Throughout my campaign for U.S. Senate, I have been talking about what my fundamental “business values” are. Points like paying a fair wage, absorbing health-care costs, building and protecting pensions, and holding employee, customer, and community needs above your own. I believe that most small businesses in America recognize these values without government intervention.
However, there are many businesses who do not. Instead, these entities operate with greed as their primary motivator, then turn around and share the wealth in campaign contributions to preserve the status quo. The minimum wage in America is a prime example of this. I have spoken at the Utah State capitol in favor of increasing the minimum wage and I will continue to fight to hold businesses responsible for fair treatment of their employees. Last Wednesday, the Senate once again rejected a minimum wage increase which has been the same since 1997.
Embarrassed over voting for yearly hikes, congress made their pay-raises automatic in 1989. Representative Jim Matheson has been a lone voice that has stood up against this increase year after year. If congress can get an automatic pay-raise for inflation, why not index the minimum wage in the same manner?
When I started hiring employees at XMission in 1995, I set the entry level pay at $7.00/hr with included benefits. I calculated this amount because as a single student, I was making about $6.15 an hour and I still needed subsidies from my father to live on my own. Today it has increased to $11.00/hr. Certainly there are new businesses that can not afford to meet a minimum wage of $7.00/hr. On the other end of the spectrum, if you compare some executive salaries against what people on the bottom are compensated for, lack of fair wages becomes unconscionable and irresponsible of the employer that is profitable. These businesses force their employees to use government sponsored benefits and as a result take taxes from responsible businesses and individuals to subsidize their own.
I will continue to fight for the American worker and will join Jim Matheson in voting down congressional pay-raises until they are properly warranted by a debt-free government, a responsible budget, and a strong American economy.
Minimum wage legislation is, generally speaking, counterproductive. The free market companies, like XMission, will pay employees what they are worth. Competition between employers will generally maintain a de facto minimum wage. We really don’t need legislation to govern minimum wage. What we really need is someone to go back to D.C. and start asking, “What legislation can we repeal?”
I love you Pete, but you shouldn’t contradict yourself by saying there needs to be a higher minimum wage and then say that your business and industry is capable of maintaining its own minimum wage independently of government regulation.
Minimum wage doesn’t cut it. Home prices in SL & Utah county have consistently risen about 10% – 15% /year. Wages have not. A greater percentage of each paycheck needs to go towards housing. My home is worth $100,000 more than the day we purchased it — 6 years ago. Wages have not kept up. Lower wage earners cannot afford decent housing.
The current minimum wage may work fine for minors/teenagers. However, they do not work well for those over 18 — those trying to support themselves and family. Many states have already mandated a higher — fairer standard.
Yes, many companies will voluntarily pay a fair wage. However, less skilled & educated workers are left behind to collect the lower-paying/minimum wage jobs. Who picks up the tab? We do through taxes going to welfare & government subsidies for the poor.
I would suggest that minimum wage be linked to an index — such as housing… since that is the greatest challenge to lower-wage earners. If housing goes up, so should the minimum wage. I would also recommend that there be 2 minimum wages — one for teenagers and another for adults.
I’m glad to see you interested in this issue. If we could depend on corporations to do what is right, then there wouldn’t even be an issue… but, hey, if they can dump the pensions of people who have worked for them for years, then what’s the worry about paying a living wage. It’s all supply and demand, right?
It’s a difficult issue. But the top corporate salaries can’t continue to rise while those in service occupations stay static. What companies are instead asking for is a resurgence in Unions. Most of the hotels and resorts are finding this out the hard way as did the janitorial services in Los Angeles.
Here’s one of my favorite links: http://www.nlihc.org/oor2005/
Why should a two bedroom apartment be out of the reach of a working person? The people at the bottom — those most likely to have a minimum wage job lack the education or skills to move up the ladder. Those that glibly respond that they need to work harder don’t realize that many already have two jobs just to make ends meet. Well, then, some might say, just increase your skills. But what happens if you lack the tuition money, the time, the basic reading and writing skills? You are stuck. The same companies that pay only minimum wage rarely offer the benefits of tuition reimbursement.
I’m familiar with arguments that raising the minimum wage actually costs jobs. How can this be when I go through Taco Time a see a sign in the window offering $8.00 an hour for part-time work? No, those arguments are specious. More money in people’s pockets will make for a better economy with more employment, not less.
Keep up the good work!
utahgirl
Ken-You’re right that teens generally don’t need the money as much as adults who are trying to support a family. The problem with your suggestion of having a two-tiered minimum wage is that it encourages greedy corporations to hire teens _instead_ of adults. If the burger place down the street can hire 4 teens for the price of 3 adults, then why would they pay for the adults?
Maybe the minimum wage for a corporation should be a function of how much the highest-paying job of that corporation is? If the company is doing well enough to pay the executives millions of dollars a year, then they can afford to pay their entry-level employees more than startup companies struggling to get off their feet. Of course I don’t know businesses well enough to suggest a percentage and there would be loopholes to watch out for, but it’s a place to start.
“Minimum wage legislation is, generally speaking, counterproductive. The free market companies, like XMission, will pay employees what they are worth. Competition between employers will generally maintain a de facto minimum wage. We really don’t need legislation to govern minimum wage. What we really need is someone to go back to D.C. and start asking, “What legislation can we repeal?—
Are you SERIOUS? I know that when I go to look for a job, as a college graduate, I am only being offered $10-11 an hour. I tried to get a job as a drafter, making drawings every day that were being charged $1000 per drawing, and i spent usually 2-3 hours on these. That means for my $15 worth of work, i was making my company $985. I quit that job because i thought that employers would pay what their employees are worth, but the more I look around the more this seems to be the norm. My wife is a college graduate and makes $8.25 after a $1.00 6 month raise, and she makes more than other people are offering. If nobody offers more money for what their employees are worth, nobody can get a decent paying job. Post 9/11 we have been scrambling to get jobs, and employers still think that they can pay minimum wages to any poor shmoe who will work them.
oh, and p.s. there is only something like 10 out of the 386 counties where min. wage is livable. And check out this site to see why it shouldn’t be 5.15 an hour
http://www.alternatives.org/livingwage2005chart.html
I think minimum wage needs to be left in the hands of the states, counties and cities, to whatever extent that is possible. Cost of living varies dramatically from one part of the country to another, and any minimum wage capable of producing a living wage for people in Boston or LA, could cause crippling unemployment and inflation in Utah, and something low enough to not do any damage directly, would encourage local governments to sit and do nothing about the minimum wage on a local level.
As far as detrimental effects of minimum wage go, it doesn’t seem unreasonable to me to say that wages that result in someone being on government assistance do nobody any good.
And Doran is right to say that market forces tend to push wages torward livable, in my time of job searching I’ve found one minimum wage job available (which I did not apply for because of working conditions, rather than pay), and outside of fast food jobs (which I did apply for, I’m getting desperate), nothing under 8 dollars an hour.
I am against the minimum wage in any shape or form. The market should bear what wages should be. The more government intervention in things like wages and prices, the less productive, reactive, robust, and dynamic the economy will be. (If you want examples you have to look no further than any country in western Europe or Japan–all of whose economies have lagged behind the U.S. economy in recent years–all of whom have a much more Socialistic model.)
The #1 reason that wages are low in this country is the endless supply of cheap labor that flows across the border every day from Mexico. If our government would actually enforce immigration laws and stop the endless flow of illegal immigrants, there would be more wage pressure at the lower end of the wage spectrum, and wages would rise. Fewer people seeking the same number of jobs… it is simple supply and demand–and basic economics.
Guaranteeing people a “living wage” is basically Socialism. Planned or “legislated” wages discourage entrepreneurship. One of the main reasons why I went into business for myself at such a young as was because I saw plainly that it would be easier for me to make the wage or income that I wanted on my own rather than working for “the man” for the rest of my life. And I was right. Had someone guaranteed me a certain income–whatever that might have been–I might have chosen to just punch a time card like most other people. But I had the FREEDOM (and that’s the key word here) to either take the jobs that were available to me–at the wage offered–or NOT. That’s why it is called a “free market economy”. No one is forced to accept any wage. If the wage they earn at the job they work at is not enough to support the lifestyle they want, they can seek another job with a better wage, seek training or education to improve their marketability and increase the number of jobs (and wages) that they qualify for, they can steal, they can sell drugs, they can choose not to work and collect unemployment, etc.
A minimum wage has no place in a free market system. It is no different than farm subsidies–guaranteeing a farmer that he will get a certain price for his milk or his corn or his beef.
Shut off the valve of cheap labor and you will see the minimum wage increase on it’s own…
Maybe I wasn’t clear enough in my original post. Businesses that pay substandard wages and use benefit loopholes, yet still make considerable profits force their employees to get assistance and help from other sources, usually the government. This subsidy of their business is forced upon me and is hardly “free”. “Free market” does not entail that multibillion dollar corporations are “free” to steal my tax dollars to subsidize their base of operations while paying executives million dollar salaries and pensions.
If bad behavior by an individual that negatively affects others is enforced by laws, then bad behavior of a company shouldn’t be exempt. Give me another solution other than the minimum wage and I’ll be all ears. Otherwise, I see no other method of enforcing responsibility upon the irresponsible. Conservativism is founded upon the principle of “personal responsibility”. Does financial pillaging not qualify as such?
One only has to look at America pre-minimum wage to get a picture of the exercised responsibility of the “free market”. Anyone for sweat shops and child labor?
The divide between the rich and poor continues to spread, while the middle class is left to buckle under the burden. This problem casts it shadow well beyond the bounds of the business community. And clearly, not every business subscribes to the same values. Here are a couple of ideas that relate to this challenge:
1. As a small business owner in a rural southern Utah town, I do the best I can for my staff, including providing health benefits. But last year, our non-profit health insurance provider raised our premium by 27%, even though we are in the lowest use teir possible. I promise you, our company’s net profits don’t grow by 27% in an average year! Unable to keep up with this “routine” premium increase, we were forced to dilute our health coverage and accept a much higher deductible.
The point is, if we want businesses to provide health insurance, we need to provide affordable options. Let’s not blame small businesses for a broken health care system!
2. Years ago I read a letter to the editor of the Utne Reader that struck me as brilliant: Let’s tie the minimum wage to Congressional salary, say as a ratio or percentage. If Congress deserves a salary increase every year, doesn’t the frontline worker? It’s appalling to me that these elected representative, who are virtually all millionairs anyway, are so arrogant as to stroke themselves with an annual raise while refusing to provide a living wage to to the poorest Americans. Shame on them! And kudos to Rep. Matheson for decrying this travesty.
A frequent argument against raising the minimum wage is that “raising the minimum wage will cause unemploymentâ€. The idea comes from simple economic theory, which says that any statutory minimum price set above the equilibrium (market-clearing) price will cause supply to exceed demand. This is one foundation of the “Wages should be set by the market, not the government†argument. This simplistic concept of the labor market may be simple, elegant and even (for some) appealing, but it is also wrong. Hard evidence to support or refute the notion was lacking..until two academic economists, named David Card and Alan Krueger, published Myth and Measurement: the New Economics of the Minimum Wage(Princeton University Press, 1995). The importance of this first Card & Krueger study was that it was the FIRST analysis of REAL DATA: whether raising the minimum wage (in one real instance- fast food jobs) actually did lead to a decrease in jobs in the fast food industry. It compared what happened in New Jersey, after it had a minimum-wage increase,to the neighboring region, eastern Pennsylvania, which did not raise its minimum wage. The results showed that – contrary to the expectations of most economists and virtually all Republican leaders – raising the minimum wage did NOT cause loss of jobs in the fast-food industry. This original work has been the subject of wide criticism, mostly from right-wing conservatives. Lots of the criticism has originated from the Employment Policies Institute( N.B.Not the Economic Policy Insitute!),which is a think tank opposed to the minimum wage and funded by employers in the hotel & restaurant industries, among others. So in 1998, Card & Krueger published another paper which looked again at the effect of the 1992 New Jersey minimum-wage increase on employment in the fast-food industry. It verified “similar or slightly faster employment growth in New Jersey relative to eastern Pennsylvania after the rise in New Jersey’s minimum wage, consistent with the main findings of our earlier study.†It went on to find that the effects of the 1996 rise in the Federal minimum wage, which raised the minimum wage in Pennsylvania but not New Jersey, caused no employment losses in Pennsylvania relative to New Jersey.
However, this factual analysis has not caused Republican leaders in Utah or the national GOP to stop quoting their myth that raising the minimum wage will cause job losses. Just ask Sen. Beverly Evans of Vernal…
Thanks, UtahOwl. I could not find that information although I distinctly remembered reading and discussing it when it first came out.
utahgirl
It’s true that raising minimum wage has a detrimental effect on unemployment rates. Various studies aside, imagine what would happen to the employees of McDonalds if they raised minimu wage to 15 dollars an hour. Not good for people who are only valued at 6.50-8.50 and hour. Not good for people who eat at NcDonalds either, profits will have to be made up somewhere.
However… well, I’ll refer you back to Pete’s post on subsidising businesses with tax money so their employees don’t starve to death.
My wife works hard and only gets paid $5.15/hr. Had it not been for JetBlue’s recent offer to work as a contractor I would have been broke before summer’s end. We’re on medicaid and WIC because of it. Hopefully when August rolls around there will be an opening somewhere so that when I return to school we’ll no-longer need the government assistance. I think that minimum wage, even for the most basic of employment tasks, should be raised.
It was interesting to note the book cited in a previous comment called, Myth and Measurement: The New Economics of the Minimum Wage, by Princeton University economists David Card and Alan Krueger. As I researched further I came across an article that in my opinion effectively debunks the book’s findings. It can be found at http://www.cato.org/pubs/regulation/reg18n1c.html in case you’re interested.
It’s illogical to think you can fix both sides of an economic equation. As the article points out, “If it is possible to mandate high wages, then why not also have low prices for food, shelter, clothing, and everything else that is good?â€
Instead of helping the poor at the expense of the rich, you end up hurting the poor with fewer jobs or more expensive products. The high cost of meeting government regulations such as the minimum wage is one reason why companies move jobs off-shore or move their entire business off-shore to countries with greater economic freedom.
Speaking of freedom, this is a basic principle I think well-meaning people too often overlook. If one person has a need for labor and another the availability, shouldn’t they be free to come to a mutually beneficial arrangement without government interference? Do you really think people are so incompetent that government bureaucrats, at the expense of the economy, must second-guess even the most basic of economic decisions?
It’s easy to get sucked into public policy that is fundamentally flawed unless we understand and apply basic principles such as freedom.