Today, the nation’s minimum wage climbs 70 cents.
Yesterday, I bought a chicken and it cost me $2 more than just a few months ago. Bread is up $1, milk is up about 60 cents, and every time I buy fruit or vegetables I go into shock when the cashier rings them up. I’m not even going to get into how much more we pay at the pump.
What does this mean — it means with inflation skyrocketing the measly 70 cent hike to minimum wage for nearly 2 million workers is not only just a drop in the bucket, but a big nose-thumb to those poor souls who only get paid the minimum.
The new minimum is less than the inflation-adjusted 1997 level of $7.02, and far below the inflation-adjusted level of $10.06 from 40 years ago, according to a Labor Department inflation calculator.
And when I say poor folks, I mean poor. The increase in the minimum wage is the second of three increases that were part of a law passed in 2007, and with the recent hike to total per hour is $6.55 cents. That means $13,624 a year if the worker never takes any time off, and that means a family of four living on that wage would still be under the poverty line.
There wasn’t much hoopla over the increase today. I couldn’t even find mention of it in the three newspapers I read every morning. I’m having my intern Katherine check now to make sure I didn’t miss it.
I don’t blame the mass media for not covering it much. It’s an embarrassment that during the last decade when Wall Street bestowed unfathomable riches on so many; and the gap between the working stiff and the elite in this country reached historic proportions, that Congress would pony up only a few cents for the people at the lowest rung of the economic ladder.
I have to say, I’m surprised there hasn’t been more of an outcry from liberals or the religious right.
Poverty in the richest country in the world is a slam to equal opportunity, no?
Poverty in the richest country in the world is a sin, no?
July 24th, 2008 at 9:51 am
“I couldn’t even find mention of it in the three newspapers I read every morning. ”
Why do you think that is? It’s because it doesn’t matter! We live in a capitalist society where wages are determined by the market, not the government.
“According to the U.S. Department of Labor, the median annual income of a U.S. worker is $32,140. Federal minimum wage is currently $5.85 an hour, or about $11,500 per year — just above the poverty line. Of the 76.5 million people paid by the hour in the United States in 2006, 2.2% make minimum wage or less.”
http://www.getrichslowly.org/blog/2007/10/09/who-earns-the-minimum-wage/
So only 2.2% of the population makes minimum wage, let’s break that down even further.
“More than half (51.2%) of minimum wage workers are between 16 and 24 years old.”
So you are hurting businesses by federally mandating that people pay high school students extra money to buy iPods and clothes…. hmmm…
Who else gets paid minimum wage? Waiters and waitresses, who get paid mostly in tips anyways!
“Most minimum wage earners work in food service. Nearly two-thirds of those paid minimum wage (or less) are food service workers. Many of these people receive supplemental income in the form of tips, which the government does not track.”
For more stats, check out federal labor statistics: http://www.bls.gov/cps/minwage2006.htm
A federally set minimum wages is just political posturing that hurts our market system, get rid of it and let the market work (it is already!).
July 24th, 2008 at 10:27 am
While 51.2 percent of minimum wages earners are under 24, nearly 50 percent are 25 plus. It might appease us all to think minimum wages workers are just funding their fashionista fix, but for many of these workers that is simply not true. They are struggling to support themselves and their families.
Waiters and waitresses do not make minimum wage. Federal guidelines mandate that they make $2.13 an hour because they do also receive tips.
I wonder what those food service workers would be paid if there was no minimum.
July 24th, 2008 at 11:00 am
Yes, the other half of minimum wage earners (25+) making minimum wage are waitresses and those paid in tips. The federal government may set the $2.13 rate for those people but, they still lump them in as people who make minimum wage or less in their statistics because they don’t track tips.
The vast majority of minimum wag earners therefore, don’t actually make minimum wage, they just have other incomes like tips or commissions (that’s what I had while working for Sears) and those who do are kids who are just making extra money for MP3s (and most of them even make more then minimum wage because they won’t work for less, the market at work!).
Let the market decide and stop wasting our time and taxpayer dollars with useless minimum wage laws.
July 24th, 2008 at 11:02 am
“I wonder what those food service workers would be paid if there was no minimum. ”
Exactly what they are now, which on average is way above minimum wage! Why? Because the market dictates wages, not the government!
I would hope that a business blog and it’s readers would understand basic economic concepts like these.
July 24th, 2008 at 11:34 am
I had a startling conversation a couple weeks ago, where people where telling me they can’t imagine anyone being able to live on $18/hr.
Companies are paying less and less for skilled workers. I know of one international company that in the last year or so cut wages 15% across the board at a local office, with employee medical benefit contributions up $1000/month for some employees. Factor in car expenses (gas, insurance, repairs, payment), food costs, and other living expenses, it’s no wonder so many people live on credit these days.
July 24th, 2008 at 12:58 pm
Jenn-
I am glad this company you are describing is an exception to the rule, both skilled and unskilled wages are constantly increasing without government interaction. If you would like to see it graphed, here is the link:
http://www.visualizingeconomics.com/2006/08/15/average-income-in-the-united-states/
There are always going to be businesses that have rough times but, wages are regulated by market factors and should not be touched by congress or any other regulating body.
Minimum wage laws just charge the taxpayer for a regulatory body (someone to enforce bogus wage laws), not to mention all the hot air debating it in congress for something the market is already doing more effectively!
July 24th, 2008 at 4:43 pm
Poverty is not, and never has been, a sin.
Having wealth is not, and never has been, a sin.
Being rich and despising the poor is a sin.
Being poor and despising the rich is a sin.
Being rich and doing nothing to share your wealth with the poor is a sin.
For some reason, many (most?) of the poor seem to have little trouble sharing what little they do have.
If we have shoes on our feet, we are among the wealthiest people on earth. In the United States, even many of the poor have shoes, basic food, and shelter. Not all have these in equal proportions. Hunger is known by some in this nation. In other nations, hunger is known by many (most?).
July 24th, 2008 at 4:45 pm
Eve, in Minnesota, waitstaff also get the regular minimum wage, not the minimum wage allowed for persons receiving tips.
Interestingly, I was at a furniture store earlier this year where none of the salespeople were paid an hourly rate. They were only paid commissions on their sales. Now I understand why I’m always attacked by salespeople when I go there.
July 24th, 2008 at 5:41 pm
(2008-07-24) — Today’s 70-cent per hour increase in the federal minimum wage has sparked a boost in prices at grocery stores and gas stations as employers attempt to recoup the cost of the higher wages they must now pay their entry-level employees.
As a result, many minimum wage workers can no longer afford the groceries they sack, nor the fuel dispensed at the convenience stores where they work.
Democrats who pushed the minimum wage hike through Congress last year, said they plan to address the problem by requiring retailers to raise their prices so they can afford to pay their workers enough to buy the pricier products.
http://www.scrappleface.com/?p=3025