Tuesday, December 8, 2015

The Minimum Wage Farce

In his first major speech as the new Speaker of the House, Paul Ryan inadvertently made a great case for raising the minimum wage: “Push wages up. Push the cost of living down. Get people off the sidelines. I could think of no better way to restore confidence in the American economy.”

But Ryan, like all Republicans currently in Congress ..., believes that more economic growth will lift wages, even though 100% of all the evidence shows: this has not been true over the past 40 years, despite record high profits and record high stock prices — and increased worker productivity.

Source: St. Louis Fed (Social Security wage data shows 50% of all American wage earners make $28,000 a year or less.)
Weekly median wage real earnings men 16 and older

When the Democratic Party took control of both houses of Congress following the 2006 congressional elections, it promised to increase the federal wage to $7.25 an hour. In May 2007 President George W. Bush signed their bill into law. The first wage increase occurred in June 2007, bringing the minimum wage to $5.85 — then to $6.55 in June 2008 — until the very last increase to $7.25 in June 2009.

Hillary Clinton was a Senator from New York from January 3, 2001 to January 21, 2009 — but had never introduced a bill to further raise the minimum wage. The Democrats had the White House and controlled the Senate and the House of Representatives for two years in 2009 and 2010 — but they never raised the minimum wage again.

A poll conducted last January by Hart Research Associates shows that 75% of Americans — including 53% of Republicans — support an increase in the federal minimum wage to $12.50 by 2020 (what Hillary Clinton reluctantly said last July she might agree to), and that 71% of Americans believe the minimum wage for tipped workers should be increased so that all workers are subject to the same wage floor (what Bernie Sanders has also proposed). The poll and a related memo also shows that 63% of Americans support an even greater increase in the minimum wage to $15.00 by 2020 (which Senator Bernie Sanders proposed last July.)

Then in March of 2013 (long after the Republicans had already taken back the House in 2010), Democrats had only then set their sights on a minimum wage increase to $10.10 an hour, and then indexing it to inflation thereafter — thereby eliminating the need to ever have to "manually" pass another minimum wage bill in Congress again. But the Democrats' proposal at that time would have only raised the tipped minimum wage to 70 percent of the regular minimum wage. And as was expected, the House Republicans unanimously rejected a bill that would have raised the federal minimum wage from its current $7.25 per hour to $10.10 by 2015.

And 6 Democrats in the House also joined the Republicans in voting it down:

  • John Barrow (Georgia- 12th District)
  • Jim Matheson- (Utah- 4th District)
  • Mike McIntyre (North Carolina- 7th District)
  • Bill Owens- (New York- 21st District)
  • Colin Peterson- (Minnesota- 7th District)
  • Kurt Schrader- (Oregon- 5th District)

At that time, a $10.10 wage would have brought it in line with about where it would have been if it had kept up with inflation since its peak in 1968. Economist David Cooper at the Economic Policy Institute (who had worked on crafting the $12 wage bill) said of $10.10 an hour:

"What you’re saying is, that low-wage workers should have seen no material improvement in their standard of living over the last 50 years” — despite the fact that there has been significant economic growth, driven in part by rapidly increasing worker productivity."

Last April (after the Republicans had, not only kept the House, but also just taken back the Senate), Senator Patty Murray (D-WA) and Rep. Robert Scott (D-VA) introduced a minimum wage bill that would raise the federal floor from its current level of $7.25 an hour to $12 an hour by 2020, eliminate the lower tipped minimum wage that currently stands at $2.13 an hour, and automatically increase it as median wages rise. (Of course, with a Republican-controlled Congress, it had no chance at all of passing — and the Democrats knew this, and were only posturing).

Not long after Murray's "proposed" bill (in May) The Atlantic wrote:

"When President Obama made the minimum wage a centerpiece of his State of the Union address in 2013, he called for the new standard to be $9 an hour. A few months later, Democrats Tom Harkin and George Miller (both since retired) introduced legislation raising it to $10.10. Now the goal is up to $12, phased in over five years ... Then again, do the details really matter if the bill doesn't stand a chance? Then-Speaker of the House John Boehner once said he'd rather commit suicide than vote for a straight-up increase..."

Last October Senator Patty Murray recently helped host a fundraiser for Hillary Clinton, where people who raised $27,000 got to attend a post-event dinner with Clinton and the female Senators. Last week Hillary Clinton was joined by 13 of the 14 Democratic women of the U.S. Senate at another fundraiser that amounted to a Monday night pep rally for the candidate who could become "the first female president". Senator Elizabeth Warren was the only female Senator that didn't attend.

A couple of months later, after Murray's "proposed" legislation in July (just after Bernie Sanders proposed his own legislation raising the minimum wage to $15 an hour), while speaking with reporters after schmoozing with the executive council of the AFL-CIO, Hillary Clinton singled out the proposed bill by Senator Patty Murray that would establish a $12-an-hour minimum nationwide:

“Patty Murray is one of the most effective legislators in the Senate, bar none. Whatever she advocates, I pay a lot of attention to.”

Which was just more useless posturing. As she has in the past, Clinton did not explicitly offer a figure she would like to see adopted, but implied that certain measures like Murray’s were more realistic than Senator Bernie Sanders of Vermont and former Gov. Martin O’Malley of Maryland, who both support raising the minimum to $15 an hour.

Then last November Hillary Clinton finally came out and said that the federal minimum wage should be $12 an hour, and that it would roughly match in today’s dollars what the federal minimum wage was in 1968 — the time when it was highest in terms of buying power — and posted it at her campaign's website)

But as far as $12 an hour roughly matching in today’s dollars, that's not true either. From Budget.Senate.Gov:

The real, inflation-adjusted, value of the federal minimum wage has fallen dramatically over time. The real value of the federal minimum wage peaked in 1968 at 10.85 an hour, 50 percent above the current level. Moreover, since 1968, average U.S. labor productivity has risen by roughly 140 percent. This means that, if the federal minimum wage had risen in step with both inflation and average labor productivity since 1968, the federal minimum wage today would be $26.00 an hour.

A whopping 210 American economists don’t agree with Hillary — they agree with Bernie Sanders’ plan to move the minimum wage to $15 by 2020 (Their working paper is here.)

But no matter who is elected as President in 2016, with a Republican-controlled Congress, don't hold your breath if you're waiting for the federal minimum wage to go over $7.25 an hour — with the exception of $10.10 an hour for all workers on federal construction and service contracts. From Eater.Com (with an inter-active map):

In his 2014 State of the Union Address, President Obama called upon Congress to raise the minimum hourly wage from $7.25 to $10.10, an increase that would've lifted annual pay for full-time workers from $15,000 to $21,000. The proposal, opposed by Republicans, quickly went nowhere. But since then, more than 20 states and the District of Columbia have moved to raise their own minimums. So while presidential candidates Hillary Clinton and Bernie Sanders have respectively come out in support of $12 and $15 minimums, the real battle for worker welfare is occurring at the local level, with states like Maryland and Massachusetts hiking their minimums past $10, and cities like San Francisco, Seattle, and Los Angeles moving towards $15 (roughly $31,000/year).

Here's a list from the Department of Labor showing each States' minimum wage, including what tipped employees are paid by the hour for each State. Social Security wage data shows 50% of all American wage earners make $28,000 a year or less.

Now let's look at some minimum wages in the EuroZone:

  • The very liberal Netherlands (whose capital is Amsterdam) pays their workers at least $11.06 an hour, their national minimum wage.
  • And Ireland (who has the third most bars per capita) pays their workers a minimum of $11.09 an hour.
  • In San Marino (an microstate inside Italy) pays their workers a minimum of $11.49 an hour.
  • Belgium pays their workers a minimum wage of $11.69 an hour.
  • France (who the Republicans always make fun of) pays their little French fries $12.35 an hour (much more than the cheapskates in the GOP would ever pay them.)
  • In Monaco (another microstate, but located on the French Riviera) pays a minimum wage of $12.83 an hour.
  • The itty bitty teeny weeny little country of Luxembourg (where Mitt Romney likes to do his banking) can manage to pay their workers a bare minimum of $14.24 an hour (no thanks to people like Mitt Romney).
  • In Denmark there's no legally mandated minimum wage, but the average minimum wage for all private and public sector collective bargaining agreements was approximately $20 per hour according to the U.S. State Department last year.

And what about our friends "Down Under?" In New Zealand the minimum wage is $11.59 an hour for those under 18 years old, but it goes even higher to $14.25 for those over 18 years old. Wow! But in Australia it's a whopping $16.87 per hour.

But yet, in the good ole U.S.A. — this "exceptional" country — in this "land of opportunity" — in the "richest country on Earth" — our "job creators" only want to pay their hard-working American Patriots a minimum wage of $7.25 hour (slave wages, not freedom wages):

  • Donald Trump said American businesses can’t compete because “wages are too high” — so he would keep the minimum wage where it is.
  • Ben Carson said he did not support raising the minimum, because “every time we raise the minimum wage, the number of jobless people increases.”
  • Marco Rubio said “if you raise the minimum wage, you’re going to make people more expensive than a machine.”
  • Jeb Bush said raising minimum wage would "kill job growth".
  • John Kasich said “we do have a moderate increase in the minimum wage." (The state minimum wage in Ohio is $8.10 an hour.)

The mainstream media would rather micro-report on ISIS and Donald Trump's remarks 24/7, rather than mentioning stagnant wages, the decline of the middle-class or the real economy.

Census Report: Poverty Increased, Incomes are Down & Rents are Rising

The Census Bureau just released its latest update to the American Community Survey, publishing a trove of recent data on everything from education levels to economic indicators for the United States in 3,142 counties. The new numbers offer evidence of the lasting effects of the Great Recession and the ongoing financial stagnation faced by most Americans: In counties across the country, poverty rates are up and incomes are down, while rents are rising and home ownership is dropping. See the recent maps from Census.Gov:

Homeownership rates

Median gross rent

Median household income

Poverty

Senator Bernie Sanders (as a true Progressive) wants to restore the American Dream. Hillary Clinton (as a "moderate" Democrat) will only maintain the status quo. Democracy for America is now taking a poll for their official endorsement of a presidential candidate — this, from their website: "The endorsement vote is live right now — and will end at 11:59pm Eastern Time on Tuesday, December 15 — DFA will only endorse in this presidential primary if there is overwhelming support for one candidate." TWEET: Tell Democracy for America who they should endorse https://t.co/2mQicGY4dv #DFA2016vote #p2

But remember, we need progressive Democrats in Congress too (especially if you want a higher minimum wage).

4 comments:

  1. IRLE WORKING PAPER #124-15

    Are Local Minimum Wages Absorbed by Price Increases? (December 2015 by Sylvia Allegretto and Michael Reich)

    "Minimum wage policies need not result in negative employment effects or shifts of economic activity to nearby areas."

    http://www.irle.berkeley.edu/workingpapers/124-15.pdf

    ReplyDelete
  2. Senator Sheldon Whitehouse (D-RI)
    http://action.whitehouseforsenate.com/page/unsubscribe/

    Rep. Alan Grayson (D-Fl.)
    http://action.senatorwithguts.com/page/unsubscribe/

    Please tell us why you are unsubscribing:

    You endorsed Hillary Clinton rather than Senator Bernie Sanders. You are not a true progressive.

    ReplyDelete
  3. SEIU's Fight for $15 couldn't get McDonald's to the bargaining table in 2015, but it won a $15 hourly wage minimum in fourteen states and cities. But even so, SEUI enodorsed Hillary Clinton (who suggested $12 an hour) rather than Bernie Sanders (who asked for $15 an hour). Tech companies like Facebook and Google also instituted a $15 wage requirement for employees of their contractors.

    ReplyDelete
  4. New Pew Research Poll:

    Only 20 percent of Americans believe the economy will improve over the next year, less than a year ago when 31 percent once believed the economy would improve over the next year.

    Only 41 percent say that plenty of jobs exist in their communities

    81.8 million wage earners (52.5%) earn less than $30,000 a year — and of those, according to Pew, a whopping 68 percent feel they’re falling behind.

    73 percent of total respondents support raising the minimum wage.

    Pew Poll:
    http://www.people-press.org/2015/12/22/as-election-year-nears-public-sees-mixed-economic-picture/

    Wage Data:
    https://www.ssa.gov/cgi-bin/netcomp.cgi?year=2013

    ReplyDelete