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Should Lawmakers Raise Minimum Wage?

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Talk about a double edged sword – our nation’s lawmakers are at odds again, this time over the potential raise in minimum wages. There’s no denying that more money in our pockets means better odds that we can save more and pay down our debt, but the problem is with recent tax increases, the upcoming Obamacare laws and the fact that our unemployment hasn’t budged in months, can companies afford a hike in pay for their employees?

Apparently, at least two lawmakers, Sen. Tom Harkin (D-Iowa) and Rep. George Miller (D-Calif.) believe it should be raised and plan to jointly introduce legislation this week that would raise the federal minimum wage to $10.10 per hour. They say it will be more in line with inflation. Harkin calls it a “matter of justice”.

Uneven Playing Field

And, they have a point, frankly,

When you see what’s happened to CEO salaries and compensation since the 1970s, and what’s happened to the minimum wage, it’s just startling,

Harkin said.

We can’t continue on this way. We need a higher minimum wage.

Miller agreed and reminded listeners that no one walks away after a raise in minimum wage as “rich”. The fact that President Obama eluded to his goals during his State of the Union Address several weeks ago adds to their determination, even if they’re wanting to see minimum wage in the double digits while the president’s goal was to hit the $9 mark via increments, through 2015.

During the address, he argued that no one earning minimum wage should have to live in poverty. What he doesn’t realize, for whatever reason, is millions would still be living in poverty even if the rate was raised to his $9 suggestion right away. If you haven’t noticed lately, gas prices are soaring and the cost of a gallon of milk has doubled in some areas. This isn’t even taking into consideration credit card debt, student loan debt and higher bank fees that we’re beginning to see.

The president also encouraged lawmakers to revise the way tipped workers are paid. Of course, there’s not been anything done to date, though the possibility exists that it will become a political pawn in next year’s election cycles.

Wage Floor Eroded

Meanwhile, the two Democratic politicians who are seeking to hit the $10 mark say it should happen right away as the current “wage floor” has “eroded”. They both also encourage their fellow lawmakers to look at it as not catching up to what it should be in small steps, but rather, establish what it should be in one swift act. And they say Obama’s recommendations are too low and that if he “index(es) it to that level, you lock people into a sub minimum wage”.

There have been no raises since 2009, when President George W. Bush’s final increment kicked in at $7.25. We’ve had a recession since then. And we’ve had record foreclosures. And massive job losses. While these are all fine reasons to revisit the debate, these are also the very reasons companies say they can’t afford to up the minimum wage.

Political Promises

Remember, too that right after he was elected into office in 2009, Obama made it clear he intended to raise the minimum wage to $9.50 by 2011 and then tying it to increase automatically to account for inflation. Little more was said after he went into office and the rate remains at a $7.25. Admitting they’re pushing the envelope, Harkin and Miller said the $10.10 rate would allow the minimum wage to rest closer to its true value – something that hasn’t happened since before the Vietnam War.

There’s plenty of opposition, as mentioned and with the biggest sure to be found with business owners, there are those who believe an increase of any kind isn’t likely in the near future and that if it’s forced, it could have catastrophic repercussions, especially for small business owners. Already the two have failed to bring it full circle during the past two Congressional sessions. Both the U.S. Chamber of Commerce and the National Restaurant Association were ready to argue that raising the minimum wage will hurt job growth and force employers to cut back on hours.

They’re ready with their excuses, though.

Republicans will throw up a smokescreen about it costing jobs,

Harkin said of the new effort.

Still, they remain optimistic and say it’s always a slow political dance. “It takes time,” said Miller. It’s likely it will be introduced in a package of other budgetary changes, which can help or hinder their efforts depending on what else is included.

The increase signed into law by Bush, for instance, was passed in 2007 as part of a military spending bill that included some sweeteners for the business community, including a small business tax cut,

he continued. It could be that the lack of any increase in the past several years will be enough to push some kind of increase through. Plus, the public wants to see the wages increased.

Still, they argue that by raising the minimum wage, it would allow many families to come off of public assistance. That is, of course, if there are any jobs to fill. The new unemployment numbers are due out this week and it’s not likely to drop significantly.

Ahead of the Curve

Already, there are several states – 19 to be exact – that have minimum wages higher than the federal rates. Another ten states already have their rates linked in with inflation and the argument could be made if the federal rate is linked to the inflation numbers, it could remove the political debates such as what we’re seeing now in their entirety. If the two lawmakers can’t drum up enough support, they say they’re considering tacking it onto a larger legislation while also making it an issue for the 2014 elections. And see? Who says politics aren’t at play?

Summarizing it nicely, Miller told the media,

Historically, the way it’s played out, you have these skirmishes…everyone writes their editorials…but at the end of the day, the American public knows that it’s very unfair for people working for low wages who can’t support themselves, that they go to work every day, in some cases at very difficult jobs, and they end up poor.

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One Response to 'Should Lawmakers Raise Minimum Wage?'

  • by Dona Collins on March 6, 2013

    Everything else we touch is impacted by inflation – cost of food, fuel, living expenses – everything. It makes sense that the federal minimum wage should inflate slightly along with the rest of the economy.

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