A friend of mine posted an on Facebook today. The article discussed eleven facts about minimum wage that President Obama failed to mention in his State of the Union address. Since Blogger appears to have some difficulty lately with links, here's the full URL of the original article...
http://thefederalist.com/2014/01/28/11-facts-about-the-minimum-wage-that-president-obama-forgot-to-mention-during-the-state-of-the-union/
The original article essentially argues against raising minimum wage. I would like to point out some counter-arguments from items asserted in the original article...
"...because nothing says “I deserve a raise” like refusing to show up to work..."
The Strike is a legal, time-honored method of seeking higher wages.
"Only 1 Percent Of The U.S. Labor Force Earns The Minimum Wage."
I will take this statement at face value, however, the article does not discuss the people who make more than current minimum wage, but less than the proposed new minimum wage of $10.10.
"Teenagers Comprise The Single Largest Age Group Of Minimum Wage Workers."
The point goes on to say that 31 percent of all minimum wage workers are between 16 and 19 years old. Okay... that means that 69 percent of all minimum wage workers are 20 or older. Using the article's own math, 45 percent of those making minimum wage are 25 or older! Have you tried living on minimum wage? Have you tried raising a family on minimum wage?
"... 25.5 percent of all minimum wage workers work in sales and related occupations..."
"26.1 percent of all minimum wage workers work in food perparation and serving related occupations..."
Again, they're missing the point. Waiters and waitresses generally work for LESS than minimum wage (because of a loophole in minimum wage law). Also, many who work on commission make zero if they don't make a sale. These occupations are kind of beside the point of minimum wage anyway. Servers are compensated by tips. Sales personnel have additional motivation to sell, and are in a position to make a great deal more than minimum wage through commissions.
"A Majority Of Them Also Worked Less Than 30 Hours Per Week"
"Less Than One-Third Worked Full-Time"
Yep. I totally agree. I would also asssert that this is the employer's choice, not the employee's. Employers don't have to give as many benefits to part-time workers. In fact, I believe that a lot of minimum wage workers are working multiple part-time, minimum wage jobs, which skews the author's first point even further.
"One-Third Of Minimum Wage Workers Either Dropped Out Of Or Never Attended High School"
Okay, I agree with this. If you don't work hard, it's harder to get ahead. That's a fact of life.
"There Are Nearly Six Times More Minimum Wage Workers Today Than In 2007"
Isn't that another reason to raise minimum wage? Statistic after statistic shows an increasing divide between the haves and the have-nots, and a shrinking middle class. Both of these indicate that it's time to raise minimum wage.
"A Change In The Minimum Wage Often Triggers Union Wage Hikes And Benefit Renegotiations"
Again, what's wrong with giving the working man a bit more of the pie?
A couple of final take-aways from the original article...
Raising the minimum wage would theoretically reduce the number of people eligible for public assistance, though I will concede that I don't have the statistics to back me up, and the Federal Government would undoubtedly adjust this as the economy adjusts to the increased minimum wage.
A large point of the original article is to minimize the impact of raising minimum wage. Okay, if it's not a big deal, then why is corporate America fighting it so hard?
I also want to point out that I make more than minimum wage, and I don't work in a union job. I will not benefit directly from raising minimum wage, but I support it.
Finally... I have included some links for further reading. These articles present both sides of the argument, so you can make up your own mind.
http://www.forbes.com/sites/timworstall/2013/12/03/so-lets-look-at-what-happens-when-they-raise-the-minimum-wage-in-bangladesh/
http://www.washingtonpost.com/blogs/wonkblog/wp/2013/02/14/why-economists-are-so-puzzled-by-the-minimum-wage/
http://www.aei.org/article/economics/fiscal-policy/labor/why-we-shouldnt-raise-the-minimum-wage/
http://www.npr.org/2012/07/08/156458470/raising-minimum-wage-a-help-or-harm
http://www.raisetheminimumwage.com/pages/job-loss
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I would say the fundamental disconnect on minimum wage is that whenever your raise the price of something you get less of it. It is a very absolute law of economics. Between healthcare and a minimum wage increase, the cost of very entry level labor may be going up 60-75% over a short period of time. Smart business people will continuously look for ways to lower costs. Perhaps automation that is too expensive if the cost of labor is less than $10 becomes attractive if the price for labor is above $10. It is not unlike the oil industry. Why are we now pulling oil out of oil sands in Canada when we didn't 15 years ago? Because the cost of production in the oil sands is $70 or $80 a barrel. When oil is trading above that, the market produces oil in the tar sands. If an automated ordering system in a restaurant costs the equivalent of $10/hour paid to an employee, and you drive the cost of an employee to above $10, the rational business owner will go automated.
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