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Wednesday, November 6, 2013

Voters Approve Minimum Wage Increases, But Congress Won’t Take it Up

Craig Newcomb/Twitter)" href="http://media.wbur.org/wordpress/11/files/2013/11/1106_seatac-minwage.jpg">Supporters of Proposition 1 which raises the minimum wage to $15 in SeaTac, Washington, celebrate their victory. (Craig Newcomb/Twitter)

Supporters of Proposition 1 which raises the minimum wage to $15 in SeaTac, Washington, celebrate their victory. (Craig Newcomb/Twitter)

Last night, New Jersey voters approved a constitutional amendment to raise the minimum wage by a dollar to $8.25 an hour.

And in SeaTac, Washington, a proposition that would make the minimum wage in some in airport-related industries $15 an hour was leading with over 50 percent of the vote.

But if raising the minimum wage is so popular with voters, why won’t Congress take up the issue?

NPR’s Marilyn Geewax joins Here & Now’s Jeremy Hobson to explain.

Guest

Transcript

JEREMY HOBSON, HOST:

From NPR and WBUR Boston, I'm Jeremy Hobson. It's HERE AND NOW.

Last night, New Jersey voters reelected their governor, Chris Christie, but they also overwhelmingly approved a $1 hike in the state's minimum wage. Starting in January, the minimum wage in New Jersey will be $8.25 an hour. Nationwide, the federal minimum wage has been 7.25 an hour since 2009. Now President Obama has asked Congress to raise that again, but so far, lawmakers have not made that happened. So more and more states are taking action on their own.

Joining us now to talk about all this is Marilyn Geewax, senior business editor with NPR. Marilyn, good to have you back. And tell us about what happened last night because it wasn't just New Jersey.

MARILYN GEEWAX, BYLINE: Right. First, in New Jersey, it really was a slam dunk. Voters overwhelmingly approved this wage hike. And now, it joins New York where the state legislature already had approved a wage hike. So we're seeing, you know, real momentum as far as states approving this. But the big thing that, you know, it's kind of a small town, SeaTac, Washington, that's where the surprise was. People appeared to have passed by a fairly good margin an increase to $15 an hour. That's a lot of money.

HOBSON: Wow.

GEEWAX: But it only applies to people who work in or around Seattle-Tacoma International Airport. So, you know, that's a relatively small group of people. But still, when you think about it, it's not just mechanics or pilots or airport workers like that. It's the people who make sandwiches, who are the janitors, whatever. The - these - everyone across the board will be able to make $15 an hour now, and that's pretty amazing, more than double the federal wage.

HOBSON: So if there is this support for this around the country, why hasn't Congress raised the federal minimum?

GEEWAX: That's interesting. The federal wage was last raised in July of 2009. It's been at this $7.25 for a long time now. And President Obama, at the start of the year, during his State of the Union Address, said he wanted to raise the rate to $9 an hour. But it always has a lot of resistance in Congress because, you know, if you think about it, every single member of Congress has at least one restaurant in their district. There are often lots and lots of restaurants.

And the restaurant owners are really opposed to higher wages as well as the small business owners. So the lawmakers get a lot of lobbying. They hear a lot about it when they go back to their districts from the small business people. So there's a lot of resistance at a federal level to raising this federal minimum wage. But as we said, you know, on the state and city level, the voters are going around the lawmakers and just taking these direct ballot initiatives.

HOBSON: Well, yeah. And the argument against it always comes from these business leaders who would say, if you raise the minimum wage, you're going to have fewer jobs created as a result of that. What does the economic research show about the impact of raising the wage?

GEEWAX: Well, the wage has been set for 75 years now. So there's been a lot of time to look at the economic impact of it. And most studies actually show that the impact on total employment is pretty marginal. You know, in any specific business, if suddenly you have to pay more in wages, you may not be able to hire an - another worker, or you may have to let someone go.

But overall, if consumers have more money in their pocket, you know, a lot of those low-wage workers, as soon as they get some more money, they can, you know, get a haircut, buy another pizza, whatever. They help stimulate the economy so that, overall in the aggregate, you end up with somewhat, you know, breaking even where you have jobs shift, but they're not necessarily shrinking.

HOBSON: Marilyn Geewax, NPR senior business editor, thank you as always.

GEEWAX: Oh, it's good to be with you, Jeremy.

HOBSON: And let us know what you think. Does the minimum wage need to go up across the country? Should it be more than $7.25 an hour? You can go to hereandnow.org and weigh in with your thoughts. This is HERE AND NOW. Transcript provided by NPR, Copyright NPR.


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  • Suz

    Absolutely we should raise the minimum wage!!!! Many of the law-makers own businesses and they want to keep the profits for themselves. Greed and selfishness are what motivates many in congress.

    • fun bobby

      so you think raising the minimum wage will result in business owners profiting less?

  • Tyler

    Government should never be in the business of setting labor prices; this should be the job of the free market in a true capitalist society. Of course, this boils down to the monetary system and our lack of “sound money,” (thanks to the Private Federal Reserve) wherein our politicians spread the fear of “depreciation” and seek to prop up the inflation tax as a result. With persistent inflation, wages forcibly rise; but this should not be confused with a “pay increase.” The purchasing power, over the long-term, of these workers actually decreases. Just compare wages/prices from 1970 to today to see how real wages have been doing. It’s not a pretty picture.

    Minimum wage laws treat a symptom of the greater problem, but should not be seen as solutions. In fact, as was mentioned on the program, these laws discourage small businesses and start-ups from adding on additional workers. It is not a “marginal” effect that they have on overall employment, as the guest suggested. You are pricing people out of the marketplace by dictating how much employers should pay their workers, when in a free market the workers would actually have a greater choice of employers and would be able to pick-and-choose their job. There wouldn’t be a shortage of employers; ideally, there would be too many jobs (imagine immigration debate if we ever get there).

    What a pipe-dream, though, despite this being “America.” Government has its hands in everything.

  • Ed

    We all subsidize business when they do not provide a living wage, those are the members of our society who have to ask for food stamps and other help programs, which we all pay for. Republicans do not understand this, and we continue to have a low wage recovery. Meaning more people dependent upon government.

    • fun bobby

      that’s true, the solution is to not provide any welfare to working people. Then employers will be forced to pay more or lose their employees to others that will.

  • Jim

    There should be a global minimum wage so there is actual fair trade and the rich don’t export jobs to exploit a form of legal slavery.

    • fun bobby

      that seems like the obvious solution. don’t allow any goods or services to be imported unless those workers are paid a minimum wage. America has simply outsourced slavery.

  • Bob Straub

    The minimum wage is an illegitimate concept. Free markets are the most moral and efficient way of determining how much a job is worth. There aren’t that many people who current ly earn only that much. In PA, where I live, and in the food preparation and service industry, from the tenth to the ninetieth percentiles, the wages earned is at least a dollar more than the legislated minimum. When a government forces an employer to pay a minimum wage, if the employer takes no other action the result is higher prices for what the employer produces. The higher prices will discourage customers from buying either the employer’s goods or someone else’s, or both. But the employer might decide that some employees aren’t worth the higher wage and lay them off. Or the employer might buy a machine that will, over the long run, do an employee’s work cheaper, and lay the employee off. Minimum wage laws take one choice away from some prospective employees: a crappy job, or none. (It’s the crappy job choice that’s taken away, of course, leaving the employee with none.)
    Finally, the employer/employee relationship is essentially a contract, made without coercion from either party. No third entity has any right to interfere with it, except if the contract is broken, when a judge or arbitrator may be called in.

    Bob Straub

    Ephrata, PA

  • Kathy Moore Pinnell

    I like what I am hearing about NJ minimum wage solution. The cost of living varies widely around the country. An hourly rate $7.25 in NYC is very different in small town Kansas. To have a universal minimum wage does not make good sense. I do not oppose what the feds have in place now. Raises over and above the fed level, however, would make more economic sense if they were decided upon at the state level.

    Availability of minimum wage workers would have an impact on a state’s desire to attract certain kinds of businesses. This would create a competitive atmosphere among states in a region to keep their minimum wages at a reasonable rate.

  • Jim

    Federal Minimum Wage should be at least a living wage based on a 40-hour week. At this time I would make it at least $15/hr and index it that to inflation. For me, what’s most important here is the necessity of respecting work. I believe that it’s immoral – very much so – to occupy people’s time for something that they must do (work), and then pay them less than a living wage. Paying starvation wages for honest, necessary work sends a very negative message about the value of that work. It’s pretty contradictory for our society to say that we value supporting oneself through work, and then pay some workers less that a living wage. It’s not simply down to the employers, either. Most of us benefit at these workers’ expense by receiving low cost goods and services, so it’s up to all of us to insist that this be corrected. We’ve waited a long time for the labor market to set fair wages for all jobs on its own. It never has, and I can’t imagine that it ever will. Setting fair wages frequently requires intervention by unions, governments, or both.

    • Jim

      Make that “less than a living wage” in line 8.

    • fun bobby

      you actually answered your own problem. Unions! that is what raised the wages and improved working conditions not government set minimum wages. if workers are not paid enough they need to find another job, get a promotion, or form a union. no one is forcing anyone to work for starvation wages

      • Muscle man

        Unions aren’t for people that do work like sweeping floors or flipping burgers. You have to have a trade and that’s what Unions want to represent, and not the kind I have just mentioned.

        • fun bobby

          why not exactly?

          • Muscle man

            Because most of those people earn minimum wages and the Federal Government dictates when their next raise will come unless the owners decide to give them more money, so they have no use for a Union. We used to get $.70 an hour raise when I was working, so that’s why we had a Union, but even the scabs got the same raise and they didn’t pay the monthly fees as we did. Many of them were fired for doing something against the rules since the Union didn’t represent them since they were scabs.

          • fun bobby

            and if they were in a union their contract would dictate what their wage was and when they got raises, what stops those people from forming a union?

          • Muscle man

            Pressure from other employees that feel they’ll be fired, if they join a Union. No one can be fired, but pressure can also be given by the supervisors. You have to learn to fight back and let them ( Supervisors ) know they may be next to get the ax.

          • fun bobby

            you have identified both the problem and the solution. good job. what happened to the BK workers who wanted $15?

          • Muscle man

            They have to wait until they make it as a manager.

          • fun bobby

            this week he sweeping the floor next week its the fries

          • Muscle man

            They showed him the exit door, but he decided I’ll stay.

  • Corwin1681

    We should follow example of the Swiss, and tie executive pay to worker pay. And we don’t need to guess how free market would operate, just look at our history, before the unions.
    http://m.us.wsj.com/article_email/SB10001424127887324103504578372203886463598-lMyQjAxMTAzMDAwNjEwNDYyWj

    • fun bobby

      and we should require military service and arm everyone

      • Corwin1681

        Not sure if you’re trolling me, but yes, I agree with mandatory military service for every one, and see nothing wrong with arming everyone who is NOT a criminal. (because if everyone serves in the military, maybe people will be less willing to go to wars)

        • fun bobby

          I would not know where to begin trolling someone.

  • Sharon

    I worked in a restaurant in Oregon for 19 years. From 1975 to 1994. I worked as a waitress, then as hostess and did the bookkeeping for the owners 2 restaurants for 12 years. So I experienced several different aspects of the business. When the minimum wage increases came during those years, the owner would wait a while and then order new menus and increase his prices to keep the same profit margin. Most people would think that there’s a large profit margin in the restaurant business, but that’s not always true. There are many hidden costs that the public don’t see. But in order to stay in business, this is what he had to do. And so the costs of course are always passed on to the public.
    I always felt the wage increase was needed for the workers so they could in turn purchase items but it affected all of us. So, if the public has to pay more to go out to eat, does this cause them to cut back on other things? Which affects the economy and on and on.
    The minimum wage increases don’t keep up with the cost of living. Even wages for people in higher paying jobs have not kept up with the cost of living. The rich get richer and poor get poorer. As a lot of us know, in the future the middle class will not exist any more, and as we also know, that’s who carries this nation.
    So, I do agree with the wage increase for these minimum wage earners, but my question is “does it really help them in the long run when business’s turn around and increase their products costs”? Sounds like a vicious circle to me.

    • fun bobby

      this sort of intervention inevitably leads to market failures

  • Dex

    Geewax blithers. Raising the minimum wage is always inflationary. Inflation is not good. Therefore, raising the minimum wage is not good. Q. E. D.

  • Evy

    It would be interesting to know how many raises Congress has had since 2009.

    • fun bobby

      perhaps these poor workers should form unions then they could vote themselves pay raises as well

  • Living wage!

    Uh, let’s see, what would help the entire economy – giving millionaires more money so they can buy more politicians or whatever OR giving people who are actually living in this country enough money to actually live in this country. There should only be a living wage. Millionaires and billionaires have been given every break the idiots in congress can think up and nothing has happened except they are richer and are buying congress. We are sinking deeper in debt. People who are working and living here and buying things to work and live, should be helped in every way possible because they are the ones and the only ones who can get the country prosperous and it would be sustainable. The Greedy Few accumulating more and more has proven unsustainable because they cannot have enough money, they do nothing with it that is good. Sorry, two men are but that is it. Growth in the economy can only happen if people who are doing the work in this country are respected enough to be paid fairly, and it has to be enough so they can live comfortably. Why doesn’t anyone look at how Costco works? They value their employees and want them to stay, so they pay them fairly. They value their customers so they make sure they have employees who want the company to succeed and they keep prices fair instead of gouging whenever possible. What is wrong with this country that we value people only if they lie, cheat and steal annual salaries in the hundreds of millions of dollars? There is no one brain worth 500 brains working for the success of anything.

    • fun bobby

      do you really think millionaires and billionaires will allow a minimum wage to cost them anything? they will pass the costs on to consumers and cut back on number of employees. that cashier at any restaurant or store can be replaced by a machine and will be if the wage is artificially raised

  • fun bobby

    “You know, in any specific business, if suddenly you have to pay more in wages, you may not be able to hire an – another worker, or you may have to let someone go.”
    Yup.
    I wonder how much those bottles of water are going to cost at SeaTac now

  • Muscle man

    Pay them what I earned straight out of High School $1.25 an hour since they still will get benefits at $15.00 an hour.

Robin and Jeremy

Robin Young and Jeremy Hobson host Here & Now, a live two-hour production of NPR and WBUR Boston.

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