The issue of the minimum wage has been a controversial one for the past decade, with the unwillingness of Congress to raise the minimum wage, which used to be raised automatically, based on the “cost of living” until the Presidency of Ronald Reagan.
Ever since, even despite occasional increases under George H. W. Bush and Bill Clinton, the argument has been that raising the minimum wage will cause more unemployment and raise prices for consumers dramatically.
But many say that is not the case, and that it is a situation of a basic human right, the ability to support oneself and one’s family, and that many of the people on the minimum wage are NOT young beginning workers, as claimed by critics, but rather people primarily of color who are single mothers with children.
Now Los Angeles has taken the bull by the horn, and mandated a $15 minimum wage in steps by the year 2020, and a few other localities, such as San Francisco and Seattle, have also raised the minimum wage, although not as high as Los Angeles.
There is a movement nationwide by fast food workers, and retail industry workers, to force an increase by demonstrations, with limited success at this time.
The fact is that IF the minimum wage was always based on the cost of living, the original minimum wage of 25 cents per hour in 1938 would not be about $22.00 an hour, so even what Los Angeles has mandated will happen, does not meet that standard.
President Obama has proposed a national minimum wage of $9 an hour, a small step forward.
It is clear that no worker, who works full time, should be expected to live in poverty, and if the rest of us must pay a higher price for goods and services, so be it!
Does increasing the minimum wage encourage business to automate (replacing workers with machines)?
It might, but this has been going on for decades anyway, and if people have higher wages, they spend it, and that helps business. There are both positive and negative aspects to the issue, but remember, IF the minimum wage was what it was worth in 1938, it would be $22 an hour, so it will still be below the cost of living when it was passed under FDR 77 years ago!
I also think there are both good and negative aspects, so that’s why it seems hard to pick one side. I can’t figure out how to tell which effect is stronger.
In 1987, the New York Times editorialized against any minimum wage. The title of the editorial said it all — “The Right Minimum Wage: $0.00.†“There’s a virtual consensus among economists,†read the Times editorial, “that the minimum wage is an idea whose time has passed. Raising the minimum wage by a substantial amount would price working poor people out of the job market. . . . More important, it would increase unemployment. . . . The idea of using a minimum wage to overcome poverty is old, honorable — and fundamentally flawed.†Why did the New York Times editorialize against the minimum wage? Because it asked the conservative question: “Does it do good?†But 27 years later, the New York Times editorial page posited the very opposite of what it had declared in 1987 and called for a major increase in the minimum wage. In that time, the page had moved further left and was now preoccupied not with what does good — but with income inequality, which feels bad. It lamented the fact that a low hourly minimum wage had not “softened the hearts of its opponents†— Republicans and their supporters.
Re: minimum wage: I agree that it’s a situation of basic human rights.
How can a price, the price of the service offered by the employee, which is set in the marketplace, be regarded a human right? How can forcing anyone to pay anyone more for their services than what the service is worth be considered a human right?
Max, it is a basic human right to have a wage that is not starvation level. As FDR said, “Freedom From Want”.
If anyone cannot afford to pay basic expenses, and millions of Americans, not just teenagers, are unable to support themselves, then it is better to earn a living wage than depend on the welfare system. Money earned gets spent, so good for business and employers!
All you are doing is “pricing poor unskilled people out of the job market” , thus welfare cost rise and your are denying the young the first step up the ladder of employment. Haven’t you seen the youth unemployment rate, specially among blacks? It’s terrible what the government system is doing to them.
Why is it unjust that the cost of living of the minimum wage continued until the rise of Ronald Reagan and George W. Bush, and now the minimum wage is ONE THIRD of what it should be IF it was continued as had been between 1938 and 1981?
And poverty has increased, and deprivation, as minorities become a permanent “slave labor” class, and single mothers are faced with impossible situations, which causes more crime and deprivation for everyone as a result!
A “living wage” is not too much to ask of a country that says it is the leading nation in the world!
Let me ask you this. Are you in favor of importing cheap unskilled labor to compete with American low skilled workers? In other words do you favor amnesty for illegal immigrants, open borders and more illegal immigration? Because if you do, then I don’t understand how on earth you can be with the American worker. I remember the day when the Democrat party was against illegal immigration. So if you want amnesty, that means you want more illegal immigrants. You know how I know? Because we have tried amnesty before in the 80’s and what did we get? More illegal immigration! Oh and what a coincidence that the low skilled working man salary stagnated after that? You should read a study that looks at the pattern of salaries and influx of low unskilled illegal immigrant workers.
And do you, Max/Juan, favor manufacturing companies moving work overseas, taking jobs away from Americans?
Max, I do not favor the continuation of illegal immigration, BUT we cannot deport 11 million people, and since 99 percent are NOT criminals, and since they contribute to our nation in so many jobs, and are harder working than many Americans, we need to pay them a living wage, instead of treating them or other workers like peons or slaves!
And remember, it was not so long ago that your ancestors and my ancestors were immigrants, and faced the same prejudices and discrimination that immigrants, legal or illegal, face now.
And believe me, many of our ancestors to this nation were illegal immigrants too, just that no one wishes to admit the past of their descendants. Not everyone is accounted for at Angel Island or Ellis Island or elsewhere.
Nativism is always wrong, and still is, and we are still the nation that many immigrants flee to, in order to escape political and religious persecution, and economic hard times. I would not want this nation to be anything else, as we are the beacon of the world!
Rustbelt: So we have the worse of both world. A governmental tax and regulation policy that make small/middle american business uncompetitive, but these small/mid size business can’t move their companies oversees as the multinational companies do. Our corporate taxes are the highest in the industrialized world and thus we incentivize oversees profits,which stay oversees, and to top it off we import illegal alien low skilled workers to compete with the battered american citizen/legal resident workers.
Ah. Your answer is just as I suspected. I consider outsourcing to be unpatriotic. That’s why I’m against the TPP.
Absolutely not true! US corporations are NOT paying the world’s highest tax rate.
http://thinkprogress.org/economy/2013/04/01/1804801/no-american-corporations-aren039t-paying-the-world039s-highest-tax-rate/
Princess Leia. I say we have the highest corporate tax rate in the world, meaning the statutory tax rate, I never said multinational corporations are paying it. That is exactly the point. As noted on the note you linked us to : “corporations as a whole do not, largely because they are keeping record amounts of money in offshore tax havens in countries where they barely do business at all.” And why are they keeping the money offshore? Because of the statutory tax rate! They keep it off shore to pay a lesser rate! The United States has the third highest general top marginal corporate income tax rate in the world at 39.1 percent, exceeded only by Chad and the United Arab Emirates. The worldwide average top corporate income tax rate is 22.6 percent. http://www.usnews.com/dbimages/master/6339/GR_PR_080815_Tax2.png
Why is it that it is so difficult for many on the left, and even some Republicans, to distinguish between legal immigrants (God Bless them) and illegal immigrants? Is the United State the only country that is not allowed to have their immigration laws respected? When asked immediately the response it, we are not in favor of illegal immigration, what are we going to do, deport 11 million? Ok then how are you going to stop illegal immigration then? Why is it unreasonable to first fix this illegal immigration issue, in other words make not only the border secure but also go after those that overstay their visa, which are over 35% of all illegals by the way, and then deal with the illegal immigrants that remain?
The problem is that we allow corporations to control the government, rather than the government control the corporations! TR knew what he was talking about a century ago!
Exactly right Professor!
Good grief! Some seem to have a one track mind.