Download In minimum wage debate, both sides make valid points by Rex

Minimum Wage- Article #1
Sen. Cornyn calls $10.10 minimum wage a job killer by Nick Swartsell
WASHINGTON–Giving the millions of Americans making low wages a federally-mandated
raise would actually hurt more people that it helps, Sen. John Cornyn says.
A bill that would have raised the nation’s minimum wage to $10.10 an hour would have
eliminated jobs, Cornyn asserted today during his weekly call with reporters, hours after he
and fellow Republicans blocked the bill in the Senate.
Democrats have pushed the increase for months. Cornyn and fellow Texas Sen. Ted Cruz,
as well as nearly all of their GOP colleagues, voted to block the bill. Sen. Bob Corker of
Tennessee was the lone Republican to vote to move forward on the bill.
“There’s a much better way to deal with income inequality and low income than the federal
government mandating what those wages should be,” Cornyn said.
He cited a Congressional Budget Office estimate released in March, which found that raising
the minimum wage to $10.10 an hour would cost 500,000 jobs, as higher labor costs
prompted employers to scale back.
But the report also found that as many as a million people would be lifted out of poverty.
Texas’ state minimum wage is pegged to the federal minimum, currently $7.25 an hour. More
than 2.5 million Texans make $10 an hour or less, according to Bureau of Labor Statistics
data.
Democrats have been in engaged in an ongoing push to raise the minimum wage as part of a
larger effort against income inequality. President Obama pushed a wage increase during his
State of the Union address, and Democrats in the House and Senate have championed the
cause, as well.
The Senate bill, authored by Sen. Tom Harkin, D-Iowa, failed on a cloture vote — a
procedural hurdle that requires 60 senators to agree to hold a final vote.
Cornyn said job training programs and easing regulations on business are the best way to
raise wages. He said good jobs are out there– people just need the qualifications to do them.
“I’ve seen that all across the state of Texas, of course, in the industries that have now come
back onshore because of the plentiful nature of natural gas and the phenomenon of the shale
gas revolution,” Cornyn said.
He said constituents who own businesses have expressed concerns that raising the wage
may make it necessary to fire workers. “There are a lot of unintended consequences
associated with this. This minimum wage mandate would be counterproductive and kill jobs.”
Swartsell, Nick. "Sen. Cornyn Calls $10.10 Minimum Wage a Job Killer."DallasMorningNews.com. The Dallas Morning News
Inc., 23 Apr. 2014. Web. 21 Oct. 2014.
Minimum Wage- Article #2
Why the Minimum Wage Should Really Be Raised to $15 an Hour by Robert B. Reich
Momentum is building to raise the minimum wage. Several states have already taken action -Connecticut has boosted it to $10.10 by 2017, the Maryland legislature just approved a similar
measure, Minnesota lawmakers just reached a deal to hike it to $9.50. A few cities have been more
ambitious -- Washington, D.C. and its surrounding counties raised it to $11.50, Seattle is considering
$15.00
Senate Democrats will soon introduce legislation raising it nationally to $10.10, from the current $7.25
an hour. All this is fine as far as it goes. But we need to be more ambitious. We should be raising the
federal minimum to $15 an hour.
Here are seven reasons why:
1. Had the minimum wage of 1968 simply stayed even with inflation, it would be more than $10 an
hour today. But the typical worker is also about twice as productive as then. Some of those
productivity gains should go to workers at the bottom.
2. $10.10 isn't enough to lift all workers and their families out of poverty. Most low-wage workers
aren't young teenagers; they're major breadwinners for their families, and many are women. And they
and their families need a higher minimum.
3. For this reason, a $10.10 minimum would also still require the rest of us to pay Medicaid, foodstamps, and other programs necessary to get poor families out of poverty -- thereby indirectly
subsidizing employers who refuse to pay more. Bloomberg View describes McDonald's and Walmart
as "America's biggest welfare queens" because their employees receive so much public assistance.
(Some, like McDonalds, even advise their employees to use public programs because their pay is so
low.)
4. A $15/hour minimum won't result in major job losses because it would put money in the pockets of
millions of low-wage workers who will spend it -- thereby giving working families and the overall
economy a boost, and creating jobs. (When I was Labor Secretary in 1996 and we raised the
minimum wage, business predicted millions of job losses; in fact, we had more job gains over the next
four years than in any comparable period in American history.)
5. A $15/hour minimum is unlikely to result in higher prices because most businesses directly affected
by it are in intense competition for consumers, and will take the raise out of profits rather than raise
their prices. But because the higher minimum will also attract more workers into the job market,
employers will have more choice of whom to hire, and thereby have more reliable employees -resulting in lower turnover costs and higher productivity.
6. Since Republicans will push Democrats to go even lower than $10.10, it's doubly important to be
clear about what's right in the first place. Democrats should be going for a higher minimum rather than
listening to Republican demands for a smaller one.
7. At a time in our history when 95 percent of all economic gains are going to the top 1 percent,
raising the minimum wage to $15 an hour isn't just smart economics and good politics. It's also the
morally right thing to do.
Reich, Robert B. "Why the Minimum Wage Should Really Be Raised to $15 an Hour." The Huffington Post.
TheHuffingtonPost.com, 08 Apr. 2014. Web. 21 Oct. 2014.
Minimum Wage- Article #3
Maybe raising the minimum wage isn’t such a good idea after all by Joann Weiner
It’s been almost five years since the federal minimum wage went up from $6.55 to $7.25. Now, House
Democrats are demanding to “Raise the wage” to $10.10 and just filed a discharge petition calling for
a vote on The Fair Minimum Wage Act that will do just that. This move follows President Obama’s
recent executive order to raise the minimum wage to $10.10 for federal contractors starting next year.
As the president said, “In the wealthiest nation on earth, nobody who works full time should have to
live in poverty — nobody, not here in America.”
But is raising the minimum wage the best way to reduce poverty?
Douglas Holtz-Eakin, who is a former director of the Congressional Budget Office, doesn’t think so. In
fact, he doesn’t think the federal government should have a minimum wage at all. In a speech to the
National Economic Club on Thursday, Holtz-Eakin said that raising the minimum wage “is an
incredibly unwise thing to do.”
Not only does it put low-skilled, low-educated workers at risk of losing their jobs, but also it prevents
those who most need a job from getting one, he said.
This conclusion comes from recent research by Jonathan Meeks and Jeremy West of Texas A&M
University showing that raising the minimum wage reduces net job growth primarily by hampering job
creation in expanding industries. The effect is especially strong for younger workers and in industries
with a higher share of low-wage workers.
Nearly five years after the recession officially ended, less educated and inexperienced workers are
still finding it hard to get a job. And, if Meek and West’s analysis of how the minimum wage affects job
creation is right, these people are going to be unemployed for even longer and bear the brunt of a
federally mandated wage increase.
As Holtz-Eakin explained, although increasing the minimum wage might cause some people to lose
their jobs, it’s more likely to keep people out of work.
But, there’s more to the story.
Holtz-Eakin pointed out that the dividing line between those who are in poverty and those who aren’t
is whether the person has a job.
The poverty rate is four times higher for people who aren’t working than for those who are, he said.
Holtz-Eakin isn’t opposed to paying people more. What he opposes is a federal mandate making
employers pay more. He would prefer allowing companies to decide whether to pay workers more, as
the retailer The Gap has said it will do, or to allow states to set their minimum wage rates above the
federal rate, as 21 states and the District of Columbia have done.
Having a job is a good way to climb out of poverty.
A recent report from the Congressional Budget Office showed that raising the minimum wage from
$7.25 to $10.10 would lift 900,000 people out of poverty. That figure partly explains why Holtz-Eakin
dismissed the CBO’s estimates as not being big enough to worry about. With 45 million people in
poverty, helping fewer than one million doesn’t give much bang for the buck.
And, with mounting evidence that raising the minimum wage stifles job creation, that may be why
raising the minimum wage isn’t such a good idea after all.
Weiner, Joann. "Maybe Raising the Minimum Wage Isn’t Such a Good Idea after All." Washington Post. The Washington
Post, 28 Feb. 2014. Web. 19 Oct. 2014.
Minimum Wage- Article #4
Here's where a minimum wage hike would do the most good by Claire Zillman
A wage hike would directly affect close to 2 million Texans. How did the Lone Star State get so many
low-wage workers? Earlier this month, Vermont increased its minimum wage to $10.50 – the highest
in the nation and the first statewide rate to exceed the $10.10 hourly rate advocated by President
Barack Obama.While the raise is good news for workers in Vermont – the eighth state this year to
boost its minimum wage – the Green Mountain State is actually one of the few states that didn’t need
an increase. Even before last week’s hike, the state’s $8.73 minimum wage was the third-highest in
the country, behind only Oregon and Washington, where workers earn at least $9.10 and $9.32 an
hour, respectively. And the new wage will directly affect a relatively small number of people. Vermont
had the one of the lowest total number of hourly worker in 2013 – 182,000 – second only to
Wyoming’s 176,000, according to the Bureau of Labor Statistics.
So, with Vermont clearly out of the running, which state needs a minimum wage increase the most?
The Economic Policy Institute tried to answer this question by examining how many state residents
would be directly affected by a minimum wage hike to $10.10 and what sort of state stimulus such a
raise would produce. After crunching the numbers, there was a clear winner: Texas, where the current
minimum wage is the federally mandated $7.25 an hour.
Out of an estimated total workforce of nearly 11 million in Texas, a $10.10 minimum wage would
directly affect 1.95 million people – in other words, that many Texans would get a raise because a
$10.10 wage would surpass what they currently make. (Another 920,000 Texans would be indirectly
affected since they make just above $10.10 and a minimum wage hike would likely adjust pay scales
overall.) In no other state would that many residents be affected by a hike to $10.10 an hour. Florida
is a distant second; just over 1 million of its residents would directly benefit from such a boost.
It’s not just the total number of workers in Texas – the second most populous state in the U.S. – that
puts the state in this position. It’s also the state’s incredibly large low-wage workforce. According to
the Bureau of Labor Statistics, there are 400,000 workers in Texas whose hourly wage is at or below
the federal standard of $7.25 – more than double that of any other state. While that’s a lot in absolute
terms, it also represents a large portion of the state’s overall workforce: 6.4% — the fifth highest
percentage in the country, behind Tennessee, Idaho, Arkansas and Alabama.
So, what’s the matter with Texas? How did it get here? First off, the Lone Star State is one of 28
states that this year offers a minimum wage equivalent to the federal minimum wage of $7.25, abides
by a lower rate, or has no minimum wage at all. States that have instituted a higher state minimum
wage like, say, Vermont will automatically have fewer affected people should the federal minimum
wage increase to $10.10.
Immigration also contributes to Texas’ large low-wage population, according to David Cooper, author
of the EPI report. While economists have mixed opinions over what immigration means for U.S.
employment and wages — some estimates imply that immigrant workers reduce the wages of lowskilled workers by 4.7% while others find that immigration raises the wages of all U.S.
workers, according to the Brookings Institution – there’s little doubt that illegal immigrants are subject
to sub-minimum wage pay and fear retaliation if they challenge it.
“What’s historically true, whenever you have large numbers of immigrant workers – generally
speaking – that means there’s a number of people who are undocumented,” Adler says. About 16.2%
of Texas’ population was foreign born in 2012, according to Pew Research, up from 13.9% in 2000.
“The overwhelming truth is that undocumented immigrant workers are extremely vulnerable to being
exploited with low wages and unsafe working conditions,” says Adler.
Education, too, is a factor. In Texas, 34.5% of adults have an associate’s degree or higher, according
to a 2012 survey by the Working Poor Families Project, compared to 39.9% nationwide in 2012, which
breeds a low-skilled, low-wage workforce, says Leslie Helmcamp, a policy analyst at the Center for
Public Policy Priorities, a nonpartisan policy institute in Austin, Texas. As children in Texas grow up
poor, post-secondary education and higher skilled jobs fall out of reach. “Six in 10 kids in the state are
economically disadvantaged; they’re very low-income so their families lack the resources for college,”
Helmcamp says. Low-wage work becomes cyclical, generation after generation.
Zillman, Claire. "Here’s Where a Minimum Wage Hike Would Do the Most Good."Fortune. Fortune.com, 20 June 2014. Web.
21 Oct. 2014.
Minimum Wage- Article #5
Minimum Wage Mythbusters by Department of Labor
Myth: Raising the minimum wage will only benefit teens.
Not true: The typical minimum wage worker is not a high-school student earning weekend pocket
money. In fact, 88 percent of those who would benefit from a federal minimum wage increase are
age 20 or older, and 55 percent are women.
Myth: Increasing the minimum wage will cause people to lose their jobs.
Not true: A review of 64 studies on minimum wage increases found no discernable effect on
employment. Additionally, more than 600 economists, seven of them Nobel Prize winners in
economics, have signed onto a letter in support of raising the minimum wage to $10.10 by 2016.
Myth: Small business owners can't afford to pay their workers more, and therefore don't support an
increase in the minimum wage.
Not true: A June 2014 survey found that more than 3 out of 5 small business owners support
increasing the minimum wage to $10.10. Small business owners believe that a higher minimum
wage would benefit business in important ways: 58% say raising the minimum wage would increase
consumer purchasing power. 56% say raising the minimum wage would help the economy. In
addition, 53% agree that with a higher minimum wage, businesses would benefit from lower
employee turnover, increased productivity and customer satisfaction.
Myth: Raising the federal tipped minimum wage ($2.13 per hour since 1991) would hurt
restaurants.
Not true: In California, employers are required to pay servers the full minimum wage of $9 per hour
- before tips. Even with a recent increase in the minimum wage, the National Restaurant
Association projects California restaurant sales will outpace the U.S. average in 2014.
Myth: Raising the federal tipped minimum wage ($2.13 per hour since 1991) would lead to
restaurant job losses.
Not true: Employers in San Francisco must pay tipped workers the full minimum wage of $10.74
per hour – before tips. Yet, the San Francisco restaurant industry has experienced positive job
growth over the past few years according to the Bureau of Labor Statistics.
Myth: Raising the federal minimum wage won't benefit workers in states where the hourly minimum
rate is already higher than the federal minimum.
Not true: Only 23 states and the District of Columbia currently have a minimum wage higher than
the federal minimum, meaning a majority of states have an hourly minimum rate at or below the
federal minimum. Increasing the federal minimum wage will boost the earnings for some 28 million
low-wage workers nationwide. That includes workers in those states already earning above the
current federal minimum. Raising the federal minimum wage is an important part of strengthening
the economy. A raise for minimum wage earners will put more money in more families' pockets,
which will be spent on goods and services, stimulating economic growth locally and nationally.
Myth: Younger workers don't have to be paid the minimum wage.
Not true: While there are some exceptions, employers are generally required to pay at least the
federal minimum wage. Exceptions allowed include a minimum wage of $4.25 per hour for young
workers under the age of 20, but only during their first 90 consecutive calendar days of employment
with an employer, and as long as their work does not displace other workers. After 90 consecutive
days of employment or the employee reaches 20 years of age, whichever comes first, the employee
must receive the current federal minimum wage or the state minimum wage, whichever is higher.
There are programs requiring federal certification that allow for payment of less than the full federal
minimum wage, but those programs are not limited to the employment of young workers.
Myth: Restaurant servers don't need to be paid the minimum wage since they receive tips.
Not true: An employer can pay a tipped employee as little as $2.13 per hour in direct wages, but
only if that amount plus tips equal at least the federal minimum wage and the worker retains all tips
and customarily and regularly receives more than $30 a month in tips. Often, an employee's tips
combined with the employer's direct wages of at least $2.13 an hour do not equal the federal
minimum hourly wage. When that occurs, the employer must make up the difference. Some states
have minimum wage laws specific to tipped employees. When an employee is subject to both the
federal and state wage laws, he or she is entitled to the provisions of each law which provides the
greater benefits.
Myth: Only part-time workers are paid the minimum wage.
Not true: About 53 percent of all minimum wage earners are full-time workers, and minimum wage
workers contributed almost half (46 percent) of their household's wage and salary income in 2011.
Moreover, more than 88 percent of those who would benefit from raising the federal minimum wage
from $7.25 to $10.10 are working adults, and 55 percent are working women.
Myth: Increasing the minimum wage is bad for businesses.
Not true: Academic research has shown that higher wages sharply reduce employee turnover
which can reduce employment and training costs.
Myth: Increasing the minimum wage is bad for the economy.
Not true: Since 1938, the federal minimum wage has been increased 22 times. For more than 75
years, real GDP per capita has steadily increased, even when the minimum wage has been raised.
Myth: The federal minimum wage goes up automatically as prices increase.
Not true: While some states have enacted rules in recent years triggering automatic increases in
their minimum wages to help them keep up with inflation, the federal minimum wage does not
operate in the same manner. An increase in the federal minimum wage requires approval by
Congress and the president. However, in his call to gradually increase the current federal minimum
wage to $10.10 per hour, President Obama has also called for it to adjust automatically with
inflation. Eliminating the requirement of formal congressional action would likely reduce the amount
of time between increases, and better help low-income families keep up with rising prices.
Myth: The federal minimum wage is higher today than it was when President Reagan took office.
Not true: While the federal minimum wage was only $3.35 per hour in 1981 and is currently $7.25
per hour in real dollars, when adjusted for inflation, the current federal minimum wage would need
to be more than $8 per hour to equal its buying power of the early 1980s and more nearly $11 per
hour to equal its buying power of the late 1960s. That's why President Obama is urging Congress to
increase the federal minimum wage and give low-wage workers a much-needed boost.
Myth: Increasing the minimum wage lacks public support.
Not true: Raising the federal minimum wage is an issue with broad popular support. Polls
conducted since February 2013 when President Obama first called on Congress to increase the
minimum wage have consistently shown that an overwhelming majority of Americans support an
increase.
Myth: Increasing the minimum wage will result in job losses for newly hired and unskilled workers in
what some call a “last-one-hired-equals-first-one-fired” scenario.
Not true: Minimum wage increases have little to no negative effect on employment as shown in
independent studies from economists across the country. Academic research also has shown that
higher wages sharply reduce employee turnover which can reduce employment and training costs.
Myth: The minimum wage stays the same if Congress doesn't change it.
Not true: Congress sets the minimum wage, but it doesn't keep pace with inflation. Because the
cost of living is always rising, the value of a new minimum wage begins to fall from the moment it is
set.
"Minimum Wage Mythbusters." U.S. Department of Labor. N.p., n.d. Web. 21 Oct. 2014.
Minimum Wage- Article #6
In minimum wage debate, both sides make valid points by Rex Huppke
After two weeks of detailing the arguments for and against raising the federal minimum wage —
interviewing economists and policy experts, poring over a flood of emails from workers and business
owners, reading scads of papers pro and con — I've reached an important conclusion: This issue
is really complicated.
As I began this series of columns, my gut feeling was: RAISE IT! And if you look at the polling
numbers, a sizable majority of Americans share that feeling. That's why Democrats, from President
Barack Obama on down, are pushing hard on this issue — it appeals to people, and it sounds like the
right thing to do. But setting emotions aside to look objectively at both sides of the argument takes
some of the shine off the idea.
Opponents of boosting the minimum wage focus mainly on the potentially detrimental side effects, like
job reduction, and a rise in the cost of consumer goods and services. Some academic studies have
confirmed those negative effects; others have shown they don't happen. You can easily battle to a
draw on those issues. I think the truth is that it's wildly difficult to predict exactly how increasing the
base wage from $7.25 per hour to $10.10 per hour would play out. Some markets might be able to
absorb the change, while others might struggle. Some companies will be able to absorb the increased
labor costs, while others with thin profit margins might cut their workforce or raise prices.
But the point that opponents of a minimum wage increase make that strikes me as the most
compelling is this: Raising the minimum wage is not a very effective means of addressing poverty. For
starters, I had never considered the diversity of minimum wage earners — this swath of the workforce
is made up of teenagers working first jobs, older workers supplementing their income and, yes, people
who are truly struggling to make ends meet.
It's that latter group that most needs the help, but by raising the minimum wage, you're not targeting
those workers alone; you're targeting everyone who happens to get paid minimum wage. And you do
so with some level of risk, as detailed in the Congressional Budget Office report that showed a wage
increase could lead to the loss of 500,000 jobs. (The report also found that higher wages could push
900,000 people above the poverty line, an unquestionably good outcome.)
Opponents of the increase say time and money would be better spent improving education and job
training programs that will give people a better shot at getting out of minimum wage jobs and into
better-paying careers. So, does this mean I think it would be bad to raise the minimum wage? No.
I hear experts opposed to raising the minimum wage talk about education and the EITC. But I don't
see Republican lawmakers who oppose raising the minimum wage rallying too hard to promote those
ideas — many of them just say "no" to a wage increase and leave it at that.
On the flip side, Democratic lawmakers seem laser-focused on only the increase itself. The debate
we're having right now is: "It's a minimum wage increase or nothing." That's too simplistic an approach
for such a complex problem.
If we claim to be concerned about the working poor in this country, then let's demand more of our
lawmakers than empty "Raise the Wage!" or "Let the Market Decide!" slogans.
I think our current federal minimum wage, which hasn't been raised since 2009, seems unreasonably
low, but I also wonder if a nearly 40 percent increase isn't asking a bit much. If it's going to be raised,
it should be tied to inflation so it exists as part of our economic philosophy and can't be used as a
political cudgel.
I realize this is impractical in an era of partisan politics, but what I'm in favor of is a comprehensive
approach to making life better for American workers. And that will require both sides to compromise.
If the minimum wage is raised, I'll be happy for the working people who benefit and hopeful that the
outcomes will be as good as promised. But if all we do is raise the minimum wage, I'll worry we're
missing a chance to lift people out of poverty for good, and that a few years from now, we'll be having
this same conversation — again.
Huppke, Rex. "Minimum Wage Debate: Valid Points on Both Sides." Chicago Tribune. N.p., 17 Mar. 2014. Web. 22 Oct.
2014.