Time To Raise Minimum Wage, Way Behind Cost Of Living!

President Barack Obama has proposed raising the federal minimum wage of $7.25 an hour to $9.00, and immediately the Republican Party comes out strongly against it.

If a person is making the minimum wage full time, he or she is earning an annual income of about $15,000, while if the wage is raised to $9.00, the annual income is about $19,000. Neither is an adequate income for anyone to live on, but it is a step upward toward leaving poverty over time, as one, hopefully, moves up at work, and gains a higher wage with growing responsibility on the job!

When the minimum wage was passed into law in 1938, under Franklin D. Roosevelt’s New Deal legislation known as the Fair Labor Standards Act, the pay was 25 cents per hour.

Wage increases kept up with the cost of living until 1981, when Ronald Reagan worked to lower the minimum wage, and failing at that, refused to sign an increase in the minimum wage. And George W. Bush did not sign an increase for the first six years of his Presidency.

As a result, the minimum wage fell behind the cost of living, and if it was to match the level it had been from 1938 to 1981, it would now have to be $13.00, or an annual income of $27,000.

Can anyone, realistically, live on even $27,000 and be able to pay one’s every day expenses? The answer is NO, so raising it to $9 an hour is far from bringing back the cost of living to what it had been, but it is an important first step, and would increase purchasing power and aid the growth of the economy, and would only increase costs to consumers by one to two percent, in the estimate of most economists.

A popular idea, it is time for the Congress to do what is right, and help low wage workers to help themselves! It would actually improve the image of the Republican Party among such workers, and would help to revive the chances of the GOP rising from the ashes of losing the popular vote for President five of the last six Presidential elections, and its low ratings among the American people in public opinion polls.

10 comments on “Time To Raise Minimum Wage, Way Behind Cost Of Living!

  1. Juan Domingo Peron February 16, 2013 9:50 am

    Why not raise it to $30 per hour?

  2. Ronald February 16, 2013 10:36 am

    Oh come on, Juan, how insensitive can you be? That kind of sarcastic comment is uncalled for, for a person who utilizes what he “considers” rational arguments! LOL Do you realize the minimum wage of 25 cents per hour in 1938 is now more like 14 cents per hour equivalent in 2013, 75 years after the Fair Labor Standards Act? Is that progress?

  3. Juan Domingo Peron February 16, 2013 12:17 pm

    All I am saying why leave the minimum wage a purely survival levels? Lets wipe out poverty once and for all. All I am asking is what is the rationale for leaving the minimum wage so low? Don’t you want to eliminate poverty and bring everyone to the middle class?

  4. Ronald February 16, 2013 2:08 pm

    I am not sure what “game” you are playing here, Juan! LOL

    You sound like a modern liberal or progressive by what you say here, and I have to say I really doubt you have had an “epiphany”! LOL

    In my mind, it would be great if we could end poverty, but I know you feel that the War on Poverty was a failure, while I feel it did not get a full chance to succeed, because Hubert Humphrey did not defeat Richard Nixon in 1968.

  5. Juan Domingo Peron February 17, 2013 10:29 am

    Is a high school dropout with no work experience worth the minimum wage? Are all jobs (sweeping the shop floor, for example) worth the minimum wage? You could have a job that pays $4 an hour where you learn something, develop good work habits, and increase your marketable skills and move on to a better paying job, or you could have no job, earn zero dollars an hour, and have no chance make progress. The true “minimum wage” is not $7.25, it’s zero. The minimum wage doesn’t assure a “living wage,” rather it assures a job-killing wage. At a time when the nation is desperate for “job creation” the minimum wage is by far the worst job destroyer. Minimum wage laws effectively outlaw all jobs with less economic value than the minimum wage. Rather than appreciating the fact that there are millions of job situations in our economy, such laws apply the government’s typical, crude, one-size-fits-all approach.There are people who would like to work for $4 an hour, and there are employers who would like to hire them for that wage. However, for them to enter into such a transaction is a criminal act. Some far-away clueless politician has arbitrarily decided that $4 an hour is not fair and not enough to live on. The clearest evidence for the damage done by the minimum wage laws is the unemployment rates for teenagers, particularly minority teenagers. Today the overall unemployment rate in the U.S. is 7.9 percent. For those 16-19, the rate is more than twice as high (20.8 percent) and for black teenagers the rate is more than four times as high (37.8 percent).

  6. Ronald February 17, 2013 11:31 am

    I see what you are saying, but this is advocating getting rid of child labor laws, and treating young people as an expendable group who can be exploited by greedy companies who have no problem taking advantage of them. This is what Ronald Reagan promoted in the 1980s, lowering the rate for young people, and it was, thankfully, stopped by the Democratic controlled House of Representatives, along with other extreme ideas mentioned by others in the Reagan Administration, or leaked to the press, and then Reagan said he had never, personally, advocated such ideas, a cute way of avoiding direct blame, which helped to make him the “Teflon” President! No President ever got so much “pass” as he did, because of his charming personality!

  7. Juan Domingo Peron February 17, 2013 12:28 pm

    No, you don’t see what I am talking about. You see what you like to see. First of all , no one is advocating eliminating child labor laws, good grief! We are not going nor wish to see children work on coal mines or sweat shops! Why do you always take the argument to the extreme? Why am I asking if I already know the answer. I asked a simple question. Is a high school dropout with no work experience worth the minimum wage? Are all jobs (sweeping the shop floor, for example) worth the minimum wage? Yes or no? I am talking about young people who might not be interested in college or are drop outs , but nevertheless could learn a trade, a skill and start working up the ladder. Those so-called minimum wage jobs are not for people to stay there all their life, but to learn and move on. As it used to be in America and in other countries. But that has been killed in America and what are the results? High sky unemployment among the young and minorities in America. These people have nowhere to start. But that doesn’t matter, right? Minimum wage law is an easy and alluring fix for politicians. Rather than having to tax the private companies and spending the proceeds on welfare, they dictate that the private companies do it directly. It’s deceptively simple and straightforward. Besides being insidious, it’s also counterproductive. Minimum wage laws do not decrease poverty, they actually increase it, probably more than any other single law. Leftist politicians don’t even mind that minimum wage laws destroy jobs and create more poverty. More poverty simply provides them with more opportunities to do what they love to do, that is, increase the size and scope of government. The jobs destroyed by minimum wage laws just mean that more money needs to be spent on unemployment compensation, food stamps, and redundant job-training programs. They have an abiding faith in the effectiveness of force and coercion. They aren’t the least bit hesitant to use force in achieving their goals. Obamacare is one gigantic application of force to our society and economy. Social Security forces every employed person to devote part of his income to a government-run pension plan. There is perhaps no law more popular and less questioned by progressive/liberals than minimum wage laws. Tell a progressive/liberal that you are opposed to minimum wage laws, and he or she will look at you as if you are a heartless ignoramus. I’ll bet you could not find a single progressive/liberal who has the least degree of doubt about the wisdom and effectiveness of minimum wage laws. Being in favor of minimum wage laws gives you the satisfaction of thinking you’ve done something good even if the actual results are harmful. This ideology is about feeling good about yourself. It is public policy based on self-indulgence. In progressive/liberal never-never land, intentions are all that matter. Intentions are the be-all-and-end-all of public policy choices. Results be damned!

  8. Ronald February 17, 2013 1:09 pm

    The cost of living has increased so that the minimum wage is the equivalent of “slave labor” in tone, as the average American from 1938 to 1981 could actually do far better in survival, but since then the minimum wage has been under 60 percent of what it was from 1938-1981. So while I understand what you are saying, I do not have the means to justify paying ANY worker less than the average for low wages for a period of 43 years. It is because of conservatives, led by Reagan and Bush II, that we are in this situation now.

    Business should pay, rather than pass on the burden to government, as for instance, Walmart is infamous for doing–paying very low wages and refusing to give health care to their workers, who have to depend on Medicaid and Food Stamps! And the cost to consumers is very minimal, if business decides it must raise prices to make up for the rise in the minimum wage, and most consumers will not have an issue with that.

  9. Ronald February 17, 2013 1:22 pm

    Also, Australia has a much higher minimum wage, and it has not had a deleterious effect on the labor market. A lot of the problem here is the refusal of corporations, many of them helped out of financial crisis by government, to open up and use their large amount of funds that are being withheld as a way to force government NOT to discipline them through the Consumer Financial Bureau promoted by Elizabeth Warren, and now being undermined by Republicans. It is purely politics by them, including fighting ObamaCare going into effect. The Chambers of Commerce is a major villain in this political game, exasperated that they could not defeat Obama.

  10. Juan Domingo Peron February 17, 2013 1:33 pm

    Who are you, or anyone else for that matter, to say most consumers will not have an issue with paying more? Do you know what is the average profit margin in the US? Furthermore it is not you who decides what should be paid but the market and if the purchasing power of the average salary is less than it was 70-80 years ago, well then guess who’s fault it is?? The private sector is based on voluntary exchange. Employers are not forced to hire a certain number of workers. If a worker adds less value than the minimum wage, an employer would lose money by hiring him. The fundamental problem is that some people have an insufficient value on the labor market. That is the problem we need to focus on if we want everyone to have a “living wage.” Reforming the dysfunctional public school system would be a good place to start. Minimum wage laws attack a symptom instead of its cause, another distinctive characteristic of progressive/liberalism. So long as our economy relies primarily on voluntary exchange, so long as any individual freedom remains, reliance on force and coercion will have limited success. Self-interest, ingenuity, and individual initiative will largely frustrate the grandiose schemes of the control mongers. The fact that everyone does not simply and sheepishly acquiesce when force is applied is the leading explanation for “unintended consequences.” It is also why one law usually begets another.The government can pass a law defining a legal “minimum wage.” It cannot, however, pass a law defining the “equilibrium wage” (or the equilibrium price of anything). An equilibrium price is that price where the quantity supplied equals the quantity demanded, the price where the supply and demand curves intersect. It is the “market clearing” price, the price where there is no shortage or surplus. A legislated price almost always results in a shortage or a surplus, depending on whether it’s set above or below the equilibrium price. Rent control laws are set below equilibrium rents, so the result is an apartment shortage. Minimum wage laws are usually above the equilibrium wage for low-skill, minimum experience workers. The result is a “surplus” or excess supply of such workers. In labor markets excess supply is called unemployment. Unemployment does far more harm to individuals and society than wages that are defined by someone as unfairly low. Shortages and surpluses represent frustrated voluntary exchange.

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