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Issues at hand:
Transcript of Issues at hand:
What is it?
"The federal minimum wage provisions are contained in the Fair Labor Standards Act (FLSA). The federal minimum wage is $7.25 per hour effective July 24, 2009." (Department of Labor)
Key political figures tend to be in favor, or against the minimum wage tend to correlate with political ideology (Liberals being for it, and Conservatives being against it.)
Interest groups vary. Groups like Americans For Prosperity are against; groups like NETWORK are for raising it.
Where are we now, and where are we going?
Issues at hand:
Raising the Minimum Wage
The Minimum Wage
Who relies on the minimum wage?
Minimum wage workers only make up 2.8% of all workers in the U.S
A Decrease from 1979 where 7.9% of all workers once worked for minimum wage
Who works for minimum wage?
78% are white, 39% are white women.
64% are part time workers
About 50% of minimum wage workers range between ages 16-24.
To The Point
According to the Pew Research center, if the minimum wage is raised, then 16.3% of the workforce in the U.S will be impacted by the law by July 2015.
However it will impact states differently.
Political Figures, Interest Groups, and The Media
Key Democrats in favor
Key Republicans Against
For a raise in the minimum wage
" It’s time to end corporate welfare for companies that pay poverty-level wages and then expect taxpayers to pick up the tab when their workers need public assistance to afford food, health care, and other basic expenses." (Youtube.com via Google+)
Senate Majority Whip
Worked with the White House gain approval
“The minimum wage is a labor standard,” Durbin said. “It says if you’re going to work in America, you will not be impoverished. We’ll make sure you have the minimum necessary to get by.” (Masslive.com)
Iowa Senator- Tom Harkins
California Rep- George Miller
"Building the middle class in this country means building opportunity for workers earning at or near the minimum wage, who are falling further and further behind each day ... They deserve a chance to build a better life for their families. That’s why this legislation is so important." (Qtd in Fcnl.com)
"Income inequality is one of the greatest threats to America’s long-term economic vitality, yet we are widening that inequality with wages that subject people to live in poverty ... That’s immoral and that’s undermining our economy." (Qtd in Fcnl.com)
House of Representative member part of the House budget committee.
"Those are some of the things he talked about and I don’t think raising minimum wage — and history is very clear about this — doesn’t actually accomplish those goals." (qtd. in Think Progress)
The question is is a minimum wage the best way to do it? And history has said the answer is absolutely not. In fact, the impact of minimum wage usually is that businesses hire less people (qtd. in Think Progress)
To The Point: The Media
The Conservative Argument
The CBO issued a report that stated, "there is about a two-thirds chance that the effect would be in the range between a very slight reduction in employment and a reduction in employment of 1.0 million workers" (CBO)
There is also the possibility that higher wage workers would lose their jobs to compensate for paying workers more.
Also, a price rise would occur because if more people have disposable income, then they can purchase more things (Demand), and if they can purchase more things then prices go up.
"About 1 and 1/2 percent of the 33 million people who earned less than 11.50 per hour would be jobless ...either because they lost or could not find a job" (CBO)
Let's just suppliment the poor with the EITC (Earned Income Tax Credit)?
The Liberal Argument
The employees of companies who are paying their workers a "living wage" have to give their tax dollars to employees who do not.
People will have more disposable income they can spend, resulting in an economic boost.
Quality over quantity. (Personal initiative) As well as less training costs, having more experienced workers.
It would lift many out of poverty .
Lowers the gender gap in pay.
Note: This is meant to provide a brief snapshot of two key players in this debate
The Network Lobby
"Catholic Social Teaching says that human beings should not be a means to an end and that the economy must serve the people, not the other way around. NETWORK believes in the right to a living wage, a safe work environment, and meaningful work." (Networklobby.org)
What makes NETWORK unique is our combination of professional lobbyists in Washington and our members who lobby as constituents. NETWORK could not exist without our members. (Networklobby.org)
Sister Simone Campbell
Author/Part of Nuns on the bus.
Americans for Prosperity
"Although the President may have good intentions, raising the minimum wage does not help low-skilled and unemployed Americans. Rather, it does more harm than good by increasing the cost of low-skilled labor." (AFP)
"But many minimum wage workers are not working to support a family. According to The Economic Policy Institute, a left-leaning think tank, less than 50% of those receiving the minimum wage are full-time workers. This is because many minimum wage workers are teenagers or part time college students. In fact, 50% of minimum wage workers are 25 years old or younger." (AFP)
Billionaire business owners who support the republican party through issue advocacy.
Second largest privately owned company.
The Supreme Court Rulings
Regarding the Court's attitude on the minimum wage, the topic has first been an issue in
Adkins V. Children's
hospital, where the ruling was later overturned in
West Coast Hotel Co v Parrish.
West Coast Hotel Co. v Parrish
The issue at hand was the same thing as Adkins V. Children's Hospital.
However "The Court noted that employers and employees were not equally "free" in negotiating contracts, since employees often were constrained by practical and economic realities. This was found to be especially true in the case of women. This case explicitly overruled the Court's decision in Adkins v. Children's Hospital (1923)." (Oyez.org)
Adkins V Children's Hospital
Congress enacted legislation that expanded the minimum wage to women and children in Washington D.C.
The issue at hand? "Did the law interfere with the ability of employers and employees to enter into contracts with each other without assuring due process of law, a freedom guaranteed by the Fifth Amendment?" (Oyez.org)
The passed legislation was only a price fixing measure, and upholding the statue would be unconstitutional because it dangerously expanded the police power of the state. (Oyez.org)
Why raise the minimum wage?
Where Do We Go From Here?
"My opinion plus a dollar and six cents will get you a cup of coffee at Biggby Coffee" Mr. (Don) Bietler
"Since the minimum wage transfers income from employers (who generally have a high savings rate) to low-wage workers (who generally have a low savings rate), a minimum-wage rise could spur consumer spending. This increase in spending could potentially compensate firms for the direct increase in wage costs. Doug Hall and David Cooper (2012), for example, estimate that an increase in the minimum-wage from its current level of $7.25 per hour to $9.80 per hour by July 2014 would increase the earnings low-wage workers by about $40 billion over the period. The result, they argue, would be a significant increase in GDP and employment: "CEPR
If the CBO estimates a decrease in a million jobs if the $10.10 minimum wage passes, and if David Henderson, a researcher at the Hoover Institute and economic professor, concluded that "A 10 percent increase in the minimum wage reduces employment of young workers by 1 percent to 2 percent." (NCPA.org) What do we do?
There is the Earned Income Tax Credit, where families with an income below $52,000 get a tax return to supplement their low paying jobs.
This way people have more income to spend and stimulate the economy. It is supplementary as people rise up the income latter (Youtube.com)
Even Barack Obama supports increasing the tax cuts for the low income workers (primarily composed of minimum wage workers.) (Washingtonpost.org)
This research implies the same idea that increase in money in peoples pockets will result in increased consumer spending resulting in the economy.
This idea of raising the minimum wage is expected to raise about 900,000 people out of poverty http://www.cbo.gov/publication/44995
Raising the federal minimum wage to $10.10 by 2016 would return the federal minimum wage to roughly the same inflation-adjusted value it had in the late 1960s. (EPI)
Across the phase-in period of the increase, GDP would grow by about $22 billion, resulting in the creation of roughly 85,000 net new jobs over that period. (EPI)
“Literally, if we took away the minimum wage—if conceivably it was gone—we could potentially virtually wipe out unemployment completely because we would be able to offer jobs at whatever level.” (Qtd in Businessweek.com)
Republican representative for the 6th district of Minnesota.