It has only been 10 years since the federal minimum wage has increased. Since 1997, the purchasing power of minimum wage has only decreased by 21%. Our current minimum wage is $5.15 which is equivalent to $3.95 in 1995 which is lower than the minimum wage at that time. This means that minimum wage is at its lowest value since 1955 which isn't even a hundred years. There is talk by the wealth distributing communists in congress to raise the minimum wage to $7.25. The poverty line for a family of three is around $15,500 per year; currently at $5.15 a minimum wage worker would only need to work an extra 13 hours of extra overtime per week to keep their selves above the poverty line. So, by keeping the minimum wage low, we weed out laziness. Two and a half extra hours of overtime a day shouldn't be a problem for a single mom living in the projects as it should be easy to find a qualified babysitter for her kids since there are so many unemployed people living in the projects. And just think, with time and a half, she would actually be able to afford a babysitter for those extra 2.5 hours.
The drawbacks:
True American's who champion the rights and freedoms of the corporation over the rights of the people (the tenet on which this nation was founded) argue that an increase in the minimum wage would result in higher inflation and more unemployment and job loss even though there seems to be no real direct correlation between increased wages and inflation. We usually don't let stuff like facts get in the way of issues such as intelligent design and the war in Iraq so I see no reason to start now. Inflation, as of late, is typically about 3% per year in the US. Using this inflation calculator I looked at December of 1996 to December of 1997, three months after the last minimum wage increase and it shows a rate of inflation of only 1.7% and a 1.57% rate for the following year. In addition, the State Minimum Wages In Small Business study in 2004 concluded that states that already have higher minimum wages than the federal level saw employment growth that was just as favorable or better than states with the federal minimum wage of $5.15. From 1998-2004, states with a higher minimum wage level saw job growth at 6.1% as opposed to 4.1% job growth in states with the federal minimum wage. In the retail industry, payrolls grew 3.7% in the higher paying states as opposed to 2.4% in the federal minimum wage states. They say employers are finding that they can make up for the increase in wages by the decrease in recruiting and training costs, increased morale and therefore decreased absenteeism. The liberal Economic Policy Institute did a study after the 1997 minimum wage increase and concluded that there were no job losses as a result of that wage increase. David Card and Alan Krueger also did a study that stated there are no negative results due to minimum wage increases but they are probably wrong even though there are no studies stating the contrary.
Who would benefit from an increase?
14.9 million workers (only 11% of the workforce) would benefit from a minimum wage increase. 6.6 million workers (a mere 5% of the workforce) are currently earning less than $7.25. But a minimum wage increase really wouldn't be fair to men because 59% of the beneficiaries would be women, most likely women with children.
Where are our priorities and who needs the governments help?
Since 1997, the year minimum wage was last increased, the estate tax exemption has risen 6 times from $600,000 to 2 million. In the same time the minimum wage has remained at 5.15. This is a good thing. Why should CEOs and stock holders surrender their steadily increasing wealth just to pay their employees enough to keep up with the cost of living? Can't these employees just get food stamps and welfare like Wal-Marts employees are instructed to do? Isn't this America? Anything else would be communism. Why would we want to put money in the hands of people who actually spend it and put it back into the economy when we could let a rich guy just put it in the bank and leave it to his kids when he dies? If you started making millions more dollars per year what would you do? Would you lower prices of your goods, increase pay for employees or would you put it in your pocket and find tax loopholes and cook the books to hide all your illegal activities? You're American; of course you pocket the money and run. 8 out of the 15 richest people or 5 out of the 10 top billionaires in this country benefited from this strategy as they have never had to work a day in their life and inherited their wealth. Why should they have to work and earn their own wealth; their parents and grandparents were rich.
Is it fair?
From 1992 to 2005 the pay of CEOs from major corporations grew 186% while the hourly wage workers only grew 7.2% at a time of record productivity. See, this just shows that the elite are willing to share their wealth; they increased worker wages by 7.2% over the last 13 years.
From 2000 to 2005, the US economy grew in size from $9.8 trillion to $11.2 trillion, an increase of 14%. Productivity also grew %16.6 but over the same period of time, the median family's income slid by 2.9%. They must not have been working hard enough.
Ok, so wages have not kept up with productivity but that's exactly the way it should be. It's nice to see that the American worker is now willing to make sacrifices for the sake company. Why should an employer give more time off for a woman just because she has a baby when they could easily give that job to a man (in India). Why should American workers take more time off for vacations? We are not French! Besides, vacationing doesn't help the economy in any way at all. Why should a company give an employee a pay raise just because productivity goes up; they are paid to be productive anyway so if anything, the company should lower their pay if productivity doesn't increase. How else is the CEO going to buy a 3 story winter home in Aspen and a beach front summer mansion in Naples, FL?
Wal-Mart thinks that an increase in the minimum wage would benefit lower end retailers because their customer base would have more money to spend at their stores... What a crock of shit right?
Wages/wages vs productivity
