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Elizabeth Warren Wonders: Why Aren’t Employers Paying $22-an-Hour Minimum Wage Rates?

Mar. 18, 2013 1:30pm Becket Adams

Democrat Senator Elizabeth Warren during a hearing of the Senate Committee on Health, Education, Labor and Pensions last week asked why the current federal minimum wage rate is only $7.25 and not $22 an hour.

“If we started in 1960, and we said that, as productivity goes up — that is, as workers are producing more — then the minimum wage is going to go up the same,” the Massachusetts senator said during the hearing.

“And, if that were the case, the minimum wage today would be about $22 an hour. So, my question … is what happened to the other $14.75?” she asked University of Massachusetts professor of economics Arindrajit Dube:

In her apparent support for an increase in the federal standard, Sen. Warren joins President Barack Obama in suggesting that the current minimum wage rate should be increased.

The president during his State of the Union Address in February called on Congress to raise the federal minimum rate to $9 an hour.

“We know our economy’s stronger when we reward an honest day’s work with honest wages. But today, a full-time worker making the minimum wage earns $14,500 a year. Even with the tax relief we’ve put in place, a family with two kids that earns the minimum wage still lives below the poverty line. That’s wrong,” he said.

“That’s why, since the last time this Congress raised the minimum wage, 19 states have chosen to bump theirs even higher,” he added. “Tonight, let’s declare that, in the wealthiest nation on Earth, no one who works full time should have to live in poverty — and raise the federal minimum wage to $9 an hour.”

However, as many, many economists argue, whether it’s $9 or $22, an exponential increase in the federal standard could have a disastrous effect on the economy (not to mention the deleterious effect the minimum wage itself already has on the free market).

First, a higher rate would force employers to cut back on hiring. Second, do you have any idea what an increase in the cost of labor would do to the cost of products/services? Third, the argument itself for blindly increasing the rate, with disregard for regional cost of living, leaves something be desired: If merely raising the rate from $7.25 to $9 or $22 would solve “income inequality” and unemployment problems, then why not just increase the rate to $50, $100, or even $1,000?

Lastly, if increasing minimum wage is a cure-all for unemployment and “income inequality,” consider this list of the top 10 states with the highest unemployment rates in the U.S. (the states with minimum wages higher than the federal standard are in boldface):

10. GEORGIA (Unemployment Rate/Minimum Wage Rate: 8.7/$7.25)
9. SOUTH CAROLINA (8.7/$7.25)
8. MICHIGAN (8.9/$7.40)
7. ILLINOIS (9.0/$8.25)
6. MISSISSIPPI (9.3/$7.25)
5. NEW JERSEY (9.5/$7.25)
4. NORTH CAROLINA (9.5/$7.25)
3. NEVADA (9.7/$8.25)
2. CALIFORNIA (9.8/$8.00)
1. RHODE ISLAND (9.8/$7.75)

Just some food for thought.

–

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Comments (511)

Ziggy
Posted on March 18, 2013 at 2:08pm
Every time I see a photo of that woman I get angry.

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Beachmastermax
Posted on March 18, 2013 at 2:07pm
If the GOP were smart, they would gode the Dems into backing this insanity and then made sure it passed, telling the American people that they are going to go along with this as an instructional tool.

Unemployment would skyrocket to 50% over night. Maybe then America will get its head out of it’s rear.

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Independent_Bill
Posted on March 18, 2013 at 2:07pm
Simple reason, you liberal headcase: I don’t want to pay $9 for a Big Mac and $12 for my Big Gulp.

Inflation anyone?

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JoeInMaine
Posted on March 18, 2013 at 2:06pm
Being a lawyer she does understand the law, yes? If the minimum wage law is raised to $22 an hour then it is ILLEGAL for me to hire someone worth only $20 and hour. There’s Granny Warren standing at the intersection of “Do-gooders and Big Labor.

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welovetheUSA
Posted on March 18, 2013 at 2:06pm
The people who voted for this idoit deserve Everything they will have to endure with this complete insane drudge.

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Nabuquduriuzhur
Posted on March 18, 2013 at 2:05pm
From National Wave of Foolishness, UbP: “Wages have crashed for five main reasons. First, in the late 1980s, when women entered the workforce in large numbers, effectively doubling the numbers of workers trying for the same jobs. Second, in the early 1990s when Baby Boomers started becoming the controllers of most large and medium businesses and with the Boomers’ control came the business-destroying short-term greed and lack of morals that wiped out or crippled so many businesses. The third was the group of free-trade agreements that exported the U.S. manufacturing base. The fourth was the mass importation of technological workers who would work for practically minimum wage in the late 1990s and 2000. The fifth— 60+ million illegals entering the nation— finished the job of reducing wages in the 2000s.”

“Republicans, wanting something for nothing, have fought every increase in the minimum wage that I can remember, not realizing that more demand for products and services has followed the increase in wages, every time. Even today, you have IDIOTS in that Party saying getting rid of the minimum wage is a good idea.

Good idea for whom? What do they think would happen in a depression (like the current one that started in 2009), if there was no minimum wage, when perhaps a third of employers have no morals at all and at least half of today’s employers have no real concern for the employee? (Don’t write me on that one— the actions of employers in the last 19 years

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- Nabuquduriuzhur
  Posted on March 18, 2013 at 2:06pm
  “19 years speak far, far louder than words ever could.) And when wages crashed as a result of no minimum wage, what’s the effect on the economy of that? Less demand for goods and services, so layoffs and thus less demand for goods and services and and more layoffs and so on in a downward spiral. Since there would be no minimum wage as a check on that spiral, the bottom the economy would ultimately crash to would be similar to the Great Depression.”
  
  “There is an insane idea that the lower the wages are, the better it is for business.
  
  The opposite is true in actual practice— until wages actually start impacting the product’s price. Sound strange? It’s not. Whenever the minimum wage goes up, it sparks economic activity for the state that the increase occurs in. This has happened every time that wages are raised in a state or the nation in the last 50+ years.
  
  Why? Because the economy is dynamic, not static. If people have more money, they buy more services and goods. With that resulting greater demand, more people are employed to meet the demand. Those people in turn hire persons, who in turn spend their money on goods and services, and so on. The economy expands. When wages drop, such as with illegal immigration depressing wages, the reverse happens, with the economy shrinking due to fewer people being able to afford goods and services. The demand for goods and services that individuals and businesses would have bought…”
  
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perry1980
Posted on March 18, 2013 at 2:05pm
because if the paid them that much they would all be out of business.
that or we would all be paying 20 bucks for a burger and fries

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- Nabuquduriuzhur
  Posted on March 18, 2013 at 2:12pm
  Not at all. The cost of the typical restaurant for labor is less than 10% of total expenses. The entire cost is typically paid for in the first five minutes of a shift. (I note I got my start in restaurants).
  
  Labor cost for producing the actual products is becoming almost inconsequential. When a hundred or so people in a company employing tens of thousands account for a third or more of the total compensation, that effectively destroys the profitability of a company.
  
  A good example was electric drills. In the 1990s, it was three times the cost of a japanese drill for an american one. Despite labor costs half that of japan, metals and other costs that were less than japan. What drove the prices up were the hundreds of top employees who made millions. You can’t rob the company of most of its money and then the products to compete.
  
  Report this comment
michaelmoron
Posted on March 18, 2013 at 2:03pm
I hate the woman, but she is right.

When I came out of High school in 1983, ANY entry-level job, with NO experience or HS diploma, was $6 an hour.

If wages had stayed equal with inflation, I figured the same job would pay $18 per hour, today.

Inflation is due to us not printing our own money based on a tangible asset.

A fiat currency kills us.

“People who will not turn a shovel of dirt on the project, nor contribute a pound of material, will collect more money, from the United States, than will the people, who supply all the material and do all the work. This is the terrible thing about interest… But here is the point: If the nation can issue a dollar bond, it can also issue a dollar bill. The element that makes the bond good, makes the bill good, also. The difference, between the bond and the bill, is that the bond lets the money-broker collect twice the amount of the bond, and an additional 20%. Whereas the currency, the honest sort, provided by the Constitution, pays nobody, but those, who contribute in some useful way. It is absurd, to say that our country can issue bonds, and cannot issue currency. Both are promises to pay, but one fattens the usurer and the other helps the people.”
– Thomas Edison

JFK knew:
http://www.youtube.com/watch?v=qYVCIdrcS6k

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JamieReckless
Posted on March 18, 2013 at 2:02pm
you can clearly & honestly tell who has had that silver spoon in their possession for a long period of time. no grasp on reality at all, when regarding economic issues. maybe she just assumed that it was the federal minimum wage, b/c she quite possibly could be one of those “public sector” employment lifers. us in the private sector get left to foot the bill for them

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Walkabout
Posted on March 18, 2013 at 2:02pm
Elizabeth Warren is an idiot, pure & simple.

-If the minimum wage goes up to $22/hour, then college grads have to be 3 , 4 or more times that.
-The unions peg their wages to the minimum wage. So when the minimum wage goes up most union wages go up shortly there after.
-Of course the elites will raise their graft & corruption prices.

So at the end of the day the minimum wage earners will still have the least amount of money & it will be just as hard as before to make ends meet. All the prices will have gone up.

But the drooling Elizabeth Warren will have caused the inflation spiral to loop around another turn & at a faster rate. Now that is progress for a liberal drooler.

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NoFameLost
Posted on March 18, 2013 at 1:57pm
Economists who believe that raising the minimum wage to $9 will make it harder for low-skilled workers to find employment (source – IGM Chicago):
Joseph Altonji Yale
Alan Auerbach Berkeley
Katherine Baicker Harvard
Marianne Bertrand Chicago
Judith Chevalier Yale
Angus Deaton Princeton
Robert Hall Stanford
Bengt Holmström MIT
Caroline Hoxby Stanford
Kenneth Judd Stanford
Pete Klenow Stanford
Nancy Stokey Chicago
Christopher Udry Yale

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J_Ind_Boston
Posted on March 18, 2013 at 1:57pm
The only reason Brown got elected here in the first place was because he was going to be the 41st vote against Obamacare, but then the Dems pulled their same weaselly stuff and he never got the chance. You don;t even need to have a brain as a politician in MA, just a “D” beside your name to get elected. And there is also a ton of voter fraud and gerrymandering. With all the stupid stuff she said and did before the election and still get elected, there is no hope for us here in MA. That’s why people are moving out.

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The-Monk
Posted on March 18, 2013 at 1:56pm
“If we started in 1960, and we said that, as productivity goes up — that is, as workers are producing more — then the minimum wage is going to go up the same…”

I have some news for you Elizabeth…. productivity is down in the USA.

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- The-Monk
  Posted on March 18, 2013 at 1:58pm
  Ignore, reposted on page 1.
  
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TEIN
Posted on March 18, 2013 at 1:56pm
Forgot to add ” Tonight, let’s declare that, in the wealthiest nation on Earth, …” Better check Liz, don’t know if we are still the wealthiest..maybe I’m wrong, but if with still are, $22.00 an hour minimum?? She must want $35 dollars cheese pizza’s and $10 cups of joe….

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Diablo4965
Posted on March 18, 2013 at 1:55pm
If you’re only making minimum wage you shouldn’t be having children!

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GhostOfJefferson
Posted on March 18, 2013 at 1:53pm
I hope to God that she’s not this stupid in real life and is only playing for the cameras.

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Skeeterhawk
Posted on March 18, 2013 at 1:53pm
“What happened to the other $14.75?” Wow, perhaps the owner put it back in his business. Or, dear God, he put it in his pocket. Perhaps he was using that to keep a lawyer on retainer so when the government thugs came in to make sure he was following all the Man’s rules regulations and had all his proper licenses. Maybe he used it for health insurance for his employees or his family.
Why not make it $2000 and hour. That would be great. I could quit my job and get a minimum wage job and come out ahead.

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TEARS FOR AMERICA
Posted on March 18, 2013 at 1:53pm
Warren..$22 an hour minimum wage….the fastest way to collapse the USA…not surprising coming from a socialist.

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DontStopBelieving
Posted on March 18, 2013 at 1:53pm
Lord have mercy on the idiot fake indian and save us from her stupidity.

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TEIN
Posted on March 18, 2013 at 1:52pm
This should automatically disqualify her from ever asking a financial question as a Senator ever again….

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Patriot72
Posted on March 18, 2013 at 1:52pm
She’s a typical, government-run economy lib that has no idea how the free market actually works. There is no magically endless pool of money from which businesses can draw upon willy-nilly to simply overdouble the minimum wage because she thinks it’d be fair…the catcall of progressive kooks. Go ahead and mandate the national minimum wage to $22/hr. and see what happens. The true unemployment rate will go from 13+% (as the 7.99% voodoo number is blatantly false. you can’t stop counting people whose unemployment has run out and dropped out of the system because it is better for the gov’ts number) to 25%+ at the least. If the left wants to annihilate entry level jobs and drastically reduce mid-level labor, good hard-working jobs solid-paying jobs that Detroit used to have, go ahead and tell all of the small, medium and large business owners that their labor costs get to explode and they have no say. More jobs will go overseas or simply disappear. That is a fact.

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firearm
Posted on March 18, 2013 at 1:51pm
They couldn’t care less about the poor. They care about more income tax from more incoime.

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freenj
Posted on March 18, 2013 at 1:50pm
Elizabeth, you are batsheat stoopid!!
It’s understandable now why the Democrat morons in the Senate, can’t come up with a budget, math and economics is so hard to understand.

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media-bias-steals-elections
Posted on March 18, 2013 at 1:50pm
Because Congress can vote themselves raises? Who cares, they got theirs?

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DR.SIGMUND-P-FLOYD
Posted on March 18, 2013 at 1:50pm
Ms Warren suffers from a delusional disorder.
She also thinks that she is a Native American.
I believe that she needs to have therapy and may need to be medicated.

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