14 Dec 2006 @ 8:33 PM 

Let me preface this with the admission that I am not making, and have never made minimum wage. Sure, during the early years of my indenture to the U.S. Army, I’m sure the wage I made, prorated hourly, was a pittance. But, they did give me a crappy room to crash in and some mediocre food and medical care. So, better than many.

This week, I had a conversation with my boss about the death of the minimum wage. He is convinced that we do not need to raise the minimum wage for any reason, letting the market decide how to pay things. So, here’s a few things that I can point to as some backing for my opinion (everyone has one) that the stagnation of our minimum wage is a bad thing for the country.

30 million Americans– one in four U.S. workers– make less than $9 per hour, or just $17,280 a year (For a family of four, the poverty threshold was listed as $19,307 in 2004.). That’s a lot of people, and they are often happy to get 9 bucks instead of 6.

Historically speaking, every time the minimum wage gets raised, employment goes up. One quick example: Santa Fe, New Mexico, raised their local minimum wage to $9.50/hr. They then had a 2.3% job growth rate, higher than the New Mexico state average. At the same time, 10% of the people on the TANF rolls have left those rolls. Unemployment is 3.8% (NM is 5.3%).

If the minimum wage had increased at the same rate as CEO pay between 1990 and 2005, the minimum wage would be $23 per hour.

The island of Saipan, part of the Marianas – a USA Territory, has a minimum wage of $3.05/hour. Chinese businesses have been taking advantage of this to run sweatshops for decades, paying Chinese or Taiwanese workers who think they’re going to “America” and end up in barbed wire-enclosed compounds, living in tiny bunks and spending their paltry wages in the company store. Sound like a throwback to the 19th Century?

I just find it difficult to believe that any company would pay their employees a living wage if they weren’t mandated to do it. To claim, as my boss did, that there is no need to raise the minimum wage for jobs that have no annual increase in productivity, is ridiculous as well.  At least keep pace with inflation!  To do any less is to condemn workers to make less money each year for doing the same job.

Posted By: Gary
Last Edit: 14 Dec 2006 @ 08:33 PM

Categories: Economics


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