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Open Edit Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Jul-16-06 10:06 PM
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Minimum Wage
Edited on Fri Mar-30-07 10:17 PM by ih8thegop
The federal minimum wage currently stands at $5.15. It was last raised as of January 1, 1997.

Why raise the minimum wage?
The Economic Policy Institute argues that:

A minimum wage increase of $2.10 by 2008 would raise the wages of 14.9 million workers. A minimum wage increase is needed to restore the minimum wage to historic levels. The inflation-adjusted value of the minimum wage is 30% lower in 2006 than it was in 1979. In addition, comparing the wages of minimum wage workers to average hourly wages, we find that the wages of minimum wage workers have not kept up with the wages of other workers. The minimum wage is 31% of the average hourly wage of American workers, the lowest level since 1947.
Congress has not increased the minimum wage in almost nine years—the second-longest stretch of government inaction since the minimum wage was enacted in 1938. Since the min wage is not adjusted for inflation, when Congress does not increase the minimum wage, the minimum wage continues to lose value.


The minimum wage does NOT cause job loss
A major argument used by opponents of minimum wage increases is that it leads to job loss.

In the year following the last minimum wage increase, 2.6 million new jobs were created, while a year later 2.2 million more were added. (ftp://ftp.bls.gov/pub/news.release/History/empsit.01089... )

Why is this? According to the EPI:

New economic models that look specifically at low-wage labor markets help explain why there is little evidence of job loss associated with minimum wage increases. These models recognize that employers may be able to absorb some of the costs of a wage increase through higher productivity, lower recruiting and training costs, decreased absenteeism, and increased worker morale.


There is no correlative data to show a increase in "INFLATION" due to a minimum wage increase.

This chart of the "CPI" depicts no cum casual effects, minimum wage vs. inflation, as a result of the last minimum wage increase.




Where was that last increase in the minimum wage increase?



What has been the historical value of the federal minimum wage?

The following graph depicts the historical value of the federal minimum wage adjusted for inflation relative. Further, since all earnings at minimum wage levels are subject to the "payroll tax" for OASDI/HI (Old Age, Survivors, and Disability Insurance - Health Insurance, i.e. Social Security and Medicare), the rate of which has varied since its inception, the net of that tax on every dollar is shown. It is clear from this graph that the minimum wage is today worth less than at any time in over 50 years!





Democrats take action
While Congressional Republicans have sat on their hands refusing to raise the minimum wage, Congressional Democrats are attempting to get the bill discharged from committee and force a vote.

Meanwhile, labor groups have joined with Democrats in many states to force statewide initiatives onto this past November's ballot. All of those states' minimum wage proposals, which tied the wages to inflation, passed in November. Those states were:

Arizona: $6.75
Missouri: $6.50
Montana: $6.15
Nevada: $6.15
Ohio: $6.85



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