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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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(H/T: Washington Free Beacon). Featured image Getty Images.

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Comments (511)

oxycontinxx
Posted on March 18, 2013 at 2:37pm
so sayeth lizzy brown………….”Why Aren’t Employers Paying $22-an-Hour Minimum Wage Rates?”

because employers are not stoopid dumbmasses like you are ……….lizzy.

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thegodfather
Posted on March 18, 2013 at 2:37pm
Communist….

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peter469
Posted on March 18, 2013 at 2:36pm
She got elected to the Senate??? Too stupid to live!

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The_Fifth_Column
Posted on March 18, 2013 at 2:35pm
Spoken like a true Socialist/Communist/Democrat. I wonder if she thinks that it would also be ok for everyone in the Nation to pay $5.00 for a loaf of bread, or $8.00 for a pound of 70% lean Cheap Hamburger? Answer…NO. The Government Eliet would just vote themselves another pay raise. The Entertainment Big Mouth Elitists would just charge more at the box office. This lying “Native American : NOT” woman is an idiot. What is wrong with Massachusetts.

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eyedr54
Posted on March 18, 2013 at 2:34pm
WAIT I GOT IT!!!!!
IF 22/hr is good; the a Min Wage of 300 Million Ka-Billion Trillion would be even better….Whhhhooooaaaa the worlds problems were just solved. Thank you Elizabeth your tribe will be pleased with you.

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Advection
Posted on March 18, 2013 at 2:32pm
This nation is ruled by morons who don’t understand how things work because they reject reality. It’s called MAGICAL THINKING!

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GuruMeditation
Posted on March 18, 2013 at 2:32pm
Hahahahaa.

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DebateMe
Posted on March 18, 2013 at 2:31pm
It must be a gargantuan task for warren to put her socks on by lifting herself up by her own ankles every morning.

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quiltgal
Posted on March 18, 2013 at 2:29pm
Very good analysis; very good food for thought!

Elizabeth Game-the-System Warren hasn’t got a clue about economics.

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CtznRespondent
Posted on March 18, 2013 at 2:28pm
Because no one is that bat crap crazy but you? Golly, where is an American Nigel Farage who can stand up and marginalize this woman for the fool she is?

‘Who the Hell You Think You Are?’ Nigel Farage throws egg in Eurocrat
http://www.youtube.com/watch?v=2gm9q8uabTs

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- moonlight on the bay
  Posted on March 18, 2013 at 4:14pm
  I would LOVE to hear Nigel’s response to her idea!. He has a way with words and his description of the stupidity of her suggestion would be most entertaining and probably hilarious.
  
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eyedr54
Posted on March 18, 2013 at 2:28pm
uuuuhhhhh. This gets so tiring with Liberals. The scary thought is she used to teach our kids economics (If you can’t do it teach it I guess holds still). Okay Elizabeth, you first can’t look at gross productivity. You need to look at net profit as a ratio of net productivity then correlate that to the wage if you even wanted your dumb metric to work. Next, and I know this is hard, but the definition of poverty changes with time….so in 200 years it would not be surprising if a person making 100K would be living in “poverty”…alright go have a snack and come back…are you still with me now? This gets harder. Now what really matters is purchasing power and in states that raise the MIN wage the power of that dollar goes down b/c other costs increase. Just compare TX to CA. In TX the lower wage actually buys more then the higher wage in CA. So even if we made the min wage 100/hr, min wage would remain a “poverty” wage..that is why Min wage was never intended to be a life wage. I know very hard; go nap for a bit then maybe read it again.

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progressiveslayer
Posted on March 18, 2013 at 2:27pm
Liz is about as intelligent as that other moron Hank Johnson,he thought the island of Guam would capsize if too many people were on it. Liz if you want our one party POS prog government to mandate a minimum wage of 22.00 hr expect 30% unemployment and 100.00 cheese burgers at mickey D’s you stupid communist POS.

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Rearden_Metal
Posted on March 18, 2013 at 2:26pm
Oh, those high cheekbones!

Erp… ew… a little “Vurp” right there. yuck.

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ghostsouls
Posted on March 18, 2013 at 2:26pm
Because, you twit, prices would soar. Bread $9 a loaf, hamburger $16 a pound, Mcdonald’s $1 burger $9. Didn’t Fauxcahontas get an education in economics. The price of such wages would be passed on to the consumers. Poor people couldn’t afford it, they would then have to triple the amount of foodstamps, costing the government it more money3 it doesn’t have.

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- moonlight on the bay
  Posted on March 18, 2013 at 4:18pm
  And wait until the earners of this $22 minimum wage see how much more comes out in taxes! Try to cover paying for food and gas (which WILL cost more) with what’s left.
  
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Mr. H.
Posted on March 18, 2013 at 2:23pm
Mindless people elect mindless people and the consequences are gross in a negative way. 47% will vote for these numb minds without fail. That leaves 53% of which 33% will not vote. And yet election have consequences. The major media does their best to go with the 47%. What ever it is the Democrats are doing to muster voters (other than buying votes with welfare and cell phones) the Republicans need to take to heart and into action with a different message.

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leasecommander
Posted on March 18, 2013 at 2:20pm
The “Fake” Native American speak with forked tongue, I hope you people that elected this idiot are proud of yourselves……she has and IS showing herself to be a true idiot.
Obviously this lady has no idea how the free market works a/o cares.

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ellietoo
Posted on March 18, 2013 at 2:19pm
This is why our government is falling apart! We send people to the senate and congress that are total fools. This woman has no idea how the business world functions. Would she like to pay $90.00 for a coffee at the 7/11?

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vbell
Posted on March 18, 2013 at 2:17pm
And this is the party in the White House.

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Beachmastermax
Posted on March 18, 2013 at 2:12pm
That is the back door way to do what Cyprus is doing. Your savings would instantly be cut by more than 50%. No one would ever save again (unless your a fool). Society would descend into chaos.

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cindyjweaver
Posted on March 18, 2013 at 2:10pm
Could we assist in educating Elizabeth in why Minimum wage is not higher? Do you like you $1 menu at the local fast food restaurant? People making $8 per hour make that possible. At $22 per hour wage, that menu item alone goes to a $3 menu items and your $6 meal goes to $18 per meal. Your grocer will have to increase your food bill to pay the attendants stocking shelves and check out. Your local bank fees will increase to pay the bank tellers. All the union jobs will immediately want a 300% wage increase to put their pay back into the competitive range based on minimum wage. this will increase the price you pay for items made in union shops. All fixed incomers like retired people become VERY VERY poor immediately and will not benefit in wage increase but will pay all the high prices with less dollars. Need I say more? What is the real purpose of raising minimum wage? it only raises the prices of everything else until people again complain why is minimum wage so low? This is basic economics People. You do not raise people out of poverty by raising wages. You step out of poverty by educated, productive, innovative work forces. By creating job opportunities with new products to create and sell. By discontinuing restrictive business practices and allowing “investment dollars” to flow into the hands of entrepreneurs and not into the hands of government entitlement programs trying to replicate what only capitalism has achieved throughout history! Productivity is no longer going u

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noslave
Posted on March 18, 2013 at 2:10pm
SHES THE SAME DOUCHBAG THAT FANTISIZES SHES AN INDIAN if she can use it if it conveinent,just disregard anything shesays as revelevent as passing gas?

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MiCurmudgeon
Posted on March 18, 2013 at 2:10pm
We’ll get there much too soon , along with $25 gasoline, $15 gallons of milk, unaffordable electricity , etc. as long as the Fed keeps printing Obama Bucks.

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blackfeather
Posted on March 18, 2013 at 2:10pm
why doesn’t warren move to cyprus???

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love the kids
Posted on March 18, 2013 at 2:10pm
“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,”
Even with the tax relief? The reason you need tax relief is from the taxes you PUT IN PLACE FIRST. If the minimum wage was tied to productivity, the minimum wage would have went down. She brings a new meaning to the term “Dumb and Dumber”.

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beardedjesse
Posted on March 18, 2013 at 2:09pm
Well, Miss Warren…our minimum wage isn’t $22 an hour because we have something called mathematics we sometimes use to reconcile these strange things we have called numbers in regards to currency. I don’t know what kind of math you use…but the kind everyone else uses OTHER than yourself is probably just off. Let me guess…none of us get it? Only you “get it?”

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