GOP Kills Minimum Wage Increase

[Jeanette X]

http://www.wesh.com/helenthomas/5183628/detail.html

Rich Senators Defeat Minimum-Wage Hike
Congressional Pay Rises While Minimum Stays Same
Helen Thomas, Hearst White House columnist

POSTED: 6:12 pm EDT October 26, 2005

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U.S. senators -- who draw salaries of $162,100 a year and enjoy a raft of perks -- have rejected a minimum wage hike from $5.15 an hour to $6.25 for blue-collar workers.

Can you believe it?

The proposed increase was sponsored by Sen. Edward Kennedy, D-Mass., and turned down in the Senate by a vote of 51 against the boost and 49 in favor. Under a Senate agreement, it needed 60 votes to pass.

All the Democrats voted for the wage boost. All the negative votes were cast by Republicans.

Four Republicans voted for it. Three of the four are running for reelection and were probably worried about how voters would react if they knew that their well-heeled senators had turned down a pittance of an increase in the salaries of the lowest paid workers in the country.

The minimum wage was last increased in 1997.

Kennedy called the vote "absolutely unconscionable."

The lawmakers are hardly hurting. They get health insurance, life insurance, pensions, office expenses, ranging from $2 million on up, depending on the population of a state. The taxpayers also pay for their travel, telecommunications, stationery and mass mailings.

AFL-CIO president John Sweeney said the rejection was "outrageous and shocking."

Sweeney said minimum-wage workers "deserve a pay raise -- plain and simple -- no strings attached."

He said it is "appalling that the same right-wing leaders in Congress -- who have given themselves seven pay raises since the last minimum wage increase -- voted down the modest wage increase proposed by the Kennedy amendment."

During the same period since 1997, raises that the Senate has given itself bolstered senatorial pay by $28,000 a year, Kennedy said.

"If we are serious about helping hard-working families, we will give a fair raise to America's low-income workers without taking away essential protections," he added.

The Senate also killed an amendment proposed by Sen. Michael Enzi, R-Wyo., which also would have increased the minimum wage by $1.10 but included drastic measures such as wiping out the 40-hour work week, cutting overtime pay and weakening job safety and health protection.

At the same time, Enzi wanted to sweeten the pot for small business by providing tax and regulatory relief and to exempt small business from the Fair Labor Standards Act.

Kennedy likened the Enzi bill to an "anti-worker poison pill" and said it would "severely hurt millions and millions of workers."

According to the Census Bureau, there are 37 million Americans living in poverty, up 1 million in just a year.

Statements by President George W. Bush since the Gulf Coast hurricane disasters indicate he has a new awareness of the plight of the poor in this country. Katrina and the devastation of New Orleans have made the more affluent realize the hardships suffered by poor families.

When asked about the Kennedy measure, White House press secretary Scott McClellan said Bush "believes that we should look at having a reasonable increase in the minimum wage ... But we need to make sure that, as we do that, that it is not a step that hurts small business or prices people out of the job market."

Bush has not weighed in with his own proposal for a pay hike.

The Senate's action comes at a worrisome time when motorists are paying much more for gasoline and heating bills are expected to rise by 56 percent this winter, according to Kennedy.

As a result, families will have to tighten their belts to pay for the basic necessities.

"It is shameful that in America today, the richest and most powerful nation on earth, nearly a fifth of all children go to bed hungry at night because their parents, many of whom are working full time at the minimum wage, still can't make ends meet," Kennedy said.

Kennedy has been in the forefront of the fight for increases in the minimum wage for years, and I don't expect him to throw in the towel now.

Congress still may have a chance to redeem itself in the eyes of the less fortunate -- before the 2006 elections.

[CaptainBubba]

Econ 101 anybody?? Econ 101?

[mburbank]

I just think it's great the way Hurricane katrina woke people up to the problem of poverty in America.

[CaptainBubba]

ECONOMICS 101 ANYBODY? HMM? ANYBODY UP FOR SOME ECONOMICS 101???

[KevinTheOmnivore]

So Bubba, is this one of those times where I shouldn't take what you say seriously??? I mean, I wasn't going to, but I just wanted to be sure.....

Is this really news? Doesn't this happen like every year? Ted Kennedy, either through a rider or a straight-up bill, proposes this, and it fails. Then he calls it "unconscionable," and gets re-elected by a landslide.

Wait until 2006.

[CaptainBubba]

All I'm saying is ya'll socialists sure like the idea that minimum wages don't lead to alot of people losing jobs. I mean, that ridiculous right? Its not like a fundamental aspect of minimum wages. Take me seriously or not but denying that fact is pretty oblivious.

[KevinTheOmnivore]

We already have minimum wages. Why hasn't everybody lost their job?

I understand the side of the spectrum "ya'll's" coming from. But you can't argue that simply establishing a bear-minimum wage leads to massive job loss. It simply hasn't proven to be true. We raised the minimum wage in 1997, as we have in the past. No massive economic collapse. Certainly, we've lost manual labor jobs and manufacturing jobs overseas, but that can't be attributed to a minimum wage. You can't compete with corporations that can pay Indonesians $0.10 an hour, no matter how low your wages are.

If the minimum wage were adjusted to the standard of living or inflation, it would be far higher than the tiny raise ol' Teddy boy wants to add on. Congress has certainly jumped throughout the years to adjust their own salaries to the standard of living, why shouldn't the blue collar worker be allowed to catch up too??? This isn't like the $8/hour hike that guys like Kucinich want, not even close.

Since we last raised it in 1997, six more states have since passed their own minimum wage laws that are higher than the federal. That makes it a total of 12, a quarter of the country.

You can argue all you like about, uh, paying people fairly for the work they do leading to no more work, but i don't think that's what this is.

It won't happen until a new Congress gets in anyway.

[Marc Summers]

Originally Posted by CaptainBubba

ECONOMICS 101 ANYBODY? HMM? ANYBODY UP FOR SOME ECONOMICS 101???

OK. Let's look at the short-run and long-run effects of a minimum-wage increase:

Short-run: Corporations have to pay more money to their low-level employees, which would result in some layoffs and downsizing plus cutting benefits to keep out of the red. This is basically what everyone is worried about :/

Long-run: People who have jobs have more money in their pockets, which means they're able to buy more stuff. That leads to increased profits for corporations, which means they would be able to expand and hire/rehire people back into the corporation, and increase benefits.

Usually minimum wage has to be a good balance between these two forces, or else you have companies with like two rich people working for it or you have companies where you have thousands of poor people working in crappy conditions because the company can't afford to take care of their workers.
Also there may have to be programs for displaced workers during this period to smooth the transition.

[El Blanco]

You also forgot to add in the raise in overhead for companies. This means they have to jack up their prices to maintain their profits. This leads to an increase in cost of living. Suddenly, that minimum wage increase doesn't look so significant.

I know very little about finance. I do know one thing: its never as simple as most amatuers make it to be.

[Marc Summers]

There's always an increase in the cost of living due to inflation, and the minimum wage has not risen to meet it. Since we have waited so long for an increase in minimum wage, things would have to get worse before they get better.

[kahljorn]

Basically, corporation likes their money. K thx.

[AChimp]

Blanco is right. When minimum wage increases, prices always increase to compensate a short while later. The only remedy is for people to get higher paying jobs in general.

[CaptainBubba]

Originally Posted by KevinTheOmnivore

We already have minimum wages. Why hasn't everybody lost their job?

Everybody else has said pretty much what I would've. I just wanted to highlight this quote for future refrence in illustrating a picture of you as completely and totally ridiculous when it comes to logic.

[kahljorn]

I think it's illogical that rich senators/businessmen don't want to increase wages because their company will close down and everyone will need to be laid off. I think it's alot more logical that they want the money to themselves.
Inflation doesn't exist because america has a lack of money it exists so people can become richer. If you don't understand that then you make me sad.
Anyone who honestly believes this has something to do with a one dollar increase closing down every business in the world is a moron. Maybe their profits won't be as high but they will probably still be making a couple billion(depending on the company).
Rich people like poverty because it keeps them rich and in control.

[CaptainBubba]

I'm not saying that is what was stupid about his comment. Its his train of thought.

Itd be like someone arguing that disease was good for thinning out numbers, then someone arguing that dieases don't kill people because then WHY ISNT EVERYONE ALREADY DEAD??

[kahljorn]

Okay then. I really just thought he was joking or something, but i can see your point.

[ziggytrix]

Economic theory unambiguously states that minimum wages should reduce employment opportunities for low-wage workers. However, recent empirical evidence has forced economists and policy analysts to question the validity of this theory. In particular, economists have attempted to quantify the impact recent minimum wage increases have had on employment. Opponents of the minimum wage argue that its negative effect on employment is large and is difficult to detect because some low-wage workers become employed while others become nonemployed following minimum wage hikes. On the other hand, proponents of the minimum wage contend that its impact on employment is small and thus acceptable from a cost-benefit perspective as well as to the American public. In short, most economists agree that the minimum wage reduces employment opportunities for low-wage workers, but they cannot agree on how much moderate minimum wage increases reduce employment opportunities.

A new area of contention centers on what effect minimum wages have had on educational attainment. Recent research by Turner and Neumark and Wascher have produced contradictory findings. Turner contends that minimum wages have no effect on educational attainment, while Neumark and Wascher argue that minimum wages significantly reduce educational attainment, particularly for minority youth. Because economic theory is ambiguous on how minimum wages affect educational attainment, additional empirical research is needed to answer these important questions.

Another new area of research is the effect minimum wages have on welfare participation. Too little research has been done on this subject for economists or policymakers to reach a consensus. In light of recent welfare reform legislation and proposals to increase the minimum wage, additional research is vital.

source: http://aspe.hhs.gov/hsp/lwlm99/turner.htm


Also, if you like charts, read http://www.swlearning.com/economics/...e_minimum.html

Despite what you've all said, it IS an open debate among economists.

[Supafly345]

The unemployment argument aside, accelerating inflation just isn't something I would be happy about.

[KevinTheOmnivore]

Originally Posted by CaptainBubba

Itd be like someone arguing that disease was good for thinning out numbers, then someone arguing that dieases don't kill people because then WHY ISNT EVERYONE ALREADY DEAD??

You made the argument that a minimum wage kills jobs (rather obnoxiously, i might add). If you're going to make a flippant comment like higher wages spells economic disaster, than I'm entitled to make an equally flippant comment. This simply is NOT the case. We have raised the minimum wage in the past, and we raised it during the Clinton administration, a time when the economy historically grew.

I tried being nice to, but you'd rather be a douche bag about it. That's fine, but aside from saying "ECON 101 guys!!" and calling me stupid, you've done nothing to prove your point. This isn't even a minimum wage increase relative to the standard of living. 12 other states have a higher minimum wage than the feds., and some comparative research has shown that employment has actually increased in states that took this route. I think the factoid about educational attainment posted by Ziggy is interesting, but regardless, there is evidence of wage increases and job expansion in certain sectors.

I don't dispute anything Blanco has said (and I am with him on the "finance" comment). My point is that this wouldn't be a disaster, if anything, it would put a few more bucks in the wallets of Americans who could probably use it (and who will spend it.

I don't buy the overhead argument, either. At least not in the era of big box stores and Walmart. Any price increases that might occur as a result of a slight increase would re-adjust, if due to nothing else than consumer demands. Again, this isn't the 8.00/hour demanded by guys like Rep. Kucinich. This is miniscule.

[mburbank]

Yeah, I'm sure I'm a huge communist and that this will show I know nothing at all about economics, but here's what I think:

You work a nine to five job, five days a week, you should get paid enough to keep a roof over your head and eat and you should get a week of paid vacation and medical insurance. We're the richest country on earth and we have a buttload of folks so rich you could empty millions of dollars out of their bank accounts and it wouldn't change their life styles one iota. Anyone who works forty hours a week should be able to cover their basic damn needs, and that should be a damn law. If that mean the filthy rich would only get to be a undred times more wealthy than the poor instead of a thousand, well that makes my heart bleed. How many cars can you drive at once, how many mansions can you live in and how the hell do people sleep at night when they horde money they can't even find the time to spend or a single thing to spend it on when other people are one bad week away from homelessness?

Yeah, the minimum wage has a lot of problems. Raise it and it gets shifted to costs, it gets paid to teenagers who's parents cover all their needs, it needs fixing to do what it ought to do, it's a big mess.

But the wealth inequity in this country is a way bigger mess. Basic economics 101? How about basic guillotine 101 Bubba? The fat and happy ought to take a look at their own self interests and the countries and realize tht a growing underclass is a very dangerous thing.

[CaptainBubba]

The actual amount might be "miniscule" from your perspective but percenage wise it isn't really. Really you have little right to criticize my simply yacking on about econ 101 because all you've managed to do so far is formulate your own theories and say you just don't believe ones your opponents present.

Your source is interesting no doubt but there are a myriad of complaints regarding it as well. Regardless of the validity of any of these complaints its pretty obvious something is amiss because no logical argument or explanation could satisfy the link their trying to make, which is that higher minimum wages cause employment. Sure a few have suggested that but their explanations largely rely on a great deal more time than this study spans. One specific major oversight is that if they're were looking at fast food chains then employment is directly tied to one's hours. Its entirely possible they all hired more employees to fill in the gaps in shifts where people nomally overlapped eachother doing the same job.

I find it really wierd that you can actually argue that business would hire more people if their already going by minimum wage just because they have to. Being the defender of the poor on these boards have you yourself ever worked in a minimum wage enviroment? They will try to squeeze every dollar of work out of you that is possible to make a profit out of you. A modest increase like this might mean they eliminate you if it is within reason, and having worked in such an enviroment its really not something hard to imagine.

[kahljorn]

Percentage wise? How many people are working a minimum wage job? What is the population of america? Where do you get your percentage from? Do you really think a one dollar raise for mimimum wage working people will effect the economy that much? How many people have minimum wage jobs? Not alot. How many corporations are out there that have billions of dollars in surplus?

And Max, I think it's a control issue. If the poor begin to have self-respect because they have good living conditions they might stop being gullible idiots. There's really no reason other than to keep things the way they are. Stagnation is the nature of government and power, they strive for it... that's not really much of a stretch.
how does it not bother them? clearly they aren't human. I find it ironic we vote for "Moral catholics" who all have tons of money and the bible says rich people don't go to heaven because they are greedy. I really think government is bullshit, clearly all the problems in america couldbe solved if some of the rich fucks took some money out of their pocket instead of pretending like the government has no money.

[CaptainBubba]

percentage wise:

1.10/5.15 = 21% raise to all employees in the nation earning minimum wage. That is signifigant. Not miniscule.

[mburbank]

"Really you have little right to criticize my simply yacking on about econ 101"

Sure I do. Or maybe I don't, but I will anyway, so lump it.

"I find it really wierd that you can actually argue that business would hire more people if their already going by minimum wage just because they have to."

I can only assume you're talking to someone else here, since I never said anything of the sort. And since you asked, nope, never worked a minimum wage job. My entry level job was seven dollars an hour many yaers ago, and on that it was very difficult to choose between rent and food and I wasn't supporting anyone. Hence, my compassion for those who work for less.

Business will always try to squeeze maximal work out of it employees. The local McDonalds, Subway, Dunkin Donuts are not (at least where I work) known for efficiency through large numbers of staff. I don't think anyone out there is hiring more people than they need to get the job done right now just as a method of improving customer service. Hence I'm not worrie about a huge drop in employment if tey had to pay more, just a drop in their overall profits, which are distributed up in shocking disproportion.

It all depends on what a society wants. Will they work creativly to give a dignified life to anyone willing to work for it, or do they value more the possibility of obscence wealth?

And stop using the word 'They' so often. Left undefined so often it makes you sound paranoid.

Hey, here's thought? How about a maximum wage?

[kahljorn]

Just because it's a 21% wage increase doesn't mean it has that much direct effect on the economy. Quit hiding behind shallow knowledge. It might be a 21% wage increase but there's other ratios to consider, that's only one part of the equation. You have to consider how much money the employers had originally and what percentage of their money was spent on the employees in the first place, what their income was might help with that. Get back to me with some better information.

Thanks for trying to fool me though. I've been in the slums all morning.