Something to Think About

"I found it is the small everyday deeds of ordinary folk that keep the darkness at bay. Small acts of kindness and love."
- J.R.R. Tolkien, The Hobbit

Monday, March 4, 2013

5 Myths and Facts about Minimum Wage

In his State of the Union Address this year, President Obama suggested that Congress raise the minimum wage from $7.25 an hour to $9.00 an hour.  There has been a lot of discussion about whether or not this is a good idea.

I'd like to take a look at some of the statements being made from both sides and see if we can discard the rhetoric and uncover the facts.

  1. Raising minimum wage will cause jobs to be lost. To be honest, this seems like a sensible conclusion.  If an employer has to increase what he is paying his employees, you'd think that he would try to make do with fewer employees to save costs.  Oddly enough, however, studies indicate that this doesn't seem to be the case. This article suggests several reasons why unemployment may not increase if the minimum wage is increased. Job loss seems not to be an effect of raising minimum wage.
  2. No one lives off of minimum wage.  It's just for teenagers. This is simply not true. The table on page 2 of this report indicates that in 2011 only 12% of minimum wage workers were teenagers. Most minimum wage workers are older and possibly trying to support a family with that income.  These people would be some of what we refer to as the working poor.  If you are paid $7.25 an hour, that means you make $15080 a year before taxes. Could you live on that?
  3. The increase of minimum wage has kept up with inflation.  Well, no. Minimum wage would be $10.56 an hour today if it had kept pace with inflation from 1968.  $9.00 seems more reasonable in this light, doesn't it?
  4. Low wage jobs are for unskilled workers.  Not necessarily...  Yes, the employee at the local burger joint probably is only paid minimum wage or close to it but have you thought about what security guards earn?  What about nurse's aides, child care workers and home health care workers? Bank tellers are not highly paid. Cooks, waiters and waitresses are generally not paid well, either.  All of these positions and many more are considered low-wage workers - paid at or slightly above minimum wage. My daughter worked as a nurses aide in a nursing home working with dementia patients - not a job for just anyone - and now works in a hospital ER.  She is a certified nursing assistant but she is not paid well for what she does (just over minimum wage in our state at the home but a bit more now at the hospital).  Think of the responsibility that is placed on workers like her but they are not paid well for what they do.
  5. Many states' minimum wages are actually higher than the federal rate. This is true! 17 states currently have a minimum wage that is higher than the federal minimum wage - though the majority of the states match the federal minimum wage.  The highest minimum wage is in Washington state where workers are paid at least $9.19 an hour!  They are the only state that would not be affected by a federal increase to $9.00 an hour.  This Wikipedia article breaks down the minimum wage by state - and territories - of the US.  Note:  Some states do not have a minimum wage law so they must use the federal wage.
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