No surprised in the outcome.
Posted on 07/21/2007 11:19:10 AM PDT by libertarianPA
WASHINGTON - Fast-food waitress Fawn Townsend of Raleigh, N.C., knows exactly what she is going to do if her salary goes up with Tuesday's increase in the federal minimum wage: start saving for a car so she can find a second job to make ends meet.
"My goal personally is to get a vehicle so I can independently go back and forth to work and maybe pick up extra work so I can have that extra income, because minimum wage is not cutting it," said Townsend, who is 24 and single.
"Being a single person, you can't pay all your bills with one minimum wage job."
Many lawmakers, along with advocates for low-wage workers, are celebrating the first increase in the federal minimum wage in a decade. Yet many acknowledge that raising it from $5.15 an hour to $5.85 will provide only meager help for some of the lowest paid workers.
About 1.7 million people made $5.15 or less in 2006, according to the Labor Department's Bureau of Labor Statistics.
"The reality for a minimum wage worker is that every penny makes a difference because low-wage workers make the choice between putting food on the table and paying for electricity or buying clothes for their children," said Beth Shulman, former vice president of the United Food and Commercial Workers Union.
"Saying that, it's clear going up to $5.85 is not enough to really make sure that people really can afford the things that all families need," said Shulman, author of "The Betrayal of Work: How Low-Wage Jobs Fail 30 Million Americans."
Minimum wage workers will get an additional 70-cent boost each summer for the next two years, ending in 2009 at $7.25 an hour. That comes to just above $15,000 yearly before taxes for a 52-week work year.
Now, someone in such a job and earning $5.85 an hour would bring home $12,168 a year before taxes. The federal poverty level for singles is $10,210, couples is $13,690 and $17,170 for families of three.
"In the wealthiest country in the history of the world, it is an outrage that anyone who works full time would still wind up in poverty," said Rep. George Miller, D-Calif., chairman of the House Education and Labor Committee. "Everyone who puts in an honest day's work should receive a fair day's pay."
Poverty and the minimum wage are becoming a major issue in the Democratic presidential race. John Edwards and Barack Obama are emphasizing raising the minimum wage during their tours of impoverished areas.
Edwards, who said he wants to eliminate poverty within a generation, favors raising the minimum wage to $9.50. Obama is advocating a "living wage" that would go up as inflation rises and he has promised to eliminate the phrase "working poor."
More than two dozen states and the District of Columbia already have minimum wages higher than the federal one. Even in those states, an increase in the federal minimum wage probably will have a ripple effect, increasing the salaries of Townsend and others.
North Carolina raised its minimum wage from $5.15 to $6.15 in January.
"It's a long overdue first step," said Cindia Cameron, the national organizing director of 9to5, the National Association of Working Women. Minimum wage workers typically are young, single and female and are often black or Hispanic.
Even then when the full increase is enacted, minimum wage workers will be just scraping by. "It's not enough money to meet your basic needs, I'm talking about your rent, your gas, and gas to get back and forth to work," said Sonya Murphy, head organizer of the Mississippi Association of Community Organizations for Reform Now, or ACORN.
But at the same time, employers who pay many of these low-wage workers say increasing the minimum wage only means they have to raise the prices of the products, cut back on employees' hours or let some workers go.
"When you go into the grocery story now, you may be checking your own groceries, you may be bagging your own groceries," said Jill Jenkins, chief economist for the Employment Policies Institute. "All of these things are because of mandated wage hikes. When you have to pay more, employees begin to find other options to keep costs down."
According to the National Restaurant Association, the last minimum wage increase cost the restaurant industry more than 146,000 jobs and restaurant owners put off plans to hire an additional 106,000 employees.
At $7.25 an hour, the most likely response from restaurants will be "increases in menu prices, elimination of some positions and reduction of staff hours to try and offset some of the increased labor costs," said Brendan Flanagan, the association's vice president of federal relations.
Others say the effect on the economy will be negligible.
A PNC Economic Outlook survey done in April showed three out of four small- and middle-market business owners said raising the minimum wage would have little or no impact on their businesses. "In a tighter labor market, they already raised wages to be competitive," said Stuart Hoffman, chief economist for PNC Financial Services Group.
I have long said that the minimum wage needs to indexed to inflation. With year small increases to reflect teh increase in inflation.
No surprised in the outcome.
When did the States grant the Federal government the power to set wages for the private sector? I just don’t find it in the United States Constitution.
Should I change “Not” for “No,” or should I change the “surprises” for “surprised”?
Decisions...decisions...
Cars in America mean freedom. Never forget that. The Left is eventually going to overreach on this issue.
So, 25% of these business, that's one in four, will feel the impact. This doesn't strike these folks as high a number?
The anti-minimum wage argument has always been that it would harm marginal businesses with an unsustainable increase in their operating costs. If they go under, of course, they are providing no one with a "fair wage."
Like, what kind of car can she buy for the extra money? Assume 40 hours a week, at 70 cents an hour, take out social security and other taxes, that's about 20 bucks a week, 52 weeks would be $1000 total.
Then the question is, will the cost of owning the car, fixing the car, putting tags on the car, insuring the car, local property taxes and parking taxes for the car, and gasoline, be more than what she will make in her 2nd minimum wage job.
Typical problem poor people have is they buy an "expensive" car but to afford it they buy used -- and the car they get breaks down constantly, while they still have to pay their monthly payments.
She'd be better off finding a place that will let her work more hours.
I bet her current employer would do so, except that they'd have to pay her overtime, another federal law. So instead of her adding 20 hours a week at a place she is already working at, knows, and can walk to, she has to go find a 2nd employer and a car to put in those 20 hours, because her current employer would have to pay overtime while the 2nd one won't.
Another example of the bad consequences of federal laws.
The current NC minimum wage is $6.15, so she is already earning 30 cents more an hour than the new Federal minimum wage.
LOL! The hypnotic swirleys made me think the grammar was correct.
Shhh, don’t tell her that!
But then again, I’m just one of those who won life’s lottery and doesn’t have to be concerned with “minimum wage”, so it is hard for me to be sympathetic towards those “less fortunate”
By “winning life’s lottery” I mean working my rear end off and getting an education that makes me worth far more than minimum wage to any employer. I have no sympathy for someone whose labor is only $5.00 an hour because they were unwilling to apply the same effort, or make the same sacrificies.
Now if you’ll excuse me, I feel an attack of “influenza” coming on.
THis is just to widen the gap between legal labor and illegals. Increases the demand and mutes the complaints...
The prevailing wage is almost always reflected in rent. That is, if you raise minimum wage, local rents rise to reflect the increase. Think of it as microinflation.
This means that typically, people pay half their paycheck in taxes, and half of the rest in rent. So their actual net should be calculated from that point, that is, 25% of their gross wages. Just as easily, minimum wage employees should make their plans based on 1/4th of what they thought was their earnings.
Of course, this can be biased if the minimum wage employees live in a low rent or no rent situation. But if it is low rent, the renter might still be taxed on the assumption that he *should* have been charging the prevailing rent. The IRS does not permit rental charity.
Alternatively, you can live with your parents or friends, if they don’t charge any rent at all.
Sorry, Illegals have already done this, increasing the minimum wage isn't going to force out the bottom tier, they're already mostly out by virtue of illegal immigration.
And yup, that market that might have hired someone at minimum wage to wash the shelves will now decide that someone can take on this additional task, rather than hiring someone.
Well, Fawn is a member of ACORN... who would have thunk it?
On July 13th, North Carolina enacted a $1 increase in the minimum wage, so that it will reach $6.15 an hour by January, 2007. The raise will affect 139,000 workers. “Finally, North Carolina workers get the raise they deserve. People all over the state are struggling to get by and this is just the first step to making sure that people are paid a fair wage for their work,” said ACORN member Fawn Townsend. North Carolina ACORN is a founding member of North Carolinians for a Fair Wage, which includes Common Sense Foundation, Institute for Southern Studies, NAACP, NC-AFL-CIO, NC Council of Churches, NC Fair Share, NC Justice Center, Southerners for Economic Justice, and Working Families Win.
Even if you call it 35 cents per hour after taxes, FICA, and whatnot . . . yeah, I can see it. Enough to pay for a couple tankfuls of gas a month or in the absence of a car, enough to "get her on the road" to owning one.
Preposterous, isn't it?
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