Blue Collar Muse

As reported at Cybercast News Service and elsewhere, when Democrats in Congress finally got around to funding the troops in harm’s way they got a quid pro quo. In exchange for funding the troops for about 6 months (mighty supportive of them, doncha think?) they slathered some pork on the military expense. The most notable pork they pulled was to raise the Minimum Wage (MW).

The President immediately signed the bill and so the MW in this country will increase from its current $5.15 per hour to $7.25 per hour over the next two years. There is a small bright spot in that the President got almost $5 billion in tax breaks for small business to help offset the cost of the increase to business. The tax breaks are good for 10 years. Of course the new MW isn’t burdened with a sunset provision. While it won’t run out in 10 years, it won’t last forever either. It’ll only be around until Congress makes it obsolete by raising it yet again.

Like most Liberal ideas, the MW looks and sounds like a great idea until one actually examines it. Once emotion and evaluation are separated it becomes clear increasing the MW is not only a bad idea but one harmful to all Americans in general and to the very ones it is trying to help, those actually earning MW, in particular.

First, the emotion …

“ACORN’s 2006 election campaign, “Raise the Minimum Wage,” represented unprecedented victory for working families.”

From Stateline.org, “… proponents of wage hikes say workers’ wages must be adjusted to keep pace with inflation. “A full day’s wages won’t buy a tank of gas today,” says Oliver Griswold of the liberal research group, Ballot Initiative Strategy Center (BISC). The annual income of a minimum-wage worker is $10,712, well below the federal poverty line of $13,200 for a family of two.”

Also from the CNS article above,

ACORN, a community organization representing low- to moderate-income families, said the “long-overdue” wage hike “will bring millions of America’s hardest- working families closer to making ends meet.”

“We will keep fighting until the minimum wage is a living wage,” ACORN President Maude Hurd said. “The minimum wage has not kept pace with inflation; we will continue to work with our allies in Congress and around the country to see minimum wage return to something that can help sustain a working family.”

Rep. Charles Rangel (D-N.Y.), chairman of the House Ways and Means Committee, praised the bill, saying it will help millions of workers “better cope with the rising cost of living while helping our businesses expand and hire new workers to keep our local economies vibrant.”

Phrases like “victory for working families”, “below the federal poverty line”, “until the minimum wage is a living wage” and more are, unfortunately, little more than boilerplate offerings from those wanting to raise the MW. The implication is millions of hard working Americans’ health and very lives are at risk. Living below the poverty level, these families face the horror of starvation in the wealthiest nation on earth while evil, heartless corporations make millions from their labor and give nothing back in return. Justice and compassion demand an increase in the MW. When the debate is framed in these terms, who wouldn’t want an increase in the MW? If for no other reason than to avoid even the perception you are one of the heartless, corporate taskmasters abusing the poor for personal enrichment.

But do the facts bear out these charges? The evaluation says, “No, they do not.”

Two old sayings illuminate the discussion of the MW. The first is “The devil is in the details” followed by “There’s lies, damn lies and statistics.” As an example of what I mean, look no further than BISC’s Oliver Griswold above. To illustrate how bad it is for today’s worker, he cannot deal honestly with the facts and reality. Instead, he compares the annual income of a minimum wage worker ($10,712) to the federal poverty line for a family OF TWO ($13,200). Integrity would seem to dictate that if you use the poverty level for two you would use the annual income for two, or $21,424 in this example. However, that would put the household income $9,000 over the poverty level instead of $2,500 under. That doesn’t make quite the same impact in a sound bite.

The rest of the debate doesn’t get much better. Groups like ACORN and big unions like AFL-CIO make much of the notion that increases in the MW have broad voter support. And there is some support for that notion. For example, “An April 2006 survey by the Pew Research Center for the People & the Press found that 88 percent of the general public approves of minimum-wage hikes, including 72 percent of Republicans. Fifty-nine percent of Democrats and 31 percent of Republicans strongly favored increases. (The Pew Research Center and Stateline.org both are supported by The Pew Charitable Trusts.)”

However, looking at efforts advocacy groups make to influence voters paints a different picture. For the most part, these efforts are not directed at increasing general voter turnout which would indicate broad support among voters. Instead, in ACORN’s own words “To pass the measures, more than 1,600 ACORN members, canvassers, and volunteers contacted 380,000 voters in low and moderate income and minority neighborhoods.” If the issue is so broadly supported, why not expend effort educating all voters as opposed to voters standing to gain the most and thus most likely to vote themselves something they may not have earned or deserve?

Interestingly enough, it seems the MW isn’t even a serious social issue at all. It’s easy to toss around phrases like “millions of families” and “millions of hard working Americans”. With a population over 300 million, it certainly seems believable many people are truly impacted by the MW. The real numbers are not quite so damning.

According to the US Department of Labor’s Bureau of Labor Statistics the following was true of the US work force as recently as 2005. Figures are from Current Population Survey ESTIMATES (emphasis mine in the interest of integrity - inflate or deflate the numbers as you will) for 2005. Only 60.1% of working Americans, or 75.6 million workers are paid by the hour. Of these, about 500,000 report making exactly $5.15 per hour and 1.4 million report making less than $5.15. This 1.9 million represents only 2.5% of all US hourly workers. Fully half of all earning MW or less are under age 25. 50% of that number are 16-19 years old and the other half 20-25. Those never married are more likely to make at or below MW than married workers.

Not only do these figures mean there are not “millions” of Americans impacted by this (there are only 1.9 million - not quite a plural of million) but the age range of those most impacted by MW make it likely that “millions of families” is also inaccurate. Fully half of the numbers point to high school and college age students likely to be single and never married.

Returning to the BLS report, some facts are noted that are NEVER addressed in the discussion but must be in the interests of integrity and full disclosure. The following is a direct quote:

About three-fifths of all workers paid at or below the Federal minimum wage were employed in this industry, primarily in the food services and drinking places component. For many of these workers, tips and commissions supplement the hourly wages received.

I have worked in this field. I did so because I needed extra money from a part time job. In looking to this industry for my part time job, I did so not because it paid so poorly but because because IT PAID SO WELL! Waiting tables and tending bar, my hourly wage was just $2.01 p/hr. I routinely made $12-$15 p/hr and often as high as $25 p/hr. Tips were the difference. Pizza delivery also made me great money! I got exactly minimum wage to start as hourly compensation to which I could happily add both tips AND a per pizza or mileage bonus from the store. Final result? $10 to $15 per hour. The inclusion of these workers in the BLS report is accurate and acceptable. To include them in the call for a raise to the minimum wage, however, is disingenuous in the extreme. Considering they make up 60% of the 1.9 million reduces those adversely impacted by low wages even further.

Finally, again quoting from the BLS report,

The proportion of hourly-paid workers earning the prevailing Federal minimum wage or less has trended downward since 1979, when data first began to be collected on a regular basis.

This is the result one would expect if opponents of raising the MW are correct. As people join the work force at ages 16-25 they start at a lower wage. As they gain experience they become more valuable and are either rewarded by pay increases from their current employer or negotiate a better rate elsewhere based on their skills. The longer one works, the more one makes. The more people in the study, the lower the percentage of total workers paid at MW. The real issue should not be how many people actually make MW now. Rather, it should be how many are still making MW 2, 5 and 10 years from now. Any serious discussion of raising the MW ignoring this basic, relevant data is flawed to the point of worthlessness.

I find myself concluding discussions of increasing the MW are unnecessary since the problem isn’t anywhere close to the magnitude advocacy groups would have us believe. This is particularly true when one considers the negative impacts of such an increase. I do not contend there are no benefits at all to be found in raising the MW. It is my opinion, however, the costs far outweigh the benefits and so the MW should not be raised.

If the issue is neither pressing or extensive, why then are people calling for it?

As is usually the case, the answer is, who really benefits from raising the MW?

Stateline.org reported in September of 2006,

Traditionally, Democrats have sponsored minimum-wage hikes as a way to help poor families climb out of poverty, while Republicans have opposed them because they say government-mandated pay raises hurt the local economy and create job loss.

This year, ALL (emphasis added) 30 bills introduced in state legislatures were sponsored by Democrats … Still, some key Republican state lawmakers broke from the pack to support minimum-wage increases.

Republican legislators in Michigan and Arkansas were so worried that minimum-wage ballot measures would drive more Democratic voters to the polls that they preemptively joined Democrats in raising the rate through legislative action.

What motivated Dems to raise wages? Was it to help families climb out of poverty? Perhaps. Might there be other motivations? I’m glad you asked.

John J. Miller noted an interesting trend late last year in his piece at National Review Online. He wrote:

If Democrats pick up a bunch of Senate seats this year, the pundits will have their explanations ready to go: Bush fatigue, war weariness, and the historic fact that midterm elections tend to favor the party that doesn’t occupy the White House.

They may also want to consider another factor: the minimum wage.

Liberal activists have placed minimum-wage initiatives on the ballot in six states this fall: Arizona, Colorado, Missouri, Montana, Nevada, and Ohio. Five of them — Colorado is the single exception — are home to a Senate race featuring a Republican incumbent.

It’s no coincidence that voters in these states will have a chance to hike the minimum wage: This is part of a coordinated campaign to boost Democratic turnout. “This is our gay marriage,” said Jen Kern of ACORN, a union-funded activist group, in the New York Times earlier this year.

The theory is that referenda to boost the minimum wage will encourage low-income workers to show up on Election Day — and then vote not only to give themselves a raise, but also for Democratic candidates. “It’s a turnout device,” says Republican governor Bill Owens of Colorado, where voters will elect a new governor and participate in several competitive congressional and state races.

Turnout was the goal in Florida two years ago, when ACORN helped place a minimum-wage initiative on the ballot. The primary purpose of that effort was not to help hourly employees earn a little extra cash. According to an ACORN document called “Floridians for All: Campaign Plan for a November 2004 Minimum Wage Constitutional Amendment Initiative” — and recently obtained by NRO — the chief motive was something else.

As the document’s first sentence states: “A Florida constitutional amendment initiative to create a minimum wage of $6.15 with indexing will help defeat George W. Bush and other Republicans by increasing Democratic turnout in a close election.” Further in, it continues:

The goals of this campaign are threefold:

1. To increase voter turnout of working class, mainly Democratic voters without increasing opposition turnout;

2. To increase the power of progressive constituencies by moving a mass agenda, putting together the capacity to get on the ballot and win, and by putting our side on the offensive;

3. To deliver a wage increase to hundreds of thousands of Floridians.

Please note, the goals were not Miller’s assessment of why the issue was on the ballot, it was their own plan in their own words.

Thus, with the rationale of real people enduring real hardship being eliminated as a need for raising wages and with the Left themselves disclosing their agenda as more political than philanthropic, it would appear the need for raising the MW is basically non-existent. Politics being what it is, that didn’t stop the Left from forcing the issue by attaching it to vital military spending to ensure they got a pound of flesh from both the GOP and the American People. Doing so amounted to little more than wasting time and resources better put to solving real needs and addressing real issues. The good news is that there are just 17 months left before we can do something serious about it. Remember in November, ‘08!

Hoping that returning Conservative values and principles to the nation’s capitol is the bare minimum we accomplish in ‘08 …

Blue Collar Muse

Trackposted to Outside the Beltway, The Virtuous Republic, DeMediacratic Nation, Maggie’s Notebook, On the Horizon, Webloggin, Leaning Straight Up, Cao’s Blog, Diary of the Mad Pigeon, Allie Is Wired, Stageleft, stikNstein… has no mercy, The Pink Flamingo, Gulf Coast Hurricane Tracker, CORSARI D’ITALIA, Dumb Ox Daily News, and Gone Hollywood, thanks to Linkfest Haven Deluxe.

Popularity: 33% [?]

This entry was posted on Sunday, May 27th, 2007 at 3:23 pm and is filed under 2008 election season, Business, Conservative, Individual Responsibility, Liberal, Politics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.