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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)

tootsie roll
Posted on March 18, 2013 at 8:38pm
Why should she worry. When the 11 to 20 million become legal they will work for 6.oo an hour. All of you dummies who voted for her and the Democraps will go from 15% to 30% and believe me They
will work for less money than the current Obama ilk voters

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tootsie roll
Posted on March 18, 2013 at 8:32pm
How much did Lizzie Borden pay Dr DUBEE for his testimony? Mr. oh Dr DuBEE ha ha
looks like he is a little light in his slippers. At best the end of his nose is Brown because Lizzie stopped too fast
How come the good? doctor did not testify how greaaaat the economy is NOT right now.
BTW who wants to pay more money for the Low hanging pants boys to work for more a higher
hourly wage? They can’t even belt up their pants what kind of service do they give??

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Raisingmy3boysright
Posted on March 18, 2013 at 8:32pm
I own my own business. If I had to pay that kind of wage per employee there would be major cuts, lay offs abound. I would also have to raise prices and pass some of it on to the consumer. This means higher prices and less employees and less investing in things I would have normally bought. With higher prices comes less people buying, less supplies I would buy ( this would then turn into the same demise for all of my suppliers, shipping material suppliers, less money for the mail service, fed ex, UPS etc and so on down the chain). These are the kind of Morons we have in govt who know NOTHING about running a business whatsoever. Businesses would close and unemployment rate would go up! I would happily work 2 jobs instead of being unemployed wouldn’t you? I have done it before!

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yoshik
Posted on March 18, 2013 at 8:29pm
Where the H E L L do these libs get their economics education?? Good Lord they are absolutely clueless.

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1Haole_Boy
Posted on March 18, 2013 at 8:25pm
IN ADDITION TO MY PREVIOUS POSTING:
__While the market adjusts the wages of those in established professional markets, presently making the same wage they were making before the government tripled the unskilled labor’s wage, they sure as hell are not going to pay $12.00 for a big mac hamburger reflecting a massive decline in their buying power. This will cause the demand for unskilled labor products to plummet causing entry level level un-employment to soar. A few lucky people will be holding down these temporarily well paying “minimum wage” jobs until the market adjusts the buying power for the established professional markets by massive increases in their pay causing hefty inflation.
__Elizabeth Warren’s initiative ostensibly to help the poor will harm the poor by eliminating entry level positions for young people while multiplying the unemployed will only create a welfare class of people and destroy upward mobility for that generation.
___When the market reaches equilibrium through massive pay raises in the more established professional markets, inflation will erase any gains for the minimum wage workers in the way of buying power.
__Elizabeth Warren’s tripling of the minimum wage will cause massive market disruption, huge un-employment, an exploding welfare class, and massive inflation to name a few problems thrust upon our economy.
****The former Soviet Union is where prices and wages are controlled by committees and not by supply and demand.

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Raisingmy3boysright
Posted on March 18, 2013 at 8:23pm
I am wondering, “Why is Warren so ignorant? Was she born that way?”

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- tootsie roll
  Posted on March 18, 2013 at 8:34pm
  No it must be her hertiage whatever that was decided to be
  
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Vic Tory
Posted on March 18, 2013 at 8:22pm
$22-an-Hour Minimum Wage Rates?

I got a college degree and that is about what I make. Sounds fair to me.
What time does the revolution start?

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NotaDemoCratNut
Posted on March 18, 2013 at 8:21pm
I know that Elizabeth Warren has spent years in Washington, but can she actually be as stupid and naive as she sounds? To think that, we the people, are actually funding the role of a nincompoop , who frankly makes a mockery of her role as Senator. Her simplistic, childlike questions, are great for democrat taskmasters who obviously tell Elizabeth how to breathe, walk and talk, and how to pretend to act as a Senator, for those voters who actually think she can do something. Thank goodness she’s not a brain surgeon.

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Bill from NJ
Posted on March 18, 2013 at 8:15pm
What kind of morons vote for this a$$ clown?

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- tootsie roll
  Posted on March 18, 2013 at 8:35pm
  Democraps
  
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Enchanted
Posted on March 18, 2013 at 8:13pm
Warren you are an idiot. A fraudulent Indian too.

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BTC55
Posted on March 18, 2013 at 8:11pm
It is a poor assumption to assume that an increase in productivity will automatically lead to an increase in wages. Companies invest in machinery to increase productivity. When they do they are going to keep the rewards. 15 years ago our garbage collection was picked up by a garbage truck with two workers. One was the driver and the other dumped the garbage in the back. Then they got a new truck that had an arm that picked up the garbage and dumped it in the truck. The driver handled the entire process. Clearly this was an increase in productivity but they didn’t double the drivers pay.

Wages are subject to supply and demand. The supply of labor is holding down wages.

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Ailius
Posted on March 18, 2013 at 8:08pm
This behavior is easily explained on the two dimensional political spectrum. If you don’t know about it, you can find it at http://www.politicalcompass.org or a quick google search.

Most of America, left or right, tends towards the libertarian axis, but the ruling elite of both political parties are authoritarian.

Warren is being a loyal soldier of authoritarianism. By deliberately saying something that is off the wall left, she is drawing libertarian conservatives into supporting authoritarian conservatives. Authoritarian conservatives will likely return the favor next week by somebody saying something right-winged stupid and driving libertarian progressives into supporting the authoritarian progressives.

DON’T GET ANGRY. Don’t fall for this trap. Warren’s not stupid…this is a deliberate ploy to convince you that you need to support the Republican establishment.

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sacwoodpusher
Posted on March 18, 2013 at 8:07pm
Actually, I am trying to hire skilled workers……The problem is, I am facing stiff competition for skilled workers. Unfortunately, the competition come not from other companies, it comes from the government and also from extended welfare benefits.

It irritates me that people won’t take my job offer until there unenployment runs out.

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- sacwoodpusher
  Posted on March 18, 2013 at 8:11pm
  Their ……duh spulling
  
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MarvinMr
Posted on March 18, 2013 at 8:06pm
I kind of like this idea. We should reciprocate with our politicians. Right now we’d be paying you… NOTHING!!

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jbcheesehead
Posted on March 18, 2013 at 8:05pm
Tell Elizabeth only fake natives are eligible to make that kind of money without some training investment on their part.

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undrprsr
Posted on March 18, 2013 at 7:59pm
An owner of a McDonald’s franchise needs to give her a store to run,”witth $22 wages,and MGR pay based at proportional rates” and have her sign a contract that after 1 year she gets the profits OR PAYS the LOSS! She must stay at McD’s dollar menu, PROMOTIONS THAT ARE THERE TO PRODUCE REVENUE!

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redsoxboii445
Posted on March 18, 2013 at 7:58pm
I certainly didn’t vote for her. Nor did I vote for our president, either time.

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Bikkiboo
Posted on March 18, 2013 at 7:58pm
I think she needs to play a few rounds of “Lemonade Stand” and find out how business works! These liberals honestly believe that business owners have millions socked away and can “eat” labor increases. They just don’t get that businesses get their money from their sales, and have to take all of their expenses (wages, materials, utilities, taxes, etc.) from the money they take in. There is no “stash” somewhere where the owner hides more money. It’s like a teeter totter: if the wages go up, so must the sales or the prices. (sales x price) = (wages + materials + utilities + taxes + etc. + profit). If something changes – like raising minimum wage – it affects the rest of the formula, which MUST be balanced or the business closes. Liberals may think the profit portion is huge and adjustable, but it usually isn’t, so if individual wages go up, the number of employees must go down (lay-offs) or the company must move (to cut taxes, utilities, rent, etc.), or they use cheaper raw materials (from out-of-the-country or of lower quality), or the sales and/or price must increase. If you think the profit should go down; in some cases that might be possible for a small amount, but if it’s too much, the owner may think it’s not worth the work, and either close the business or ship it to a cheaper country – costing lots of jobs!!! See how great raising wages can be?

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AnimalsAsLeaders
Posted on March 18, 2013 at 7:56pm
Tomorrow’s headline: Elizabeth Warren Wonders Why People Still Get Shot in Safe Zones

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1Haole_Boy
Posted on March 18, 2013 at 7:55pm
WHEN McDONALD’S BIG MACS GO TO $12.00 EACH, AND EVERYTHING ELSE GOES UP COMMENSURATELY…………………………
When professionals who make a wage that they earned by their hard work to learn their specialty, does Elizabeth Warren think that they are going to par three times as much for their consumables?
___The buying power for consumers will be cut drastically when minimum wage is tripled. What then happens is that the market will make an adjustment by increasing everyone elses wages so that they recoupe their original buying power.
___People who once made $35 thousand per year (for the sake of illustration) would conceivably be making, upon market equilibrium, $105 thousand, and so on……………no one sees value in paying $12.00 for a big mac; $3.50 for a 3 Musketeers bar; and $10.00/gallon for milk without getting a pay raise that reflects the true value of the stuff made at $22.00/hour. Go read David Ricardo’s Opus Magnus ‘Political Economy and Taxation.’
How Stupid Ms. Warren!!!!!

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- undrprsr
  Posted on March 18, 2013 at 8:12pm
  Right on! Bimbo Warren,can’t seem to fathom that if the guy fillip’n burgers is gettting $22 a hrs and the McD’s is now a $3 menu the they guy that has to hold a CDL to transport the beef,cheese,bread,plates to the same McD’s thats getting $20 an hr,NOW WITH UNION HELP will demand $70 an hr and on down the line to the very producer on every product.DUMB B**CH!
  
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nighttrainno9
Posted on March 18, 2013 at 7:51pm
The biggest thing that stupid woman doesn’t understand, is the cost
of govt. regulations and interference that businesses have to contend
with. The govt. has just about regulated all of us out of business.
Their stupidity has sent 60% of our manufacturing overseas and I
know because I have to live with the manufacturers we have left and
they spend a tremedous amount of time trying to figure out how to
deal with the govt. and stay in business. Eliminate the EPA and OSHA,
and manufacturing will come back.

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NOTYERHUCKLEBERRY
Posted on March 18, 2013 at 7:51pm
In 1965, I took my first job away from the ranch. I traded in the boots and spurs for a set of loggers. I took a job under JFK”s Neighbor Youth Program. I would drive 40 miles every day, climb into a deuce and a half and drive for one and a half hours into the woods of the reservation. There I would swing a double bit axe all day cutting lodge pole to length, building fences. Some of my friends out there tell me that some of those fences are still there. That was 47 years ago, I was making 1.25 per hour and living high on the hog.
To me, the minimum wage should be done away with. If you don’t like the money, look somewhere else for a job.
No one owes you a living, that is up to you., Get a life!

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FEMALL
Posted on March 18, 2013 at 7:37pm
1 grocery clerk@$22/hour= $12 for 1 gallon for milk and $13 for a loaf of bread.
1 Senator@ a gizzilion dollars/hour= 24/7 at the public trough

QED

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Netsurfer2
Posted on March 18, 2013 at 7:36pm
Can anyone tell me why a person with little or no education should make 22 and hour??? After all, Bill Gates (Microsoft) houses tech boot camps in India so that they can come over here, while not consider our youth in that are already here to take those jobs by educating them right here in the US of A!

Why do we need in-sourcing when you can do with what is already here???

After all, our children’s futures are ruined when you look at the deficit, why don’t they deserve a chance to prove themselves Bill??? Or is it the money you get for importing others for jobs here in the US of A???

America’s children should come first! American values first! America for America first!

Warren needs to see more in depth, not in a Hollywood Utopia!

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BoringThoughts
Posted on March 18, 2013 at 7:29pm
Productivity is not simply a measure of working harder to produce a product. When we work smarter and utilize technology we require more skilled labor and fewer unskilled. Therefor, the same output with fewer bodies. Not a concept a politician would necessarily understand. As long as our “free trade partners” embace wage control (maximum wage) which is a fraction of our minimum wage our blue-collar standard of living will continue to decline (a form of entropy).

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