Business

‘Real News From The Blaze’: Is the Minimum Wage Fair?

NPR has done two recent stories examining the battle over the minimum wage, its historical progression in American politicsleading up to a recent increase proposal by Sen.Tom Harkin, and a current bitter dispute between political leaders and city employees regarding the wage in Scranton, PA.

Sen. Tom Harkin, an Iowa Democratic, has introduced a bill in Congress to raise the minimum wage to $9.88 an hour from $7.25. NPR reports that 18 states have set minimum wage rates slightly higher than the national level, while four states actually have exemptions and even lower minimums. The increase may seem reasonable and could make a difference for millions of Americans, but opponents of Sen. Harkin’s proposal say that it could lead to increases in already high unemployment, as small business owners claim an increase would foce them to make cuts. Employers cannot increase wages for workers to a standard set by the government if the revenue is not there.

In Scranton, a political fight between political leaders has sunk the pay for every city employee to $7.25 an hour — minimum wage. NPR reports:

Last week Mayor Chris Doherty slashed pay, on his own, saying Scranton had run out of money. Lackawanna County Judge Michael Barrasse issued an injunction telling the city it must recognize pay rates spelled out in union contracts. But Doherty continues to violate that court order.

Scranton’s Mayor and Council are all Democrats, but have different views on how to remedy the finances of a city that has arguably been in decline since the end of World War II. The Mayor wants to increase taxes, the council wants to find other sources of revenue to fill a $16.8 million budget gap. NPR reports that the unions representing police, fire fighters and public works employees are threatening to file a contempt of court motion against the mayor, hoping that will help their members get their old salaries back, while starting a new week earning minimum wage.

Debate around achieving a practical minimum wage in the midst of economic uncertainty once again brings us to a question that has always percolated in American politics but come to a head of late “What is fair?”

Will raising the minimum wage to what the government, rather than the market, deems to be “fair” help or hurt the economy? Watch a segment from “Real News” Tuesday dissecting the current politics surrounding the minimum wage, as well as a debate on the concept’s practicality:

Comments (63)

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  • lthm
    Posted on July 11, 2012 at 2:31am

    Disgusting. The minimum wage needs to be abolished outright. What happens when the minimum wage goes up? Employers are forced to pay employees more–sometimes more than the employee is worth for the job he or she performs. When that happens, the employer has to either raise prices or dismiss employees in order to pull a profit and keep the company solvent. They typically do a combination of these. So when the minium wage goes up, so does the cost of living, making no difference in the lives of those who are at minimum wage, but decreasing the quality of life for everyone else who didn’t get a raise due to the minimum wage boost.

    So how do we deflate this? Abolish the minimum wage and let the free market work. Employers will pay employees what their work is worth to them, poorly-paying businesses will lose good employees, good-paying employers will gain good employees, prices will fall and every hard worker will reap the benefits of the work they do.

    Report Post »  
    • soybomb315
      Posted on July 11, 2012 at 6:24am

      federal minimum wage is a pure progressive idea. It ignores all economic realities – such as things are naturally cheaper depending on what part of the country you live in.

      remember earlier in the year when Mitt Romney supported automatic increases in the minimum wage? There’s a progressive for ya
      http://www.huffingtonpost.com/2012/02/01/mitt-romney-minimum-wage_n_1247852.html

      Report Post » soybomb315  
    • Rightofwayne
      Posted on July 13, 2012 at 12:56am

      Agree with you LTHM, I have thought for years that all it does when we artificially raise minimum wage is reduce the number of workers, and increase the cost of goods. It is actually the worst thing you can do for the uneducated and people needing a starting job. They can never get a job because employers will hire a better employee if they are forced to pay them a higher wage. All this dose is devalue the American Dollar! Just let the free market dictate what a wage should be. Today, we would have more people working if we were allowed to pay a fair wage for work performed.

      Report Post »  
  • lylejk
    Posted on July 11, 2012 at 1:05am

    The problem with the minimum wage is that it just gives an excuse for business to raise their rates and manufacturers to raise their prices and they always raise it, roughly 1.5 times higher then the increased difference between the former and new wage. In other words, the folks getting the increased raise will suffer more since it will cost more to purchase the necessities in life then the increase in income that they get. It wasn’t that long ago that you could have purchased a Burger King Whopper for $1; it’s over $4.00 now in some places. That’s what the minimum wage and also Quantitative Easing does. We no longer have a market driven economy and that is why our nation’s crashing now. A command economy never works. If folk would have trusted in the free market w.r.t. wages, everyone would have won since more folk will have jobs including the kids who are now unemployed. Those folks would then get skills and increased wages due to those skills. The increased number of jobs would also means there would be competition and companies will pay a wage large enough to keep talent. Alas, you can‘t close Pandora’s box once opened and even Hope is no more; only change. :)

    Report Post » lylejk  
    • mtcountrygrl
      Posted on July 11, 2012 at 2:24am

      You know why prices go up 1 1/5 times the wage increase…payroll taxes. Payroll taxes are employer paid taxes that are calculated on a percent of gross wages. You increase gross wages and these taxes automatically go up. Minimum wage increases are a back door way to increase taxes on businesses. They don’t help anyone because they cause inflation, but the increase social security, medicare, and unemployment taxes without any of that pesky “raising taxes’ negative publicity. It’s for the poor!

      Report Post »  
    • Stoic one
      Posted on July 11, 2012 at 3:40am

      mtcountrygrl

      What makes matters worse is that those “payroll” taxes are non refundable employee wages that became hidden back in the sixties i believe.

      Report Post » Stoic one  
  • michael7695
    Posted on July 10, 2012 at 11:41pm

    The only truly fair thing to do is pay everyone $100,000 a year no matter what you do. This would mean the liberal hollyweird types would have to put up and shut up and take a huge pay cut as well. Oh come on people…its only fair!

    Who cares if this bankrupts the US and devalues the dollar…we are moving towards a One World Government anyway with a single currency.

    Report Post »  
    • CapitalismWorks
      Posted on July 11, 2012 at 3:07am

      You’re promoting socialism, where “we pretend to work, they pretend to pay us”.

      Report Post » CapitalismWorks  
  • CapitalismWorks
    Posted on July 10, 2012 at 11:10pm

    Before even attempting to answer the question “what is a ‘fair’ wage?”, the first question that must be answered is “who decides?”. An employer makes an offer, and an employee or potential employee has only 2 choices, either accept or reject it. By accepting the offer, a worker has agreed it is “fair”.

    Complaints about not being able to raise a family on minimum wage are ludicrous and overlook the original intent of the law. Look it up – read it.

    Report Post » CapitalismWorks  
    • Bikkiboo
      Posted on July 11, 2012 at 9:15pm

      The original intent of the law was to keep unskilled workers from working. I believe Jonah Goldberg’s LIBERAL FACISM says that the progressives wanted to eliminate minorities who had no skills, so they instituted a minimum wage which would guarantee that only those with skills would be paid that amount. Unskilled workers could starve. Check it out.

      Report Post » Bikkiboo  
  • GrumpyCat
    Posted on July 10, 2012 at 10:55pm

    Minimum wage laws only serve to provide a glut of unmotivated unskilled cheap labor. Being told minimum wage is the law of the land frees entry level workers from having to think or be competitive. Why care about doing your job well when there are so many others paying no better, no worse?

    As a business why would you offer more than minimum? Turnover is high because supply is high and quality is low. You’ll occasionally find a jewel among the gravel and that one can be promoted out of the pile. As for the others, just let them wallow at the bottom.

    Report Post »  
  • Skrewedretiree
    Posted on July 10, 2012 at 10:43pm

    Tom Harkin: OUR HERO! Raise the minimum to $9.98 per hour from $7.25.

    So…telll me Tom, how many jobs to do figue to ELIMINATE with you horses**t? If I had a business- and I used to , but got out in the 1980S! because of Government BS!, I wonder how many employees I would have to lay off to make up the difference? Don’t say, “I could raise my prices!” That is also a BUSINESS KILLER! Don’t believe me? Then WHY does everything we buy now come from Communist CHINA?!

    Report Post » Skrewedretiree  
  • CapitalismWorks
    Posted on July 10, 2012 at 10:41pm

    Minimum wage laws should be eliminated entirely. The free market would do the rest – both employees and employers would benefit tremendously.

    Report Post » CapitalismWorks  
  • Skrewedretiree
    Posted on July 10, 2012 at 10:32pm

    Scenario: You go to work for $8.50 per hour. After time, say a year, you get a step increase to $8.75 per hour, plus a bonus of 10 cents an hour, to $8.85 per hour, and a step up to Shift Supervisor.

    The Democrats pass a new law: The minimum wage is now $8.90 per hour. Now, you are making $8.90 per hour, five cents more than before. But:……

    The Company can not raise your pay to pass the entry level, and you cannot be compensated for being the Shift Supervisor anymore. So:……

    They find some trumped up charges against you and fire you.

    You file a complaint with the State and there is a Hearing. The Company does not show up or argue their case. You win. You get unemployment insurance, at taxpayer expense. After 9 months on TAXPAYER EXPENSE, you find another job. It pays $9.10 an hour.

    Not a joke, friends. Real life.

    Remember in November.

    Report Post » Skrewedretiree  
  • OperationNorthwoods
    Posted on July 10, 2012 at 10:30pm

    7.25 would buy people a whole lot more if we weren’t devaluing or currency and causing inflation. This out of control borrow and spend cycle hurts low wage and fixed income people the most. Bring that up the next time somebody says Obama is helping the poor.

    Report Post » OperationNorthwoods  
    • MAMMY_NUNN
      Posted on July 10, 2012 at 10:59pm

      Tell me about it I am on a fixed income and the grocery bill is really killing me I’ve seen prices jump 50 to 60 percent in the last 2yrs.

      Report Post »  
  • TexasKnight
    Posted on July 10, 2012 at 10:16pm

    The mayor should be jailed on contempt of court. He can not violate the contracts.
    That said, he should have reduced staff to what they can afford, which would not violate the union contracts.
    If they have 5 police, they have 5 police. Willing to bet the problem would go away very fast the day after the pink slips went out.
    Also, why do they have paid firemen? The vast majority of PA (yes I live here, cry) uses volunteer fire departments.

    Report Post » TexasKnight  
  • Popp40
    Posted on July 10, 2012 at 10:11pm

    Think about it logically…you raise min. wage it has 2 effects. The first it will cause businesses not to hire entry level positions, they will look for people with experience to fill those entry level positions. After all, these businesses will want to get the most bang for the buck and if they are paying more bucks then they are going to want more experienced people.

    Secondly, when you raise the min. wage you are lowering the purchasing power of those making more than min. wage (aka the middle class) because businesses will have to raise prices on their product to cover the new min. wage salaries. This means it will take more money to buy the same products so those making min. wage will still be in the same position, however, those who make more than min wage will now be paying more for the same items.

    Plus, most jobs pay more than min. wage, min. wage is meant for entry level positions and if you don’t aspire to work your way up then you deserve to make min. wage!

    Report Post »  
    • TexasKnight
      Posted on July 10, 2012 at 10:27pm

      You can pay less than the minimum wage. The federal min. wage only applies to companies that cross state lines. One of my first jobs paid 25cents less than the min. wage (I think i made $2.25, in the 70s), and the company had about 100 employees. Those of us that were good at our jobs, got picked off by one of their competitors and earned more. The lazy, stayed and earned less.
      PS, the job was running small hotel/apartment pools. Included chemicals/filtration scrubbing the tile and cleaning the deck, as well as being a lifeguard.

      Report Post » TexasKnight  
    • Popp40
      Posted on July 10, 2012 at 10:28pm

      Here is a perfect example: In a city in CA they raised the min. wage to $10 an hour because of that Subway had to stop selling their $5 foot long.

      Report Post »  
  • SIXFRIGATES
    Posted on July 10, 2012 at 10:10pm

    Most government employees should be making minimum wage. Imagine how many hundreds of billions would be saved every month or so

    Report Post » SIXFRIGATES  
    • Doobug
      Posted on July 11, 2012 at 3:31am

      Minimum wage, hmmmm. I wonder if a politician could live on it????? When you bring home $900 a month after taxes and your rent is $650 a month (if your lucky enough to find an apartment that cheap) the $250 that‘s left over really doesn’t stretch very far. If you can afford a car, $45 might last you 2 weeks if you only drive to work and home. Oh, and then if you can actually afford to eat you may spend the remainder at the grocery store. And what did Obama say about electricity would naturally sky-rocket under his plan? Now we have mandatory “affordable” health care premiuns on top of mandatory car insurance. Is the average worker on minimum wage pulling their hair out???? It’s time for us to get some folks in the White House that have some common sense instead of worrying about passing more and more legislation that is breaking the backs of the working people in this country. Are you, too, receiving your food stamps, Mr. O?????????

      Report Post »  
  • drydino
    Posted on July 10, 2012 at 10:07pm

    Simple solution to minimum wages and tax revenue – set the national minimum wage to $200 per hour. That would make all workers earn over $250, 000, which would put them in the tax bracket Obama wants to pay higher taxes. Instead of half of Americans not paying taxes, all workers would be contributing at the highest rate to lower the deficit.
    Before you criticize a $200 per hour minimum, use your logic, not emotion, to justify the minimum wage you would support. Then think back 50 years and consider how an $8 minimum would have seemed to them .. just about as absurd as you think $200 would be today.

    Report Post »  
    • Skrewedretiree
      Posted on July 10, 2012 at 10:23pm

      Won’t work. You’re using math and logic. Won’t work on Democrats.

      Report Post » Skrewedretiree  
    • MrConservative63
      Posted on July 12, 2012 at 1:30am

      Yeah, this isn’t about math and logic, it is completely about “feelings”! The liberals get a happy “feeling” when they stump for “the working poor” by artificially raising the cost of everything, then blaming the greedy rich business owners for raising their prices to compensate for the increased cost of doing business! How dare they attempt to make a profit?!?!

      Report Post »  
  • SIXFRIGATES
    Posted on July 10, 2012 at 10:07pm

    The biggest problem is that more and more businesses are only hiring part-time and at near minimum wage rates. The more people there are begging for jobs, the lower wages are going until they can find the first idiot willing to work so few hours for such little pay. The American dream is very near death.

    Report Post » SIXFRIGATES  
  • Mapache
    Posted on July 10, 2012 at 10:04pm

    The minimum wage is a crock. If an adult is making minimum wage you have to ask yourself, WHY? If an adult with a family is making minimum wage you have to ask yourself why again. The minimum wage results in teenagers not being hired for part-time or summertime work…so they fail to learn the value, rewards and discipline of work. They do not learn essential business skills that would help them not only in school but life as well. Why should a small business take a risk on a person with no skills for their cost of up to $15 an hour after benefits and employer contribution to medicare and social security?

    Report Post » Mapache  
    • firemanfrank
      Posted on July 10, 2012 at 10:11pm

      Amen….. when I worked as a kid as a landscaper I made minimum wage. That was twenty years ago and 5.50 an hour. I was happy for that. An adult should not be able to support afamily for that kind of money we know that. An adult should be making much much more if he has the maturity to have a family he should have put effort in making more money.if an adult is an employee for a landscaper he shouldn’t expect to make 15 dollars an hour when a teenager can do the job for 10.He should have started his own business by then.

      Report Post »  
  • The_Almighty_Creestof
    Posted on July 10, 2012 at 10:02pm

    The minimum wage is not there for you to live off of. It is what an entry level job is worth when compared to how easy (or mindless) the job is.

    I‘m sorry if you can’t take a minimum wage job and being able to have a nice car and a nice apartment or home.

    Fast food cashier, stock clerk, bank teller, whatever may be…minimum wage is fair. From there you work your way up. I don‘t know any job where you don’t get increases for time with the company, promotions and or learning new job skills above and beyond your job title.

    If promotions and merit raises for learning are not available to you at your current job…then move on.

    But always remember…how much (or how little) would they hav to offer someone to do the same job you do?

    I’m sorry, but a cashier –no matter how long they’ve been on the job– can be replaced in a day and functioning just fine within a week.

    Your job function is only so valuable…profits are not bottomless…and you are replaceable.

    Pick a job in area you are interested in and work your way up…your wages will follow.

    I started work out of high school for $2.83 an hour. Walked or got rides to work. Lived in a crappy apartment for $200.00 a month.

    I’m 54 now, make $19.65 an hour, own my own home, have no other debt, have 1/2 million in the bank and an 8 year old truck.

    Your start and the long road to retirement are not fun or fair…nobody ever said they would be. Aim to live comfortably in your 60′s and on and you

    Report Post »  
  • mdman
    Posted on July 10, 2012 at 10:01pm

    If the min wage in Arizona was 9.88 I would have to fire an employee just to make up for it… we could not afford to pay entry level employees that much… no way.. You need to work your way up to it.

    Report Post »  
  • cemerius
    Posted on July 10, 2012 at 9:51pm

    The ONLY thing increasing the minimum wage does is…..GIVE YOU MORE “PAPER” IN YOUR WALLET!! Seriously, raising the minimum wage ONLY makes the prices of items INCREASE accordingly!!!! I saw it EVERY year when I got a Cost of Living Increase in the military….the prices in the PX and Commissary BOTH increased the same damn percentage rate as I got for the COLA!!! Fluking MORONS!!!!

    Report Post » cemerius  
  • Kankokage
    Posted on July 10, 2012 at 9:51pm

    Raising minimum wage ruins economies. When I was 14, I was able to get a job at minimum wage (which was like 5.50 or something) because that’s what I was worth per hour. When minimum wage is raised to 7.50, in order to recoup losses from added expenditures, employers will aim to hire more experienced, intelligent, and trustworthy people over entry level teenagers. When minimum wage goes up to 10 bucks an hour (~20,000 a year full time) even higher quality employees are needed to reduce costs, improve efficiency, and eliminate waste. Increasing minimum wage increases unemployment and, most devastatingly, makes people comfortable in their poverty.

    Report Post » Kankokage  
  • MAMMY_NUNN
    Posted on July 10, 2012 at 9:34pm

    The Government wants everyone to earn a union wage which is a vicious cycle when we all make a union wage the unions would demand a higher wage therefore repeating the cycle. So the market should determine wages.

    Report Post »  
  • HorseCrazy
    Posted on July 10, 2012 at 9:27pm

    minimum wage rips off all the higher paid employees. every time my state of wa jacks up the minimum wage I cannot bump everyone elses pay who is deserving but am forced to raise the pay of those who haven’t been promoted to higher paying jobs for various reasons. think about that for a moment. the rest of the employees get ripped off. my state of wa $8.55 an hour is the minimum wage right now. may be small picture but it is my small business reality

    Report Post »  
  • blackyb
    Posted on July 10, 2012 at 9:26pm

    When you have millions in this country illegally, you have a workers glut and they will bring down the wages. They take the jobs and Obama knows this. He wants them to vote illegally and Holder is attempting to make a way for them to do this. They are purposefully ruining this country.

    Report Post » blackyb  
  • Psychosis
    Posted on July 10, 2012 at 9:25pm

    for unskilled workers and kids just gatting into the market, it is unfair……………..and their unemployment rates prove it

    Report Post » Psychosis  
  • blackyb
    Posted on July 10, 2012 at 9:25pm

    Of course not, but when it is raised everything else is raised. Those multi-multi millionaires would not work for it.

    Report Post » blackyb  
  • wianno94
    Posted on July 10, 2012 at 9:25pm

    Not if you’r a public employee in Scraton, PA.

    Report Post »  
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