Friday, July 27, 2007

Minimum Wage

A post! I've been too busy to even update my blog on readings of what I'm reading, but the exam nears (less than 2 weeks!) and then I will have a life for two whole weeks. At any rate, this article from CNN struck me as worth a few minutes of my time -- a quick post, but an important issue.

Ted Kennedy is proposing an increase of the minimum wage to $9.50 an hour and, of course, the idea of minimum wage has many detractors and supporters. The latter (and despite its problems, I'm one of these) maintain that everyone should have a basic standard of living -- and I would add that the figures that say fewer than 5% of people are supporting families on minimum wage doesn't include the number of students who are supporting themselves while maintaining a full course load, etc. Ergo, there is a need for a higher wage. At that rate, someone would make $1520/mo. Which is princely considering what the wage is now; of course, that assumes they work 40 hours a week and with holidays, sick days, etc. no one does that year round.

What struck me in the article was a complaint: that this is too much for a rural area and too little for NYC. (The guy wasn't suggesting that NYC should be higher, just that local markets should determine the wage.) Aside from the obvious arguments (which I won't go into it), I was wondering whether the national average could instead of setting such a blanket rate for all municipalities set an average -- i.e. enough that a person will be out of poverty (or even poor-ness) by working 40 hours a week -- and then each area would adjust. So for instance, 125% of the poverty rate or something like. Regardless, we shouldn't wait around for an ideal situation, when there is a need at the moment. Since when was it too much to ask that people be required to pay workers fairly? Can you imagine such an insulting situation where one works 40 hours a week and still cannot afford to comfortably live?


teanatl said...

Ah, Ted Kennedy...good old school limosine liberal...the Left's "Lion in Winter." Unfortunately, he's more like the lion in the "Wizard of Oz"...the only one he scares is himself!

Actually local conditions have already dictated that the minimum wage is too low in most of the country. Thirty states have a minimum wage above the federal minimum wage. Only five states...of course Georgia is among them...have minimum wages lower than the federal minimum. There are five states...of course all of them Southern...that have no minimum wage.

Kennedy's bill is just political grandstanding...what it seeks to accomplish is in fact already in effect!


Chelsea said...

While I agree with you that there is some grandstanding, I don't think that it is entirely useless. He's talking about the new minimum wage (and the chart you sent is regarding an old one -- we should look at it again when the two raises go into effect) and regardless of his reasons, his point is valid.

There was an interesting report by the NYTimes a year or so ago about Phoenix, AZ which raised its minimum wage to the level Kennedy proposes -- a number of businesses complained, but in a followup most had only good things to say about it. Which shows that it is a feasible plan.

But the reality that some states -- incl. dear old GA -- have such low rates (GA's was $3.25 when the federal was $5.15) comes from people being unaware that this is a difference. And it does matter because small businesses and those that do not do business outside of the state are exempt from federal laws. Letting local municipalities determine the wage will continue to leave areas such as the South in poverty with little hope for improvement. Which, of course, creates breeding grounds where kids do not stay in school or work longer hours to help support families, feel they cannot go to a good college and even increases the levels of crimes since economics is a major factor in that.

teanatl said...

I'm not saying Ted's bleeding heart isn't in the right place...just maybe not for the right reasons. Precisely because so many small businesses...which actually employ more people than big business...don't have to comply with the federal minimum wage the law will have minimum impact...but it will get some headlines.

I'm not suprised by the NY Times report. To me it just seems common sense to pay your employees a living wage and treat them well...especially if you deal with the public...because, just like children learn from and imitate their parents...your employees will treat your customers more or less the way that you treat them. If you're a lousy employer, you'll have lousy customer service...if you're a good employer your employees will care about the business and value its customers and you'll all be more successful...seems like a no brainer to me but unfortunately it's not the common practice.

What role government should play in this debate is itself debatable. I have no problem with the federal government establishing a livable minimum wage for the WalMarts of the world but the frontlines of this battle are in the state houses across the country...Washington, as so often is the bringing up the rear.