Archive for Thursday, January 11, 2007
Minimum wage vote pleases Lawrence workers
U.S. House passes legislation increasing hourly pay to $7.25; measure now goes to Senate
January 11, 2007
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Joey McDonald, who works at Rudy’s Pizzeria, makes $6 an hour, just a handful of change more than the cost of the restaurant’s daily special of a slice, drink and salad.
It’s no wonder he finds it hard to make ends meet.
But under legislation passed Wednesday by the U.S. House of Representatives, McDonald would receive a 20 percent pay increase.
The Democratic-controlled House voted to increase the federal minimum wage to $7.25 in three phases during the next 26 months. The vote was 315-116, with more than 80 Republicans joining Democrats to pass it.
The measure now goes to the Senate, which is expected to move quickly — perhaps in the next few weeks.
Those affected
McDonald, a Johnson County Community College student, works to pay for his tuition and cost of living. The $1.25 increase would amount to an extra $50 a week or $2,600 a year for the full-time worker. McDonald said he has to make tough financial choices, such as whether to pay his electricity bill or make a late payment.
“Sometimes you get enough, and other times you have to wait (to pay a bill). Sometimes you have to wait a couple nights for the extra tips,” McDonald said.
Caterina Benalcazar, a barista at La Prima Tazza, 638 Mass., doesn’t think of the proposed increase as a raise, but rather as a cost-of-living adjustment. With the increase in inflation and prices, she said it’s only fair that workers see a wage increase.
Benalcazar, a Kansas University student who makes about $7.25 an hour, rejects the argument that those making minimum wage are often students or others who receive substantial financial support.
“You can’t pigeon-hole students as a group,” she said. “Most students are pretty hard-working and deserving of an increase.”
About the bill
The legislation calls for a 70-cent increase 60 days after the bill becomes law. The other 70-cent increases would take place one and two years later. The federal minimum wage was last increased in 1997 from $4.75 to $5.15.
U.S. Rep. Nancy Boyda, D-Kan., said the increase is long overdue. She dismissed concerns that raising the minimum wage could cost jobs. U.S. Reps. Jerry Moran, R-Kan., and Dennis Moore, D-Kan., joined Boyda in supporting the legislation. U.S. Rep. Todd Tiahrt, R-Kan., was the only state representative to oppose the legislation.
In remarks on the House floor, Democratic Majority Leader Steny Hoyer said an estimated 5.6 million Americans making less than $7.25 would be directly affected by the increase, while another 7.3 million would benefit indirectly.
The federal minimum wage law covers virtually all Americans. The Fair Labor Standards Act extends federal minimum protection to employees of any company doing at least $500,000 in business or engaging in any sort of interstate commerce.
In Kansas, of the 1.4 million individuals in the labor force, only 19,000 are not covered by the federal minimum wage, according to Beth Martino, a spokeswoman for the Kansas Department of Labor. Those employees are covered by Kansas state minimum wage, which is $2.65 per hour.
Employers weigh in
Business owners were mixed in their reaction to the proposed increase.
Monica Bowers, co-owner of Penny Annie’s candy store, 845 Mass., said the proposed increase would be rough on small businesses.
“I would be against it — that much of a raise, at least,” she said.
Bowers said she’d probably be forced to raise prices in order to pay for the raises — something she’d rather not do.
“I pay close to $7, but there are some people who are part-time who make close to the minimum,” she said.
Pat Kehde, co-owner of The Raven Bookstore, 6 E. Seventh St., is generally in favor of the increase. She said that because of the store’s desire to keep employees, it already paid above the level that the new law would require.
“I don’t think it will affect us,” she said. “We like to have good people who work for us, and we think they deserve a decent wage.”
A recent Newsweek poll shows 89 percent of Americans support increasing the minimum wage.
Democratic agenda
The minimum wage bill is the second of six measures that Democrats intend to pass in the first two weeks of the new Congress. Legislation aimed at making the nation safer from terrorist attacks passed easily on Wednesday. The agenda for today includes a measure to permit expanded federally funded embryonic stem cell research, a bill Bush has threatened to veto.
On Friday, the House is expected to pass legislation directing the administration to negotiate with drug companies for lower prices on prescription drugs for Medicare recipients. Republicans said Wednesday they believed Bush would veto that bill, as well, if it reached his desk as drafted.
The remaining measures on the early Democratic agenda would cut the interest rate on student loans and raise taxes on energy companies to pay for an effort to reduce dependence on foreign oil.
11 January 2007 at 2:39 a.m.
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lunacydetector (Anonymous) says…
timeline 2008: the cost of goods and services has skyrocketed. experts i trying to understand: more manufacturing jobs are being shipped overseas; major fast food restaurants have incorporated outsourced drivethru window operators - when you order your burger, you have to talk to someone in india; unemployment for high school kids has increased; recreational drug use is going up….
since workers between the ages of 16 and 24 account for 53 percent of all minimum wage-earners, school dropouts has increased which inturn has reduced their long-term employability.
since the prices of goods and services have increased accordingly to cover the increased wages and since union hourly wage contracts are tied to percentage increases in the minimum wage, over the short term, low income earners have seen a zero net effect, and are far worse off in the long run.
have a great day!
11 January 2007 at 6:23 a.m.
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Porter (Anonymous) says…
Sounds like doomsday to me, LD. I wouldn't have been pleased at the min wage raise if I had known it would be a catalyst for rapture.
I'm no econ expert, but it seems to me that the cost of goods and services goes up every year regardless of wage changes. If a business owner is using a 1994 pay scale for his/her business model, he/she has bigger problems than an increase in the minimum wage.
If “union hourly wage contracts are tied to percentage increases in the minimum wage” then would that mean union workers haven't seen a raise in 12 years? Somehow I doubt that's true.
I don't remember the oceans drying up and the mountains caving in the last time the min wage went up. Anybody else remember that?
11 January 2007 at 7:34 a.m.
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craigers (Anonymous) says…
No but remember Porter that the cost of goods sold is determined by demand. If more people can afford product A, then the demand higher. And if the demand is higher for product A, then the company can charge more for it. So when you hike everybody's wage up that much, then you are just asking for inflation to come right after it. Give it a couple years, but inflation will jump up due to this hike.
11 January 2007 at 7:44 a.m.
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just_another_bozo_on_this_bus (Anonymous) says…
luny is just doing his usual— lacking sound arguments, he resorts immediately to baseless hysteria.
11 January 2007 at 8:19 a.m.
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SettingTheRecordStraight (Anonymous) says…
Were this a discussion among economists and not politicians, the conclusion reached would be different. The correct minimum wage, and the one that helps the most low-wage earners, is $0.
11 January 2007 at 8:28 a.m.
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getserious (Anonymous) says…
problem is, that no one(hardly) works for minimum wage. Even the guy in the story makes $6.00. If you make min wage $7.00, then businesses will have to pay $8.00 for employess, at the least, because employees, especially in a college town, can always find another job. Get ready to pay $8.00 for a burger. The market should set the pay scale, not the government.
11 January 2007 at 8:28 a.m.
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conservative (Anonymous) says…
And bozo is showing once again that he flunked Economics 101. The federal reserve board has been doing everything in their power to keep inflation down, and have been doing a pretty good job of it. This move will drive inflation drastically, which means instead of fed rate cuts that would allow our economy to grow and expand we will see the fed rates remaining the same or even going up.
The problem here is that politics 101 says to give the people what they want even if it isn't good for the country. This is a way for politicians to ingratiate themselves to the uninformed voting public. If it was simply related to keeping the minimum wage earner on pace with inflation the raise would have been much lower. The last raise took effect less than 10 years ago, and I can agree that a certain amount of a raise is due. However since 1997 the rate of inflation has not driven costs up by 40% and that is how much the minimum raise is being hiked.
11 January 2007 at 8:34 a.m.
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preebo (Anonymous) says…
The current minimum wage is at an all time low, it has never been lower, when analyzed against “real dollars” (inflation), that should be enough to quell this argument. Somehow, I am guessin that it won't so…
Not all of us are skilled labor, there are those who take on less lofty pursuits in efforts to support their families. Those people are as necessary to our nations survival as you or I, and to say that there shouldn't be a minimum salary for those people is ridiculous. In my profession there is a minimum to the salary range, as for most professions, so the same should apply to those people who work harder then me to make a living.
…isn't it interesting that those who complain about the minimum wage idea do not earn it. Hmmm.
11 January 2007 at 8:41 a.m.
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preebo (Anonymous) says…
Conservative? Isn't it also true that the current gap between economic growth and wages is the largest in 30 years? The only real growth is in stocks and other investments, while there is no real growth in jobs or wages. I know you'll throw in the “surge” of jobs in late 2006, but when levied against the hole we have been in over the last 5 years it is a drop in the Proverbial bucket.
Just another example of the growing gap between haves and have-nots. When the economy grows on top and there is nothing underneath to support like labor, jobs, and wages you have a troubled nation.
11 January 2007 at 8:42 a.m.
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just_another_bozo_on_this_bus (Anonymous) says…
“However since 1997 the rate of inflation has not driven costs up by 40%”
Now who is it that is an economic idiot?
11 January 2007 at 8:50 a.m.
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just_another_bozo_on_this_bus (Anonymous) says…
Just for the record, by the time this increase takes full effect in 2009, with an average inflation rate of 3%, costs will have increased by 43% since 1997, and with an average inflation rate of 4%, which is probably closer to the actual rate, costs will have risen by 60% since 1997.
11 January 2007 at 8:52 a.m.
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common_cents (Anonymous) says…
Regardless of which circle of economic theory you favor, government intervention directly upon any factor of COGS (cost of goods sold) never has a positive effect upon the economy.
Even under Keynesian Theory, where government intervention is considered a vital part of the economy, the intervention itself is limited to government expenditures. (whether it's called investment or consumption is irrelevant)
Under minimum wage laws, the government is not investing or consuming, which both require an expenditure on the part of the government. It instead requires an expenditure on the part of the businesses, which, in and of itself, reduces the bottom line by increasing expenses.
Reducing the bottom line of businesses does any of four things: 1) causes prices to rise so that the bottom line can remain level and not sink; 2) causes the employer to reduce workforce if they consider labor as a percentage of COGS; 3) causes the employer to reduce its own investment or consumption; or 4) causes the employer to shut the business down. None of these things has a positive effect upon the economy or the labor market
A much better solution would be to hike the EITC and work it through the tax system. An even better solution would be to improve our public education system and change the attitudes of our children so they “want” an education instead of an I-Pod or a PS3.
11 January 2007 at 8:59 a.m.
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conservative (Anonymous) says…
Well bozo, according the CPI which for the last 10 years has run as follows
1997 2.34%
1998 1.55%
1999 2.19%
2000 3.38%
2001 2.83%
2002 1.59%
2003 2.27%
2004 2.68%
2005 3.39%
2006 Data not available yet.
Taking at item that in 1997 cost 100 dollars and running it throught he calculations makes it now cost $124.52. Since I know you have trouble with math that is only a 24.52% rise in the price.
11 January 2007 at 9:04 a.m.
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Wilbur_Nether (Anonymous) says…
Oddly, the Gallup group's analysis finds that the impact of a minimum wage increase will be, well, minimal.
http://gmj.gallup.com/content/23590/1/A-…
11 January 2007 at 9:25 a.m.
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logrithmic (Anonymous) says…
Common Cents wrote: “An even better solution would be to improve our public education system and change the attitudes of our children so they “want” an education instead of an I-Pod or a PS3.”
I agree. But this is a long term fix and to do it we need investment from business and households. It is businesses that have primarily been the receipient of the welfare state - and not small businesses - but multi-national corporations. Dick Cheney's firm Haliburton won a $7 billion no-compete contract to do work in Iraq, for example. The war in Iraq and Afghanistan, primarily to support the energy industry of this country and its shareholders, has cost the American taxpayer $2 trillion according to one Nobel prize winning economist.
We spend more on our military than all the other countries of the world put together. And for what? To defend America's interest, or the interest of the owners of the multi-national corporations? Anyone with half a brain would recognize and would have recognized that Iraq was no threat to America. Yet the fuhrer said we had to go.
Now the same wackos that support all of this government deficit spending on a war that cannot be “won” militarily and that should have never been fought, squawk about the rise in the minimum wage. What a joke. A sad joke…..
11 January 2007 at 9:26 a.m.
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common_cents (Anonymous) says…
Not sure what part of the gallup link you are reading, but I didn't see much to indicate minimal impact from the q/a session. I did see one section to which I think you were referring. In that section the reasoning for this having a minimal effect was that the person interviewed stated that there were few companies left for it to effect: They have either already gone out of business, already replaced their minimum wage workers or will do so soon, by going overseas or hiring illegals. (remember… this was followed by “if that's true… this will have minimal impact”)
So… if this is going to have a minimal impact because of these reasons, why do it?
Here is that section:
GMJ: According to several lobbying groups, like the U.S. Chamber of Commerce, a minimum wage hike will hurt the backbone of the economy.
Jacobe: Well, in an economic analysis, there is no real justification for the minimum wage. In fact, it inhibits the free market. In that kind of analysis, there are always companies on the margin paying the minimum wage, and some of those will go out of business if their labor costs increase. My guess is that there are few such companies left. Most of these companies have probably already replaced their minimum wage employees, or will do so soon, by going to one of the other two sources of cheap labor — job outsourcing overseas or hiring illegal immigrants who don't have any choice in the wages and benefits they earn.
So if that's true, then based on the results of our most recent survey of small-business owners, the Wells Fargo/Gallup Small Business Index, the real economic effect ought to be basically minimal, if there's any at all. So, the real cost of a reasonable increase of minimum wage probably is not significant because U.S. minimum wage laws have effectively been undercut by the global labor market and illegal immigration. Now, you can argue that if you keep increasing it really rapidly over a period of time, that at some point it will become binding.
11 January 2007 at 9:28 a.m.
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just_another_bozo_on_this_bus (Anonymous) says…
I stand corrected on the average inflation rate, conservative, but let's look at what even that lower rate means to someone working at the minimum wage.
If you add up the aggregate erosion of that wage from 1997 to 2007, the overall reduction in actual buying power means that that worker actually worked for 1 1/2 of the last ten years for free.
And it also means that even with this increase, they will never even come close to recouping those lost wages.
Sure that's good for all of you who want the cheap goods they provide for you, but they're just screwed. As long as you get yours, so what, right?
11 January 2007 at 9:29 a.m.
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common_cents (Anonymous) says…
logrithmic - Yep, time to end the spending.
11 January 2007 at 9:36 a.m.
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crazyks (Anonymous) says…
“the cost of goods sold is determined by demand. If more people can afford product A, then the demand higher. And if the demand is higher for product A, then the company can charge more for it. ”
How again is this such a bad thing? If more people were earning more money at their jobs, wouldn't there be more who could afford to buy product A?
By the way, I've noticed over the years that more demand for a product usually LOWERS the price, not raises it. See, the more of product A that a business is able to sell, the less they have to charge for it. Besides, if a business continues to raise the price of a product, eventually the demand for it will go down.
I've also noticed that the products that usually go up in price are the ones that are NOT in high demand, and so the business raises the price to continue to make a profit.
Unless, of course, it's a brand new product, in which case the business usually gouges the market for the highest price that it can get while it can get it.
11 January 2007 at 9:43 a.m.
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jafs (Anonymous) says…
If one believes in a Libertarian-type of philosophy, then there is no justification at all for any kind of regulation on businesses. That perspective rests on a great faith in the “free market” to sort everything out.
Of course, that would mean removing all of the corporate subsidies, tax breaks, etc. as well - I wonder if the Libertarians advocate that or not.
For more moderate folks, it seems clear that we must regulate business in a variety of ways. Raising the minimum wage is one way to do that.
Interestingly enough, the conversation quoted above left out one obvious way that businesses (especially larger ones) can compensate for the raise in wages - lower their profits. Another obvious way is to lower the wages of the top wage-earners. CEO's, etc. make outrageously large sums of money. I'm sure they could make do with a bit less.
11 January 2007 at 9:49 a.m.
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sunshine_noise (Anonymous) says…
However, this is only a rise in federal minimum wage not State. Kansas who has the lowest min wage in the country will remain the same 2.65 until folks join the Grassroots Action to campaign for an increase in State Min wage. The Fed min wage increase is only going to affect a small group of people not across the board. Some businesses are except from Fed min wage increases like restaurants workers - = wait staff and such. So the more that join Grassroots the better chance of getting an increase in State wages and more money in our hard-working pockets.
11 January 2007 at 10:03 a.m.
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tolawdjk (Anonymous) says…
Crazyks: I agree, supply and demand arguements only hold so much water when the demand side is operating at near 100% capacity. Refining capacity in the US is an example of this. We just barely have enough capacity to address our demands that any hiccup in that capacity corresponds to a rise in prices, or as demand increases during the summer driving season and stockpiles deminish, then prices rise.
But if all of a sudden demand in cars goes up, all that means is that GM and Company (more likely Toyota…American automakers can't seem to fight themselves out of a wet paper bag right now) do is add another shift, or increase production rates at exisiting factories. At that point a wide number of variables fly in to determine the effect of costs, but the overall result being that things tend to stay the same or dip slightly lower.
What I don't understand (really I do understand it, no need to go into explainations here) is why there is always outrage at the idea of raising a minimum wage but when a CEO is -fired- for basic failure to do his job (Home Depot) and recieves a $210 million dollar severance package, Congress is never there screaming that things need to change.
I thought the basic idea of a good market was that success breeds its own rewards, but lately the market seems to indicate that once you reach a certain point failure breeds some pretty sweet rewards as well.
11 January 2007 at 10:12 a.m.
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jafs (Anonymous) says…
Tolawdjk,
Thank you for pointing that out - the discrepancy between the top and the bottom wage-earners in this country is immense, and quite discouraging.
I was told that CEO's now include mandatory severance packages as part of their initial contracts. Why any board of directors would agree to this I can only guess at - it seems ridiculous on the fact of it.
11 January 2007 at 10:16 a.m.
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hammysammy (Anonymous) says…
Peolple just cannot live on the current minimum wage, period! When I started working the min wage was 4.25/hr, about 11 years ago. If it weren't for my education, and the governments intervention, I feel I can safely say that I wouldn't be earning more. In short, I might become one of “those lazy” homeless people you all have to shell out so much money for. And let's not even get into the complete lack of benefits at those jobs. And respect, from customers and the company.
11 January 2007 at 10:26 a.m.
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drake (Anonymous) says…
Who makes minimum wage? Do you know anyone personally or do you just feel sorry for the multiple millions of single parents who raise 6 kids on just $5.15 per hour.
Think with your heads and not react to what “feels good”.
In 2005 only .06 percent of wage earners earned at or below federal minimum wage. That is 1 in 167 people. Of those a full 60% are bartenders and servers who make much more than that in unreported, and untaxed, tips.
Of those very few people who earn minimum wage only 1 in 5 live in households that earn less than the poverty level. That means that a overwhelming majority are students and part-time workers who are new to the workforce and will certainly earn more very soon (once they learn working skills like showing up for work on time).
If you earn minimum wage longer than a couple of months it is either by choice or ignorance.
11 January 2007 at 11:08 a.m.
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budwhysir (Anonymous) says…
This is old news. We once read about a city minimum wage that was researched by lawrence. I think minimum wage promotes minimum work and this is what we suffer from. Transit times to get to work and increased traffic is causing expansive use of gasoline and oil. As we all know, gas prices have skyrocketed. So minimum wage equals minimum work equals more people getting more loans to buy $50,000 suv's that guzzle 4 gallons per mile. equals high interest rates
11 January 2007 at 11:28 a.m.
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BunE (Anonymous) says…
A minimum wage is a public policy statement indicating that empoyers shall pay X. The argument that it causes jobs to be lost is frankly immaterial and frankly specious. Any immediate job loss will be quickly made up as demand is not dropping.
You really want 8.00 cheese burgers? Shut down illegal immigration. There won't be a single job that pays minumum wage in America.
11 January 2007 at 12:13 p.m.
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deec (Anonymous) says…
Every time there's talk of raising the minimum wage, there's talk of wild growth in inflation. Didn't happen the last time; won't happen this time.
Inflation rates from above post
1997 2.34%
1998 1.55%
1999 2.19%
2000 3.38%
2001 2.83%
2002 1.59%
2003 2.27%
2004 2.68%
2005 3.39%
11 January 2007 at 12:43 p.m.
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deec (Anonymous) says…
This one anecdotal illustration does not negate the facts stated in my post.
If this small business owner chooses not to raise prices, then I guess she will be choosing to make less profit.
11 January 2007 at 12:58 p.m.
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Jamesaust (Anonymous) says…
“If this small business owner chooses not to raise prices, then I guess she will be choosing to make less profit.”
Oh, yes! The infamous excessive profits of the retail candy industry! Damn you, profiteers! I'm sure Ms. Bowers must fall asleep each night in her mansion, rolling on her bed of juu-juu beans.
Query: is the “wage” earned by a 70-hour per week “candy baron” much above minimum wage either?
11 January 2007 at 1:05 p.m.
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Jamesaust (Anonymous) says…
The effect of this change will be small, for the not-so-small reason that the minimum wage is earned by almost no one (and earned for a significant time period by something like 0.001% of the population - the never-quite-seen workers who never earn more than the minimum wage).
Some marginal workers will lose their jobs.
There will be a small increase in school dropouts (high school and college).
Some working poor will be replaced by newly attracted discretionary workers (part-time housewives, retirees, students).
The non-working poor will remain the non-working poor.
Those with little skills or experience will have an even greater difficulty in acquiring skills and experience.
(But that's okay, all those people are marginal persons who don't matter anyway.)
11 January 2007 at 1:31 p.m.
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deec (Anonymous) says…
I have nothing against Penny Annie's. I have no idea what her profit margin is or isn't . If she doesn't adjust her prices to compensate for mandated wage increases, that's her decision. I don't know her, so I have no idea how many hours she works, where she lives, etc. I didn't bring her up; someone else did. And none of this changes the actual fact that inflation did not rise wildly as predicted the last time it was raised.
11 January 2007 at 1:56 p.m.
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Jamesaust (Anonymous) says…
“And none of this changes the actual fact that inflation did not rise wildly as predicted the last time it was raised.”
Please cite this “prediction” that an increase in a statutory minimum wage will/does/must lead to wild (whatever that means) inflationary price increases.
(Absent that, we'll just leap to the assumption that this is merely a “straw man” argument, made only for the purpose of pretending to demonstrate as fact something one believes anyway for non-factual reasons. There is little debate among economists that higher minimum wages result in lesser employment and higher-than-otherwise inflation; the only real debate is (a) by how much, and (b) does it “matter.” One is perfectly free to answer (a) I don't think by much, and (b) it doesn't have an effect on me so I don't care. Those are at least honest answers that have a reasoned basis why they might be “correct” - even if they dismissive of the plight of the poor.)
11 January 2007 at 2:25 p.m.
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deec (Anonymous) says…
“Watch for the inflation numbers and/or the unemployment numbers to climb after this BS goes into effect.”
I was responding to this assertion. The inflation numbers from this thread disprove this claim.
11 January 2007 at 2:28 p.m.
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hammysammy (Anonymous) says…
http://www.responsiblewealth.org/living_…
11 January 2007 at 2:35 p.m.
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BunE (Anonymous) says…
What data is available for backing up a net loss in jobs and an increase in inflation rates with an increase in the minimum wage? Preferbaly not from the Cato Institute or the Small Business lobby.
11 January 2007 at 2:36 p.m.
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deec (Anonymous) says…
http://www.policyalmanac.org/economic/mi…
Supporters point to a controversial study by Princeton economists David Card and Alan Krueger of minimum wage employees in New Jersey, which found little or no impact on employment. Economist Robert Solow, an MIT Nobel Laureate, wrote in a 1995 New York Times article that the “main thing about the research is that the evidence of the job loss is weak…. And the fact that the evidence is weak suggests the impact on jobs is small.”
http://www.infoplease.com/ipa/A0774473.h…
http://www.cbpp.org/6-20-06mw.htm
11 January 2007 at 3:45 p.m.
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red6102003 (Anonymous) says…
I tell you what me being a buissiness owner I welcome the increase. It will have little effect on unemployement, but it will effect on how much people are spending which will boost our economy.
11 January 2007 at 3:47 p.m.
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Tychoman (Anonymous) says…
It's amazing how many experts on every single subject are on these boards. You guys should be working at the Federal Reserve, or at an economics think tank! *rolls eyes*
11 January 2007 at 4:04 p.m.
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ASBESTOS (Anonymous) says…
“Every time there's talk of raising the minimum wage, there's talk of wild growth in inflation. Didn't happen the last time; won't happen this time.
Inflation rates from above post
1997 2.34%
1998 1.55%
1999 2.19%
2000 3.38%
2001 2.83%
2002 1.59%
2003 2.27%
2004 2.68%
2005 3.39%”
There was and has been no “talk” of an increase in the minimum wages throughout those years. The economy is booming. I do see a trend though. In 2000 the rate was as high as it is now. And we were weak on terrorists. Then Sept. 11th. Now in 2005 it seems as if those have forgot about it and we are at that inflation rate again.
Will we get hit?
11 January 2007 at 4:07 p.m.
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ASBESTOS (Anonymous) says…
THis is going to be an hourly raise in Kansas from our minimum which is $2.65 up to $7.00 per hour. That is inflation. I do not know whom works for 2.65 an hour, but I bet waitresses and some waiters across the state are paid that rate and then includes tips. That will raise up the costs. The whole world is NOT lawrence with a fence around it.
11 January 2007 at 4:25 p.m.
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common_cents (Anonymous) says…
>
“the cost of goods sold is determined by demand. If more people can afford product A, then the demand higher. And if the demand is higher for product A, then the company can charge more for it. “
>
I have to comment on this one. Cost of Goods Sold (COGS) is NOT determined by demand. Final Price is determined by demand.
COGS is determined by the cost of materials, incidentals and labor necessary to product a final product.
Profit = Final Price - COGS
Considering labor is a factor of COGS, if labor costs rise, profit reduces, unless other factors are changed, like Final Price. Profit made affects the amount of capital available for process improvements, work place improvements, WAGE increases (the natural sort), etc etc.
Thus, some methods to retain a constant profit level is to 1) increase price 2) use less costly or inferior materials in the manufacturing process (whatever you are manufacturing - food, clothes, etc stuff is stuff) 3) reduce labor headcount to keep the labor factor steady (which leads to overworking current labor force.)
All in all, this will hurt small businesses more than it will hurt large corporations. (For which I believe this is intended) As a former small-business only, I can tell everyone that I personally have gone through a wage increase and it ended up only making me work more hours while I reduced my labor pool.
Here's a link on some statistics on how small business make up our economy and are affected by various governmental policies:
http://www.sba.gov/advo/stats/sbfaq.pdf
Contrary to popular belief, small business owners do not rake in the cash either. I worked close to 65 hours a week on average and my pay was only 4K higher than my highest paid employee. My hourly wage earners averaged $8 per hour back in the 1990's. Then I decided to hang it up and go work for corporate America. I now make twice as much as I did then for a 45 hour work week and a lot less stress.
Small businesses are what I see the population of this town liking. Be very aware of what you wish for or there will be chain stores cropping up on every corner while our local businesses fade away.
Oh wait… that's exactly what's happening.
11 January 2007 at 4:25 p.m.
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hammysammy (Anonymous) says…
All waiters and waitresses make 2.13/hr in nearly every state.
11 January 2007 at 5:03 p.m.
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hammysammy (Anonymous) says…
because it is 2007 people!!! Gas cost over 2 dollars a gallon! Rent in Lawrence is as much as 1000 a month for a 3/4 bedroom house. It is just not enough money! You people are so shockingly ignorant to the hardships that poor people suffer! The current minimum wage is sufficient only for highschool kids with out any financial responsibilities. Our economy will recover. Chili's has raised their menu prices 4 times over the last 3 years, similar to most other businesses. Some small businesses will suffer, but people cannot expect to be able to pay the same wages for years in a row, because they are small. Yes, Wal-Mart sucks, and is making hard for people to compete; but it is the Republicans and stodgy economic conservatives that oppose this increase that have made it ripe for businesses like that to flourish.
11 January 2007 at 5:57 p.m.
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just_another_bozo_on_this_bus (Anonymous) says…
There goes Pilgrim, cutting and pasting again.
11 January 2007 at 6:43 p.m.
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ASBESTOS (Anonymous) says…
ALl this minimum wage crap is nonsense FOr this reason:
Why support raising the minimum wage, and support illegalaliens coming here to word? They are the reason wage erosion and why the wages at the loowest end of the econmic spectrum is stagnant.
A minimum wage increase will do nothing if an illegal alien will agree to work for less. Hell it is illegal to start with, do you think business will just pay them because that is the “legal” thing to do.
That is what gets me here. Those pushing for the minimum wage increase are usually those supporting the illegal aliens coming here and polluting our country with their third world ways and customs.
11 January 2007 at 6:53 p.m.
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crazyks (Anonymous) says…
Hammy brings up an interesting point…
Prices have been going up for years, and yet there's been no change in the minimum wage yet.
You guys make it sound like minimum wage is the only evil reason that businesses have to or would have to raise their prices.
And Pilgrim, unemployment rates are a farce anyway. It only counts the most recent people who have applied for unemployment, or who are now receiving it.
It doesn't even count all the thousands of people out there who are still unemployed and either aren't eligible for unemployment benefits or have already used them all up.
11 January 2007 at 6:55 p.m.
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crazyks (Anonymous) says…
If people make more money, they will spend more. Isn't this why you all have those wonderful high-paying jobs?
You may have a good job, with good money, and have all those “skills” you talk about ad nauseum, but I'll bet there are skills you don't have, even in the corporate world, that are needed for your job to run smoothly.
If the peons didn't exist, your job would be worthless. I'm talking specifically about things like trash hauling and housekeeping, people you consider “unskilled” workers, and yet your job couldn't be done without them.
How about the person who brings you mail and delivers paperwork to other offices and makes sure you have all the toner and paper and pencils and staples that you need? Could your job run smoothly without them?
Do you know how to do housekeeping properly? Believe me, there are all kinds of rules and regulations and methods that have to be used now, per OSHA. Training is required. Could you make sure there was always toilet paper and soap in the bathrooms, and clean it to specifications, putting up with the ungodly messes that so-called civilized business people put there every day?
Could you haul your own trash to the landfill every day? Would you know how? Do you know the regulations concerning items that need to be disposed of in a proper manner, such as old computers, batteries, tires, etc., and would you know the proper place in the landfill or recycling center to take them?
Could you drive a big rig and deliver the materials necessary every day that all businesses need to make a product or market it? It would require a Commercial driver's license, which requires training and you have to take a test about 50 pages long.
Would you be able to deliver meals to eight tables at a time in a timely manner, so that your snobby customers (who are rushing lunch to get back to that cushy job) will be happy? Would you know how to prepare food and store it properly?
Could you clean a hotel room in an hour and make sure everything was spotless for the next customer (and again, up to regulations)? The hotel room that you occupied for that last business meeting?
Could you clean and disinfect an entire school building every night, clean up puke and whatever else per regulations, so that your little darlings will have a nice classroom to go to during the day while you're busy at that cushy job?
Or do you consider those sort of things beneath your superior “skill” level?
But all those people are “unskilled” and don't deserve any more money. Yeah. Right.
11 January 2007 at 7:14 p.m.
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Godot (Anonymous) says…
When I know that pizza delivery guys and waitresses are making over $7 per hour, my usual 15 to 20% tip will be greatly reduced and will definitely be based on the quality of service I receive.
11 January 2007 at 8:06 p.m.
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werekoala (Anonymous) says…
“Those pushing for the minimum wage increase are usually those supporting the illegal aliens coming here and polluting our country with their third world ways and customs.”
You only believe that if you listen to pandering pundits.
Personally, I am in favor of raising the minimum wage because I think trickle-up economics works much better than trickle-down economics. Basically, if you cut a rich man's taxes, he still only needs to buy one copy of Deuce Biggalo (if that). But with the same money,
you can raise the disposable income of 100 poor people
=100 more purchases of Deuce Biggalo
=more energy put into the economy
=Rob Schneider takes over the world. Hooray!
I'm also not in favor of illegal immigration, as I think it does drive down wages and depreciates products below a fair and legal market value. The only difference between us is: I understand why they come here. Believe it or not, it's not primarily to sponge off of US taxpayer benefits. It's because they can make more in a few months here than they can all year at home - so why wouldn't they go for it?
And as long as we have a social, political, and economic climate that glosses over the employment of illegal immigrants, and gives giant companies a slap on the wrists for knowing violations of employment law, well, then you'll have an inexhaustable supply willing to meet the demand.
The solution is to end the demand. Of course, then prices go up by about half in every labor-intensive industry we've got. Good old Law of Unintended Consequences at work.
BTW - just noticed this gem: “Polluting our country with their third world ways and customs”
STFU with your xenophobia already. We all came here on a boat, ain't no point discriminating based on who came on which one. But if you're truely such a terrified crybaby, fear not, I'll protect you from such 3rd World practices as Roman Catholicism, patios, and Taco Bell.
11 January 2007 at 8:10 p.m.
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Godot (Anonymous) says…
I vote for a maximum wage. Let us start with government administrators. Make it no more than double the median wage of the citizens of the governmental unit.
11 January 2007 at 8:11 p.m.
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Godot (Anonymous) says…
There is no reason a government administrator living in Lawrence, Kansas, should make more than $100,000.
11 January 2007 at 8:12 p.m.
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deec (Anonymous) says…
1. We have federal wage laws, so that's why small business owners must obey them. Those laws exist to protect the lowest-paid workers.
2. If a particular business owner does not wish to adjust her prices. her own labor, her suppliers of basic ingredients, or profits in order to meet federal wage mandates, that's their decision. I've posted several links showing arguments regarding inflation and job loss are bogus, which have been ignored.
11 January 2007 at 8:17 p.m.
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Godot (Anonymous) says…
deec, my suggestion to you is, open your own business, pay the new minimum wage, and see how long you last before your close your doors and look for a government job.
11 January 2007 at 8:24 p.m.
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deec (Anonymous) says…
I do have my own business, and I don't work for the government. Do you?
11 January 2007 at 8:29 p.m.
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budwhysir (Anonymous) says…
I believe in maximum pay for minimum work. I think we should all make $7.15 per hour for watching cable tv every night after our 9 to 5 jobs.
We could also get min. wage for walking, shopping, and swimming.
I dont think the government realy has anything to do with minimum wage. If they did it would be considered more of an unemployment wage or something of the nature. Politicaly speaking of course
11 January 2007 at 8:36 p.m.
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werekoala (Anonymous) says…
Godot:
I agree with your comments about the salaries of public administrators, but take issue with this comment:
“open your own business, pay the new minimum wage, and see how long you last before your close your doors and look for a government job.”
It's a federal minimum wage. Which means it's a non-factor in the competition. It may require you to raise your prices, lower your margins, or cut costs elsewhere, but every one of your competitors faces the exact same dilemma.
So if you fail while your competitors succeed, it's not the minimum wage that killed you, but your failure to adapt to the changing business climate. Which, by the way, is the essence of capitalism - competition in theory, forces increased efficiency and hence better service for the customer at the lowest price.
Why do you hate the free market?
11 January 2007 at 8:39 p.m.
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Godot (Anonymous) says…
deec said, ”
I do have my own business, and I don't work for the government. Do you?”
Yes, I do own my own business. Yours must be insulated from the impact of higher costs of goods and labor.
Let me guess: consultant? purveyor of luxury goods? Artist? Musician? Writer, producer, anyone who does not rely on demand, but, rather, creates demand through networking and marketing?
11 January 2007 at 8:44 p.m.
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just_another_bozo_on_this_bus (Anonymous) says…
“I vote for a maximum wage.”
I agree. That's probably a better way to approach the whole issue. Ben and Jerry's had a policy where the highest paid person in the company (usually themselves) couldn't get more than 7 times what the lowest paid got.
Under that scenario, a cap of $100,000 for government employees would mean that the lowest paid would get just under $15,000 a year. That's too low to ask of anybody if you expect any quality production out of them.
The current highest wage of about $140,000 to the city manager would translate to $20,000 a year for an entry-level job, which is probably about right.
Contrast that with many ma