House Democrats to tackle minimum wage

Ron Burgundy · 01-10-2007, 04:45 AM

AP - The Democratic-controlled House voted Wednesday to increase the federal minimum wage to $7.25 an hour, bringing America's lowest-paid workers a crucial step closer to their first raise in a decade.

The vote was 315-116, with more than 80 Republicans joining Democrats to pass it.

"You should not be relegated to poverty if you work hard and play by the rules," said House Majority Leader Steny Hoyer (news, bio, voting record), D-Md.

The bill was the second measure passed since Democrats took control of the House, ending more than a decade of Republican rule.

The measure, which now goes to the Senate, would raise the federal wage floor by $2.10 from its current $5.15 an hour in three steps over 26 months.

The last increase was in 1997, when President Clinton successfully prodded the GOP-controlled Congress to enact the increase. Republicans declined to approve another raise for the six years in which they held majorities in the House and Senate and President Bush was in the White House.

Organized labor and other supporters pitched the bill as badly needed assistance for the working poor.

Business groups and other critics said it could lead to higher prices for goods and services, force small companies to pink-slip existing workers or hire fewer new ones, and crimp profits.

The White House issued a statement saying it opposed the bill because it "fails to provide relief to small businesses."

Senate Democratic leaders have already signaled they will accept changes designed to shield small businesses from adverse consequences of higher labor costs.

"This bill increases costs for mom-and-pop businesses," said Steve Chabot (news, bio, voting record), R-Ohio, contending the legislation doesn't do anything to help offset that burden.

Many businesses want the pot sweetened, perhaps by faster depreciation or other tax breaks or letting small businesses band together to buy health insurance for their workers.

The bill would raise the wage floor in three steps. It would go to $5.85 an hour 60 days after signed into law by the president, to $6.55 a year later and to $7.25 a year after that.

Dumpy Dooby · 01-10-2007, 07:12 PM

Honestly, my response to this can be summed up with that smilie. Americans seem to be so incredibly oblivious that they don't understand how increasing minimum wage only serves to increase inflation, increase taxes, and just plain steal from the public. It's fucking pathetic.

...... err,

Donkey® · 01-10-2007, 07:35 PM

This is a good thing and I am glad people who haven't ever had to feed a family off minimum wage are bitching about it.

Dumpy Dooby · 01-10-2007, 08:17 PM

Originally Posted by Donkey®

This is a good thing and I am glad people who haven't ever had to feed a family off minimum wage are bitching about it.

This won't change the position of poverty in America. Certainly there will be anomalies, but the people that were paid the previous minimum wage will be unaffected by this in the long run. $7 is now what one hour of entry-level work is worth. People that are currently making $7 will get moved to $10. And people making $10 will get bumped up as well. Give it time, but it will happen. While $7 still has value, it will become more valuable to the IRS. Thus, overall taxation is increased as people are bumped up into higher brackets. When the money loses its value, the government programs will be forced to shut down or get more money, thus our taxes go up.

Again, this only serves to inflate our economy, raise taxes, and steal from the general public. The economically inept just don't realize it, albeit it's an incredibly elementary concept.

RMNIXON · 01-10-2007, 09:26 PM

"According to the Employment Policies Institute, the average family affected by the minimum wage has an annual income of $38,000 because seven out of 10 minimum-wage workers live with a working spouse or relatives.

Furthermore, the average income of minimum-wage workers increases by 30% within one year of employment on the basis of learned skills. Which is why any artificial barriers to learning those skills — which is what the minimum wage is — represents a cruel hoax to the working poor. Wage increases due to increased skill levels explain the remarkable fact that only 2.8% of workers over the age of 30 are receiving the minimum wage.

The Clinton administration and far too many members of both parties in Congress seem enamored of the labor policies of European countries such as France and Germany — policies that claim to be compassionate but that end up creating double-digit unemployment and economic stagnation. We don't need to import Euroscloris to the United States.

In fact, the primary reason to reject an increase in the minimum wage is rooted in the very essence of America: freedom.

If you as a job hunter wish to take a $5-an-hour job offered by a prospective employer who sees that as the value of the job, why should that be against the law?

Why, in the land of the free, should the federal labor police be allowed to step in and prevent that free economic contract from taking place? But if freedom isn’t reason enough to oppose the minimum-wage law, consider this pithy comment from two real economists. Donald Deere and Finis Welch of Texas A&M University write:

“Our conclusion is simple and direct: To the extent that increased minimums raise the cost of hiring low-productivity workers, fewer of those workers will be employed.”

No one, neither labor nor management, wants that to happen."

Minimum Wage Myth

Recently, the Small Business Administration (SBA) looked closely at the types of businesses employing low-wage workers. Not surprisingly, the bulk of them are small businesses, not big corporations. Among all minimum wage workers, 54% work in businesses with fewer than 100 employees and two-thirds work in businesses with fewer than 500 employees.

Working in a small business is precarious because they are perpetually underfinanced and just a short step away from bankruptcy. According to the SBA, in 1998, there were 590,000 new businesses established in the United States. Of these, 565,000 employed fewer than 20 workers. But there were also 541,000 firms that went out of business that year, and 512,000 had 20 workers or less.

In other words, although small businesses may create 75% of new jobs, they are also responsible for the vast bulk of job losses. That is why we must be especially careful when contemplating new burdens on small businesses. With so many of them close to the edge to begin with, it often doesn't take much to push them over, destroying many jobs in the process.

The minimum wage is like a tax on small businesses that reduces their ability to hire and raise wages. According to the SBA, there was slower wage growth among low-wage workers in small firms during times when the minimum wage was rising. Even among large firms, the probability of a low-wage worker being un employed doubled after the minimum wage was increased.

Nevertheless, small businesses are a critical stepping-stone into the labor force for most workers. If one is young, poor, undereducated or a member of a minority group, they are the most likely places one can get a job. According to the Bureau of Labor Statistics (BLS), someone with less than a high school diploma is almost twice as likely to work in a small business than a large one.

Most minimum-wage workers are young and have low education levels. According to BLS, in 2002, half of all workers earning just the minimum wage were under age 25, and a fourth were between the ages of 16 and 19. One-third of all minimum wage workers had less than a high school diploma. Three-fifths of minimum wage employees work only part-time and frequently are students or others living in homes with high family incomes.

Nevertheless, minimum wage jobs are not unimportant jobs. They are the first rung on the employment ladder for most workers. The experience they gain in such simple areas as showing up for work on time, and learning to follow instructions and how to interact appropriately with customers, clients and patients are critical to success in life.

That is why wage growth among those hired in a minimum wage job is very high for those who stick with it. According to a new study from the Employment Policies Institute, median annual wage growth for minimum wage workers is six times greater than that of workers earning more than the minimum wage. The BLS confirms this analysis, finding that 90% of workers hired at the minimum wage are earning more than the minimum after one year.

Unfortunately, despite a vast amount of research showing that raising the minimum wage is a highly ineffectual means of aiding the poor, the lure of simplistic solutions constantly beckons the intellectually shallow and unsophisticated. On June 18, Sen. John Kerry, (D.-Mass.), the presumed Democratic presidential nominee, proposed raising the minimum wage from $5.15 per hour to $7.

Liberal Myths of Minimum Wage

Bottom line this is ignot the facts feel good politics. If you feed a family a good plan would be to get some skills and a better paying job. Just about any teenager seems to do it!

7th Ninjai · 01-10-2007, 10:02 PM

What meaningless legislation. If Democrats were serious about putting more money in American's pockets, they would reduce government spending (military and entitlement) and look at tax cuts instead. Increasing the minimum wage does nothing for the vast majority of working Americans other than increase the cost of goods sold. This ultimately has the opposite effect of the perceived intent of raising minimum wage. How about putting more money in everyone's pockets in addition the 'working poor' (more like high schoolers) while keep the cost of goods sold stable? Business owners are also forced to consider cutting the number of low skilled employees on staff. Democrats love the minimum wage issue because most of their constituents are dumb enough to support it and it has an extra benefit to the government of increased tax revenue.

All Americans are overtaxed. Democrats and Republicans both need to become better stewards of our money and allow all of us to keep more of what we make.

PetriW · 01-10-2007, 10:16 PM

Bah, real countries like Sweden don't even have a minimum wage! We've got a couple of chinese foreign workers down in the harbour right now working for $0.80 per hour (or something similar), on a 30 meter high platform, with poor safety regulations (only one has fallen off so far).

It's all about abusing the people who are willing to work cheap, the cheaper the better.

(Btw, I hope you sense the irony... some don't on the internet...)

ballz2wallz · 01-10-2007, 10:48 PM

Originally Posted by Donkey®

This is a good thing and I am glad people who haven't ever had to feed a family off minimum wage are bitching about it.

Yes, finally, people making 7.25 per hr can feed their families!!!

DosEquis · 01-10-2007, 11:18 PM

I like to

at the doom and gloom conservatives. Considering 98%+ jobs already get paid 7 bucks or more anyway. This doesnt mean everyone else in america gets a 2 buck an hour raise. I consider this useless "Feel good" legislation that will benefit very few, but will also harm very few businesses as well. This is just one of those things that democrats can be like "Hey see we did this we like working people" when it really doesn't help that many.

Thorgrim · 01-10-2007, 11:47 PM

I like how every single democrat, even conservative ones, voted for this clean bill, and basically half the Republican Party did...

315 votes, it got more than the 9/11 recommendations did, it was veto proof and just a few shy of a supermajority vote

Sometimes on this board I don't think people realize how unpopular their positions are in Congress and with the American people...yet when it comes to their specific issues its always "the average american wants this"

Pro Street · 01-11-2007, 12:40 AM

Congress is afforded a "Cost of Living" increase every year unless it is voted out. It never has.

Inflation has taken place even though the wage hasn't increased.
Congress has voted to have several pay raises.
The Cost of Living has increased.

all within the same span that the minimum wage has stayed the same.

So while all in the median incomes were scarecly keeping up, those in the lower class were falling farther behind, thus forcing even more class seperation.

Those at the top level won't cut thier pay to keep thier business alive. They'll raise prices.

Then some will undercut the other, and so forth. and it will balance out.

Thorgrim · 01-11-2007, 12:50 AM

Originally Posted by Pro Street

Congress is afforded a "Cost of Living" increase every year unless it is voted out. It never has.

Inflation has taken place even though the wage hasn't increased.
Congress has voted to have several pay raises.
The Cost of Living has increased.

all within the same span that the minimum wage has stayed the same.

So while all in the median incomes were scarecly keeping up, those in the lower class were falling farther behind, thus forcing even more class seperation.

Those at the top level won't cut thier pay to keep thier business alive. They'll raise prices.

Then some will undercut the other, and so forth. and it will balance out.

For how many times we've increased the minimum wage, I'm finding a total lack of any evidence it's causing such economic harm as people here are writing...

It sounds like they heard a 2nd hand argument from cato based on total theory and came here like it was common sense

Pro Street · 01-11-2007, 01:08 AM

Originally Posted by Thorgrim

For how many times we've increased the minimum wage, I'm finding a total lack of any evidence it's causing such economic harm as people here are writing...

It sounds like they heard a 2nd hand argument from cato based on total theory and came here like it was common sense

I agree.. any raise in prices will likely quickly be undercut by the competition... due to the increase in inflation since with no change, they have plenty of "padding" to absorb the slightly higher labor cost.

Scrum · 01-11-2007, 01:29 AM

Originally Posted by Thorgrim

For how many times we've increased the minimum wage, I'm finding a total lack of any evidence it's causing such economic harm as people here are writing...

It sounds like they heard a 2nd hand argument from cato based on total theory and came here like it was common sense

Amazing how this powerful economy can be taken down by so few people getting such a meager raise.

Thorgrim · 01-11-2007, 01:40 AM

Originally Posted by Scrumtralecent

Amazing how this powerful economy can be taken down by so few people getting such a meager raise.

If the economy sneezes the slightest way they'll blame this...that is if taxes aren't raised...if any tax is raised they will find any small iota of difference in the economy (even though economists like Dr. Krugman have been saying we have barely been fighting off a second recession for years) and blame it on that

If Walmart's profits fall after taxes are raised on those making over $200,000 a year, look for right wingers to blame it on tax increases because obviously Walmart's primary business is comprised of those making over $200,000 a year

nbiggershaft · 01-11-2007, 02:17 AM

I stil fail to see the justification for a federal minimum wage hike. Hell, why do we even have state governments?

Pro Street · 01-11-2007, 02:31 AM

Originally Posted by nbiggershaft

I stil fail to see the justification for a federal minimum wage hike. Hell, why do we even have state governments?

we're the United States of America.

always have been, always will be.

In fact, we're more federal than we should be.

we have a minimum wage because it's part of progressive reform.

Considering there are tens of thousands of jobs that do not pay more than minimum wage, one can easily see that if it wasn't there the chances of less wages offered is fairly high.

and fact that there are wages at minimum wage also show that they will not go up even to compensate for CoL and inflation.

Thorgrim · 01-11-2007, 02:33 AM

Originally Posted by nbiggershaft

I stil fail to see the justification for a federal minimum wage hike. Hell, why do we even have state governments?

state governments have enormous power, look at how different laws can vary from state to state (California, Utah, Alaska, Georgia, New Jersey, Texas)

On things it's hard to tell a difference because we are one federal country, but when it really comes down to it, when you are in a civil or criminal procedure, it can be night and day

Dumpy Dooby · 01-11-2007, 08:58 AM

Originally Posted by Thorgrim

I like how every single democrat, even conservative ones, voted for this clean bill, and basically half the Republican Party did...

315 votes, it got more than the 9/11 recommendations did, it was veto proof and just a few shy of a supermajority vote

Sometimes on this board I don't think people realize how unpopular their positions are in Congress and with the American people...yet when it comes to their specific issues its always "the average american wants this"

Are you going somewhere with this or what?