Minimum wage not enough to beat poverty, research says
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I'm not sure if there is an official thread for fastfood/walmart/mcdonalds/ fair wages. I searched but didn't see anything definitive so I'm posting this here.
McDonald's offers worker a budget solution: Apply for food stamps
http://www.dailykos.com/story/2013/...orker-a-budget-solution-Apply-for-food-stamps
McDonald's is finally getting real about helping its workers get by. The company has moved past the fake budget that includes a second job and allocates just $20 a month for health insurance. Nope, now McDonald's is giving workers the real secret to survival on McDonald's wages: government assistance.
Chicago McDonald's worker Nancy Salgado—a single mother, 10-year McDonald's employee making the state minimum wage of $8.25, and activist who has twice joined one-day strikes for higher wages—called the "McResources" 1-800 number:
McDonald's answer to living on $8.25 an hour: food stamps. Also heating assistance. And maybe Medicaid.
This is totally realistic and in fact what makes survival on $8.25 an hour possible for most people. But could it possibly highlight more perfectly the reliance of the fast food industry on government assistance to subsidize poverty wages? It's basically a straight-up admission from McDonald's that the highly profitable company knows it isn't paying workers enough to live on and is looking to taxpayers to make that possible while keeping profits high and prices low. This has got to be one of the most f'ed up, corrupt kinds of capitalism imaginable: companies padding their profits by pushing their workers onto public assistance. And it's a feature, not a bug.
So for every person who worries what would happen to the price of their Big Mac if McDonald's had to pay a living wage, there should be a couple who'd be saving by not having to subsidize the other guy's cheap hamburger and McDonald's high profits. I'd mention the benefit to workers and to the basic value that work should pay enough to live on, but let's be real: Those things obviously don't matter to McDonald's.
McDonald's offers worker a budget solution: Apply for food stamps
http://www.dailykos.com/story/2013/...orker-a-budget-solution-Apply-for-food-stamps
McDonald's is finally getting real about helping its workers get by. The company has moved past the fake budget that includes a second job and allocates just $20 a month for health insurance. Nope, now McDonald's is giving workers the real secret to survival on McDonald's wages: government assistance.
Chicago McDonald's worker Nancy Salgado—a single mother, 10-year McDonald's employee making the state minimum wage of $8.25, and activist who has twice joined one-day strikes for higher wages—called the "McResources" 1-800 number:
McDonald's answer to living on $8.25 an hour: food stamps. Also heating assistance. And maybe Medicaid.
This is totally realistic and in fact what makes survival on $8.25 an hour possible for most people. But could it possibly highlight more perfectly the reliance of the fast food industry on government assistance to subsidize poverty wages? It's basically a straight-up admission from McDonald's that the highly profitable company knows it isn't paying workers enough to live on and is looking to taxpayers to make that possible while keeping profits high and prices low. This has got to be one of the most f'ed up, corrupt kinds of capitalism imaginable: companies padding their profits by pushing their workers onto public assistance. And it's a feature, not a bug.
So for every person who worries what would happen to the price of their Big Mac if McDonald's had to pay a living wage, there should be a couple who'd be saving by not having to subsidize the other guy's cheap hamburger and McDonald's high profits. I'd mention the benefit to workers and to the basic value that work should pay enough to live on, but let's be real: Those things obviously don't matter to McDonald's.
Subs
Thanks Camille.
source: Huffington Post
Walmart Is One Of The Biggest Beneficiaries Of Food Stamps
One of the major beneficiaries of the nation's food-stamp program is actually a hugely profitable company: Walmart.
Americans spend about 18 percent of all food stamp dollars at Walmart, according to company estimates told to the Wall Street Journal and confirmed by The Huffington Post. That's about $14 billion of the $80 billion Congress set aside for food stamps last year. The company's total profits for 2013 were $17 billion.
The news comes just as food-stamp benefits are about to be cut for 47 million Americans. On Friday, a key provision boosting the program is set to expire.
After that, 47 million Americans will struggle even more than usual to afford the basics. Walmart isn't too concerned: When shoppers become more concerned about price, they’re more likely to turn to Walmart, Bill Simon, the retailer’s U.S. CEO, said at an analyst meeting earlier this month.
"I would say we're cautious but modestly optimistic," Simon said. "When the [food-stamp] benefits expanded, our market share actually went down."
Still, as the nation's largest low-cost retailer, the company has close ties to the food-stamp economy. Walmart has historically lobbied around food stamps, according to a report from Eat Drink Politics, an advocacy group. In addition, the company also worked with First Lady Michelle Obama in 2011 on the Great American Family Dinner Challenge, a push to get families to eat healthy on a food-stamp budget.
“A significant percentage of all SNAP dollars are spent in our stores, and they are used to buy items like bananas, whole milk, Ramen noodles, and hot dogs,” then-Walmart executive Leslie Dach said at a conference in 2011, where he discussed the retailer's plans to help shoppers buy healthier meals on food stamps.
That so many people associate Walmart with food stamps was clear earlier this month, when Louisiana food-stamp users realized a computer glitch caused them to temporarily have unlimited food-stamp money to spend. What did they do? They raced to local Walmart stores and stripped the shelves bare.
In the past, companies like Pepsi, Coke and the midwestern grocery chain Kroger, have lobbied around food stamps, indicating how much they rely on the money. Last year, Tony Vernon, then the incoming CEO of Kraft, admitted the mac n’ cheese maker opposed food stamp cuts because food stamp users were “a big part of our audience.”
Walmart Is One Of The Biggest Beneficiaries Of Food Stamps
One of the major beneficiaries of the nation's food-stamp program is actually a hugely profitable company: Walmart.
Americans spend about 18 percent of all food stamp dollars at Walmart, according to company estimates told to the Wall Street Journal and confirmed by The Huffington Post. That's about $14 billion of the $80 billion Congress set aside for food stamps last year. The company's total profits for 2013 were $17 billion.
The news comes just as food-stamp benefits are about to be cut for 47 million Americans. On Friday, a key provision boosting the program is set to expire.
After that, 47 million Americans will struggle even more than usual to afford the basics. Walmart isn't too concerned: When shoppers become more concerned about price, they’re more likely to turn to Walmart, Bill Simon, the retailer’s U.S. CEO, said at an analyst meeting earlier this month.
"I would say we're cautious but modestly optimistic," Simon said. "When the [food-stamp] benefits expanded, our market share actually went down."
Still, as the nation's largest low-cost retailer, the company has close ties to the food-stamp economy. Walmart has historically lobbied around food stamps, according to a report from Eat Drink Politics, an advocacy group. In addition, the company also worked with First Lady Michelle Obama in 2011 on the Great American Family Dinner Challenge, a push to get families to eat healthy on a food-stamp budget.
“A significant percentage of all SNAP dollars are spent in our stores, and they are used to buy items like bananas, whole milk, Ramen noodles, and hot dogs,” then-Walmart executive Leslie Dach said at a conference in 2011, where he discussed the retailer's plans to help shoppers buy healthier meals on food stamps.
That so many people associate Walmart with food stamps was clear earlier this month, when Louisiana food-stamp users realized a computer glitch caused them to temporarily have unlimited food-stamp money to spend. What did they do? They raced to local Walmart stores and stripped the shelves bare.
In the past, companies like Pepsi, Coke and the midwestern grocery chain Kroger, have lobbied around food stamps, indicating how much they rely on the money. Last year, Tony Vernon, then the incoming CEO of Kraft, admitted the mac n’ cheese maker opposed food stamp cuts because food stamp users were “a big part of our audience.”
McDonald's And Starbucks' CEOs Make More Than $9,200 An Hour
McDonald's And Starbucks' CEOs Make More Than $9,200 An Hour
By Hayley Peterson | Business Insider
Tue, Dec 10, 2013 6:01 AM EST
The chief executives of McDonald's and Starbucks earn more than $9,200 an hour, which is at least 1,000 times the hourly wages of their sales associates, according to a new report by the personal finance website NerdWallet.
The report highlights fast food and retail companies with some of the biggest gaps between CEO pay and hourly wages paid to associates.
McDonald's, Starbucks and Dollar General top the list, followed by Gap, TJ Maxx, Target, Wal-Mart, CVS Caremark, Best Buy and AT&T Wireless.
Out of those 10 companies, median CEO pay on an hourly basis was calculated as $7,334, compared to $8.73 for sales associates. NerdWallet reviewed 100 companies for the report and selected the 10 that had the highest annual CEO pay to compare the disparities.
CEO pay was calculated by dividing each chief executive's total compensation (as reported in the company's annual proxy statement) by 60 hours a week times 50 weeks per year. Sales associates' wage information was obtained from Glassdoor.com.
The NerdWallet study comes as employees of fast food and retail chains have been staging a series of demonstrations and strikes demanding better pay.
http://finance.yahoo.com/news/mcdonalds-starbucks-ceos-more-9-110100507.html
McDonald's And Starbucks' CEOs Make More Than $9,200 An Hour
By Hayley Peterson | Business Insider
Tue, Dec 10, 2013 6:01 AM EST
The chief executives of McDonald's and Starbucks earn more than $9,200 an hour, which is at least 1,000 times the hourly wages of their sales associates, according to a new report by the personal finance website NerdWallet.
The report highlights fast food and retail companies with some of the biggest gaps between CEO pay and hourly wages paid to associates.
McDonald's, Starbucks and Dollar General top the list, followed by Gap, TJ Maxx, Target, Wal-Mart, CVS Caremark, Best Buy and AT&T Wireless.
Out of those 10 companies, median CEO pay on an hourly basis was calculated as $7,334, compared to $8.73 for sales associates. NerdWallet reviewed 100 companies for the report and selected the 10 that had the highest annual CEO pay to compare the disparities.
CEO pay was calculated by dividing each chief executive's total compensation (as reported in the company's annual proxy statement) by 60 hours a week times 50 weeks per year. Sales associates' wage information was obtained from Glassdoor.com.
The NerdWallet study comes as employees of fast food and retail chains have been staging a series of demonstrations and strikes demanding better pay.
http://finance.yahoo.com/news/mcdonalds-starbucks-ceos-more-9-110100507.html
Seven Nobel Laureates Endorse Higher U.S. Minimum Wage
Seven Nobel Laureates Endorse Higher U.S. Minimum Wage
By Lorraine Woellert
Jan 14, 2014 12:39 PM CT
Seven recipients of the Nobel Prize in Economic Sciences were among 75 economists endorsing an increase in the minimum wage for U.S. workers.
In a letter released today, the group called for the hourly minimum wage to reach $10.10 by 2016 from its current $7.25, and then be indexed for inflation thereafter. They said “the weight” of economic research shows higher pay doesn’t lead to fewer jobs.
Past increases in hourly pay have had “little or no negative effect on the employment of minimum wage workers, even during times of weakness in the labor market,” the economists wrote. “A minimum wage increase could have a small stimulative effect on the economy as low-wage workers spend their additional earnings.”
Nobel Prize winners Kenneth Arrow, Peter Diamond, Eric Maskin, Thomas Schelling, Robert Solow, Michael Spence and Joseph Stiglitz were among signatories of the letter, which was released by the Economic Policy Institute, a Washington research group funded in part by labor unions.
Eugene Fama, Lars Peter Hansen and Robert Shiller, last year’s laureates, were among those who didn’t sign the letter.
“I am against the concept of a mandated minimum wage,” Fama said in an e-mail. “Wages should be determined in the open market, without government interference.”
Real Wages
Christopher Sims, who shared the prize in 2011, said research shows “very small, if any, negative effects on employment,” especially when real wages are low. And the impact on worker incomes can be “substantial,” he said.
“Certainly a high enough minimum wage would have damaging effects, but it seems to me unlikely that $10.10 is high enough to have widespread bad effects,” Sims said in an e-mail.
The minimum wage debate is perhaps more a matter of politics than economics. Fewer than 5 percent of hourly U.S. workers made the federal minimum wage or less in 2012, according to Commerce Department data.
That’s a drop from 5.2 percent in 2011 and the share is likely to shrink further as more states and localities adopt their own, higher wage floors. Twenty-one states and Washington, D.C. have minimum wages higher than the federal rate, with 13 approving additional increases beginning Jan. 1. Legislators in several more, including South Dakota and Maryland, will consider establishing their own minimum wages this year.
While President Barack Obama has endorsed an increase in the wage, legislation is stalled in Congress. A Dec. 12-15 ABC News/Washington Post poll found 66 percent of Americans supporting an increase in the minimum wage. Thirty-one percent oppose an increase, which they say could lead some businesses to cut jobs.
http://www.bloomberg.com/news/2014-...urge-increase-in-u-s-worker-minimum-wage.html
Seven Nobel Laureates Endorse Higher U.S. Minimum Wage
By Lorraine Woellert
Jan 14, 2014 12:39 PM CT
Seven recipients of the Nobel Prize in Economic Sciences were among 75 economists endorsing an increase in the minimum wage for U.S. workers.
In a letter released today, the group called for the hourly minimum wage to reach $10.10 by 2016 from its current $7.25, and then be indexed for inflation thereafter. They said “the weight” of economic research shows higher pay doesn’t lead to fewer jobs.
Past increases in hourly pay have had “little or no negative effect on the employment of minimum wage workers, even during times of weakness in the labor market,” the economists wrote. “A minimum wage increase could have a small stimulative effect on the economy as low-wage workers spend their additional earnings.”
Nobel Prize winners Kenneth Arrow, Peter Diamond, Eric Maskin, Thomas Schelling, Robert Solow, Michael Spence and Joseph Stiglitz were among signatories of the letter, which was released by the Economic Policy Institute, a Washington research group funded in part by labor unions.
Eugene Fama, Lars Peter Hansen and Robert Shiller, last year’s laureates, were among those who didn’t sign the letter.
“I am against the concept of a mandated minimum wage,” Fama said in an e-mail. “Wages should be determined in the open market, without government interference.”
Real Wages
Christopher Sims, who shared the prize in 2011, said research shows “very small, if any, negative effects on employment,” especially when real wages are low. And the impact on worker incomes can be “substantial,” he said.
“Certainly a high enough minimum wage would have damaging effects, but it seems to me unlikely that $10.10 is high enough to have widespread bad effects,” Sims said in an e-mail.
The minimum wage debate is perhaps more a matter of politics than economics. Fewer than 5 percent of hourly U.S. workers made the federal minimum wage or less in 2012, according to Commerce Department data.
That’s a drop from 5.2 percent in 2011 and the share is likely to shrink further as more states and localities adopt their own, higher wage floors. Twenty-one states and Washington, D.C. have minimum wages higher than the federal rate, with 13 approving additional increases beginning Jan. 1. Legislators in several more, including South Dakota and Maryland, will consider establishing their own minimum wages this year.
While President Barack Obama has endorsed an increase in the wage, legislation is stalled in Congress. A Dec. 12-15 ABC News/Washington Post poll found 66 percent of Americans supporting an increase in the minimum wage. Thirty-one percent oppose an increase, which they say could lead some businesses to cut jobs.
http://www.bloomberg.com/news/2014-...urge-increase-in-u-s-worker-minimum-wage.html
Re: Seven Nobel Laureates Endorse Higher U.S. Minimum Wage
How Does Your State Rank on the Minimum Wage?
Up to 35 million workers—nearly a third of the U.S. workforce—would see their incomes increase with a raise in the minimum wage, according to a new study by The Hamilton Project that details the “ripple effect”: that an increase in minimum wage also tends to bump up pay for workers who earn slightly more than the minimum wage.
Less than 3 percent of workers are paid exactly minimum wage, but close to 30 percent earn equal to or below 150 percent of the minimum wage ($10.88 for states where the federal minimum wage of $7.25 is the base). The study uses data from 2012, when 18 states and Washington, D.C. fixed minimum hourly pay above the federal threshold of $7.25. (In 2014, that number rose to 21 states plus D.C.) The Hamilton Project estimates that 16 million workers in these states could gain from a minimum wage hike; the other 32 states could see up to 18.9 million workers earning more.
In Montana, where the minimum wage in 2012 was $7.65, the highest share of workers—37.2 percent—made equal to or less than 150 percent of the minimum wage.
Where does your state stand?
SOURCE
How Does Your State Rank on the Minimum Wage?
Up to 35 million workers—nearly a third of the U.S. workforce—would see their incomes increase with a raise in the minimum wage, according to a new study by The Hamilton Project that details the “ripple effect”: that an increase in minimum wage also tends to bump up pay for workers who earn slightly more than the minimum wage.
Less than 3 percent of workers are paid exactly minimum wage, but close to 30 percent earn equal to or below 150 percent of the minimum wage ($10.88 for states where the federal minimum wage of $7.25 is the base). The study uses data from 2012, when 18 states and Washington, D.C. fixed minimum hourly pay above the federal threshold of $7.25. (In 2014, that number rose to 21 states plus D.C.) The Hamilton Project estimates that 16 million workers in these states could gain from a minimum wage hike; the other 32 states could see up to 18.9 million workers earning more.
In Montana, where the minimum wage in 2012 was $7.65, the highest share of workers—37.2 percent—made equal to or less than 150 percent of the minimum wage.
Where does your state stand?
SOURCE
Re: Seven Nobel Laureates Endorse Higher U.S. Minimum Wage
An interesting 2013 post from the thread Minimum Wage Increase $2.00:
in context of the next post, below . . .
An interesting 2013 post from the thread Minimum Wage Increase $2.00:
in context of the next post, below . . .
Re: Seven Nobel Laureates Endorse Higher U.S. Minimum Wage
Obama to raise minimum wage
for federal contract workers
McClatchy Washington Bureau
By Anita Kumar
January 28, 2014
President Barack Obama will announce tonight in his State of the Union address that he will raise the minimum wage to $10.10 per hour for workers on new government contracts, according to a White House document.
Liberal groups have been pressing Obama to act unilaterally since a divided Congress has failed to take up the issue to raise the minimum wage for all Americans.
But Obama's action will be more limited that advocates wanted -- impacting only future cntracts, not existing ones.
Obama will renew his call tonight for Congress to pass legislation to raise the minimum wage for all workers from $7.25 per hour to $10.10 per hour by 2015.
"Hardworking Americans...working on new federal contracts will benefit from the Executive Order (EO)," the White House said in a statement. Some examples of the people who would benefit are military base workers who wash dishes, serve food and do laundry.
An estimated 2 million Americans work on federal contracts, though the number of workers receiving the minimum wage are only a portion of that number.
A survey by the National Employment Law Project of contractors who manufacture military uniforms, provide food and janitorial services, and truck goods found that 75 percent of them earn less than $10 per hour.
Read more here: http://www.mcclatchydc.com/2014/01/28/215973/obama-to-raise-minimum-wage-for.html#storylink=cpy
Obama to raise minimum wage
for federal contract workers
McClatchy Washington Bureau
By Anita Kumar
January 28, 2014
President Barack Obama will announce tonight in his State of the Union address that he will raise the minimum wage to $10.10 per hour for workers on new government contracts, according to a White House document.
Liberal groups have been pressing Obama to act unilaterally since a divided Congress has failed to take up the issue to raise the minimum wage for all Americans.
But Obama's action will be more limited that advocates wanted -- impacting only future cntracts, not existing ones.
Obama will renew his call tonight for Congress to pass legislation to raise the minimum wage for all workers from $7.25 per hour to $10.10 per hour by 2015.
"Hardworking Americans...working on new federal contracts will benefit from the Executive Order (EO)," the White House said in a statement. Some examples of the people who would benefit are military base workers who wash dishes, serve food and do laundry.
An estimated 2 million Americans work on federal contracts, though the number of workers receiving the minimum wage are only a portion of that number.
A survey by the National Employment Law Project of contractors who manufacture military uniforms, provide food and janitorial services, and truck goods found that 75 percent of them earn less than $10 per hour.
Read more here: http://www.mcclatchydc.com/2014/01/28/215973/obama-to-raise-minimum-wage-for.html#storylink=cpy
The Birth Of The Minimum Wage
The Birth Of The Minimum Wage (17:17)
January 17, 2014 8:51 PM
For most of U.S. history, there was no minimum wage. A few times, politicians passed laws tiptoeing toward a minimum. But the Supreme Court struck those laws down.
On today's show: how the U.S. finally got a minimum wage. It's a story of exploding bakeries, a blue eagle, and a guy who may or may not have been drunk.
http://www.npr.org/blogs/money/2014/01/17/263487421/episode-510-the-birth-of-the-minimum-wage
The Birth Of The Minimum Wage (17:17)
January 17, 2014 8:51 PM
For most of U.S. history, there was no minimum wage. A few times, politicians passed laws tiptoeing toward a minimum. But the Supreme Court struck those laws down.
On today's show: how the U.S. finally got a minimum wage. It's a story of exploding bakeries, a blue eagle, and a guy who may or may not have been drunk.
http://www.npr.org/blogs/money/2014/01/17/263487421/episode-510-the-birth-of-the-minimum-wage
http://www.dailykos.com/story/2014/02/03/1274646/-Business-Recognizes-Eroding-Middle-Class
Corporate America Recognizes Eroding Middle Class
The world of business is admitting what working people have been living: the middle class is dying:
NY Times: The Middle Class Is Steadily Eroding. Just Ask the Business World.
What this may mean is more and more bubbles, as the wealthy chase higher returns that can not be created by an economy without middle class demand. Meanwhile, the increasing impovrishment and proletarianization of the former middle class could lead to a greater class consciousness and acts against the wealthy. It might. There's no inevitability.
The income and wealth inequality in our nation is immoral and bad for business.
Update I: From bobswern in the comments:
I agree with bobswern and Elizabeth Warren that this has been long in the making. The data is there. Since 1978, in the middle of the Carter administration (an administration that was often unsympathetic to the concerns of labor), and accelerating with Reagan, the imporvishment of the middle class has been happening. Killing unions was key to it.
Corporate America Recognizes Eroding Middle Class
The world of business is admitting what working people have been living: the middle class is dying:
NY Times: The Middle Class Is Steadily Eroding. Just Ask the Business World.
What this may mean is more and more bubbles, as the wealthy chase higher returns that can not be created by an economy without middle class demand. Meanwhile, the increasing impovrishment and proletarianization of the former middle class could lead to a greater class consciousness and acts against the wealthy. It might. There's no inevitability.
The income and wealth inequality in our nation is immoral and bad for business.
Update I: From bobswern in the comments:
I agree with bobswern and Elizabeth Warren that this has been long in the making. The data is there. Since 1978, in the middle of the Carter administration (an administration that was often unsympathetic to the concerns of labor), and accelerating with Reagan, the imporvishment of the middle class has been happening. Killing unions was key to it.
CBO: Wage hike to cost 500K jobs
CBO: Wage hike to cost 500K jobs
By Erik Wasson
February 18, 2014, 01:41 pm
President Obama’s proposal to raise the minimum wage to $10.10 per hour would cost 500,000 jobs in 2016, according to a report released Tuesday by the nonpartisan Congressional Budget Office.
The report also found hiking the wage from $7.25 per hour would raise income for about 16.5 million workers by $31 billion, potentially pulling nearly 1 million people out of poverty.
The White House and economic groups on the left immediately pushed back at the CBO’s conclusions on jobs even as they hailed the findings on poverty, saying its conclusions on jobs ran counter to other research.
“CBO’s estimates of the impact of raising the minimum wage on employment does not reflect the current consensus view of economists,” Council of Economic Advisers Chairman Jason Furman wrote in a blog post. “The bulk of academic studies, have concluded that the effects on employment of minimum wage increases in the range now under consideration are likely to be small to nonexistent.”
Given its findings on poverty alleviation, Furman told reporters the CBO report was an overall positive for the White House.
“Sometimes you have to have a respectful disagreement among economists,” Furman said in a conference call. “I think a lot of economists who have looked at [the] literature would summarize it differently than CBO has done here.”
Democrats are hoping to make the minimum wage a top issue in the 2014 midterms if the GOP blocks passage of a bill, but the CBO report would bolster Republican arguments for stopping a wage hike.
The office of Speaker John Boehner (R-Ohio) was quick to seize on the CBO finding, arguing it shows Republicans are right that the proposal would hurt the economy.
“This report confirms what we’ve long known: while helping some, mandating higher wages has real costs, including fewer people working. With unemployment Americans’ top concern, our focus should be creating — not destroying — jobs for those who need them most,” said spokesman Brendan Buck.
Senate GOP conference Chairman John Thune (R-S.D.) noted that the CBO estimated the upper range of job losses from hiking the minimum wage to $10.10 was 1 million jobs.
“Despite the fact that unemployment is Americans’ top concern, Democrats continue their insatiable quest to pass heavy-handed government policies that are costing jobs,” he said.
The minimum wage findings are the second time in weeks the CBO has stirred up controversy on a high-profile issue.
Earlier this month, the CBO found that over the next decade, ObamaCare would result in the equivalent of 2.5 million fewer workers. It concluded many workers would chose to remain at home due to ObamaCare’s expansion of health coverage.
Republicans said the analysis was evidence that the healthcare law will hurt economic growth, while Democrats countered that jobs are not being “lost” because workers will be able to choose other options.
CBO reports have frequently complicated the GOP agenda as well. They have consistently found that ObamaCare overall would reduce budget deficits, for example.
The CBO looked at two options for raising the minimum wage, and did so without prompting from Congress.
The first option is similar to the Senate Democratic approach, and would raise the minimum wage in three steps every year through 2016 until the $10.10 level is reached, on July 1, 2016. This option also includes an increase to the minimum wage for tipped workers and would index the wage increase to inflation.
The report found this hike would result in total employment being lower by 500,000 fewer jobs by 2016.
It found 900,000 fewer people would be living in poverty by 2016 and that families below the poverty line would receive $5 billion more in income.
The figures on poverty are important because Obama is making the minimum wage hike a key part of his message that government must do more to tackle income inequality. Democrats have rallied around the wage hike, which polls well among Democrats, Republicans and independent voters.
Senate Majority Leader Harry Reid (D-Nev.) has said he will bring a minimum wage bill to the floor in the coming weeks.
The CBO also looked at a second option in which the minimum wage rises to $9 per hour over two years. Under this option, the CBO did not index the wage hike to inflation. Obama initially proposed this idea before being pressured by Senate Democrats to seek a higher increase.
This scenario would cost the nation 100,000 jobs in 2016. Low-wage workers still employed would make $9 billion more and real income increases, factoring in job losses, would be $1 billion.
Obama raised the minimum wage for federal contractors last week to $10.10 by executive order, and had discussed it at length in his State of the Union address last month.
“Today, the federal minimum wage is worth about 20 percent less than it was when Ronald Reagan first stood here,” he said.
Raising the wage to $10.10 per hour will help families and “give businesses customers with more money to spend,” he said. Lobbying on the issue is also intensifying.
“The CBO report illustrates what small businesses have long contended — increasing the minimum wage costs jobs,” said National Federation of Independent Business spokesman Eric Reller. “Coming on the heels of rising health care costs, higher taxes, and increased regulations — this is another example of Washington piling on to small business.”
The liberal group Americans United for Change, meanwhile, blasted the findings, releasing a YouTube video that depicted the CBO’s conclusions as being from outer space.
AFL-CIO union President Richard Trumka dismissed the CBO finding as “noise.”
“Every time momentum builds for lifting wages, conservative ideologues say it will cost jobs,” he said. “Let’s raise the wage and we’ll prove the CBO wrong again.”
http://thehill.com/blogs/on-the-money/economy/198605-cbo-minimum-wage
CBO: Wage hike to cost 500K jobs
By Erik Wasson
February 18, 2014, 01:41 pm
President Obama’s proposal to raise the minimum wage to $10.10 per hour would cost 500,000 jobs in 2016, according to a report released Tuesday by the nonpartisan Congressional Budget Office.
The report also found hiking the wage from $7.25 per hour would raise income for about 16.5 million workers by $31 billion, potentially pulling nearly 1 million people out of poverty.
The White House and economic groups on the left immediately pushed back at the CBO’s conclusions on jobs even as they hailed the findings on poverty, saying its conclusions on jobs ran counter to other research.
“CBO’s estimates of the impact of raising the minimum wage on employment does not reflect the current consensus view of economists,” Council of Economic Advisers Chairman Jason Furman wrote in a blog post. “The bulk of academic studies, have concluded that the effects on employment of minimum wage increases in the range now under consideration are likely to be small to nonexistent.”
Given its findings on poverty alleviation, Furman told reporters the CBO report was an overall positive for the White House.
“Sometimes you have to have a respectful disagreement among economists,” Furman said in a conference call. “I think a lot of economists who have looked at [the] literature would summarize it differently than CBO has done here.”
Democrats are hoping to make the minimum wage a top issue in the 2014 midterms if the GOP blocks passage of a bill, but the CBO report would bolster Republican arguments for stopping a wage hike.
The office of Speaker John Boehner (R-Ohio) was quick to seize on the CBO finding, arguing it shows Republicans are right that the proposal would hurt the economy.
“This report confirms what we’ve long known: while helping some, mandating higher wages has real costs, including fewer people working. With unemployment Americans’ top concern, our focus should be creating — not destroying — jobs for those who need them most,” said spokesman Brendan Buck.
Senate GOP conference Chairman John Thune (R-S.D.) noted that the CBO estimated the upper range of job losses from hiking the minimum wage to $10.10 was 1 million jobs.
“Despite the fact that unemployment is Americans’ top concern, Democrats continue their insatiable quest to pass heavy-handed government policies that are costing jobs,” he said.
The minimum wage findings are the second time in weeks the CBO has stirred up controversy on a high-profile issue.
Earlier this month, the CBO found that over the next decade, ObamaCare would result in the equivalent of 2.5 million fewer workers. It concluded many workers would chose to remain at home due to ObamaCare’s expansion of health coverage.
Republicans said the analysis was evidence that the healthcare law will hurt economic growth, while Democrats countered that jobs are not being “lost” because workers will be able to choose other options.
CBO reports have frequently complicated the GOP agenda as well. They have consistently found that ObamaCare overall would reduce budget deficits, for example.
The CBO looked at two options for raising the minimum wage, and did so without prompting from Congress.
The first option is similar to the Senate Democratic approach, and would raise the minimum wage in three steps every year through 2016 until the $10.10 level is reached, on July 1, 2016. This option also includes an increase to the minimum wage for tipped workers and would index the wage increase to inflation.
The report found this hike would result in total employment being lower by 500,000 fewer jobs by 2016.
It found 900,000 fewer people would be living in poverty by 2016 and that families below the poverty line would receive $5 billion more in income.
The figures on poverty are important because Obama is making the minimum wage hike a key part of his message that government must do more to tackle income inequality. Democrats have rallied around the wage hike, which polls well among Democrats, Republicans and independent voters.
Senate Majority Leader Harry Reid (D-Nev.) has said he will bring a minimum wage bill to the floor in the coming weeks.
The CBO also looked at a second option in which the minimum wage rises to $9 per hour over two years. Under this option, the CBO did not index the wage hike to inflation. Obama initially proposed this idea before being pressured by Senate Democrats to seek a higher increase.
This scenario would cost the nation 100,000 jobs in 2016. Low-wage workers still employed would make $9 billion more and real income increases, factoring in job losses, would be $1 billion.
Obama raised the minimum wage for federal contractors last week to $10.10 by executive order, and had discussed it at length in his State of the Union address last month.
“Today, the federal minimum wage is worth about 20 percent less than it was when Ronald Reagan first stood here,” he said.
Raising the wage to $10.10 per hour will help families and “give businesses customers with more money to spend,” he said. Lobbying on the issue is also intensifying.
“The CBO report illustrates what small businesses have long contended — increasing the minimum wage costs jobs,” said National Federation of Independent Business spokesman Eric Reller. “Coming on the heels of rising health care costs, higher taxes, and increased regulations — this is another example of Washington piling on to small business.”
The liberal group Americans United for Change, meanwhile, blasted the findings, releasing a YouTube video that depicted the CBO’s conclusions as being from outer space.
AFL-CIO union President Richard Trumka dismissed the CBO finding as “noise.”
“Every time momentum builds for lifting wages, conservative ideologues say it will cost jobs,” he said. “Let’s raise the wage and we’ll prove the CBO wrong again.”
http://thehill.com/blogs/on-the-money/economy/198605-cbo-minimum-wage
Re: CBO: Wage hike to cost 500K jobs
This assessment makes no sense. History proves different.
<iframe width="420" height="315" src="//www.youtube.com/embed/ioTmVSpdjkE" frameborder="0" allowfullscreen></iframe>
This assessment makes no sense. History proves different.
<iframe width="420" height="315" src="//www.youtube.com/embed/ioTmVSpdjkE" frameborder="0" allowfullscreen></iframe>
http://features.blogs.fortune.cnn.com/2014/02/21/wal-mart-minimum-wage/
FORTUNE -- You may be experiencing neck strain if you've been trying to track Wal-Mart's position on a federal minimum wage increase over the last couple of days. Bloomberg made waves on Wednesday when it reported that the mega-retailer was looking at backing a federal wage hike. Considering the company's size -- it employs 1.3 million people in the U.S. alone, roughly 1% of the entire private-sector workforce -- such a pronouncement could have a seismic impact on the living-wage debate heating up in the capital.
Except that the company isn't considering throwing its support behind the Democratic push. Wal-Mart (WMT) spokesman David Tovar, who gave the interview to Bloomberg that set off the frenzy, made that much clear on Thursday in follow-up interviews with other outlets, including Fortune.
The company, Tovar says, is simply monitoring the debate to assess what impact any new policy could have on its business. That said, Wal-Mart will remain neutral unless it decides a proposed minimum wage increase either unfairly targets the company while exempting other retailers, as it did in Washington, or doesn't allow employers to phase the higher wage in over time. "If a proposal meets those conditions, we'll stay out of it," Tovar says. "If they don't, we'll strongly consider opposing it."
This can't be true that Walmart is supporting raising wages, hell has frozen over by the Polar Vortex...
FORTUNE -- You may be experiencing neck strain if you've been trying to track Wal-Mart's position on a federal minimum wage increase over the last couple of days. Bloomberg made waves on Wednesday when it reported that the mega-retailer was looking at backing a federal wage hike. Considering the company's size -- it employs 1.3 million people in the U.S. alone, roughly 1% of the entire private-sector workforce -- such a pronouncement could have a seismic impact on the living-wage debate heating up in the capital.
Except that the company isn't considering throwing its support behind the Democratic push. Wal-Mart (WMT) spokesman David Tovar, who gave the interview to Bloomberg that set off the frenzy, made that much clear on Thursday in follow-up interviews with other outlets, including Fortune.
The company, Tovar says, is simply monitoring the debate to assess what impact any new policy could have on its business. That said, Wal-Mart will remain neutral unless it decides a proposed minimum wage increase either unfairly targets the company while exempting other retailers, as it did in Washington, or doesn't allow employers to phase the higher wage in over time. "If a proposal meets those conditions, we'll stay out of it," Tovar says. "If they don't, we'll strongly consider opposing it."
This can't be true that Walmart is supporting raising wages, hell has frozen over by the Polar Vortex...
The argument against the minimum wage is that the market will set the wage. If you study large big box retailers that pay a flat wage across the country, you can see if there a competitive market.
If there was a market you would see something like gas prices, one minute it is $3.90, than it drops to $3.10. With these big box stores, you see one low labor rate near the minimum wage for the entire country that does not fluctuate. This indicates there is a lack of a free market and the company has become state run similar to the companies in China that are controlled by the state.
Government needs to step in when you see wages that do not fluctuate at all by a large company. In the long run, the role of the free market will decrease, and wages and prices will be planned using various mechanism. This will have to occur because of automation, mergers, technology or you will have economic chaos.
If there was a market you would see something like gas prices, one minute it is $3.90, than it drops to $3.10. With these big box stores, you see one low labor rate near the minimum wage for the entire country that does not fluctuate. This indicates there is a lack of a free market and the company has become state run similar to the companies in China that are controlled by the state.
Government needs to step in when you see wages that do not fluctuate at all by a large company. In the long run, the role of the free market will decrease, and wages and prices will be planned using various mechanism. This will have to occur because of automation, mergers, technology or you will have economic chaos.
Re: CBO: Wage hike to cost 500K jobs
Why are you comparing Ford raising wages voluntarily to a government mandate for everyone, no matter what industry it is?
If raising minimum wage is not enough to reduce poverty then should we do nothing? Because it will not reduce poverty then we should let the wage stand regardless of the ability to buy one more gallon of gas or two more meals?
because one step towards ending poverty doesn't find poverty being reduced we should not even take that step in that direction?
posted from a hood near you
because one step towards ending poverty doesn't find poverty being reduced we should not even take that step in that direction?
posted from a hood near you
Last edited:
What makes you think it takes "one step" in that direction?If raising minimum wage is not enough to reduce poverty then should we do nothing? Because it will not reduce poverty then we should let the wage stand regardless of the ability to buy one more gallon of gas or two more meals?
because one step towards ending poverty doesn't find poverty being reduced we should not even take that step in that direction?
posted from a hood near you
What makes you dismiss the real phenomenon that for every person who's currently working for $7.25, and will get a raise to $10, that there is a percentage of the low-skilled workforce that will not even get hired for $10? Is there a poverty reduction by not getting hired at the higher wage?
The problem is every layman, that wishes for a minimum wage to be a good idea, is looking at this as a political issue instead of an economic issue.
Is poverty reduced if two people work for $6 each for a total of $12, or is it better to have one person for $10. Which solution puts more money in the hands of the low skilled?
Companies don't just hire the second person and say, "fuck it, I'll pay $20 for two people." Especially if the business's optimal labor cost is $12. They make the one do more and not hire the second. Is that efficient? Companies have budgets for labor and they aren't likely to casually exceed it because of a government decree.
If raising minimum wage is not enough to reduce poverty then should we do nothing? Because it will not reduce poverty then we should let the wage stand regardless of the ability to buy one more gallon of gas or two more meals?
because one step towards ending poverty doesn't find poverty being reduced we should not even take that step in that direction?
posted from a hood near you
Not a concern since the CBO report estimated that raising the MW would lift nearly a million people out of poverty.
That's a million people with more disposable income and using fewer resources like Medicaid and food stamps.
Absolutely true. No argument from me on that one point.
But they do hire when the demand is up and they need the help. When more people on the lower rungs make more money, they spend it, feeding that demand.
The answer is never make it so companies can pay whatever they can get away with but to open more opportunities so people can make themselves work that 10.10 or greater through education and training.
Or you can not dictate the $10.10 and let OJT take up a greater percentage of "education and training."
And let's stop taking for granted that the poor will or should spend extra money. Your President wouldn't think his MyRA plan will work if we actually thought poor people spent all their money.
Or you can do both. There are many exceptions to the minimum wage for training.
To do that would have us no longer dealing in reality. I would hope poor people would save more but having to spend more would be inevitable.
Or you can not do the one that doesn't work. Tens of millions of people in poverty and you're especially attached to the government plan that could lift a million out of poverty. It doesn't even address teen black-males that don't have jobs at all. Telling them stay in a broken education system is sadistic.
And everyone saves and spends more when their income increases. Bill Gates saves 99% of an extra dollar earned and a poor person will save 1%. Neither percentage is set in stone, and neither one is only buying necessities.
And telling them to not participate in that same education system (which isn't broken everywhere) is setting them up for failure and disarming them for their future.
http://www.washingtonpost.com/blogs/wonkblog/wp/2014/01/04/economists-agree-raising-the-minimum-wage-reduces-poverty/
Economists agree: Raising the minimum wage reduces poverty
By Mike Konczal
January 4 at 9:00 am
One funny part of watching journalists cover the minimum wage debate is that they often have to try and referee cutting-edge econometric debates. Some studies, notably those lead by UMass Amherst economist Arin Dube, argue that there are no adverse employment effects from small increases in the minimum wage. Other studies, notably those lead by University of California Irvine economist David Neumark, argue there is an adverse effect. Whatever can we conclude?
But instead of diving into that controversy, let’s take a look at where these economists, and all the other researchers investigating the minimum wage, do agree: They all tend to think that raising the minimum wage would reduce poverty. That’s the conclusion of a major new paper by Dube, titled “Minimum Wages and the Distribution of Family Incomes.”
Let’s first highlight the major results. Dube uses the latest in minimum-wage statistics and finds a negative relationship between the minimum wage and poverty. Specifically, raising the minimum wage 10 percent (say from $7.25 to near $8) would reduce the number of people living in poverty 2.4 percent. (For those who thrive on jargon, the minimum wage has an “elasticity” of -0.24 when it comes to poverty reduction.)
Using this as an estimate, raising the minimum wage to $10.10 an hour, as many Democrats are proposing in 2014, would reduce the number of people living in poverty by 4.6 million. It would also boost the incomes of those at the 10th percentile by $1,700. That’s a significant increase in the quality of life for our worst off that doesn’t require the government to tax and spend a single additional dollar. And, given that this policy is self-enforcing with virtually no administrative costs while challenging the employer’s market power, it is a powerful complement to the rest of the policies the government uses to boost the living standards of the worst off, including the Earned Income Tax Credit, food stamps, Medicaid, etc.
Now, this is normally the part where we’d have to go through the counter-arguments, using different data and techniques from different economists, to argue that the minimum wage wouldn’t do this. But this is the fun part: Dube’s paper finds a remarkable consistency across studies here. For instance, in a 2011 paper by minimum-wage opponent David Neumark, raising the minimum wage 10 percent would reduce poverty 2.9 percent (an elasticity of -0.29) for 21-44-year-old family heads or individuals. That’s very similar to what Dube finds. Neumark doesn’t mention this directly in the paper however; Dube is able to back out this conclusion using other variables that are listed.
Indeed, Dube digs out the effects of the minimum wage on poverty from 12 different studies in the new wave of literature on the topic that started in the 1990s with David Card and Alan Krueger field-creating research. Of the 54 elasticities that Dube is able to observe in these 12 papers, 48 of them are negative. Only one study has a sizable positive one, a 2005 one by David Neumark, a study that stands out for odd methodology (it lacks state and yearly fixed effects, it assumes quantiles are moving in certain directions) that isn’t standard in the field or in his subsequent work. (Indeed, it is nothing like Neumark’s standard 2011 study, mentioned above, which finds that the minimum wage reduces poverty.) Including that study, there’s an average elasticity of -0.15 across all the studies; tossing it, there’s one of -0.20 across the 11 studies, similar to what Dube finds.
However these previous studies also have issues which Dube’s new study examines. This paper uses data up through 2012, so there is much more substantial variations to examine between states’ minimum wages compared to earlier studies from the 1990s. Meanwhile there are additional controls added, including those that deal with the business cycle as well as regional effects. The range of controls provide 8 different results, all of which are highlighted.
Now, as a general rule with these numbers, you should never observe too far away from the mean — that is, you shouldn’t take the effects of small changes to see what would happen if we, say, increased the minimum wage 500 percent, or to levels that don’t actually exist right now. But the results are promising.
Indeed, they are promising on three different measures of poverty. There’s the normal definition of poverty established in the 1960s as a result of how much food costs takes up in your family budget. But the relationship is both relevant and even stronger for the poverty gap, which is how far people are away from the poverty line, and the squared poverty gap, which is a focus on those with very low incomes. The elasticities here are -0.32 and -0.96 respectively, with the second having an almost one-to-one relationship because the minimum wage reduces the proportions of those with less than one-half the poverty line.
What should people take away from this? The first is that there are significant benefits, whatever the costs. If you look at the economist James Tobin in 1996, for instance, he argues that the “minimum wage always had to be recognized as having good income consequences….I thought in this instance those advantages outweighed the small loss of jobs.” Since then there’s been substantially more work done arguing that the loss of jobs is smaller or nonexistent, and now we know that the advantages are even better, especially when it comes to boosting incomes of the poorest and reducing extreme poverty.
The second is that this isn’t a thing that people proposing an inequality agenda just happened to throw on the table. A higher minimum wage is a substantial response to the challenges of inequality. Opponents of a higher minimum wage focus on the idea that it largely won’t benefit the worst off. However, look at this graphic from the study:
A higher minimum wage will lead to a significant boost in incomes for the worst off in the bottom 30th percent of income, while having no impact on the median household.
As many economists have argued, the minimum wage ”substantially ‘held up’ the lower tail of the U.S. earnings distribution” through the late 1970s, but this effect stopped as the real value of the minimum wage fell in subsequent decades. This gives us an empirical handle on how the minimum wage would help deal with both insufficient low-end wages and inequality, and the results are striking.
Charles Darwin once wrote, “If the misery of the poor be caused not by the laws of nature, but by our institutions, great is our sin.” One of the key institutions of the modern economy, the minimum wage, could dramatically reduce the misery of the poor. What would it say if we didn’t take advantage of it?
Mike Konczal is a fellow at the Roosevelt Institute, where he focuses on financial regulation, inequality and unemployment. He writes a weekly column for Wonkblog
Finally, someone that gives a working alternative to the minimum wage.
Unfortunately, it comes with major drawbacks as well.
http://www.cbsnews.com/news/does-raising-the-minimum-wage-really-help-workers/
Does raising the minimum wage really help workers?
(MoneyWatch) Is President Obama's call this week to raise the minimum wage a good idea, or is there a better way to help low-income workers?
An increase in the minimum wage raises the income of those who are employed, but it also raises the cost of hiring unskilled labor and can potentially reduce the number of people hired by businesses. So there are winners and losers from this policy. Those who remain employed and receive higher incomes are better off, and those who would be employed if not for the increase in the minimum wage are worse off.
Overall, the impact on workers is uncertain: Does the gain for those who remain employed more than offset the loss to those who cannot find work?
By contrast, if the employment effects turn out to be small, then we can be much more certain that an increase in the minimum wage is a net positive for the households we are trying to help.
What does research on this issue tell us about the minimum wage's employment effects? It depends on which set of research studies you believe. One set of studies -- the most cited is by the University of California, Berkeley's David Card and Princeton University's Alan Krueger, who is also head of the White House Council of Economic Advisers -- finds that increasing the minimum wage does not have significant effects on employment.
Other studies reach the opposite conclusion, notably the work of David Neumark and William Wascher. They claim that workers are made worse off overall when the minimum wage goes up. More recent work such as this paper by University of Massachusetts economist Arin Dube tends to support the view that the minimum wage has minimal employment effects and is beneficial to workers, but the debate on this issue is far from over. (There's a nice summary of the empirical work on this issue, including a full set of citations to the work mentioned above, at the beginning of this paper by economist John Schmitt.)
Since the employment effects of the minimum wage appear to be small, but there is enough counter-evidence to raise questions about this conclusion, an obvious question is whether there is a better way to raise the incomes of low-income workers, one that does not raise these questions.
In fact there is: the Earned Income Tax Credit, a solution that finds support among both liberals and conservatives (Milton Friedman, for example, was a strong supporter of "negative income tax" policies). Democrats favor the EITC because of its ability to lift families out of poverty, and conservatives like its incentives for people to work relative to traditional poverty assistance programs.
So why not increase the EITC instead of increasing the minimum wage? For two reasons. First, and most important, any program that would increase spending and increase the federal debt has little chance in this political environment. An increase in the minimum wage -- which does not involve federal payments -- is more attractive to politicians. Second, the EITC has high administrative costs, while the administrative costs of mandating a minimum wage are very low. As economist Brad DeLong of UC Berkeley says: "The EITC is a good program, but it is a costly program to administer, and it is administered imperfectly to say the least. The minimum wage, on the other hand, is nearly self-enforcing: its administrative costs are nearly nil, for workers (legal workers, at least) have a very strong incentive to drop a dime on bosses who violate it. From a government-administrative and error-rate perspective, it's a very cost-effective program."
Thus, although the EITC has better economic properties and has worked well in practice, the chances of it being expanded on a scale that an increase in the minimum wage would achieve are very low. The same is true for most other government-funded, government-administered poverty reduction programs, there's little chance of expansion in the current budget and political environment.
That leaves the minimum wage as the only realistic option for those who want to increase the income of households at the bottom of the income distribution. It may not be the best approach, but if the recent work suggesting that an increase in the minimum wage does not have significant employment effects is correct, it's an approach that can work.
.
© 2013 CBS Interactive Inc.. All Rights Reserved.
Unfortunately, it comes with major drawbacks as well.
http://www.cbsnews.com/news/does-raising-the-minimum-wage-really-help-workers/
Does raising the minimum wage really help workers?
(MoneyWatch) Is President Obama's call this week to raise the minimum wage a good idea, or is there a better way to help low-income workers?
An increase in the minimum wage raises the income of those who are employed, but it also raises the cost of hiring unskilled labor and can potentially reduce the number of people hired by businesses. So there are winners and losers from this policy. Those who remain employed and receive higher incomes are better off, and those who would be employed if not for the increase in the minimum wage are worse off.
Overall, the impact on workers is uncertain: Does the gain for those who remain employed more than offset the loss to those who cannot find work?
By contrast, if the employment effects turn out to be small, then we can be much more certain that an increase in the minimum wage is a net positive for the households we are trying to help.
What does research on this issue tell us about the minimum wage's employment effects? It depends on which set of research studies you believe. One set of studies -- the most cited is by the University of California, Berkeley's David Card and Princeton University's Alan Krueger, who is also head of the White House Council of Economic Advisers -- finds that increasing the minimum wage does not have significant effects on employment.
Other studies reach the opposite conclusion, notably the work of David Neumark and William Wascher. They claim that workers are made worse off overall when the minimum wage goes up. More recent work such as this paper by University of Massachusetts economist Arin Dube tends to support the view that the minimum wage has minimal employment effects and is beneficial to workers, but the debate on this issue is far from over. (There's a nice summary of the empirical work on this issue, including a full set of citations to the work mentioned above, at the beginning of this paper by economist John Schmitt.)
Since the employment effects of the minimum wage appear to be small, but there is enough counter-evidence to raise questions about this conclusion, an obvious question is whether there is a better way to raise the incomes of low-income workers, one that does not raise these questions.
In fact there is: the Earned Income Tax Credit, a solution that finds support among both liberals and conservatives (Milton Friedman, for example, was a strong supporter of "negative income tax" policies). Democrats favor the EITC because of its ability to lift families out of poverty, and conservatives like its incentives for people to work relative to traditional poverty assistance programs.
So why not increase the EITC instead of increasing the minimum wage? For two reasons. First, and most important, any program that would increase spending and increase the federal debt has little chance in this political environment. An increase in the minimum wage -- which does not involve federal payments -- is more attractive to politicians. Second, the EITC has high administrative costs, while the administrative costs of mandating a minimum wage are very low. As economist Brad DeLong of UC Berkeley says: "The EITC is a good program, but it is a costly program to administer, and it is administered imperfectly to say the least. The minimum wage, on the other hand, is nearly self-enforcing: its administrative costs are nearly nil, for workers (legal workers, at least) have a very strong incentive to drop a dime on bosses who violate it. From a government-administrative and error-rate perspective, it's a very cost-effective program."
Thus, although the EITC has better economic properties and has worked well in practice, the chances of it being expanded on a scale that an increase in the minimum wage would achieve are very low. The same is true for most other government-funded, government-administered poverty reduction programs, there's little chance of expansion in the current budget and political environment.
That leaves the minimum wage as the only realistic option for those who want to increase the income of households at the bottom of the income distribution. It may not be the best approach, but if the recent work suggesting that an increase in the minimum wage does not have significant employment effects is correct, it's an approach that can work.
.
© 2013 CBS Interactive Inc.. All Rights Reserved.
Re: CBO: Wage hike to cost 500K jobs
According to you raising the minimum wage no matter if it is mandated or volunteered is detrimental. You decried that Wal Mart should increase their minimum wage because the employees are unqualified. Something that is counter to anyone's business model.
During the time Ford increased his wages, every big business, much less every large auto manufacture claimed it was a failed business move.
The result, Ford sold more cars than anyone.
According to you raising the minimum wage no matter if it is mandated or volunteered is detrimental. You decried that Wal Mart should increase their minimum wage because the employees are unqualified. Something that is counter to anyone's business model.
During the time Ford increased his wages, every big business, much less every large auto manufacture claimed it was a failed business move.
The result, Ford sold more cars than anyone.
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http://finance.yahoo.com/blogs/the-exchange/two-dozen-countries-with-a-higher-minimum-wage-than-america-s-162113410.html
Two dozen countries with a higher minimum wage than America’s
The debate seems to be intensifying over whether the U.S. minimum wage is too low, too high or just right. But compared with the minimum wage in other countries, it’s nearly the lowest in the developed world.
Earlier this month, President Obama signed an executive order raising the minimum hourly wage for new federal contractors from $7.25 to $10.10, fulfilling a promise he made in his State of the Union speech to hike pay where he could without the approval of Congress. That move affects a very small percentage of people, but it could generate momentum for a broader effort to do the same thing nationwide, as one bill pending in Congress would do.
Even so, the U.S. minimum wage has fallen far behind what other countries pay. Data from the Organization for Economic Cooperation and Development shows the federal minimum wage of $7.25 per hour ranks 26th out of 27 countries, when measured as a percentage of the average wage in each of those countries. Canada, most European nations, and Asian powerhouses such as Japan and South Korea all have a higher minimum wage, relative to average pay. Here’s a chart showing the data for 2012, the latest available,with the second bar from the right representing the United States:
Minimum Wage as a Portion of the Average Wage
Source: OECD
On a dollar basis, the U.S. minimum wage is slightly above average when adjusted for differences in purchasing power among countries. That puts the U.S minimum above the wage in Japan and Spain, plus less-developed nations such as Poland and Turkey. But even by that measure, it’s still below the minimum wage in Australia, the Netherlands, the U.K. and several other countries.
No matter how U.S. pay levels compare with those in other countries, the minimum wage is a combative issue here at home, with advocates for business arguing that raising the wage will threaten profits that are already thin, leading many firms to hire fewer workers. The nonpartisan Congressional Budget Office recently found that raising the minimum wage to $10.10, as one Senate bill would do, would lift 900,000 families out of poverty but also cost the economy 500,000 jobs. One pro-business TV commercial warns that raising the wage will compel more businesses to replace human workers with tablet devices and other technology.
But some economists feel the threat to the economy is overblown. “Arguments that lifting the minimum wage will cost low-income workers their jobs are significantly overstated,” writes Mark Zandi of Moody’s Analytics. “While raising the minimum wage has probably eliminated some jobs for very low-skilled workers, this loss has been marginal.”
Outside of Washington, there’s less controversy over the issue. About 20 states already have a minimum wage that’s above the national average. Retailers such as Costco (COST), Whole Foods (WFM) and the Gap (GPS) have said they’ll set wages above the federal minimum, because it reduces employee turnover. Polls show that three-quarters of Americans favor raising the minimum wage. Even 43% percent of small-business owners — who, in theory would have the most to lose if the minimum wage went up — support hiking it.
A big part of the problem with the U.S. minimum wage is that it’s not indexed to inflation — the way Social Security is — so instead of rising automatically as living costs go up, it requires an act of Congress every few years to raise it. That generates repeated political tussles such as the one brewing in Washington now. Ten U.S. states do index their minimum wage to inflation, as do several other countries.
The Senate bill, which Obama supports, would raise the minimum wage to $10.10 in stages over two years, then link increases to the rate of inflation, eliminating the need for future votes on the issue in Congress. Most Congressional Republicans oppose the bill, but it could still pass if a handful of Republicans join most Democrats in voting for it.
Last year Obama called for hiking the minimum wage to a mere $9 an hour, before he signed on to the more aggressive Senate bill and signed the order raising contractor pay. That suggests a possible compromise could emerge on a nationwide minimum wage — at some level lower than $10.10 — allowing Republicans to claim a modest victory.
Still, Congress is a place where national priorities go to die, so it’s also possible the United States could end up 27th out of 27 before long.
Two dozen countries with a higher minimum wage than America’s
The debate seems to be intensifying over whether the U.S. minimum wage is too low, too high or just right. But compared with the minimum wage in other countries, it’s nearly the lowest in the developed world.
Earlier this month, President Obama signed an executive order raising the minimum hourly wage for new federal contractors from $7.25 to $10.10, fulfilling a promise he made in his State of the Union speech to hike pay where he could without the approval of Congress. That move affects a very small percentage of people, but it could generate momentum for a broader effort to do the same thing nationwide, as one bill pending in Congress would do.
Even so, the U.S. minimum wage has fallen far behind what other countries pay. Data from the Organization for Economic Cooperation and Development shows the federal minimum wage of $7.25 per hour ranks 26th out of 27 countries, when measured as a percentage of the average wage in each of those countries. Canada, most European nations, and Asian powerhouses such as Japan and South Korea all have a higher minimum wage, relative to average pay. Here’s a chart showing the data for 2012, the latest available,with the second bar from the right representing the United States:
Minimum Wage as a Portion of the Average Wage
Source: OECD
On a dollar basis, the U.S. minimum wage is slightly above average when adjusted for differences in purchasing power among countries. That puts the U.S minimum above the wage in Japan and Spain, plus less-developed nations such as Poland and Turkey. But even by that measure, it’s still below the minimum wage in Australia, the Netherlands, the U.K. and several other countries.
No matter how U.S. pay levels compare with those in other countries, the minimum wage is a combative issue here at home, with advocates for business arguing that raising the wage will threaten profits that are already thin, leading many firms to hire fewer workers. The nonpartisan Congressional Budget Office recently found that raising the minimum wage to $10.10, as one Senate bill would do, would lift 900,000 families out of poverty but also cost the economy 500,000 jobs. One pro-business TV commercial warns that raising the wage will compel more businesses to replace human workers with tablet devices and other technology.
But some economists feel the threat to the economy is overblown. “Arguments that lifting the minimum wage will cost low-income workers their jobs are significantly overstated,” writes Mark Zandi of Moody’s Analytics. “While raising the minimum wage has probably eliminated some jobs for very low-skilled workers, this loss has been marginal.”
Outside of Washington, there’s less controversy over the issue. About 20 states already have a minimum wage that’s above the national average. Retailers such as Costco (COST), Whole Foods (WFM) and the Gap (GPS) have said they’ll set wages above the federal minimum, because it reduces employee turnover. Polls show that three-quarters of Americans favor raising the minimum wage. Even 43% percent of small-business owners — who, in theory would have the most to lose if the minimum wage went up — support hiking it.
A big part of the problem with the U.S. minimum wage is that it’s not indexed to inflation — the way Social Security is — so instead of rising automatically as living costs go up, it requires an act of Congress every few years to raise it. That generates repeated political tussles such as the one brewing in Washington now. Ten U.S. states do index their minimum wage to inflation, as do several other countries.
The Senate bill, which Obama supports, would raise the minimum wage to $10.10 in stages over two years, then link increases to the rate of inflation, eliminating the need for future votes on the issue in Congress. Most Congressional Republicans oppose the bill, but it could still pass if a handful of Republicans join most Democrats in voting for it.
Last year Obama called for hiking the minimum wage to a mere $9 an hour, before he signed on to the more aggressive Senate bill and signed the order raising contractor pay. That suggests a possible compromise could emerge on a nationwide minimum wage — at some level lower than $10.10 — allowing Republicans to claim a modest victory.
Still, Congress is a place where national priorities go to die, so it’s also possible the United States could end up 27th out of 27 before long.
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“When one interest group holds too much power, it succeeds in getting policies that benefit itself, rather than policies that would benefit society as a whole.
Only a relative handful of Americans have benefited from the credit bubbles, deregulation, and other Reaganomic policies and outcomes since 1980, garnering most of the gains from growth. Side effects of those policies wiped out an entire generation of toil and savings for virtually all American families. And those policies promise a future that is equally bleak."</blockquote>
This book - What Went Wrong : How the 1% Hijacked the American Middle Class … and what other countries got right / by George R. Tyler -in a plain language easy-to-read style, easily explains how the financial elites starting with the Reagan administration have engineered the destruction of the once worldwide admired American "middle-class".
For those of you who still read books read it.
Ebook download epub
Code:
https://www.rapidshare.com/files/1922211399/WhWeWrong.rar
The article below is from that multi-billion dollar 'Socialist, Marxist, Communist,' organization that makes so much money providing electronic data to Wall street & individuals via its Bloomberg Terminals, that its entire cable television business channel and publishing division (Business Week, Bloomberg Markets) is a rounding error $$$$$$$$$$$$ on its balance sheet. Who calls Bloomberg 'communists'? ; the RepubliKlans do with relentless regularity, because the don't spew the "virtue-of-selfishness", "I got mine, FUCK YOU" ideology 24/7 which is the holy-grail of todays ReupliKlans.
More importantly the RepubliKlans, most critically in the House-Of-Representatives where they have control due to severe gerrymandering, have under 'Boners' leadership refused to allow a vote on increasing the minimum wage - because- they know it would pass. Whose interests is 'Boner' protecting? He is protecting the monopoly capitalists who fund the republiklan campaigns. The same mostly faceless capitalists who pay people $37 Dollars a month to stitch fabric into clothes in Bangladesh, in a unsafe building, that collapses into rubble, killing the workers. These capitalists believe that there should be No minimum wage, NO building-code regulations, No pollution control laws. Since the Bangladesh catastrophe, not only have the capitalists who owned the fabric stitch death factories refused to provide any compensation to the survivor family of the workers crushed-to-death; they are now looking for alternative locations to move their fabric stitch death factories so that they can continue business-as-usual with NO changes.
The overwhelming majority of business elites do not want any change in the U.S. economic policy infrastructure that would alter the current structure which is pushing more than 97% of all 'real' economic wealth to the 1% of Americans. NO minimum wage increase, interest rates at almost 0%, $65- $85 Billion dollars a month of Federal Reserve 'quantitative easing' are all policies that serve the interests of entrenched wealth. Most new jobs created since the nadir of this great depression in 2008 are jobs that pay $13.00 a hour or less. Delta Airlines posted an ad for 300 flight attendants, a job that they were offering $19,000 a year, and they got 22,0000 responses. These same business elites have instructed their owned slave-bitch republiklan legislators to block any federally funded infrastructure repair jobs bill, even though almost 70% of the bridges in the U.S. are structurally unsafe and seriously 'below code'. They don’t want any stimulus that would help 'working people' but when the Fed says they are extending quantitative easing (cheap plentiful money) which benefits the 1% who have the credit & business history to actually borrow millions-of-dollars of that cheap money; the stock market soars to new highs. Taxes are at a 50 year low, wages as a percent of GDP are at an all time low, but these scolds are entrenched in their opposition to wages going up and a capitalist gains tax increase from 15% to 20% -23%. They want more, more, more!
The economy will remain sluggish if Washington continues to focus on deficits. Jobs & wage gains should be the top priority.
(1) The minimum wage was last increased in 2009. Before 2007, it was stuck at $5.15 for ten years. Follow the example of Australia: it pays workers a living wage (roughly $15.00-US for adults).
How can Australia can afford to pay a living wage and provide good benefits, including universal health care???
Business Profits as a Percentage of National Income:
U.S.: 20.4%
Australia: 12.7%
(2) More than 30% of workers belonged to unions in the 50s. Today, it is only 7% in the private sector. Clearly, we need to strengthen labor rights legislation.
(3) Our trade agreements were designed to benefit corporate America and their top executives. Americans should not be asked to compete with workers who earn 20-30 cents an hour and with countries that lack adequate or no environmental and safety standards. We need fair trade not the TPP that both Obama and the republiklans are pushing, which would put American workers in competition with Vietnamese workers who earn as little as $3 Dollars a day
(4) Investing in our crumbling infrastructure, research, education, and clean energy would create MILLIONS OF JOBS. We can fund these investments with a financial transaction tax―0.5% on the purchase of stocks and taxing bonds and derivatives at lower rates. It would curb speculation and generate more than $350 billion a year.
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Highest Minimum-Wage State Washington Beats U.S. Job Growth
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by Victoria Stilwell, Peter Robison and William Selway
Mar 5, 2014 | http://www.bloomberg.com/news/2014-...t-minimum-wage-state-beats-u-s-with-jobs.html
When Washington residents voted in 1998 to raise the state’s minimum wage and link it to the cost of living, opponents warned the measure would be a job-killer. The prediction hasn’t been borne out.
In the 15 years that followed, the state’s minimum wage climbed to $9.32 -- the highest in the country. Meanwhile job growth continued at an average 0.8 percent annual pace, 0.3 percentage point above the national rate. Payrolls at Washington’s restaurants and bars, portrayed as particularly vulnerable to higher wage costs, expanded by 21 percent. Poverty has trailed the U.S. level for at least seven years.
The debate is replaying on a national scale as Democrats led by President Barack Obama push for an increase in the $7.25-an-hour federal minimum, while opponents argue a raise would hurt those it’s intended to help by axing jobs for the lowest-skilled. Even if that proves true, Washington’s example shows that any such effects aren’t big enough to throw its economy and labor market off the tracks.
“It’s hard to see that the state of Washington has paid a heavy penalty for having a higher minimum wage than the rest of the country,” said Gary Burtless, an economist at Brookings Institution who formerly was at the U.S. Labor Department.
Costs, Benefits
Raising the U.S. minimum wage to $10.10 in three steps, as Obama proposes, would reduce employment nationally by about 500,000 workers, or about 0.3 percent, according to a Congressional Budget Office report published Feb. 18. At the same time, the increase would lift 900,000 people out of poverty and add $31 billion to the earnings of low-wage Americans, the report found.
While debate persists on the employment effect, “CBO is as qualified as anyone to evaluate that literature, and I wouldn’t argue with their assessment,” Federal Reserve Chair Janet Yellen said Feb. 27 to the Senate Banking Committee.
The Cost of Minimum Wage Laws
Looking past the effect on jobs, increasing the minimum hourly wage to $10.10 would also reduce food stamp expenditures by about 6 percent, or nearly $4.6 billion a year, according to a report today from the Center for American Progress. The Washington-based research institute, which was founded by Obama adviser John Podesta, released its report as the president reiterated his call for a higher wage floor.
Washington voters in November 1998 approved increasing the state’s minimum wage in two stages to $6.50 and tying future annual changes to inflation as measured by the consumer price index.
Groups representing retailers, restaurants and hotels opposed the measure, according to a voters pamphlet on the 1998 election published by Washington’s Office of the Secretary of State. Employment in those industries has increased in the state of Washington since then, Labor Department data show.
Shock Absorbers
One possible explanation: Businesses have plenty of ways besides job cuts to absorb the costs of a minimum-wage increase, according to Arindrajit Dube, an economist at the University of Massachusetts at Amherst, whose research found no significant effects on employment. Price increases, reductions in profits and savings from lower turnover can help soak up the shock.
“When you put all of these together, then the finding that moderate increases in minimum wages do not appear to have much of an effect on employment is less surprising,” Dube said in an interview.
Not everyone buys that argument. Minimum-wage laws not only reduce employment opportunities and earnings for low-wage workers, they also reduce demand for their labor as it’s replaced by other forms of capital, according to research published in 2008 by David Neumark, an economist at the University of California at Irvine, and William Wascher, an economist at the Federal Reserve Board of Governors in Washington.
Boehner, Reid
The federal minimum-wage legislation is opposed by business groups such as the National Retail Federation, along with many Republicans, including House Speaker John Boehner of Ohio.
In the Democratic-controlled Senate, Majority Leader Harry Reid of Nevada on Feb. 25 postponed a vote on the legislation, a centerpiece of the party’s election-year focus on income inequality. The delay until senators return March 24 from a week-long break gives labor unions more time to organize support for the proposal, said a Senate Democratic leadership aide who requested anonymity to discuss strategy.
Gridlock in Congress may mean the debate is waged more immediately by states and cities instead of at the federal level.
State Minimums
As of January, 21 states and the District of Columbia had a higher minimum wage than the federal floor. Cities including San Francisco and Santa Fe, New Mexico, require even higher hourly earnings than the proposed federal level, at $10.74 and $10.66 respectively.
New Jersey
New Jersey voters in November approved increasing the minimum wage by $1 an hour to $8.25, tying future increases to the consumer price index. In January, after the raise took effect, private employers added 8,320 jobs in New Jersey, according to ADP Research Institute. That was the fastest pace of job growth since December 2012.
Raising Prices
Joe Olivo, the chief executive officer of Perfect Printing, a Moorestown, New Jersey, company that makes materials such as marketing brochures for businesses, was among those who opposed the state’s minimum-wage increase. Since it began, he hasn’t cut his 48-person staff. Instead, he’s looking to pass on the costs by raising prices, a step that he said could impede his business’s ability to grow and hire in the future.
“If I am losing work and I have less money to grow, what good does it do for those employees that are looking for future work?” said Olivo, 47. “The people that are looking for jobs find it harder.”
Long-Run Effects
Those kinds of long-term costs leave economists including Charles Brown undecided in the debate. Brown is a professor of economics at the University of Michigan in Ann Arbor who reviewed the CBO’s analytical approach.
“The report does a very careful job of trying to make the best use of the available literature,” Brown said in an interview. “If I balance short-run gains against short-run losses, this looks like a reasonable thing to do. The problem is, we don’t have a good handle on how large those long-run effects are likely to be.”
$15 Minimum
Washington’s relatively benign experience with a higher minimum has encouraged some communities in the state to push for even more.
SeaTac, Washington, a Seattle suburb where the major employer is the region’s international airport, voted in November to raise the hourly minimum by more than 60 percent to $15 for 6,300 people who work at the airport, hotels and nearby businesses.
Companies including parking lot operator MasterPark LLC had said the higher pay might lead to job losses. Since it passed, 140 MasterPark employees have received raises and the company hasn’t cut jobs because that might compromise service, managing partner Roger McCracken said.
Adding Surcharge
“We’re in the valet business -- that means employees,” he said. Instead, the company responded by tacking on a 50-cent daily “living-wage surcharge” to prices.
Seattle’s Mayor
Now, Seattle Mayor Ed Murray, a Democrat elected in November, is following SeaTac’s lead as he also promotes raising the city’s minimum to $15. A task force of business and labor representatives, advised by academics from the University of California at Berkeley and the University of Washington in Seattle, is meeting monthly and hopes to produce a proposal in April, Murray said in an interview.
The Seattle-Tacoma-Bellevue metropolitan area ranks 14th in a list compiled by Bloomberg of 50 cities where it’s hard for fast-food workers to gain upward mobility, based on median pay compared with rent, tuition and health-care costs. Advocates such as Murray say a higher minimum would help change that.
“We can’t rebuild this economy if it’s just people who buy 94-foot yachts and play in the derivatives,” Murray said. “You build an economy when a middle class is buying microwaves or flat-screen TVs or the next set of clothes for their kids.”
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