Archive for Sunday, April 27, 2008

Take a Stand: Minimum wage is too low

April 27, 2008

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The April 1 Journal-World carried a column by Kansas University business professor Mark Hirschey called "Inconvenient truth about minimum wage." Since it was April Fools' Day and the article gave many anecdotes but few "facts," we're not certain it was altogether serious. In case it was, we're responding with some facts of our own.

Henry Ford had the novel idea that anyone building his cars should be able to afford to buy one. But most employers never bought this idea, and the period after Ford's death was wracked by some of the worst labor strife in our history. Since those early days, every time a minimum wage has been implemented or increased, businessmen have screamed that the sky was falling. But the sky hasn't fallen.

Here are 10 historical facts about minimum wages:

1. We had no minimum wage law until the Fair Labor Standards Act passed in 1938.

2. Since then, in terms of actual buying power, the value of the minimum wage peaked in 1968 - when it was just $1.58 per hour! Last year, according to the U.S. census, an equivalent minimum wage, in constant dollars, would have been $9.47.

3. Thanks in part to the minimum wage law, the American working class turned into a giant "middle class." For many years, this middle class enjoyed relative prosperity and could afford to buy products from the very businesses that had worried so much about minimum wage laws - and which now profited from them!

4. Minimum wage laws don't cause job loss. More than half the states have minimum wage rates that exceed the federal level, and none have suffered job loss as a result.

5. The growth in productivity of American workers has always outstripped any increases in wages and benefits.

6. Corporate earnings and profits have soared during the minimum wage era. Over 10-year, 25-year, and 50-year periods, the best place to invest has been the stock market. Minimum wages clearly do not hold back corporate growth and profits.

7. Over the same period, pay for corporate CEOs has soared to obscene levels - nearly 500 times the average wage - even when companies they "led" fell into bankruptcy.

8. The economic expansion that ended a few months ago was the first in our history that saw an actual decline in median income. Workers are suffering!

9. The Kansas minimum wage is $2.65 for firms not covered by the federal law. That means that today 17,000 Kansans earn less than the federal minimum wage! Does that mean that our state legislature wants workers who are employed full-time to earn under half of what it would take to rise to the federal poverty line?

10. In economic development, Kansas ranks near the bottom. States with much higher state minimum wages have zoomed past us in terms of economic growth. Our lowest-in-the-nation minimum wage law is a joke - but sadly, the joke is on us.

These are the actual facts about minimum and maximum wages.

Hirschey reminisced about the great low-wage jobs he held as a kid. State law now prohibits kids from working in many of those jobs - but, ironically, allows parents who are trying to raise kids to work the same kinds of jobs, for pennies.

Arguments against making the minimum wage a living wage are based on the faulty claim that it will hurt corporate profits and result in higher unemployment. But history shows that dividing the pie more equitably will neither bankrupt corporations nor cost us jobs. It will, rather, improve life for all employees and their families.

Graham Kreicker, a Lawrence resident, wrote this column on behalf of the Grassroots Action board.

Comments

SettingTheRecordStraight 7 years, 1 month ago

Time to set the minimum wage at $0.00 per hour, the wage economists believe benefits the most low-income workers.

just_another_bozo_on_this_bus 7 years ago

I bet there's a lot of discussion at your KKK meetings about rescinding the Emancipation Proclamation, too, STRS.

TopJayhawk 7 years ago

I don't really have anything against raising it some, but the minimum wage was never meant to be a living wage. Realistically, you can't raise it enough to make it a living wage, so I really don't see the point.

Bladerunner 7 years ago

I agree. What is the point? Who would work for that amount? I dont know a single soul that makes the minimum wage. Even McDonald's starts out at nearly twice that.

imastinker 7 years ago

How does the minimum wage NOT creat job loss? Has anyone NOT noticed less baggers at the supermarket, or self checkout, or self service fuel pumps?

just_another_bozo_on_this_bus 7 years ago

"Has anyone NOT noticed less baggers at the supermarket, or self checkout, or self service fuel pumps?"This has nothing to do with the minimum wage. It's driven almost solely by advances in technology.

Matt Toplikar 7 years ago

Here's a link to a video illustrating the distribution of wealth in America. The video is pretty crude, but is definitely interesting if you haven't seen a graphical representation before. You just might be surprised by the huge amount of disparity between the wealthiest 1% and the rest of us.http://www.youtube.com/watch?v=woIkIp...

notajayhawk 7 years ago

imastinker:Yes, it would appear Mr. Kreicker's "facts" leave out that the number of minimum wage jobs has dropped dramatically. In 1980 there were 7.8 million minimum wage workers, about 8.9% of the workforce. In 2005 that number was down to 1.9 million, or 1.5% of the workforce. And unemployment rates typically only reflect those collecting or eligible to collect unemployment benefits. In the types of jobs we're talking about, you don't have to lay people off or fire them; the attrition rate is sufficiently high that you simply don't replace workers who quit. The last increase cost the restaurant industry alone about 280,000 jobs between direct reductions and post-poned new hires. The labor force has grown (along with the population) so the overall number of jobs has not decreased, but unless Mr. Kreicker believes that these grocery sackers and fast food workers have taken jobs as CEO's, it's pretty apparent that the people who the minimum wage effects are, indeed, losing jobs. Another fact that Mr. Kreicker omits is that at no time in history has the minumum wage been enough to lift a single-earner family beyond the poverty level. This has never been its purpose. Some people like to throw out the figure that 40% of minimum wage earners are heads of households. What they omit is that the vast majority of those are the 'household.' Only 2.8% of minimum wage workers are singleparents, only 1.2% are adult heads of household with incomes less than $10,000/year.Yet another fact that the proponents of increasing the minimum wage seem to forget - most minimum wage earners have incomes that also include tips, commissions, piece-rate pay, etc. And then there's students who also get parental support and/or student loans/grants. Not too many people are actually trying to support a family on $2.65/hr. It's kind of hard to take someone purportedly spouting "facts" when he includes such editorializing as "obscene" pay levels for CEO's.Is there some reason we should force businesses to pay $10 or more per hour to people who make $500/wk in tips, to high school students living at home with their parents, to college kids driving a brand new car and living off their student loans, etc.?

notajayhawk 7 years ago

just_another_bozo_on_this_bus (Anonymous) says: "This has nothing to do with the minimum wage. It's driven almost solely by advances in technology."Funny, I must have missed those robotic grocery sackers last time I was shopping. I don't suppose it's occured to our bus-riding clown that those advances in technology were driven by, and made cost-effective, because of the increase in the cost of manual labor?

just_another_bozo_on_this_bus 7 years ago

"In 2005 that number was down to 1.9 million, or 1.5% of the workforce."What about the millions of undocumented workers who likely get less than minimum wage? And how many millions of workers who make more than the current minimum wage actually have less spending power than a minimum wage worker in 1980?"And unemployment rates typically only reflect those collecting or eligible to collect unemployment benefits."Which means that the unemployment statistics paint an unrealistic picture-- someone who isn't going to significantly improve their financial status by working a minimum wage job has decreased incentive to remain in the labor pool."It's kind of hard to take someone purportedly spouting "facts" when he includes such editorializing as "obscene" pay levels for CEO's."They are, in fact, obscene."Is there some reason we should force businesses to pay $10 or more per hour to people who make $500/wk in tips,"Current minimum wage is only on track to a bit over $7 an hour, and in a 40 hour week, $500 in tips adds up to about $12.50 an hour, for a combined total of about $20 an hour, and that's only if the server is working hard enough to earn good tips. A good server in a good restaurant works their a$$ off in what is often a very stressful environment. If you are unwilling to pay for the service you get, I suggest you eat at home."to high school students living at home with their parents, to college kids driving a brand new car and living off their student loans, etc.?"Yes, that makes perfect sense. Let's make sure all wage levels are set by the amount of money the employee's parents have. And if the employer's parents are poor, wages can be set even lower.

just_another_bozo_on_this_bus 7 years ago

notajayhawk, my fellow bozo, the human species is a technological species. We have been seeking ways to reduce work, or make it easier, for thousands of years. Generally, it's been a good thing, and it will continue regardless of whether or not there is a minimum wage.

notajayhawk 7 years ago

just_another_bozo_on_this_bus (Anonymous) says: "What about the millions of undocumented workers who likely get less than minimum wage?"Um - what about them? If they don't like it they are free to go back to their own countries. I don't exactly have sympathy for a worker who breaks the law to come here to make money, and then the money isn't good enough."And how many millions of workers who make more than the current minimum wage actually have less spending power than a minimum wage worker in 1980?"And what does that have to do with whether increasing the minimum wage costs jobs? By the way, all those millions of former minimum wage workers that no longer have jobs at all because they aren't qualified for anything else - what's their 'spending power' looking like?"someone who isn't going to significantly improve their financial status by working a minimum wage job has decreased incentive to remain in the labor pool."Someone who's guaranteed some obscenity like a 'living wage' doesn't have much incentive to finish school, get training, build work experience, or otherwise better themselves, now do they?"They are, in fact, obscene."Yes, bozo, we all know that you think anyone who profits by keeping their jack-booted heel on the throat of the exploited workers is obscene. It would be really nice if those in favor of increasing the minimum wage could construct an argument without the inclusion of blatant class envy.[cont]

notajayhawk 7 years ago

[cont]"Current minimum wage is only on track to a bit over $7 an hour, and in a 40 hour week, $500 in tips adds up to about $12.50 an hour, for a combined total of about $20 an hour, and that's only if the server is working hard enough to earn good tips. A good server in a good restaurant works their a$$ off in what is often a very stressful environment. If you are unwilling to pay for the service you get, I suggest you eat at home."Wow, only $20/hr? Only $40K/year? Do you even read, let alone think, before you post? There are people with Masters degrees working in professional positions that make less, bozo. And you think a restaurant server should make as much or more than them? Come on, clownie, just try to be serious once a month or so.And by the way, if a restaurant server doesn't think $40K/yr is sufficient to compensate then for their stressful job, I suggest they work elsewhere."Yes, that makes perfect sense. Let's make sure all wage levels are set by the amount of money the employee's parents have."Nice attempt at misdirection, clown. I asked if there's some reason we should set the minimum wage at enough to support a household when most of those earning that wage are doing no such thing."my fellow bozo"I will never, ever be your fellow clown, bozo."We have been seeking ways to reduce work, or make it easier, for thousands of years."The technology of which you spoke, that of the workplace, was not designed to make work easier on the employees, but to replace them and therefore cut costs. This is why a fast food restaurant that formerly required 20 people on a shift can now get by with 3 or 4. Some of this equipment is very expensive and only becomes cost effective when the labor it replaces costs more. If you can't understand that, there's not much hope for getting a sensible argument out of you.

jumpin_catfish 7 years ago

This country already has all kinds of regulations by the government and still have a mess while many on this blog think even more regulation will solve all our problems. I seriously doubt that would be the case.What does the government do well? Oh, collect taxes.

kansas778 7 years ago

So Bozo, when inflation makes your utopian living wages worthless, will you just raise it again and again? Or will you call on the government to step in and take possession of the means of production, comrade?

SettingTheRecordStraight 7 years ago

When bozo doesn't like an argument, he vilifies the person and dismisses the idea. Then he vilifies the person again. Bozo, you are the intolerant roadblock to progress in our society.

notajayhawk 7 years ago

Multidisciplinary (Anonymous) says: "Applebee's pays $2.13 on hour."And how much do you think the average Applebee's employee makes? I spent over 20 years in the restaurant business. In most cases, my fellow employees and I would not even count on having a paycheck - usually the amount we got paid wasn't enough to cover the withholding on our reported/allocated tips.If someone's bringing in even $250/week in tips, then they're already making more than the minimum wage, and the employer shouldn't be under any obligation to pay them at all. And no, that's not what I'm advocating - just that the amount most minimum wage workers actually make is more than the low figures everyone throws around.

imastinker 7 years ago

I am currently working for a company that starts hiring for unskilled labor at around $10/hr. We are unable to find good help. I find it hard to believe that anyone is chugging along at minimum wage unless it is because they are unable to take a step beyond their comfort level and look for another job. I can assure you that our company is not unique in this way.

manbearpig 7 years ago

Does nobody have a problem with the loose definition of 'facts' that the author uses? Without underlying data, the claims are more aptly defined as arguments, or, even better, assumptions.Rather hypocritical considering the way the column begins is by attacking the previous column for being anecdotal and presumptive.

just_another_bozo_on_this_bus 7 years ago

"Um - what about them? (undocumented workers)...And what does that have to do with whether increasing the minimum wage costs jobs?"You're the one who claims that the drop in the number of minimum wage earners is somehow significant to the debate on whether there should be one, or that it should be raised. I merely pointed out why your little statistic is actually irrelevant."Someone who's guaranteed some obscenity like a 'living wage' doesn't have much incentive to finish school, get training, build work experience, or otherwise better themselves, now do they?"No one is "guaranteed" a living wage-- they still have to show up and do the job, for which they should get paid a living wage, assuming the company is required to pay one in exchange for a tax abatement, or to get government contracts, etc., which in Lawrence is currently calculated at around $10.50 an hour. I think anybody with half a brain realizes that the vast majority of workers, especially young, talented ones, are not going to be satisfied with that wage the rest of their lives. BTW, a "living wage" does not equal "minimum wage." But given your overall weak, but mean-spirited arguments, I understand why you want to change the subject."Wow, only $20/hr? Only $40K/year? Do you even read, let alone think, before you post? There are people with Masters degrees working in professional positions that make less, bozo. "Last time I looked, no university gives any graduate, with any degree, a guaranteed level of income. Not every waiter (even one with a master's degree) is going to make $40K a year, even if they do get minimum wage plus tips. Those that do will have to work their a$$es off to accomplish it. So I repeat, if you can't afford to pay for that level of service, eat at home. You have no god-given right to eat out at someone else's expense."It would be really nice if those in favor of increasing the minimum wage could construct an argument without the inclusion of blatant class envy."You're the one who obviously favors exploitation of employees, which is, by definition, class warfare."The technology of which you spoke, that of the workplace, was not designed to make work easier on the employees, but to replace them and therefore cut costs. "If plantation slavery were reinstated today, southern farmers would not give up all their machinery in favor of the free labor of slaves. Raising the minimum wage will have zero effect on the further advancement of technology in the work place. And displaced workers will be a problem as long as that happens, regardless of living wages, minimum wages, etc.

notajayhawk 7 years ago

just_another_bozo_on_this_bus (Anonymous) says: "You're the one who claims that the drop in the number of minimum wage earners is somehow significant to the debate on whether there should be one, or that it should be raised. I merely pointed out why your little statistic is actually irrelevant."Oh, irrelevant. Right. First off, it was the article above by Mr. Kreicker that (falsely) claimed that increasing the minimum wage did not cost jobs. But then, the article that spawns these discussions is usually irrelevant to bozo's diatribes.Minimum wage jobs are typically entry-level positions. The elimination of millions of such jobs has life-long ramifications on the earnings of those for whom those jobs are no longer available. But that's irrelevant."I think anybody with half a brain realizes that the vast majority of workers, especially young, talented ones, are not going to be satisfied with that wage the rest of their lives."And those without half a brain, like bozo, think that minimum wage positions, those that do not require education, experience, or skills beyond breathing are for those "talented" workers."BTW, a "living wage" does not equal "minimum wage.""Absolutely correct. So there's absolutely no reason to increase it, is there?"You have no god-given right to eat out at someone else's expense."Expense? They're getting paid, bozo, they're not being charged to work there. They have a job for which they're being compensated, they're not paying for my food. Maybe you need a dictionary to explain what "expense" means. Oh, forgot, that whole jack-booted heel on the necks of the proletariat you keep slinging."You're the one who obviously favors exploitation of employees, which is, by definition, class warfare."Uh, right. Except you're the only one who considers it "exploitation.""If plantation slavery were reinstated today, southern farmers would not give up all their machinery in favor of the free labor of slaves. Raising the minimum wage will have zero effect on the further advancement of technology in the work place."Wow, you're as ignorant of history as you are of economics and business. Tell me, something, clown-boy, do you think maybe - just maybe - the elimination of "free" (after, of course, actually purchasing the slaves, feeding them, housing them, etc.) labor had anything to do with the industrialization of the southern plantations in the first place? Just maybe?

RobertMarble 6 years, 11 months ago

More nudie bars should be opened in Lawrence. Strippers work for tips which makes this entrie thread a moot point.

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