Senate Rejects Minimum Wage Boost

[amaverick]

Senate Rejects Minimum Wage Boost (They have raised their own salaries 4 times in this period)

By DAVID ROGERS
June 21, 2006 5:49 p.m.

WASHINGTON -- Fifty-two senators voted in an unsuccessful bid to increase the federal minimum wage, a high watermark in labor's pay-raise campaign and one certain to boost pressure on Republican leaders to permit a House vote on the issue.

The 52-46 Senate roll call fell short of the 60 votes needed to avoid a filibuster but, for the first time, a clear majority of senators are on record supporting the proposed $2.10-an-hour increase.

Eight Republicans joined in support of the measure, and even among those who opposed the specific amendment, there is support for some increase in the wage, frozen at $5.15-an-hour since September 1997.

"It's time, it's time. There's no question about it," said Sen. Ted Stevens (R., Alaska). In his closing remarks, Sen. Edward Kennedy (D., Mass.) said it was "obscene" that senators had continued to increase their pay over the past nine years while failing to make any adjustment for the poorest workers.

"Americans understand decency, Americans understand fairness," Mr. Kennedy thundered. "Nine years they've waited but not the members of the United States Senate. Thirty thousand dollars we've increased our salaries and nine years, we've refused to provide an increase to the men and women who are working on the lowest rung of the economic ladder. That is obscene."

Labor will next press for a vote on the House floor and a first skirmish could come as early as Thursday when the Republicans hope to call up an estate tax bill which Democrats are already criticizing as a give-away to the wealthy and timber interests.

Even late Wednesday, further changes were being made in the estate bill in the face of a rebellion from Republican conservatives who had preferred outright repeal. The added provisions -- including indexing key brackets to inflation -- could add $4 billion on top of the package's $280 billion cost over the next 10 years.

All these factors make the measure an attractive target for Democrats, who may force procedural votes Thursday to draw a contrast between the tax relief promised upper-income Americans vs. the Republican resistance to a minimum wage increase for the poor.

"There is clearly a majority in the Senate for an increase in the minimum wage. I suspect there's a majority in the House if it was allowed to come to the floor by the Republican leadership," said Bill Samuel, a top lobbyist for the AFL-CIO.

Majority Leader John Boehner (R., Ohio), a longtime business ally and former chairman of the House Education and Workforce Committee, is strongly opposed to even allowing a vote on the minimum wage. But the Republican-controlled House Appropriations Committee last week endorsed the $2.10 increase as part of a giant budget bill funding labor, health and education programs after Sept. 30. Going into November's elections, a growing number of rank-and-file members are more accepting of a wage increase, if only to take away a potential issue for Democrats in the fall.

These domestic policy calculations are being made in an atmosphere where Republicans appear more confident on the great foreign policy question hanging over the elections: the Iraq war.

As debate opened in the Senate Wednesday, Majority Whip Mitch McConnell (R., Ky.) predicted the Senate will easily reject Thursday two Democratic amendments urging the redeployment of U.S. troops. And mocking the divisions within the minority party, Mr. McConnell defined the choice as between "cut-and-run" and "cut-and-jog."

The first amendment, as proposed by Sen. John Kerry (D., Mass.), calls for the administration to begin moving troops out of Iraq by the end of this year in expectation of completing withdrawal by July 1, 2007. While many in his party object to such a fixed timetable, the former Democratic presidential nominee said it was needed if a political solution can be reached. "That is not abandonment," he said. "That is empowerment."

By contrast, the second proposal, sponsored by Sen. Carl Levin (D., Mich.), avoids such specifics and instead asks the administration to submit its own report to Congress by the end of this year with estimated dates -- the White House would choose -- for the phased redeployment of American forces. Democratic Whip Richard Durbin of Illinois predicted a "substantial" vote for the Levin language.

[mgeoffriau]

Raising minimum wage costs Americans jobs. If I was an uneducated, unskilled laborer, I'd rather make $5.25 than have no job at all.

[Mark S.]

I noticed that Congress voted itself another pay raise....

[Frenchy]

Originally Posted by Mark S.

I noticed that Congress voted itself another pay raise....

Speaking of "unskilled labor"...

[Frenchy]

Originally Posted by mgeoffriau

Raising minimum wage costs Americans jobs. If I was an uneducated, unskilled laborer, I'd rather make $5.25 than have no job at all.

Sorry mgeoffriau...Skilled or unskilled, every American deserves a living wage for his toil!

[mgeoffriau]

Really? Even if it costs other Americans their jobs?

The minimum wage intends to help the least-skilled workers in America -- but it actually costs them jobs. Raise minimum wage to $8.00 an hour, and watch what happens. The gas station on the corner will only be able to pay 2 workers instead of 3.

[VTJames]

Oh how the wicked and lazy rail against the sins of the "greedy", without understanding that the real world works in real ways. Those who worry about *minimum* wage and getting more for doing the *minimum* fail to understand that the *minimum* will never be very much. They don't understand that fiat money is an idea, and an arbitrary number bases loosely in real world value... so if you want to redefine $1 so that $1 equals $2 then $2 really just equals $1. Do that math a few times, it checks out.

If you want more, you have to do more, you have to bring more, you have to contribute more, you have to become more. If that's too tough, takes too much time, presents too much opportunity for failure and embarrasment, or you just can't find a clear path to it, then you'll never have more, no matter how you try to redefine it, or rail against it.

Trust me, feeling for the sick, poor, and destitute is easy. It's easy, and it's built into all of us. Feeling for them doesn't help them. Neither does raising the minimum wage. Teaching them to fish takes time, effort, money, and investment in failure (because not everyone can or will learn), but it's the only way to really help them.

Raising minimum wages just chains them.

http://www.townhall.com/opinion/colu...02/188387.html

The Economist magazine reports that the official unemployment rate in South Africa is 26 percent but that the real unemployment rate there may be even higher. The South African economy is growing. Why then this extremely high unemployment rate? What is going on?

What is going on in South Africa is what has been going on in other economies with huge problems. Somebody could not resist the lure of something for nothing.

Minimum wages in South Africa have been set higher than the productivity of many workers, so employers have no incentive to hire those workers, even though such workers are perfectly capable of producing much-needed goods and services.


South African labor unions say that they are not going to let their workers become "the West's sweatshop." But the irony is that a South African firm which has been manufacturing aluminum wheels solely in South Africa for two decades has begun expanding its output by outsourcing the additional jobs to Poland.

Does that mean that Poland is becoming South Africa's sweatshop? Or does it mean that there are economic consequences to setting wage levels in disregard of productivity levels?

The South African government refuses to admit that an unrealistically high minimum wage rate has anything to do with the high unemployment rate. In other words, they think that they can pass a law to give workers something for nothing.

That idea is not peculiar to South Africa. In many cities and towns across America, local politicians, activists, and even religious groups have been pushing for laws mandating "a living wage" higher than the federal minimum wage.

They too apparently think that there will be no dangers to the jobs of workers whose output is not worth what third parties choose to call a "living wage" -- in other words, that the workers can get something for nothing.

South Africa's problem is compounded by the fact that, in addition to minimum wages set above the level of many workers' productivity, the government has passed laws making it very difficult to fire an employee.

That should reduce unemployment, right? Wrong. Countries like Germany with strong job protection laws have chronically much higher unemployment rates than countries like the United States, where the government does not impose such laws on private businesses.

Making it harder to fire workers makes it more risky to hire workers in the first place. It is easier to substitute capital for labor. South African companies "rely more on capital" than labor, according to The Economist magazine.

Even when times are booming and there is a demand for more output, employers may work their existing employees longer hours rather than hire new workers whom they will have a hard time letting go after the boom passes.

Nothing is easier for politicians than to think up benefits that they can confer on workers by imposing the costs on somebody else. It's something-for-nothing time, and it pays off for politicians at election time.

Meanwhile, businesses can't just pick up and leave the city or the state, much less the country, overnight. But, like the South African company that expanded its output and employment in Poland, businesses can do their expansion where costs imposed on them by politicians are not so high.

Some businesses are not expanding but are just trying to survive. Costs blithely loaded onto them by politicians can prevent some of these kinds of businesses from surviving -- and their employees lose their jobs.

Over time, businesses can shift more and more of their operations out of places where extra costs are imposed politically and some just move their whole business elsewhere. That means taking their jobs, and the taxes they pay, elsewhere.

For politicians, however, killing the goose that lays the golden eggs is a viable strategy, provided that the goose doesn't die before the next election. Provided also that people have short memories, don't connect the dots, and don't keep in mind that there is no such thing as something for nothing.

[Mark S.]

The minimum wage has been raised 19 times since it was first introduced in 1938. If it were true that raising the minimum wage causes unemployment, we should have seen a large increase in the unemployment rates since 1938, but in fact the unemployment has not varied that much over the years.

All raising the minimum wage does is help keep it up with inflation. The minimum wage has not been raised since 1997. The value of the minimum wage in constant dollars has declined by about 26% during that time.

During that same period of time members of Congress increased their own pay by $28,500.

[Frenchy]

Originally Posted by Mark S.

The minimum wage has been raised 19 times since it was first introduced in 1938. If it were true that raising the minimum wage causes unemployment, we should have seen a large increase in the unemployment rates since 1938, but in fact the unemployment has not varied that much over the years.

All raising the minimum wage does is help keep it up with inflation. The minimum wage has not been raised since 1997. The value of the minimum wage in constant dollars has declined by about 26% during that time.

During that same period of time members of Congress increased their own pay by $28,500.

Yes!...The "sky is falling" argument has been used every time there has been an increase.

[mgeoffriau]

You've mistaken the direction of the causation. Raising the minimum wage will only drive inflation higher. As wages go up, prices will go up to compensate, and our dollars will be worth less. End result? The buying power of the minimum wage worker is exactly the same.

How can you not understand this? It's basic microeconomics. If you force employers to pay their employees more, then they have two decisions, and only two: either fire some employees, or raise prices. That's the only two options. If they fire some employees, then you're guilty of using government influence to benefit certain workers at the expense of other workers. If they raise prices, then the buying power of those minimum wage workers drops to its previous level. You can't avoid it.