Monday, March 8, 2021

$15 an Hour or Bust; Why Can't Democrats Be Reasonable About the Minimum Wage?

President Joe Biden campaigned on raising the federal minimum wage to $15 an hour.  Republicans and some Democrats in Congress think the increase is too steep.  Republican Senators Mitt Romney and Tom Cotton have proposed raising the minimum wage to $10 an hour and indexing it to inflation. This is unacceptable to liberal politicians who insist that it needs to be immediately raised to $15 an hour to keep up with inflation.  But a look at the numbers shows this is not true.  

In October 24, 1938, when the minimum wage was first adopted it was 25 cents an hour.  Adjusted for inflation, that would be $4.67 today.  In February 1, 1967, the minimum wage was raised to $1.40 an hour.  That would be $11.13 in today's dollars.  The federal minimum wage in 2009 was raised from $6.55 an hour to $7.25. If the that rate was indexed to inflation it would be $8.81 today.   

The fact is, because of the demand for unskilled labor, very few workers today receive the federal minimum wage of $7.25 an hour.  In 1980, when the federal minimum wage was $3.10 an hour, 13% of hourly workers earned the federal minimum wage or less.  Today, only 1.9% of hourly workers do.  Whether it is working at McDonalds, stocking grocery shelves, or ringing up customers at the Dollar General, all those jobs in the Indianapolis area start at $10 or more (with regular pay increases).  This is despite the fact that Indiana's minimum wage reflects the $7.25 federal minimum wage.

While some of that is due to states enacting their own, higher, minimum wage laws, the biggest factor is the huge demand for unskilled labor.  Workers can move from one job to another securing better pay.  A worker who is making $10 an hour, can quite easily move to another job paying $12 an hour.

The nonpartisan Congressional Budget Office estimates the increase of the minimum wage to $15 an hour would cost 1.4 million jobs.  That statistic doesn't include the number of people who would remain employed but have their hours cut because their employer can't afford $15 an hour.  

We have an ideal situation now where demand, and job mobility, is driving up wages of unskilled workers far above the federal minimum wage of $7.25 an hour.   While I don't think a federal minimum wage is necessary, at the very least we should not set it at such a level that it costs people their jobs or causes their hours to be cut.

OOP's short takes:

  • I'm sorry, but I can't bring myself to be concerned about the goings on in the British royal family.  Because someone is born or marries into the right family, they get to live high on the taxpayer dime despite no actual tangible accomplishments?   It is such a dumb institution.  We Americans fought the Revolutionary War to get away from the British monarchy.  So, why should I care about it now?  I just don't care.
  • Got the Johnson and Johnson vaccine yesterday at the Speedway.  I was doing okay, until about 11:30 last night when I suddenly got the chills.  That lasted for 1 1/2 hours.  After that, I had a slight headache and low grade fever.  Both of those are gone now.  
  • Over the years, Republicans have pursued legitimate ballot security measures, things like requiring a photo ID to vote.  Unfortunately, the GOP is now pursuing changes that seem less aimed at the security of the ballot and more at stopping people from voting.  Not every Republican ballot security proposal is "voter suppression" but any such effort will certainly be labeled that way from this point forward.  What is ironic is that voter suppression rarely works and is often counterproductive.  A prime example is the 2018 Georgia election.  Although Democratic gubernatorial candidate Stacey "Sore Loser" Abrams complained that her loss of the state by 55,000 votes (Trump lost by 11,779 votes) was due to "voter suppression" that election had huge turnout, including record African-American participation.
  • So Republicans in Congress are now worried about debt from the Covid-19 relief plan, but they had no problem with all the debt Trump ran up while the economy was booming?  Give me a break.
  • I could be wrong, but I really don't think the Covid-19 variants are going to derail the end of the pandemic which seems clearly in sight.

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