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The Tribune editorial today is entitled: The minimum wage mirage
A better way to help poor people is to increase the Earned Income Tax Credit, which supplements the wages of low-income working families. Its genius is that it increases the compensation of low-wage workers without inducing companies to cut back hiring. And it spreads the costs of this generosity across all taxpayers, instead of singling out employers.
This approach lacks the bumper-sticker appeal of legislating pay raises for some workers. But it also lacks the serious drawbacks that still make the minimum wage a losing deal.
The Daily Southtown editorial is headlined: Minimum wage should be raised as governor wants
The governor is right. At a time when corporate salaries are soaring, workers at the bottom of corporate ladder should share in the benefits, too. […]Advocates of an increase point out that the average American corporate CEO saw his salary increase 16.1 percent between 2004 and 2005 alone. A study by the American Federation of Labor said the average CEO receives salary and benefits equivalent to the salary and benefits of 411 average employees. In 1990, the ratio was 107 employees to one CEO, and in 1980, it was “only” 42 to 1.
Obviously, that gap between average Americans and those at the top of the corporate ladder is growing at an astounding pace. While the CEOs of the 500 Standard and Poor’s corporations was $13.5 million in 2005, a minimum-wage workers in Illinois earns only $13,520 a year.
Opponents worry increasing the minimum wage would result in workers being laid off or not being hired in the first place. But a $1-per-hour hike would amount to little more than $2,000 a year for an hourly worker.
Pick a side, or come up with your own argument.
posted by Rich Miller
Wednesday, Nov 15, 06 @ 7:49 am
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“Earned income tax credit”? It seems like the Tribune on behalf of business is looking for more ways to pass the buck. I’m all for increasing the “earned income tax credit” for working people however with CEO salaries rising ever year it seems like the companies have the resources to pay for a minimum wage increase.
Comment by wndycty Wednesday, Nov 15, 06 @ 8:11 am
Increasing the minium wage will cause inflation.
Comment by Ravenswood Right Winger Wednesday, Nov 15, 06 @ 8:22 am
“Earned income tax credit†does nothing for guest workers here in Illinois. I’m against it. I’d rather see corporations pay more money out to their lowest paid employees. Someone making coffee at Starbucks should be making enough to raise a family on their income. After all Starbucks is charging like $6 for that cup of coffee, why shouldn’t the employees benefit.
And is mom and pop can’t pay a living wage, they shouldn’t be in business. Let the corporations in, they can do it.
Comment by Just Say No Wednesday, Nov 15, 06 @ 8:26 am
Increasing the minimum wage always looks good to those who do not have to come up with the money to pay it. Somehow, all business owners (who are labelled corporate fat cats, although there are starving cats as well) are going to have to figure out how to ladder increases for regular employees who wonder why their wages can’t rise a buck if the entry level worker goes up a dollar. After all, they have proven that they are delivering economic value to the company.
Just a reminder, a buck raise costs the company an additional 14% as it must pay the employer’s share of social security and medicare. It ain’t free lunch.
Where the company can, it will raise prices to cover the increased labor costs — the consumer pays, just like he pays everything. Where it can’t raise prices (or lower the size of the container, effectively raising the price per ounce a couple of alternatives exist. Cut entry level people by 14% or more — the latter by increasing internal efficiencies and raising the wages of other employees. Outsource entry level jobs to contractors. Start using the Gray Market (payment by cash or barter) or hire illegal aliens. Postpone the owner’s future.
In sum, in today’s economy the one thing an increase in the minimum wage does is buy votes.
Comment by Truthful James Wednesday, Nov 15, 06 @ 8:30 am
the state has an earned income tax credit?
Comment by bored now Wednesday, Nov 15, 06 @ 8:33 am
A job is worth not what it pays but what value the work brings to the enterprise. Raising an already arbitrary minimum wage adds no value to the business; therefore, costs rise without adding revenue.
The only way to add revenue is to increase prices or to cut expenses. Either way, those who supposedly benefit from an increase in the minimum wage lose because they are paying higher prices for goods and services and/or they lose their jobs.
Let the market decide the value of a job.
Comment by Fan of the Game Wednesday, Nov 15, 06 @ 8:40 am
The false assumption help by many in this debate is that the artifical pay increases associated with a minimum wage hike would come from large corporations ran by CEOs with seven figure pay, mansions, stock options, and private jets. Those who truly support small businesses must realize that it is the “mom and pop” businesses who will suffer here, along with those seeking to find entry-level employment. It seems like the Governor and his allies are willing to throw them under the bus in exchange for a press pop and a jab at big businesses.
Comment by Anon Wednesday, Nov 15, 06 @ 8:56 am
This says it all…
http://www.latimes.com/news/opinion/commentary/la-oe-mcclintock11apr11,0,4317694.story?coll=la-news-comment-opinions
Comment by Just Wonderin' Wednesday, Nov 15, 06 @ 8:57 am
At times, the old adage that some jobs aren’t worth that much comes in to play. When I worked at Dairy Queen in high school, I certainly was NOT worth more than $5.15 an hour. Yet the people who had been there for many years made almost twice that amount and this was in a small town. What does that tell you? First, some jobs just aren’t worth more than the minimum wage. Second, not all companies or businesses that employee people who make the minimum wage keep wages low; many businesses offer pay raise opportunities, 401(k) plans, health benefits and upward movement options to employees who start out low.
The sad reality is that while my previous statement may be viewed as harsh or mean I would like to see a public opinion poll asking people if they want their goods and services increased in price and possibly becoming more difficult to obtain. If businesses are forced to increase their pay to minimum wage-level employees, real costs will go up. People in Southern Illinois will not be able to afford the changes, and people in the suburbs will complain about the added costs. That is reality!
I am all for union rights and increased pay for skilled (and dangerous) positions. But some jobs do not warrant the increase.
Comment by Team Sleep Wednesday, Nov 15, 06 @ 9:07 am
While the EITC is a great tool for making our tax system more progressive (and, imo, fair), it’s not the answer to low wages.
First, it involves paperwork that many low income folks don’t complete. One of the big disappoints about the EITC is that not everyone takes advantage of it.
Second, it shows a pretty jarring ignorance of the lives of poor people to think thay will respond to financial issues in the same way that middle class folks. Remember, tax forms are filed once a year, while paychecks are distributed every couple of weeks.
Third, it’s fundamentally unsound to give tax credits under a low income tax. In Illinois, the top (and only) income tax rate is 3%. Those, a credit costs the state a lot more than it costs the federal government.
All that said, I think the EITC we have now is good policy. I also think increasing the minimum wage is good policy, because the wage market is no longer working, particularly for low wage jobs.
Comment by the Other Anonymous Wednesday, Nov 15, 06 @ 9:08 am
There is overwhelming evidence that raising the minimum wage has little to no effect on employment rates. There are plenty of economic theories that think it does, but when it comes to the facts, they just aren’t there.
Comment by BIG MIKE Wednesday, Nov 15, 06 @ 9:09 am
I agree with Team Sleep. We have to take the debate about minimum wage out of the context of living wage.
Let’s face it, not every job is meant to be the primary income supporting a family. When I was in high school, I stocked shelves at Frank’s Nursery, making minimum wage. I was fine with that, because I was 16, and only needed the money for gas money. I’m glad that there is a floor on wages, because it would have sucked to do that work for $2 and hour, but I certainly didn’t need $10 plus benefits.
Are there people working in retail – big box or otherwise – who are supporting themselves? Of course. And that’s there the tricky part comes in. It’s not fair to pay two people doing the same job different amounts, but does it make sense to have both the single mom checking at Wal-Mart in Evergreen Park and the upper-middle class teen working for gas money at Home Depot in Naperville enough to support a family of 3?
The Governor should be focusing on attracting higher paying jobs to Illinois, not forcing the companies already here to increase wages. Bring in the better jobs and increase funding for workforce education and community colleges. Someone needs to explain to the Governor that responsible governing doesn’t include asking voters ‘do you want your employers to pay you more?’ and then using the legislature to fulfill the understandable but ultimately reckless answer he’s sure to get.
Comment by grand old partisan Wednesday, Nov 15, 06 @ 9:10 am
Agree entirely; not to “get back” at greedy CEO’s but as a practical matter. In this day and age, corporate leaders aren’t going to raise the minimum wage themselves, they expect the government to tell them when to do it. Until gov. does, it’s pure profit.
Comment by Todd Wednesday, Nov 15, 06 @ 9:16 am
I agree with the Daily Southtown that Executive pay has gone from high to ridiculous, taking advantage of employees and stockholders. Most of these executives have not risked their own money or created any product, they are just employees and good financial manipulators. Entrepreneurs and inventors and business creators should be rewarded for the risks they take with mental and financial capital, but this overvaluation of executives in public corporations has gotten out of hand. I do not know what the solutions are, but we should be considering how to right this inequity of the system.
Comment by Middle Majority Wednesday, Nov 15, 06 @ 9:17 am
grand old partisan - just because you have won life’s lottery and don’t have to work at Frank’s for minimum wage doesn’t mean everyone has.
And try working two minimum wage jobs and raise a family. When do you think I will have time to attend community college vocational training? That would be one of your so-called ‘benefits’ that would not help me (or alot of others who aren’t good at school either) at all.
That, on top of fuel taxes going up, electricity rates going up, property taxes going up, cigarette taxes going up, tolls going up…some of us just can’t make ends meet anymore.
The best answer is to get corporations to raise how much they pay. They have the money, they can afford it.
Comment by Just Say No Wednesday, Nov 15, 06 @ 9:21 am
I agree that the minimum wage is an imperfect way to aid low-wage workers, but in politics you rarely get the perfect. A modest increase in the minimum wage does more good than harm, especially (as some posters have noted) since wages seem to be so limp in this recent economic recovery.
Comment by ZC Wednesday, Nov 15, 06 @ 9:23 am
Welcome to the peoples republic of Illinois. Economics don’t matter as Just say no says above
” mom and pop can’t pay a living wage, they shouldn’t be in business” That is compassion. What is a living wage?
Comment by RAI Wednesday, Nov 15, 06 @ 9:42 am
So a single parent w/3 kids cannot afford to have a certain lifestyle working at McDonalds? These jobs are not meant to sustain/raise a family. They are largely entry level jobs. While I am opposed to concepts as the EITC, I will not demand their repeal as long as I can mock those commercials “DO you work really hard, but not make enough money?” Some issues I may be opposed to out of fairness, but I figure the benefit is worth it. At lease people are working.
Comment by Wumpus Wednesday, Nov 15, 06 @ 9:52 am
Will the State increase it what it pays for services to home care agencies, personal assistants, direct service providers, nursing home aides, and many other groups who currently make barely above minimum wage while providing services to people? These are low paying jobs because the state rate is so low.
So will the price of a McRib simply go up $0.35 to cover the additional cost? Guess that 50% electrical increase will be just fine because the minimum wage increase will cover it. Daily Southtown can say what it wants but most employees do not work for large corporations. They are with a mom/pop, small business (under 100 people), or maybe a regional firm. As I talk with our local bankers, the number of private employers just hanging on financially with high credit lines is climbing rapidly because of rising costs.
Comment by zatoichi Wednesday, Nov 15, 06 @ 9:55 am
It’s all about balance.
Very few people believe there shouldn’t be a minimum wage, so the only question we have is “how much should the minimum wage be to serve its purpose.”
Some believe the purpose of the minimum wage is to ensure an earner can support a family. Some believe the purpose of the minimum wage is to prevent employer abuse of workers. Some believe it is “Leftist Populism” that “wants to get rid of low-wage jobs”, as the LA Times puts it.
With the exception of the last belief, do you believe $5.15 an hour serves the purpose of preventing employer abuse, or supporting a family? How about $6.50? Or $7.50?
We have already settled the whether and why, we need to continue to determine the worth.
Comment by deedoop Wednesday, Nov 15, 06 @ 9:57 am
deedoop
You are obfuscating the problem. The miunimum wage is an entry level wage for a worker. As much as I respect family values, the entering worker is expected to make his own social choices — at what time can I afford to marry. At what time can I start a family. That will be related to his income level, his propensity to save or consume, his abilities and his ambition.
The government should not subsidize his social choices. But we have people insisting on a living wage being installed as a minimum wage. A family of four is to be supported by all employers by government fiat. That is beyond ridiculous.
In a very small minority of cases there will be persons who have acquired social obligations but neglected work skills re-entering the work force.
That is one reason for th earned income tax credit.
Comment by Truthful James Wednesday, Nov 15, 06 @ 10:14 am
Yikes, faulty logic regarding minimum wage abounds. If you want to working poor to have more money, then the EITC is the best way to go.
Otherwise, government intervention KILLS JOBS. When the price of Big Mac meals goes up from $4.50 to $5.00 as a result of the wage hike, how many less Big Mac Meals are sold? As a result, how many less people do we need to make Big Macs?
One can complain about CEO salaries all you want. That’s irrelevant to the discussion. Raise prices and demand for the product is decreased - whether you’re talking about Big Macs, cars, or labor.
This “free lunch economics” sounds nice in a 10-second soundbite, but is destructive policy. The vast vast majority of economists agree.
Comment by Maroon Wednesday, Nov 15, 06 @ 10:38 am
Truthful James,
I am just trying to clarify the discussion. It seems you don’t fall into the living wage camp.
Does that mean you are in the “prevent employer abuse” camp? If so, at what level is the minimum wage sufficient, as of today, tomorrow and until it is changed again, in order to serve that purpose?
Comment by deedoop Wednesday, Nov 15, 06 @ 10:39 am
And, if the minimum wage isn’t increased now, when should it be increased?
At what value is the minimum wage appropriate in society? Is it too high already? Does anybody think it should be lowered?
Comment by deedoop Wednesday, Nov 15, 06 @ 10:41 am
How about trying REALITY?
If you are OLD, then you were told by OLD professors in school that the Minimum wage works. But since REAGAN, we discovered that there is a better way to do this. It is called the Earned Income Tax Credit. But then again, if you haven’t kept up over the past 20 years, you would still believe in the minimum wage and those other obsolete New Deal era social programs.
The Earned Income Tax Credit has been an incredible success! It works so freaking well, everyone who has studied it over the past 20 years wants it increased - and no one is fighting over increasing it - BECAUSE IT WORKS!
There is a reason why the minumum wage hasn’t been increased - it is because we have SOMETHING BETTER.
This is not a fight between good and evil, or rich and poor. This is a fight between OUTDATED ideas that don’t work and NEW ideas THAT DO. Minimum wage belongs back in Roosevelt’s era. It is a old fart of an idea that still gets votes from old farts who haven’t read anything since Ronald Reagan was president. JEEZ!
Just where the heck have you people been for the past 20 years?
Comment by VanillaMan Wednesday, Nov 15, 06 @ 10:53 am
According to a report by Voices For Illinois Children, 81% of minimum wage earners are adults over 20. It’s a false perception that these jobs are for teenagers, or that they are entry level jobs, or jobs for housewives looking to make a little extra money. People do depend on these jobs to support their families.
As for the Tribune’s EITC suggestion, Illinois taxpayers pay $2.2 Billion a year to provide food, shelter, healthcare and other necessities to low-wage workers. We’ve already shifted a lot of the “burden†of paying people for their work from employers to taxpayers.
But, in the spirit of compromise, I say let’s raise the minimum wage and the EITC.
Comment by Progressive FP Wednesday, Nov 15, 06 @ 10:54 am
I once turned in a pol I suspected of cheating on his taxes.
One of the first options on the IRS helpline is to turn in poor people for cheating on the EITC.
Ever since I heard that message I’ve been suspicious that one of the things Right Wingers like about the EITC is that it has the potential to cause poor people to hate the IRS as much as rich Republican tax cheats.
Comment by Carl Nyberg Wednesday, Nov 15, 06 @ 10:58 am
deedoop
There are many camps. I am in the “expansion of jobs camp” myself. The more jobs, the better. The more jopbs there are, the less the employee abuse.
As far as a minimum wage, the low income worker is scammed by the deductions for withholding taxes, FICA and medicare taxes. We can give him a wage increase by forgiving, but crediting his share of FICA and medicare taxes for all workers earning less than 110% of the minimum wage. That’s a fattened paycheck a “wage increase” right there.
Let’s look again at the single rate tax and set the bottom threshold at $20,000. Withholding is a regressive tax for minimum wage people, even if they get a rebate at the end of the year from the IRS.
because of the machinations of the minimum wage and the rest, we have developed a gray market where entrants are receiving the announced minimum wage without deductions and in cash.
It is easy to do, store owners ring up sales as zero dollars and at the same time underreport sales taxes and pay their employees out of the till.
It has been estimated that the gray market causes an underreporting of the GDP of more than 15%. It also causes BLS to over report unemployment rates, because they have no way to measure the number of workers in that sector.
Comment by Truthful James Wednesday, Nov 15, 06 @ 10:59 am
Perhaps a maximum wage of 1 million would be appropriate. And, not to be a cheapscate, why not take the minimum wage up by two bucks or even more. That would really be “progressive”.
Comment by Citizen A Wednesday, Nov 15, 06 @ 11:05 am
Not many people make the minimum wage, they make more. Raising the minimum pretty much requires that you raise everyone else’s wages as well. The person who was making more than minimum is now just making minimum after it’s raised will expect a raise to be above minimum again.
Raising the specter or “wage disparity” and CEO’s make soooo much is just a red herring. Michael Jordan make a load of money, so does Britney Spears. Will you call for wage parity there too?
All people are different. They have different skills, interests, and talents. If you want a better job, learn a skill, go to school and get an education, take singing and dancing lessons. Practice. Get better at what you want to do. You’ll be paid better too.
Comment by kimsch Wednesday, Nov 15, 06 @ 11:14 am
Man, there’s so much misinformation floating around out there, I don’t know where to start.
Who the heck ever told you that the “minimum wage” was for entry-level jobs for 16 year-olds? Hundreds of thousands of men and women with children are trying to raise a family on a minimum wage.
You may not realize it because you travel in different social circles, and because you assume that everyone you see working every day is being paid a fair wage by their employers. Well, you’re just plain wrong.
I have to agree with the Chicago Tribune that the Earned Income Tax Credit is a great tool for providing targeted benefit to those at the bottom of the economic ladder. But it does have it’s weaknesses. And what the Tribune failed to mention is that if the state is going to expand the EITC, we have to raise taxes or cut spending somewhere else to pay for it — we’re talking about tens of millions of dollars. If the Tribune is sincere, I’ll ask them the same question their reporters ask lawmakers: How ya gonna pay for it?
That said, I’m not sure how I feel about Governor Press Release’s latest push. Now that Congress is in the hands of Democrats and Pres. Bush has openly supported a minimum wage hike, I think Illinois would be wise to see what - if anything - the feds do first.
I know that economically, raising the minimum wage only boosts the economy. But I also know that psychologically, raising the minimum wage gives pause to business investors.
Of course, the real long range solution — the one Rod Blagojevich doesn’t want to talk about — is reforming the way we fund our schools and raising their performance, so that we stop preparing our kids for a career pushing a broom at Wal-Mart and start preparing them for a career at Microsoft.
Comment by Yellow Dog Democrat Wednesday, Nov 15, 06 @ 11:31 am
Progressive, I’ve seen that stat and it seems ridiculously high.
I’ve been to the Voices website, and can’t figure out how they came to that percentage. They site using some current population survey data, but don’t spell out where or who it is culled from.
What they don’t say is how many of the 81% that are AT LEAST 20 are single, living with parents, and/or are college students. I’m betting that if you factor them out of the study, the numbers plummet, and then there isn’t as strong of a case.
But we can’t say, because they don’t give us the numbers.
“There are three kinds of lies: lies, damned lies and statistics.”
Comment by Anon from BB Wednesday, Nov 15, 06 @ 11:40 am
YDD, educating people doesn’t guarantee that there will be jobs that use them to their potential.
Comment by Carl Nyberg Wednesday, Nov 15, 06 @ 11:41 am
Carl
Hopefully, nobody gets jobs that use them to their potential — that only happens after a long career of upward slogging with the worker supposedly adding to his potential every day,
And while we are not talking about it, nobody is guaranteed a job in Chicago or in Illinois. People used to move to where the jobs were — geographic mobility.
YDD
Hundreds of Thousands should never have made that social decision to form and raise a family until they had the resources to support it.
Legal immigrants are raising families on the minimum wage because they combine their resources. But they don’t stay there long.
Gardeners save money to buy used equipment and a truck and even hire newer immigrants. Koreans work in non-union construction until they can save up enough to by a drop off cleaners business and have the wife do sewing. Then they move up to a cleaners with a small plant.
People struggle to get off the minimum wage not live off of it.
But we have compounded the problem. The welfare system pays less than the minimum wage, even when wefactor in the subsidized housing value. Yet people choose to remain there unto the third generation.
Illegal aliens compound the problem as well. They are to a great extent in the Gray Market earning minimum wage net depending on the supply of labor. In thir absence, employers would have to pay more or go out of business. Those higher wages should attract movement from welfare to workfare and that is what we want to see
It will force us consumers to pay slightly more, but price increase on goods and services is no more than the cost to us of supporting a larger welfare system
Comment by Truthful James Wednesday, Nov 15, 06 @ 12:08 pm
In the November 15th opinion piece “The minimum wage mirage’, the Chicago Tribune stated “[The minimum wage’s] full effects are generally not understood”. Unfortunately after reading the Tribune opinion, it’s quite possible to be even more confused about the full effects of minimum wage.
The Tribune cites ‘the elementary axiom that when you raise the price of something, you reduce the demand for it’ and that ‘[employers] will certainly start looking for ways to reduce staff’. Unfortunately for the Tribune this issue needs to be debated above an elementary school level. The University of Illinois-Chicago’s Center for Economic Development conducted a 2003 study on the impact of raising the minimum wage in Illinois and across the nation and found that employment in the industries most affected by minimum wage all saw
steady employment rates. Some industries actually gained employees. These results can most likely be attributed to reductions in turnover costs, increases in productivity, and minimal reductions in profits. While the Tribune editorial board would certainly decry the the latter effect, I would love to see them try and defend keeping Hilton hotel clerks, maids, and bellhops wages steady while Paris and the family
get more money.
That really isn’t fair though because UICCED found that except for the hotel industry, businesses that rely on minimum wage workers are
almost always local operations like the Home Run Inn cited by the Chicago Tribune. However, the Chicago Tribune loses its business savvy when it tries to blame wage raises on the Home Run Inn buying new ovens that allows them to move from 14 employees to 12 employees. The Home Run Inn isn’t in the business of giving people money, they are in the business of making high quality pizzas at a competitive price. Ovens that allow pizza to be served quicker and faster would
be in the planning regardless of how much Home Run Inn was paying employees. Does anyone think the Tribune would hire an army of employees to use movable type and Guttenberg’s printing press if only Illinois would push back its wage laws?
The Tribune gets serious at the end pointing to research as opposed to elementary logic and first hand anecdotes. A Earned Income Tax Credit
should be looked into in the state of Illinois. The problem is the Tribune presents this case like it’s a case of either or. There’s no
law that says both can’t be put into place. Imagine how much money would be put into the pockets of people if both were put into place.
Either way raising the minimum wage or the earned income tax credit could be a winning deal.
Comment by Tweed Wednesday, Nov 15, 06 @ 12:13 pm
I think the best thing about the gov’s proposal is that it includes an index to the min. wage so that we never have to have this fight again. The fact is, the federal minimum wage installed in the 70’s under Nixon, would be quite sufficient today had it been indexed to inflation so it kept the same purchasing power. An index will also keep it going up slowly (assuming a minimal 3% or less level of inflation) so that it’s not a shock to the economy when it rises.
While I like what the EITC has done to improve the lives of the poor. I’m not completely comfortable with it either due to the fact that I see it being unfair to some classes of workers. If 2 employees are both doing the exact same job (say stocking shelves) and have the same level of seniority and relevant experience, it seems like they ought to be paid the same. Now let’s say one of them is 17 and living with his folks and the other is a single mom. She will qualify for EITC and therefore, when it’s all factored in, will earn a much higher wage. It doesn’t seem fair to the 17 year old though. I agree with the endpoint, that she needs the money more, but the fairness issue does run the wrong way.
Comment by cermak_rd Wednesday, Nov 15, 06 @ 1:26 pm
Man, there’s so much misinformation floating around out there, I don’t know where to start.
Who the heck ever told you that the “minimum wage†was for entry-level jobs for 16 year-olds? Hundreds of thousands of men and women with children are trying to raise a family on a minimum wage.
________________________________________________
The question then becomes, “Why?” Why haven’t they found better jobs? Why haven’t they improved their skills to promote?
________________________________________________
You may not realize it because you travel in different social circles, and because you assume that everyone you see working every day is being paid a fair wage by their employers. Well, you’re just plain wrong.
_________________________________________________
What is a fair wage? If a person agrees to do certain work for a certain wage, isn’t that fair? Both employer and employee have to agree in order for that to happen.
The idea of a “fair” wage presupposes that the employer has a responsibility to the employee that goes beyond the agreement they reach when the worker is hired. It implies that the employee has a right to the employer’s money beyond the value of the job.
________________________________________________
Of course, the real long range solution — the one Rod Blagojevich doesn’t want to talk about — is reforming the way we fund our schools and raising their performance, so that we stop preparing our kids for a career pushing a broom at Wal-Mart and start preparing them for a career at Microsoft.
_______________________________________________
Reforming education funding will only help taxpayers. It won’t necessarily make education any better. The one thing that would help is for parents to value education, so their children will value it and, thereby, have a chance to escape the minimum-wage mindset.
Comment by Fan of the Game Wednesday, Nov 15, 06 @ 1:41 pm
Nobody has answered my basic fundamental question -
If you believe that there should be a minimum wage, how much should that minimum wage be?
Stop talking increments, the side effects of raising and lowering it. Give a number or a value (quantitative or qualitative) of what should be the minimum wage paid in the state of Illinois.
What is so significant about $6.50 that you want to keep it there? Do you want to lower the minimum wage to the federal level ($5.15)? Do you want to raise it to $7.50?
What number would you consider appropriate?
Comment by deedoop Wednesday, Nov 15, 06 @ 1:47 pm
Raising the minimum wage will bring in $2,000 more for a worker. If you are a business with 100 workers your total payroll will increase by $200,000 (+ higher payroll taxes). Will a business just loose the $200,000? or will they cut workers time? Will they now work 35 hours instead of 40? Or will they just cut jobs? What businesses should do is irrelevant. What they will do is what we should think about.
Comment by moderate Wednesday, Nov 15, 06 @ 1:49 pm
“What is a fair wage? If a person agrees to do certain work for a certain wage, isn’t that fair? Both employer and employee have to agree in order for that to happen. ”
So you don’t believe in a minimum wage at all, then? Employers can pay people $0.15 / hour if they find someone who would work for that?
Comment by deedoop Wednesday, Nov 15, 06 @ 1:52 pm
- deedoop - Wednesday, Nov 15, 06 @ 1:47 pm:
Nobody has answered my basic fundamental question -
If you believe that there should be a minimum wage, how much should that minimum wage be?
______________________________________________
I have answered that: The minimum wage for any job should be what the market will bear. It should not be mandated by the government.
Comment by Fan of the Game Wednesday, Nov 15, 06 @ 1:53 pm
“YDD, educating people doesn’t guarantee that there will be jobs that use them to their potential.”
No Carl, it is the government’s job to create those.
Comment by Leroy Wednesday, Nov 15, 06 @ 1:58 pm
Some random thoughts:
Nobody is owed a living.
A government has no right intruding on wage negotiations between and employer and employee.
CEOs serve, and are paid at the whim of the stockholders. If the stockholders wish to pay their CEOs huge salaries, or peanuts, it’s their business…not the business of the gov’t.
Raising the minimum wage only works so long as the increases outpace the inflation they cause.
Wouldn’t it be easier to set a maximum wage?
What about setting 1 wage - everybody 18 or older gets a guaranteed $1M from the govt? All citizens are created equal…all citizens get the same pay.
If you are planning on having a family, wouldn’t it be a good idea to figure out how to pay for that family before you have it?
Comment by Frosty Da Snowman Wednesday, Nov 15, 06 @ 2:26 pm
Leroy
The government does not create private sector jobs. They create the conditions under which private sector jobs are created.
Comment by Truthful James Wednesday, Nov 15, 06 @ 2:27 pm
Deedoop at 1:52
So you don’t believe in a minimum wage at all, then? Employers can pay people $0.15 / hour if they find someone who would work for that?
YES. If someone would take that wage, the employer can offer it. No one will take that wage however.
Learn a skill (or three), take a course of some kind (there are all sorts offered even for free - try the library, employment offices, for resources). Your labor will be worth more to the employer and he will subsequently offer more for that labor. Gain experience in what you are doing. That is another step on the ladder to higher wages.
People are paid what their labor is worth. If you think your labor is worth more, try another employer.
A High school diploma is worth more than no diploma. A certificate in something earned at a local community college can be worth more than the HS diploma alone. An Associate’s degree gets you more than that. Same for Bachelor’s and Master’s degrees.
Books at the library can teach you things.
All these add up to higher wages over time.
Comment by kimsch Wednesday, Nov 15, 06 @ 3:56 pm
Every business along the WI, IN, IA and MO borders is looking at what the minimum wage is across the line; If Bob’s BP Amoco in South Beloit IL has to pay his employees $7 per hour but Tom’s BP Amoco in Beloit WI pays his employees $6 per hour, what will that do to Bob and his employees? Fewer hours, fewer employees, close up and move 1/2 mile north or raise the price of Bob’s products. Ever run Sim City simulations as part of Economics courses? Raise taxes or raise wages and business drops off, inflation rises. Is that what we in IL want? It is certainly what WI, IA, IN and MO want.
Comment by North of I-80 Wednesday, Nov 15, 06 @ 3:56 pm
The Economist on the min wage vs EITC.
Where most economists agree is that the higher minimum wage does not do much to relieve poverty. That is partly because many poor people would not gain (since they do not work); partly because some of the costs of higher minimum wages are shifted onto poor consumers; but mainly because many minimum-wage workers are not poor. Only 5% of the workforce—some 6.6m people—will gain directly from a rise in the minimum wage, and 30% of those are teenagers, many from families that are not poor. Supporters of an increase, though, argue that once you include the “spillover†effects on workers who earn just above the minimum wage (but whose wages would rise as a result), the income gains from a hike are concentrated among poor families.
Comment by Bill Baar Wednesday, Nov 15, 06 @ 4:21 pm
North of I-80,
That’s really only a concern along the borders. I’m not sure how many of the millions of Illiniosans that impacts.
And wouldn’t it cut both ways? Can’t Bob now be choosier about the employees he hires because people from accross the borders (say Tom’s current employees) see his business as a more desireable employer?
Take Costco. They don’t pay minimum wage. They’ve found that this results in a more loyal workforce with far less turnover. Additionally they can more easily weed out bad applicants because they get a lot of applicants. So if the applicant pool of Tom and Bob’s businesses includes the 2 state border area, wouldn’t the IL businesses get that kind of advantage?
Comment by cermak_rd Wednesday, Nov 15, 06 @ 4:23 pm
I would be happier with a federal increase, because that wouldn’t disadvantage our employers compared to other states.
Comment by steve schnorf Wednesday, Nov 15, 06 @ 4:39 pm
Well, according to the Trib, the Illinois Senate just passed a $1 increase (to $7.50 an hour–$2.35/ hour higher than the national minimum) in the minimum wage for next year. Let’s see what the House does.
http://www.chicagotribune.com/news/custom/newsroom/chi-061115wage-hike,1,7098850.story?coll=chi-news-hed
Comment by Fan of the Game Wednesday, Nov 15, 06 @ 4:59 pm
One of the problems with this discussion and others like it, is that I think that there is a clear lack of realism to the debate. For all of the people complaining about the minimum wage, do you all know folks on the west and south sides where the only available jobs are minimum wage? Sure if you live in certain suburbs jobs are plentiful. But in many southern suburbs and on the west and south sides of the city, there are three people for every one job. In other areas, its just the opposite. And I am not talking about just schoolkids either.
At bottom: Do you know the REAL LIFE implications of a dearth of opportunity?
Comment by jarvis Wednesday, Nov 15, 06 @ 5:24 pm
Frosty the Snow Man is right. A business person risking their life savings, creating jobs and wealth for themselves and society, is entitled to determine how they allocate their resources. It’s not the government’s money. It’s not my money. It’s not your money. Slavery was abolished, so worker-employer relations are voluntary.
If society collectively wants to tax itself to provide a guaranteed minimum income to everyone ( through a negative income tax), as proposed by Milton Friedman, then fine. Then the burden is spread among all taxpayers and citizens.
But increasing the minimum wage, at the expense of entreprenuers and people seeking to break into the workforce, is neither moral nor practical.
Comment by Rudolph the Reindeer Wednesday, Nov 15, 06 @ 5:30 pm
Here are some thoughts.
I work in the finance industry. I see peoples credit reports and income docs every day. Want to know how many I’ve seen in the past two years making minimum wage? I can give you the exact number. ZERO And some of these people even work at Wal-Mart.
I will contend the only people out there who are likely working for minimum wage are entry level kids, that defined as high school or younger.
An employer today really cannot hire anyone of quality and experience to do anything paying minimum wage. Bottom line reality and everyone here knows it. Ask any McDonalds manager what they are paying for help and you will get the answer.
I would contend there is absolutely no reason to have a minimum wage.
For those who want an increase, why not set it at $15/hour? Why not? Heck, why not make it $20/hour? Why not? Why stop at $7.50?
This whole argument by politicians is useless. It is just to get press coverage.
Comment by DRB Wednesday, Nov 15, 06 @ 5:54 pm
So there appear to be 2 arguments against a minimum wage:
1) Ideological opposition. OK rabid free-marketers, if the six states that voted in favor of a minimum wage last week don’t show you that you’re on the fringe, nothing can convince you. Keep advocating for the $0.15 an hour jobs, though!
2) It will cost jobs. Here’s a good quote about the minimum wage debate that was in a very balanced Bloomberg news article:
Alan Blinder, a former Federal Reserve vice chairman who teaches economics at Princeton University in Princeton, New Jersey. “The evidence appears to be against the simple-minded theory that a modest increase in the minimum wage causes substantial job loss.'’
http://www.bloomberg.com/apps/news?pid=20601070&sid=atp2MiOAZ3Xc&refer=home
People can disagree in good faith about the jobs impact. It comes down to this – our economy is broken when millions of jobs don’t provide enough to support people. Taking action to make sure employers pay people enough to survive is a better course of action than accepting that whoever holds those millions of jobs are doomed to poverty. Are there risks? Yes. Are they worth taking? Yes.
Comment by Progressive FP Wednesday, Nov 15, 06 @ 6:18 pm
Rich, speaking of minimum wage whats up with the legislation to give the legislature, etc. pay raises. wasnt that going to be part of this session. Isnt there something sneaky like if they dont bring it up the raises are a go. I remember Emile saying his people deserved raised, and now Blago says every one deserves a wage to keep up with the cost of living. I’m a state MC employee, guess I dont count.
Comment by spfld guy Wednesday, Nov 15, 06 @ 6:18 pm
Why do we work? We work to make a living. If our economy doesn’t do that for regular people who are willing to work, then we need to rethink the rules that run our economy including the minimum wage.
Comment by David P. Graf Thursday, Nov 16, 06 @ 7:58 am
Throughout this discussion those in favor of a minimum wage being raised, etc. have stated, implied or inferred that we who oppose it are not only illeitimate, we are also bastards who would likely bring back slavery, the lash, starvation and probably assisted suicide.
I have never — nor have all the bloggers who share my view — taken other than an intellectual position based on our perception of reality. You have ridiculed our business and work experiences.
The time has come to call the roll.
How many of you have actually operated (managed or owned) a retail or service business with zro to five employees, including family?
How many of you are speaking from the public sector?
From the non-profit sector, including education or government?
That many, eh.
It is a lot easier to give away other people’s money earned by pouring in their savings and their sweat, facing daily competition, regulation and the like.
There is a market clearing wage for every job based on the economic worth to the organization. Owners can and should not pay any more than that. Revenue does not increase because wages increase. Setting prices involves a lot of factors. But if prices could move up to acccommodate the higher wage costs, who would pay it? The customers, not the owner.
The minimum wage true believers seem to think that the worker at that level has that compensation as his final goal. If it is, then we do have a permanent underclass and we should nationalize all the fast food restaurants
I thought so
Comment by Truthful James Thursday, Nov 16, 06 @ 10:47 am