Minimum Wage Increase....good or bad?

[Army_of_One]

Minimum wage hike would boost 4 percent of U.S. workers, but advocates say it won’t go far
By Associated Press
Tuesday, December 5, 2006 - Updated: 06:34 AM EST

NEW YORK - Two months into her minimum wage job at Target Corp., Tara Dennis realized she and her three children would be better off if she was unemployed and on food stamps. So she quit. Better off living on someone else's dime...must be nice.

"As a single mom, minimum wage isn’t going to get me ahead. It’s not even going to get me caught up," said Dennis, who lives in Missoula, Montana. This is where they should ask..."have you filed for child support from any of the men that have fathered your children??

A proposed hike that would bring the Federal minimum wage to $7.25 would give workers like Dennis their first raise since the Federal minimum increased to $5.15 in 1997. But some low-income workers and their advocates say the wage increase won’t affect many workers and is not a way out of poverty for minimum wage workers. Since the last hike, wages for most of the lowest-paid workers have risen above the federal minimum wage, while prices for necessities such as housing and transportation have grown faster.
"We should be aware that this is an extremely moderate proposal," said Jared Bernstein, senior economist of the Economic Policy Institute.
The minimum wage hike, which Democrats have put at the top of their agenda when the next Congress convenes in January, would affect 1.9 million hourly workers who make minimum wage and workers who get tips, who can make less than minimum wage. It would raise wages for an estimated 6.5 million workers or 4 percent of the work force _ janitors, waitstaff, security guards, cashiers and store clerks _ according to the Economic Policy Institute.
Adjusting for inflation, the minimum wage of $5.15 is at its lowest level since 1955. By 2009, a $7.25 minimum wage would have the spending power of $6.75 today, Bernstein calculated using Congressional Budget Office projections.
A wage increase to $7.25 would help, but "it wouldn’t put anybody in the clear," That's what having a skill does for you...said Cara Prince, 41, of Louisville, Kentucky. She has been working for a temporary agency for two years, doing factory, warehouse and restaurant work at $6 an hour.
"There’s a whole lot I can’t do," because of the low pay, she said. "By the time they take taxes out, there’s nothing left. Just $23 a day." But she probably gets all of those taxes back at the end of the year plus some.....
But the proposed increase "is not a solution to poverty," said Matt Fellowes, a scholar at the Brookings Institute. "This is, for the most part, a symbolic effort," he said.
Twenty-eight states and the District of Columbia will have 2007 minimum wages above the Federal level. The highest minimum wage in the nation is Washington state’s $7.63 an hour, which is set to increase to $7.94 on Jan. 1. A minimum wage worker in the state working full time would make $16,515 a year before taxes. The federal poverty threshold for a family of three is $16,600.
The real-life math of the minimum wage is even more complex.
Dennis, who is 23 and has three children, said she lost her food stamps when she went to work. Her family lives in subsidized housing and when her income increased, her rent did too. Plus, she got a bill for previous months at the higher rate. Then there were the day care costs. Hmmm, lets see, rent, day care, food...sounds like something we ALL have to pay...
"It got to the point where if I wasn’t working there, I could be with my kids and pay my bills," said Dennis, who lives in Missoula, Montana.
Montana was among states that passed minimum wage increases in the November election, along with Arizona, Colorado, Missouri, Nevada and Ohio.
Herman (Mack) McCowan, 61, of Cleveland, was active in the Ohio office of Let Justice Roll, an organization that advocated for a higher minimum wage. In Ohio, the minimum wage increased from $5.15 to $6.85 and will now be indexed to inflation.
"At $5.15an hour, you can’t really extend yourself, you only exist," he said. McCowan worked for four years as a day laborer, making $5.15 an hour, before landing a $6an-hour job at a community center.
With the roughly $80 a week a full-time worker would have after the federal wage hike, "You’re able to afford a telephone, able to pay your light bill on time, able to pay your rent," he said. and occassionally get a bottle....
If there are two people at home "it will allow you to put a little more food on the table, sustain yourself a little bit better than before," McCowan said. "You will be able to relieve a lot of the stress."
Stagnating wages for unskilled workers coupled with increased housing costs have put more working people at risk of being homeless. For instance, about 28 percent of homeless adults in Louisville, Kentucky homeless shelters are working, according to the Louisville Coalition for the Homeless.
One-quarter of hourly workers who make minimum wage are teenagers, but about half are older than 25, according to the Bureau of Labor Statistics.
For some workers, a job near minimum wage is their only option. Paula Berrios, 66, helps support her daughter and grandchildren in El Salvador working as a janitor for $7.18 an hour. Berrios, who lives in Alexandria, Virginia, does not speak English. DOESN"T SPEAK ENGLISH..and complains about $7.18 an hour to do unskilled labor...she's fortunate to have a job....

"I’m desperate," she said, speaking through a translator. "That’s all I can get."

[Highwayman]

Originally Posted by Army_of_One

NEW YORK - Two months into her minimum wage job at Target Corp., Tara Dennis realized she and her three children would be better off if she was unemployed and on food stamps. So she quit. ....

Simple question. How much would she have made if she kept the job for a year? I’ve never worked anywhere that started folks out at full pay. Is it reasonable to expect an employer to pay top wages to someone that has a work history of only staying at a job for two months?

But I’ll refer to Walter Williams, professor of economics;

Minimum wage, maximum folly
By Walter E. Williams
Wednesday, April 26, 2006

About a fortnight ago, Mrs. Williams alerted me to an episode of Oprah Winfrey's show titled "Inside the Lives of People Living on Minimum Wage." After a few minutes of watching, I turned it off, not because of the heartrending tales but because most of what was being said was dead wrong. Let's look at it.

The show claims that 30 million Americans earn the minimum wage of $5 an hour. Actually, the federal minimum wage is $5.15 an hour, and 17 states mandate a higher minimum wage that approaches $7 an hour. At one point, Oprah did manage to clear up this aspect of the show's errors.

The U.S. Department of Labor reports: "According to Current Population Survey estimates for 2004, some 73.9 million American workers were paid at hourly rates, representing 59.8 percent of all wage and salary workers. Of those paid by the hour, 520,000 were reported as earning exactly $5.15."

Workers earning the minimum wage or less tend to be young, single workers between the ages of 16 and 25. Only about two percent of workers over 25 years of age earn minimum wages.

According to the U.S. Bureau of Labor Statistics: Sixty-three percent of minimum wage workers receive raises within one year of employment, and only 15 percent still earn the minimum wage after three years. Furthermore, only 5.3 percent of minimum wage earners are from households below the official poverty line; forty percent of minimum wage earners live in households with incomes $60,000 and higher; and, over 82 percent of minimum wage earners do not have dependents.

The U.S. Department of Labor also reports that the "proportion of hourly-paid workers earning the prevailing Federal minimum wage or less has trended downward since 1979."

Another issue that's not often taken into consideration is there's a difference between what a worker takes home in pay and his total compensation. Employers must pay for legally required worker benefits that include Social Security, Medicare, unemployment insurance, workers' compensation, health and disability insurance benefits, and whatever paid leave benefits they offer, such as vacations, holidays and sick leave. It's tempting to think of higher minimum wages as an anti-poverty weapon, but such an idea doesn't even pass the smell test. After all, if higher minimum wages could cure poverty, we could easily end worldwide poverty simply by telling poor nations to legislate higher minimum wages.

Poor people are not poor because of low wages. For the most part, they're poor because of low productivity, and wages are connected to productivity. The effect of minimum wages is that of causing unemployment among low-skilled workers. If an employer must pay $5.15 an hour, plus mandated fringes that might bring the employment cost of a worker to $7 an hour, does it pay him to hire a person who is so unfortunate as to have skills that permit him to produce only $4 worth of value per hour? Most employers would view hiring such a person as a losing economic proposition.

Two important surveys of academic economists were reported in two issues of the American Economic Review, May 1979 and May 1992. In one survey, 90 percent, and in the other 80 percent, of economists agreed that increasing the minimum wage causes unemployment among youth and low-skilled workers.

Minimum wages can have a more insidious effect. In research for my book "South Africa's War Against Capitalism" (1989), I found that during South Africa's apartheid era, racist unions, who'd never admit blacks, were the major supporters of higher minimum wages for blacks.

Gert Beetge, secretary of South Africa's avowedly racist Building Worker's Union, in response to contractors hiring black workers, said, "There is no job reservation left in the building industry, and in the circumstances I support the rate-for-the-job [minimum wages] as the second best way of protecting our white artisans." Racists recognized the discriminatory effects of mandated minimum wages.

I'm trying to figure whether ineptitude explains the errors in Oprah's show or a deliberate attempt to mislead.

Townhall.com::Minimum wage, maximum folly::By Walter E. Williams

[Made in the USA]

I get a dollar an hour, if I am lucky! -------------- I have been all over the pay scale throughout the years, and I find that no matter what you make, it is never enough. I was just as happy at low wages as high wages. We always made it because we were not afraid to work, and we tried to never live out of our means. And, we never expected someone else to support us! Yeah, I might not have always liked the job that I had, but if you want to survive, you do what you have to do. Today's workers are spoiled. There are jobs out there, if you want to work. I can't count the number of times that I hear the phrase, "but I ain't working at no packing plant"!!!

[K C Muffin]

ya know, I don't get it, this minimum wage crap. Why does the government need to be involved in private business? If the local store down the street thinks they can hire and keep capable people for $3 an hour, why can't they just do it? Probably they'll find that they have to pay more like $7 or $8 to get high school kids to be there - and we all know they sometimes don't 'work'. Whenever the legislated minimum wage goes up, suddenly, so do prices. Who gains? If I wanna make more than the minimum wage, I'm gonna hump my butt and study at the local community college and university to make myself eligible for the higher paying jobs. I just don't tend to get along well with people that expect handouts and that's essentially what a minimum wage is.

[Dodgegal]

I would love a study of all those on min. wage who have cell phones, cars, TV, Cable for that TV. Those are luxuries! not necessities. I was a single mom after my divorse and lived on min wage for a short period of time. During that time, I sold my TV and had local phone service only. It is amazing how much you can cut when you have to.

I also agree that there are tons of jobs out there. Go to the packing plants! You know you are paid every Friday and it is much more than min wage. Every area has those jobs, but we have created a society of lazy, picky people who are too good for those jobs.

[TexKan]

What I notice are the folks puttin groceries on a credit card........ and just buyin crap with credit cards........ I thought those were for "emergencies"....... strange society we are in now. I have one credit card and leave it in the house - I don't even carry it let alone use it! I just see a lot of strange purchases with credit. No wonder we are all broke - everythinng is an emergency

[Bubba]

Are you sure that they are credit cards? I use my VISA card for almost every purchase, from a route 44 drink at Sonic, to groceries at Dillons, to a cart full of crap from WalMart. The only catch is, my VISA card is a debit card and every purchase gets deducted from my checking account. I don't even own a credit card!

[wordsmythe]

nobody owns a credit card Bubba. The actual card is owned by the issuer not the user.

Doesn't have anything to do with anything but I thought it fit in here.

[Made in the USA]

Originally Posted by Bubba

Are you sure that they are credit cards? I use my VISA card for almost every purchase, from a route 44 drink at Sonic, to groceries at Dillons, to a cart full of crap from WalMart. The only catch is, my VISA card is a debit card and every purchase gets deducted from my checking account. I don't even own a credit card!

OK BUBBA! I thought you wouldn't set foot in Walmart?

[TexKan]

Now this is gonna get to be real fun to watch......... I know it's a credit cause they ask debit or credit - they say credit and sign......... you don't have to sign for a debit........... easy to tell the difference......

OK - I cleared my story.............. lets talk about the basket of crap from ...... WALMART?????................... you are slippin Bubba!!!.... did you mean Target????.. Just kidding I know we all go to walmart even you from time to time......... but a cart of stuff is more than I thought you would buy...LOL