimum.html)

Why the Republican controlled Congress and Senate didn't do this was because of fallacies based on myth, not economic certainty.

[01Snake]

David Hendricks: A minimum wage boost is no godsend

San Antonio Express-News

As with many measures coming out of Congress, the minimum wage increase bill approved by the House on Wednesday is a matter of appearance vs. reality.

What it is: The jump to $7.25 an hour from $5.15 over the next 26 months is a victory for unions, especially those that negotiated contracts that trigger wage increases when the minimum wage goes up. Many of those workers already earn more than $7.25 an hour.

What it's not: The wage increase, if signed into law, is not positive for unskilled workers. Businesses will be less likely to pay $7.25 an hour for unskilled labor, so they will create positions that combine unskilled tasks with other responsibilities that require skills. Some businesses will invest more to mechanize unskilled tasks, eliminating even more positions.

Other businesses will make their customers do the unskilled labor themselves. The minimum wage long ago eliminated the person who pumped your gasoline for you.

This process will squeeze out workers without a high school degree. It also will narrow the job opportunities for workers with a high school degree but no skills certificate or experience.

These people are the working poor the Democrats say they are trying to help. The real winners, again, are the unions, whose members are more likely to possess some basic skills.

The minimum wage increase also would not be a backbreaker for the U.S. economy or even small businesses. The labor market is so tight that businesses already had priced nearly all jobs above the minimum wage anyway. Congress, basically, is just catching up with reality in the workplace.

U.S. Labor Department statistics for 2005, the latest available, show that only 479,000 workers earned the minimum wage, out of a total U.S. work force of more than 150 million.

More workers, of course, will benefit from the wage rise. Perhaps as many as 13 million now earn less than the probable new floor wage of $7.25 an hour.

Most workers earning the minimum wage live in households that aren't poor. They are young, unmarried workers still living with their parents or young spouses living with another working spouse. Statistics show that the average family income of workers earning the minimum wage is $45,500 a year.

The wage increase's resulting ripple effect naturally will lift consumer prices for everyone regardless of whether their pay goes up. That reduces the beneficial effect of the pay increases, but the price increases most hurt the working poor, who will be squeezed out of job opportunities.

So what should Congress do to really help the single-parent workers with no skills?

The Employment Policies Institute recommends expanding the Earned Income Tax Credit, which would reduce taxes for the working poor. That helps them without jeopardizing their jobs, the institute says.

More should be done, though, to help them obtain skills. As important as workplace skills are now, their necessity could easily double with this pending minimum wage increase. More tax credits should be available to employers to conduct on-the-job training that results in marketable skills.

Congress also should make it easier for small employers to band together to secure health care insurance for workers. That is being discussed for inclusion in the minimum wage bill when it reaches the Senate.

Unless Congress takes these or similar steps, the minimum wage bill means little by itself. It solidifies the Democratic Party's relationship with unions, but low-wage working people needing help will still need help.

[Nbadan]

The union angle is always the conservative talking-point when it comes to raising the minimum wage, but a higher minumum wage would ripple to all hourly wage earners as employers are forced to 'adjust' their wage scales for long-term employees.

Businesses are gonna recontruct skilled and unskilled positions as necessary anyway to save money and expand the responsibilities of its employees. Jobs get eliminated all the time, but putting money in the hands of consumers who are sure to spend the money and not save it, or invest it, is the quickest way to jump-start a stagnant economy and get more real money into the hands of those who deserve it, the working poor.

[turambar85]

Well, do you really think that a place such as Mcdonalds would maintain prices following the hike? If they go from 5.15 to 7.25, that is an increase of over 40%.

Now, if they low-end workers gain a 40% increase, do you think the person who was making 6$ an hour will accept that they now make 1$ less than the people who were below them? No, every worker will demand, and deserve, a raise.

Now, since the average worker at McDonalds doesn't make much more than minimum wage, if any, then McDonalds will, as a whole, pay every employee an extra 30-35% of their previous wages. Having paid this large percentage more, this will indubitably cut seriously into profit. Prices will have to raise to compensate. Thus, not only will this cut away the benefit for the low-end workers, but people who are self-employed are screwed, as they will be unlikely to demand an extra 30-40% themselves, but will have to pay more for goods.

[SpursWoman]

Now, if they low-end workers gain a 40% increase, do you think the person who was making 6$ an hour will accept that they now make 1$ less than the people who were below them? No, every worker will demand, and deserve, a raise.


If he's only making $6 ... he'd be bumped up to at least $7.15, too. :nerd

[SpursWoman]

But I get your point ... someone has been working for years to gather enough tenure to justify his $8.00 ... and Jenny, the 16 year old piercing dummy just jumps right in at $7.15.

[xrayzebra]

The union angle is always the conservative talking-point when it comes to raising the minimum wage, but a higher minumum wage would ripple to all hourly wage earners as employers are forced to 'adjust' their wage scales for long-term employees.

Businesses are gonna recontruct skilled and unskilled positions as necessary anyway to save money and expand the responsibilities of its employees. Jobs get eliminated all the time, but putting money in the hands of consumers who are sure to spend the money and not save it, or invest it, is the quickest way to jump-start a stagnant economy and get more real money into the hands of those who deserve it, the working poor.


Well dan, I disagree. The prices of everything will increase accordingly. Our
economy is doing quite well. Employment is the highest it has been in years.
Housing is slowing, but that isn't bad, unless you are trying to sell a
house, but still robust. Inflation is still not a problem at this time.

Every survey I have seen is that minimum wage is a joke anyhow. The
only people earning it are those that are entering the job market.
And the unions do use the minimum wage as a bargaining point. But
unions are learning a hard lesson now anyhow, UAW is having to eat
some serious crow and will continue to do so in the future.

But most folks, like you, really believe the wage earner in the family is
working for minimum wage, so it will get passed, maybe. The Senate,
Harry Reid, said he is in favor of tax breaks for small business. Pelosi
and her bunch wont like that.

But we shall see.

[01Snake]

.. someone has been working for years to gather enough tenure to justify his $7.00 ... and Jenny, the 16 year old piercing dummy just jumps right in at $7.15.


:lol :lol :lol If someone has worked years to get to $7.00/hr, I'd say they have a lot bigger issues to deal with than payrate.

[Crookshanks]

Guess what - I'm an hourly worker and I earn almost double the proposed new minimum wage; however, I WILL NOT get a pay raise of 40%. And when prices go up, my earning power will be diminished. As a single parent working two jobs, that doesn't please me one bit!

[turambar85]

If he's only making $6 ... he'd be bumped up to at least $7.15, too. :nerd

Yeah, thats true, but...as you kind of mentioned in your next post, it causes problems in certain scenarios.

For example... Mcdonalds has two workers. One fry guy who makes 5.15, and a nearly promoted front-end supervisor who makes 7.00.

Now, with the jump, the fry-guy must make at least 7.25, so the newly promoted employee is...well, screwed. It would only be fair to them, depending on their greed, if they also got a 40% promoted, or if they also got a 2.10 promotion. If Mcdonalds gives either promotion, then the front end supervisor is making at least 9.10. Now, the night manager makes 9 an hour....and the nealy promoted front end supervisor makes more then her at 9.10 an hour. The cycle continues, and Mcdonald's must increase every salary equally, or allow half of its work force to quit.

If this is the case, if there a benefit?

[scott]

I've yet to see the affect on tip-earning workers? Is that wage going up as well? Contrary to what Dan believes, that will affect my small business tremendously (since most of my employees will be tip-earners).

[exstatic]

Here's a clue for Congress: don't wait over a fucking decade next time. That 40% is 10 years of 4%.

[Nbadan]

I've yet to see the affect on tip-earning workers? Is that wage going up as well? Contrary to what Dan believes, that will affect my small business tremendously (since most of my employees will be tip-earners).

Tip-earners only make $3.00 per hour slave-owner.

[Nbadan]

Guess what - I'm an hourly worker and I earn almost double the proposed new minimum wage; however, I WILL NOT get a pay raise of 40%. And when prices go up, my earning power will be diminished. As a single parent working two jobs, that doesn't please me one bit!

Price won't go up 40% either, well, anything not real estate :lol . True, minimum wage increases are inflationary, but many times sellers fail to pass on the additional costs for consumers, or resize packaging to make up for the increased costs. Prices, led by housing more closely tied to speculation rather than inflation, have gone up anyway and those increases have occurred for years where Congress failed to increase the lowest wage, even to keep up with inflation, so in effect, employers and consumers are all benefiting at the costs of the lowest wage earners who's own purchasing power has been eroded and who must more heavily rely on government subsidies to stay afloat.

Your wage may initially only go up 5-10%, but more people with more bread in their pockets means that your business will likely increase over time too, leading to even more bread for you.

[ObiwanGinobili]

Tip-earners only make $3.00 per hour slave-owner.

It was $2.10 last time I was a sla... i mean tip-earner.
Did it go up?

[DarkReign]

It was $2.10 last time I was a sla... i mean tip-earner.
Did it go up?

Thus the reason I tip so damn well. Those (typically speaking) women so damn hard for scraps.

Even when my service sucks, I still throw down an excellent tip.

[Yonivore]

I really don't understand why one would be against this.
Then you don't understand economics.

[johnsmith]

Then you don't understand economics.


No, I completely understand economics, I just don't agree that a raise in minimum wage from $5.15 an hour to $7.25 an hour is going to have a big affect on the national economy.

[Yonivore]

No, I completely understand economics, I just don't agree that a raise in minimum wage from $5.15 an hour to $7.25 an hour is going to have a big affect on the national economy.
D'okie dokie. Then why did Pelosi protect the tuna industry?

Oh yeah, how many entry-level teen jobs, grocery sackers, stock persons, unskilled maintenance, etc... will now cost $2.10.

Trust me, a $2.10 mandatory raise will affect the price of groceries and other products where there is a high dependency on unskilled, minimum wage labor.

[Spurminator]

I guess we'll see...

[SpursWoman]

:lol :lol :lol If someone has worked years to get to $7.00/hr, I'd say they have a lot bigger issues to deal with than payrate.


Using that logic, the only non-loser people with no "issues" that should be affected by a minimum wage increase would be the 16 year olds, or those brand new to the workforce.

But yes, IMO, being uneducated, unmotivated, and/or having a very low capacity to learn to advance your position is a big issue.

[Crookshanks]

What you people fail to comprehend is that the vast majority of minimum wage earners are not people trying to support a family! They are KIDS, living with mommy and daddy. So those kids earning $2.10 an hour more are really going to help the economy? I guess they'll be buying more movie tickets, ipods, and sneakers!

I heard on the radio this morning that, even though Texas is considered a low-wage state, we still have a very small minority of minimum wage earners. The economist said the minimum wage hike would have very little, if any, impact on our economy.

[Spurminator]

Would it be so difficult to have an over-18 minimum wage and an under-18 minimum wage?

[Crookshanks]

Would it be so difficult to have an over-18 minimum wage and an under-18 minimum wage?
Nah, that makes too much sense! :spin

p.s it's a great idea though and I'm pretty sure it's been discussed.

[101A]

Would it be so difficult to have an over-18 minimum wage and an under-18 minimum wage?


Politicians want to hook em young.

[DarkReign]

Politicians want to hoom em young.

Especially the Democrats. They just gave their (potentially) biggest voting demographic a $2 raise.

[Extra Stout]

D'okie dokie. Then why did Pelosi protect the tuna industry?

Oh yeah, how many entry-level teen jobs, grocery sackers, stock persons, unskilled maintenance, etc... will now cost $2.10.

Trust me, a $2.10 mandatory raise will affect the price of groceries and other products where there is a high dependency on unskilled, minimum wage labor.
Gross markup in the grocery business is like 25% on average. Net margin is like 6%. Labor costs are probably a little over half the difference. So that's about 10% of the price of groceries.

If the 40% bump ripples through the entire labor force, that would mean a 4% rise in the cost of groceries.

For a family spending $150 a week of groceries, that works out to $6 a week, or $312 a year.

Now if it on average is say, a 25% bump, then the hit is $195 a year.

[George W Bush]

Gross markup in the grocery business is like 25% on average. Net margin is like 6%. Labor costs are probably a little over half the difference. So that's about 10% of the price of groceries.

If the 40% bump ripples through the entire labor force, that would mean a 4% rise in the cost of groceries.

For a family spending $150 a week of groceries, that works out to $6 a week, or $312 a year.

Now if it on average is say, a 25% bump, then the hit is $195 a year.


It's all fuzzy math to me.

[angel_luv]

It is about time the minimum wage is increased; it needs to start catching up to the cost of living.