Slog
News & ArtsTuesday, March 19, 2013
Money A $22 an Hour Minimum Wage
Posted by Eli Sanders on Tue, Mar 19, 2013 at 6:00 AM
Based on how hard Americans are working, that's what we should have:
Sen. Elizabeth Warren (D-Mass.) made a case for increasing the minimum wage last week during a Senate Committee on Health, Education, Labor and Pensions hearing, in which she cited a study that suggested the federal minimum wage would have stood at nearly $22 an hour today if it had kept up with increased rates in worker productivity.
And something else: If we were to raise America's minimum wage to keep pace with increases in wages for the top 1 percent over the last 50 years, then our lowest earners would now be getting "closer to $33 an hour."
1
If we just adjusted for inflation 1968's minimum wage would be a tad over $19 an hour today. If that were true we would have no revenue shortfall in government, and spending - which is 70% of todays GNP - would be driving the economy towards more income equity and healthier families
3
HULK AGREE WHAT #1 SAY! MORE MONEY IN WORKER POCKET = MORE SPENDING! MORE SPENDING = HEALTHY ECONOMY! IT CALLED 'CURRENCY' FOR A REASON! MONEY NEED CIRCULATE, NOT STAGNATE IN COFFERS OF 1%!
4
You want to see an increase of productivity? Tell a small business owner that every employee they hire needs to be paid a minimum of $33/hr. They'll do all the work themselves. Setting the minimum wage to $33/hr won't magically take money out of the pockets of the 1% that has all the wealth in this country.
I'm all for increasing the minimum wage and attaching it to cost-of-living, but Warren's comments are unusually removed from economic reality and don't help the cause.
I'm all for increasing the minimum wage and attaching it to cost-of-living, but Warren's comments are unusually removed from economic reality and don't help the cause.
5
Of course this was all long before Americans had to compete with Chinese workers or are you all willing to pay $50 for a 3 pack of tube socks at Target? That's what I thought.
6
We are guessing that Liz has never operated a business and has never paid one fucking penny in payroll to anyone.
Perhaps she can show us how it is done.
Actions speak so much louder than words.....
Perhaps she can show us how it is done.
Actions speak so much louder than words.....
7
@4 actually, I think this is probably good politics, and takes a page out of the Republican play book. If we want anything like a livable minimum wage, we need to move it beyond the $10-12 range. To get republicans to even consider that, you need to set the playing field in the $18-20 range, and let them work their way down from there. This is one of the more insidious ways the country has been shifted to the tight in the last 30 years: the right wingers set the debate so far to the right that today's moderates are substantially to the right of many of yesteryear's conservatives. I like it. It feels like dems are finally playing the game.
8
Hey, maybe we can have French style unemployment too: 10% permanent unemployment with 22% permanent youth unemployment. Then you'll all stop bitching about 8% unemployment.
9
@ 4, I think you really missed the point. Nobody is proposing that the minimum wage be increased to $33/hr, or $22/hr. Warren is illustrating how we've gradually been robbed over decades. It's politics, just as @7 observes.
10
Productivity has always been trumpeted as a hallmark of a healthy economy. All it really means is that corporations have dumped employees and the remaining workforce is doing is doing more work for the same money.
12
@10 Errrrr, no. It means the economy has invested heavily in technology too, the main reason we have productivity increases.
But go ahead, make your neighborhood artisanal hemp vegan gluten free bakery pay their staff $22/hr. see how long they stay open.
But go ahead, make your neighborhood artisanal hemp vegan gluten free bakery pay their staff $22/hr. see how long they stay open.
13
Many of the $20/hr jobs for non-college graduates were off shored. Does the first time Dairy Queen worker deserve $20/hr?...probably not.
14
It's an interesting argument. While productivity gains have come mostly due to technological advances, one would think that low end workers would enjoy at least some of the fruits of those gains.
And Warren is smart to throw around high numbers like $22 and $33 to frame the discussion - $10 doesn't sound like much in comparison.
And Warren is smart to throw around high numbers like $22 and $33 to frame the discussion - $10 doesn't sound like much in comparison.
15
It's just smart politics.
If you start from the current $7.25 p/hr, and propose to increase to $10, it sounds like a huge increase.
If you start throwing around rational arguments for $22 or $33 p/hr, then $10 starts sounding like a real bargain.
If you start from the current $7.25 p/hr, and propose to increase to $10, it sounds like a huge increase.
If you start throwing around rational arguments for $22 or $33 p/hr, then $10 starts sounding like a real bargain.
16
"Smart politics"
Yeah it's also sound economics. If the people working in the economy can afford most, if not upwards of 75% of the items on the market, then that's an economy in good working order. If you have people born into poverty and passing that on, you create a class of people working for companies they couldn't ever dream of affording. If we're just splitting hairs I say we move the "liberal" goalpost down to the $100 an hour line. Then we can meet in the $50 an hour middle, problem solved.
Yeah it's also sound economics. If the people working in the economy can afford most, if not upwards of 75% of the items on the market, then that's an economy in good working order. If you have people born into poverty and passing that on, you create a class of people working for companies they couldn't ever dream of affording. If we're just splitting hairs I say we move the "liberal" goalpost down to the $100 an hour line. Then we can meet in the $50 an hour middle, problem solved.
17
I'm loving the stupid arguments of people like @4 and @13.
They fail to realize that if this pay rate would have been gradually increased, as it should have been, then $22/hour would be a minimum wage, and college graduates would be making closer to $50-60 right out of college, and most white collar workers would be making $70-100/hour.
That seems outlandish because you've been trained to think that's what richy rich folks make. But, in the 60s, that's the type of pay scale that afforded most people the ability to rent without completely scraping together change, and to buy without going broke. Prices would have gone up a little more than what they are now, but if I'm making $22-33/hr, then I don't mind paying $30 for a 3 pack of socks, as Sugartit seems to think I would. Hell, the minimum wage is $7.25 right now, and a 3 pack is $6.50.
They fail to realize that if this pay rate would have been gradually increased, as it should have been, then $22/hour would be a minimum wage, and college graduates would be making closer to $50-60 right out of college, and most white collar workers would be making $70-100/hour.
That seems outlandish because you've been trained to think that's what richy rich folks make. But, in the 60s, that's the type of pay scale that afforded most people the ability to rent without completely scraping together change, and to buy without going broke. Prices would have gone up a little more than what they are now, but if I'm making $22-33/hr, then I don't mind paying $30 for a 3 pack of socks, as Sugartit seems to think I would. Hell, the minimum wage is $7.25 right now, and a 3 pack is $6.50.
18
Anyone who thinks upping the minimum wage is a good idea has either A) never run a business (highly likely here at the Slog) or B) is fucking retarded. (yeah, I said it)
Its a simple macroeconomic rule:
Raise the minimum wage = raise the unemployment rate. Because firms will not hire as many people. More unemployment is BAAAAAAD BTW.
Its a simple macroeconomic rule:
Raise the minimum wage = raise the unemployment rate. Because firms will not hire as many people. More unemployment is BAAAAAAD BTW.
19
@18 Higher pay to the people means more purchases and higher prices means more money to the companies means more people to hire with more pay means more purchases, etc etc.
That is a successful capitalist model.
What we have is a failing capitalist model where we have inflation with minimal increases in wage, and a stagnant minimum wage, where the poor are getting poorer, but a select few are getting massive amounts of wealth.
That is a successful capitalist model.
What we have is a failing capitalist model where we have inflation with minimal increases in wage, and a stagnant minimum wage, where the poor are getting poorer, but a select few are getting massive amounts of wealth.
21
#18 makes a good point, I agree.
Americans refuse to pay real world costs. That hurts the minimum wage worker. Want to PAY a real world wage means you have to PAY a real world cost.
Americans refuse to pay real world costs. That hurts the minimum wage worker. Want to PAY a real world wage means you have to PAY a real world cost.
24
Personally, I'm against a $22/hour minimum wage because it would put all the alt weeklies out of business and I like reading Slog.
26
@ 18, yeah, the unemployment rate skyrocketed when it went up under Clinton, didn't it? Oh, wait, no it didn't.
How about when Obama did? No, sorry, that didn't result in worse unemployment than we already had thanks to Bush, who never allowed it to go up.
As usual, you are lying.
How about when Obama did? No, sorry, that didn't result in worse unemployment than we already had thanks to Bush, who never allowed it to go up.
As usual, you are lying.
27
The trolls are using a common, and effective, scare tactic, or threat: Make us raise the minimum wage and we'll have to fire you. This is specially effective when the employers have all the power and the workers have very slim, or nonexistent, financial reserves. Our ignorance supports our fears. For all we know, the employers are right. So we cling to this $7.25/hour, which is an outrage and a tragedy, because we're too fearful to lose even that. We can't afford to go even a little while without income.
To make matters worse, the propaganda of our consumerist society has convinced us to buy a whole bunch of crap we don't need on credit and go into onerous debt, or we have created a whole raft of monthly bills that sap our income. So, in effect, we are indentured servants to a master who pays us the barest pittance. This dependency also keeps us in check.
To make matters worse, the propaganda of our consumerist society has convinced us to buy a whole bunch of crap we don't need on credit and go into onerous debt, or we have created a whole raft of monthly bills that sap our income. So, in effect, we are indentured servants to a master who pays us the barest pittance. This dependency also keeps us in check.
28
Let's split the difference: $10/hour guaranteed wage for everyone, paid for by a surtax on the very wealthy, plus a $12/hour minimum wage. That puts total compensation where it should be based on productivity gains, without putting an undue burden on small business owners.
It's the billionaires that are the problem, not Joe Small Businessman who has a workforce of minimum wage workers.
It's the billionaires that are the problem, not Joe Small Businessman who has a workforce of minimum wage workers.
29
If we paid people a higher minimum wage we wouldn't need to give tax breaks for developers or use tax dollars for developers to produce subsidized "affordable" housing.
$20/hr = $40K yr.
in australia every worker is paid closer to a living wage - which means that baristas, waiters, and burger flippers can have a better-than-struggling life.
for all those fuckwits that say "you haven't run a business", i say: you haven't run a business successfully if you can't pay you people a decent wage.
$20/hr = $40K yr.
in australia every worker is paid closer to a living wage - which means that baristas, waiters, and burger flippers can have a better-than-struggling life.
for all those fuckwits that say "you haven't run a business", i say: you haven't run a business successfully if you can't pay you people a decent wage.
30
btw, it's the lazy as shit "business owners" that run franchised shit-job joints that pay huge franchise fees rather than employee wages because they can't come up with their own business plan or manage a real business.
get rid of chain stores, fast food franchises, and these wealth extracting crap outfits and we'd help our residents and economy.
all the fucks that run or own these things don't live here, and if they do they should be shot for being exploitative scum.
get rid of chain stores, fast food franchises, and these wealth extracting crap outfits and we'd help our residents and economy.
all the fucks that run or own these things don't live here, and if they do they should be shot for being exploitative scum.
31
@18: Its a simple macroeconomic rule:
If you think the relationship between inflation, unemployment, wages, consumer confidence, etc. can be captured by your "simple macroeconomic rule", you're a fool.
If you think the relationship between inflation, unemployment, wages, consumer confidence, etc. can be captured by your "simple macroeconomic rule", you're a fool.
32
If we raise the minimum wage to inflation adjusted 1968 levels, business will have to lay people off, and naturally we would see those crazy 1968 levels of unemployment. Which was3.6%
Or perhaps employment is only loosely tied to wages.
Or perhaps employment is only loosely tied to wages.
33
@32 Or, hell, by December 1969, giving the minimum wage a good amount of time to lead to firings, the US unemployment rate was 3.5%. CRAZY!!!
34
"To make matters worse, the propaganda of our consumerist society has convinced us to buy a whole bunch of crap we don't need on credit and go into onerous debt, or we have created a whole raft of monthly bills that sap our income. So, in effect, we are indentured servants to a master who pays us the barest pittance. This dependency also keeps us in check."
You make it sound like you have no free will …. oh wait, morons don't apparently.
"Get rid of chain stores, fast food franchises....."
@30 How? By marching all the owners out to the rice paddies and killing them?
Sorry guys, if you think your boss is a dipshit moron what does that make you?
You make it sound like you have no free will …. oh wait, morons don't apparently.
"Get rid of chain stores, fast food franchises....."
@30 How? By marching all the owners out to the rice paddies and killing them?
Sorry guys, if you think your boss is a dipshit moron what does that make you?
35
Unionized grocery stores pay average wages much, much higher than minimum wage. Yet they stay in business and often make a profit.
It is definitely possible for business to afford higher wages.
It is definitely possible for business to afford higher wages.
36
@31
These guys, libertarians, conservatives, teabaggers, think everything is simple. Complexity makes them angry so. When they get angry at something they try to kill it, deny it. Make it disappear any way they can. They replace complicated the facts of reality with imaginary simple rules of thumb that they find comforting. That keep the fear at bay.
These guys, libertarians, conservatives, teabaggers, think everything is simple. Complexity makes them angry so. When they get angry at something they try to kill it, deny it. Make it disappear any way they can. They replace complicated the facts of reality with imaginary simple rules of thumb that they find comforting. That keep the fear at bay.
38
Why don't all the Big Talker Betty Crockers here start a business, say a restaruant on the Ave, and pay all your workers $30 an hour + benefits? How much is that bowl of noodles going to cost?
39
I work as a barista for my second job, right down by Seattle center. The owners at my shop aren't really living high on the hog by any means, and they pay me minimum wage. Now, I would love love love to be able to make enough money as a barista/college instructor to not have to stress every month about bills and rent and food, and raising the minimum wage would help me enormously. However, I'm paid so little because that's all the owners can really afford without turning their enterprise into a co-op.
The normal arguments don't seem to work here either--it's not really all that likely that sales would go up considerably on coffee of all things if we all made more money. It's a rare person in LQA that makes a financial calculation about their 2nd or 3rd $4 latte that day. Even if sales increased about 10%, we're still not looking at the kind of money to support much of a pay raise for all 8 of us working there. Maybe we'd make better tips? Probably not much better though, since even as someone who relies on tip money for groceries, I think it's ridiculous to tip more than a buck and some change for a latte.
I don't know. Someone convince me that I'm wrong.
The normal arguments don't seem to work here either--it's not really all that likely that sales would go up considerably on coffee of all things if we all made more money. It's a rare person in LQA that makes a financial calculation about their 2nd or 3rd $4 latte that day. Even if sales increased about 10%, we're still not looking at the kind of money to support much of a pay raise for all 8 of us working there. Maybe we'd make better tips? Probably not much better though, since even as someone who relies on tip money for groceries, I think it's ridiculous to tip more than a buck and some change for a latte.
I don't know. Someone convince me that I'm wrong.
40
@38 you obviously haven't been to any upscale restaurants.
Lunch for two frequently costs around $250.
Keep pushing your "conservative" (aka al-Qaeda USA) beliefs. Nobody's buying them anymore.
Lunch for two frequently costs around $250.
Keep pushing your "conservative" (aka al-Qaeda USA) beliefs. Nobody's buying them anymore.
41
The really sad part is commentators on Slog really think that the current level of income inequality is just somehow going to magically become better without involving some very hard, very bitter adjustments for a huge number of Americans (and not just the rich..think upper middle and middle income earners)
Sad or the foolishness is just funny as hell...I'm not sure.
Sad or the foolishness is just funny as hell...I'm not sure.
42
Where the fuck do you eat lunch? Dinner for my wife and I at Elliots or Dainels Broiler isn't $250. For lunch I am trying to eat for $6 or less, at a restaurant that is. If I pack my own it's $3.
43
@42, so your packed lunch is canned soup? Just assuming since a can of Campbells Chunky Chicken Noodle is usually runs around $2.00 a can and if you add an apple or banana you hit close to $3.00
44
Thank you Lew.
Thank you for letting us know that you can afford to eat at Daniel's Broiler enough to know you can dismiss the pricing, and we can subsequently write you off as an asshole telling us that we should be grateful for what little we have.
Fuck you too. :-)
Thank you for letting us know that you can afford to eat at Daniel's Broiler enough to know you can dismiss the pricing, and we can subsequently write you off as an asshole telling us that we should be grateful for what little we have.
Fuck you too. :-)
45
Huh, wierd. Will in Seattle has $250 lunches, and a couple of times a year I eat out with family. Guess I am a rich asshole. You motherfuckers must be REALLY poor. You want to piss away over 1K a year on a cellphone, feel free. Buy your gay ass skinny jeans for $100, great. You pricks are too stupid to buy bulk and make a 10 dollar bag of ham last for two weeks with a head of lettuce and a 4 dollar bag of bread (of which you put 1/2 in the freezer for next week), go fuck yourself.
I take frugal to the limit & my condo is 98% payed off. Have fun being poor.
I take frugal to the limit & my condo is 98% payed off. Have fun being poor.
46
You eat "bulk" pig, nutrient-devoid lettuce and half frozen bread every day? I'd rather be poor than that kind of frugal.
47
This is a silly argument. Where are these productivity gains coming from? In the case of minimum wage workers, it's not because they're gotten so much smarter and better at their jobs. Does the guy at the 7-11 "deserve" a raise because barcodes means he doesn't need to memorize or type in prices? He's more productive, sure, but the skills/talent required to do the job have decreased. There shouldn't logically be any upward pressure on wages other than the ol' Invisible Hand. Which must not be pushing that hard.
If anything, that money should be going to the inventor of the barcode.
If anything, that money should be going to the inventor of the barcode.
49
@39, In the restaurant industry, wages make up about 20-30% of the cost of the product. A 100% increase in wage (from $7.50 to $15) would require a 20-30% increase in the price of the product (in reality the cost increase is a bit less). However, the buyers, in general, would have significantly more disposable income, which would enable them to purchase more even at the higher rate.
The argument that businesses can't afford to raise the minimum wage is a short sighted fallacy, which does more harm to business owners in the long run.
The argument that businesses can't afford to raise the minimum wage is a short sighted fallacy, which does more harm to business owners in the long run.
50
@39 - also, while I doubt that the owners of your cafe really can't afford to pay more in wages, the price they can charge is set by competition. So, if everyone's cost goes up, they won't actually lose business (and will likely gain business) when they raise their retail prices (because everyone else will be raising their prices a similar amount).
And yes, a coffee shop, particularly one that has 'baristas' rather than 'clerks' is patronized by people with disposable income. More people with disposable income == more people buying lattes.
And yes, a coffee shop, particularly one that has 'baristas' rather than 'clerks' is patronized by people with disposable income. More people with disposable income == more people buying lattes.
51
This gives some context for Kshama Sawant's city council campaign calling for a $15/hour minimum wage in Seattle, one of the most expensive cities to live in anywhere in the US. Check out her campaign at www.VoteSawant.org
52
What happens to the guy making $24 hr when the minimum wage gives up to $20 hr? His pay will not go up $13 hr. He basically is moved that much closer to poverty. Why? Because the price to buy a loaf of bread would triple along with the minimum wage, but his pay wouldn't. That's what liberals want, two classes. The mega rich and the poor. And if you think the cost of goods would not increase with minimum wage your crazy. Look at the price of a value meal at McDonald's. A big Mac meal was $2.99 in 1993 minimum wage was +/- $3.25hr. Today both have basically doubled, but the middle class pay has not. That is what nobody wants to admit. They are killing the middle class.
53
The problem, really, is our perverse tax system. Both in 1968-69 and now, a business could and can write off their expenses, including wages, and pay no income tax on them. None, nada, zero. The difference is, in 1969, your business paid 24.2% income tax on the first 25K in profit (about $155K today) and 52.8% on everything above that. In 2002, that same $163K would have run you a marginal 39% in tax (yes, higher, but with a marginal rate all the way down to 15% on the first $50K of that). Now, that sucks for small businesses. Overall, they pay more! BUT, if you have a nice big business, well, you're in luck. The marginal rate on profit over $335K dropps to 34%, growing incrementally to 38% for businesses with a little over $18M profit, before dropping again to 35% for businesses with more than $18.3M in profit. (From my quick Googling, these rates have not changed since 1993)
So mom-and-pop shopkeeper are slightly worse off on the tax front, but mega corp is sittin' real nice and pretty. Let me just run the numbers for you, to be clear. Mr. & Mrs. mom-and-pop took home $25K in 1969 and it's equivalent in 2012. In 1969, they paid $6050 in corporate income tax ($37,367 in 2012 dollars). In 2012, they took home $155K and paid $43,700 in corporate income tax. Faceless mega corp took home $3.076M in 1969 ($19M in 2012 dollars), paid $1.617M in corporate income taxes ($9.987M in 2012 $). They took home $19M in 2012, and paid $6.65M in corporate income taxes. This without even getting into PERSONAL income tax rates on the folks taking home that income (hint: similar results).
I'm not patient enough to sit here and find out what income level a business starts to pay less at, but I think this paints a very clear picture. Remember, folks, taxes are a disincentive to investment, except when they're NOT. (If you'd like to play, you can find the corporate tax tables here: http://www.irs.gov/pub/irs-soi/02corate.… and an inflation calculator here: http://www.westegg.com/inflation/)
More...
So mom-and-pop shopkeeper are slightly worse off on the tax front, but mega corp is sittin' real nice and pretty. Let me just run the numbers for you, to be clear. Mr. & Mrs. mom-and-pop took home $25K in 1969 and it's equivalent in 2012. In 1969, they paid $6050 in corporate income tax ($37,367 in 2012 dollars). In 2012, they took home $155K and paid $43,700 in corporate income tax. Faceless mega corp took home $3.076M in 1969 ($19M in 2012 dollars), paid $1.617M in corporate income taxes ($9.987M in 2012 $). They took home $19M in 2012, and paid $6.65M in corporate income taxes. This without even getting into PERSONAL income tax rates on the folks taking home that income (hint: similar results).
I'm not patient enough to sit here and find out what income level a business starts to pay less at, but I think this paints a very clear picture. Remember, folks, taxes are a disincentive to investment, except when they're NOT. (If you'd like to play, you can find the corporate tax tables here: http://www.irs.gov/pub/irs-soi/02corate.… and an inflation calculator here: http://www.westegg.com/inflation/)
54
I swear I changed that first $163K to $155K. I decided to go with 1969, though I had started with 1968. $155K is the RIGHT number, going from 1969 to 2012.
55
What happens to the guy making $24 hr when the minimum wage gives up to $20 hr? His pay will not go up $13 hr. He basically is moved that much closer to poverty. Why? Because the price to buy a loaf of bread would triple along with the minimum wage, but his pay wouldn't. That's what liberals want, two classes. The mega rich and the poor. And if you think the cost of goods would not increase with minimum wage your crazy. Look at the price of a value meal at McDonald's. A big Mac meal was $2.99 in 1993 minimum wage was +/- $3.25hr. Today both have basically doubled, but the middle class pay has not. That is what nobody wants to admit. They are killing the middle class.
repost of comment 52. The fact that no one sees what 52 is saying scares the shit out of me. [though he shouldnt single out liberals; the descent into a 3rd world, 2 tier system is obviously a joint venture.
repost of comment 52. The fact that no one sees what 52 is saying scares the shit out of me. [though he shouldnt single out liberals; the descent into a 3rd world, 2 tier system is obviously a joint venture.
56
And, while no one has complained yet, I will state upfront that I think a small business owner taking home $155K is fair. That's a good income, but not unreasonable for someone who has put their neck, credit, savings, etc. on the line to run a business. If you've built a successful small business, taking home what is just slightly above middle-class wages is not unreasonable. OTOH, getting an extra $3M to make it rain on your executives because of tax breaks is obscene.
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