Minimum Wage Hike?
The stars are beginning to align around an increase in the minimum wage. The Republicans are under intense pressure from their moderate wing to do something that might shore up support in the Northeast where many of their seats up for re-election this fall are very vulnerable. The New York Times makes this point here: G.O.P. Nears Vote to Increase U.S. Wage – New York Times
As usual we can expect to hear squeals from the business community about the damage to job creation that a hike would do. But let’s consider the facts: profits are taking a higher percentage of the economy than any time since the 1930’s; and the minimum wage, adjusted for inflation has less purchasing power than at any time since the early 1950’s. You have to go back all the way to 1949 to find a year in which the minimum wage was less as a percentage of the average wage.
This tells me that it’s high time for an increase. Yes I agree that job creation will be slowed down. Globalization has made our low wage jobs vulnerable to foreign competition, particularly from places where the wage rates are especially low. But American profits are very high so companies have already milked their low wage labor; and a very large number of low wage jobs are in the service sector or agriculture where foreign competition has far less impact.
An interesting study of the issue can be found at the Economic Policy Institute, here: Minimum Wage Analysis .
The Democrats have been pushing for a minimum wage increase for some time. It will be interesting to see how they avoid losing this issue during the election run-up.
In any case this is good news for a change!
UPDATE:
I spoke too soon!! Those Republicans aren’t going to leave their rich friends behind, so they are planning to attach the minimum wage hike to a bill handing out more tax cuts for the really, really wealthy. CNN has the story here: GOP Tax Cut Wheeze This is really low. Now the Democrats will be put in the position either of having to vote for a tax cut they can’t stand, or of opposing a minimum wage hike. That’s ugly. The Republicans simply cannot get away from handing out cash to the wealthy. And we have a massive deficit to fund! This is politics of the worst kind. It is a wanton slap at the working poor.
