Sunday, July 02, 2006

Republican Values in Action

Bob Herbert makes a compassionate and reasoned plea for increasing the minimum wage. The statistics he cites in his NY Times op ed should give everyone pause.

Republicans ran on a "compassionate conservative" platform and touted their God-based Republican values. We have since come to see the rhetoric for what it is--empty words.

There is no compassion or Godly values in class warfare.

Working for a Pittance
By Bob Herbert
The New York Times
"We can no longer stand by and regularly give ourselves a pay increase while denying a minimum wage increase to the hardworking men and women across this nation."

— Hillary Rodham Clinton, to her fellow senators.

The federal minimum wage, currently $5.15 an hour, was last raised in 1997. Since then, its purchasing power has deteriorated by 20 percent. Analysts at the Economic Policy Institute and the Center on Budget and Policy Priorities jointly crunched the numbers and determined that, after adjusting for inflation, the value of the minimum wage is at its lowest level since 1955.

For those who don't remember, Eisenhower was president in 1955, the Dodgers were still in Brooklyn, and Barack Obama hadn't even been born.

If you're making the minimum wage, you're hurting. If Congress and the president don't raise the minimum wage by Dec. 2, it will have remained unchanged for the longest stretch since it was established in 1938. (The longest period previously was from January 1981 to April 1990 — a span that saw the entire Reagan administration come and go.)

Senate Republicans recently blocked a Democratic bill, sponsored by Senator Edward Kennedy, that would have raised the minimum wage to $7.25 an hour over the next two years. Jared Bernstein, a senior economist at the Economic Policy Institute, noted that while Republicans in Congress are standing like a stone wall against this modest increase in the poverty-level wage, "they are working as hard as they can to repeal the estate tax."

"That," he said, "is just vicious class warfare."

The most important pay increases for most members of Congress are their own, and they are diligent in that regard. Senator Clinton, in a floor speech supporting the minimum-wage hike, said, "During the past nine years, we've raised our own pay by $31,600."

Mrs. Clinton has introduced a bill that, in addition to raising the minimum wage to $7.25, would link Congressional pay raises to hikes in the minimum wage. Under the bill, the minimum wage would be increased automatically by the same percentage as any increase in Congressional pay.

Polls have shown that Americans overwhelmingly favor an increase in the minimum wage. But the low-income workers who would benefit from such an increase are not part of the natural G.O.P. constituency. Thus, the stonewall.

A separate study by the Economic Policy Institute found that in 2005, with the pay of top corporate executives up sharply, and with the minimum wage falling further and further behind inflation, "an average chief executive officer was paid 821 times as much as a minimum wage earner."

That C.E.O., according to the study, "earns more before lunchtime on the very first day of work in the year than a minimum wage worker earns all year."

"The reality," said Senator Clinton, "is that a full time job that pays the minimum wage just doesn't provide enough money to support a family today. We have to acknowledge that fact and do something about it. As a country, we cannot accept that a single mother with two children who works 40 hours a week, 52 weeks a year earns $10,700 a year — let me say this again: $10,700 a year. That is almost $6,000 below the federal poverty line for a family of three."

During the 1950's and 60's, the minimum wage was roughly 50 percent of the average wage of nonsupervisory workers. It has now fallen to 31 percent — less than a third — of that average.

As the Economic Policy Institute and the Center on Budget pointed out in their study: "Each year that Congress fails to raise the wage floor, its purchasing power erodes. The fact that the minimum wage has remained the same for nearly nine years means that its real value has declined considerably over that period. As inflation has accelerated recently due to higher energy costs, the real value of the minimum wage has fallen faster."

There is no justification — none — for condemning the nation's lowest-paid workers to this continuing slide into ever deeper economic distress. "No one who works for a living should have to live in poverty," said Senator Kennedy.

It's very telling that in the most prosperous nation in the world, that kind of comment actually sounds radical. We have a very long way to go.

Photo credit: Bob Herbert. (The New York Times)

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Internet Esquire said...

The minimum wage debate is steeped in ignorance. Specifically, very few advocates of raising the minimum wage mention the fact that an expansion of the Earned Income Tax Credit (EITC) would be a much more effective and equitable way of helping the working poor than raising the minimum wage. Of those few advocates of raising the minimum wage who do mention the EITC, many that a minimum wage law is necessary, . . . that somehow these two programs work in tandem to fight poverty.

In terms of fighting poverty, the EITC is highly effective because it puts more actual money into the hands of the working poor whereas the minimum wage is simply a huge off-the-books tax that redistributes wealth from employers to minimum wage employees. The EITC also reduces entitlement spending, provides a boost to the local economy from the bottom up, and increases labor force participation.

Over two thirds of those who work for minimum wage are not living in poverty. In striking contrast, most of the working poor make a substantial amount of money more than the minium wageand and but for the EITC would be living in poverty and would need to apply for food stamps and other entitlement programs.

The Unknown Candidate said...

Internet Esquire writes: "...the minimum wage is simply a huge off-the-books tax that redistributes wealth from employers to minimum wage employees."

I disagree. Nice manipulation of the argument, though. The minimum wage is not a tax of any kind. It is an attempt to more fairly pay workers for work done. Every employer must pay wages to workers. It is a cost of doing business, not a tax.

The EITC does not bring wages up. It decreases taxes on too low wages. Even if you remove all taxes from minimum wage workers, they are still below the poverty line.

A source for your statistic ("of those who work for minimum wage are not living in poverty. In striking contrast, most of the working poor make a substantial amount of money more than the minium wage...") would be appreciated.

What is missing from your argument is this: individual people are not statistics. A single mother with two kids cannot support her family at $5.15/hr with our without EITC.

Don't believe me? Try it.