Minimum Wage… 9 years later…
It would appear that the new Congress will finally be raising the federal minimum wage, nine years after it’s last increase in 1998.
I wrote an analysis about the disparity between congressional pay hikes (which are almost annual these days) .vs. the minimum wage non-hikes last summer.
Over on finepoll.com you can vote and be heard on this topic below…
What do you think?
Do increases to the minimum wage hurt, or help the economy?
One side predicts doom if the minimum wage is raised, massive layoffs, higher priced goods, and so on.
The other side predicts more purchasing power for the unskilled workforce that would counter-act any of the doom the other side predicts.
I’ve heard arguements both ways, but the best indicator in my mind is the historical record.
If you look at the data it becomes obvious. During times when the minimum wage was raised (or kept up with inflation) doom and gloom did not happen, quite the opposite really, the economy expanded, inflation remained steady, and there were no massive layoffs.
Compare that to the last 5-6 years where job growth has been at historic lows, and the economy at best, has been sluggish since Bush came to office. All this during a period of zero hikes in the federal minimum wage.
So…what do you think?
Dave — On 12-15-2006 at 2:43 am
I think min wage should be set by market forces, not government. Good piece on NPR the other morning - go to their web site to read/listen.
restless — On 12-15-2006 at 8:03 am
With the signing of “free trade” agreements we have effectively introduced “market forces” that allows no one to maintain an adequate standard of living. Because of these agreements and other factors, market forces, if left to their own, would drive wages down even further than they are now. This migh be ok, so long as prices for goods, services and real estate were also driven down to compensate. People have to earn enough to buy goods or else people who make and sell the goods don’t do well. Even the push for a mininum wage increase is now being coupled with an agreement by the pols to allow even more “free trade” agreements to be signed, thus obviating the benefits associated with a wage increase: if the jobs go offshore to other countries that pay far far below the minimum wage here, what difference does it make if we have a minimum wage that’s a little higher?
restless — On 12-15-2006 at 8:23 am
I did check NPR’s Web site for stories and found 3. The one I listened to (www.npr.org/templates/story/story.php?storyId=6619460) was about Florida’s min wage increase of a few years ago. The conclusion? Hardly anyone makes minimum wage anyway, so businesses aren’t affected and workers aren’t either. Maybe that’s a “market forcer” (low unemployment) that makes min wage increases irrelavent (at least in local economies that are doing well). So many states (23 so far) have passed their own min wage increases already further making a federal increase of minor help. The real issue is job flight. That would be far more provocative than this issue.