Is it time for a $33 minimum wage?
No matter how you calculate it, minimum wage has flat-lined over the past 50 years. That's the finding in a 2012 study from the Center for Economic Policy Research. The study reads, “By all of the most commonly used benchmarks – inflation, average wages, and productivity – the minimum wage is now far below its historical level.” If wages had kept up with productivity gains since 1968, it would be nearly $22 dollars an hour.
Senator Elizabeth Warren cited the study in a Senate Committee Hearing last week, calling for the national minimum wage to be tripled. While questioning University of Massachusetts Amerherst Professor, Dr. Arindrajit Dube, who has studied the economic impact of minimum wage, Warren said, “with a minimum wage of $7.25 an hour, what happened to the other $14.75? It sure didn't go to the worker.”
Dube said if wages had kept pace with income going to the top 1%, today it would stand at $33 an hour. Productivity gains show Americans are working harder than ever, and profits have skyrocketed over the last half century. It's time businesses in our nation start rewarding that hard work, and start paying workers a living wage.
As long as corporate outsourcing is permitted the American worker will be butting heads with sweatshop labor in the third world. It comes down to the fact that some level of "protectionism" (call it Socialism if you like) will be required to reverse the downward spiral that's stagnated wages for our middle class. What's ironic is that, at a personal level, successful business people practice nepotism. But as for the public at large, if you ain't in the family, tough luck, buddy.
Since Adam Smith promoted high tariffs, there is no way you can call it socialism. I heard Thom read some passage from the "The Wealth of Nations" that talked about the invisible hand had to have tariffs to work.
This really puts the "makers" vs "takers" issue into proper perspective.
It's like; How high can you go? How long is it before there's nowhere left to go, $22, $33, $55 or $100 dollars an hour? This is really rediculous, more cars, more crap, more this more that!
It's time to rethink everything, less printing of money, less consuption, less everything.
Outback ~ I concur! It's a nice notion; but, realistically, its putting the cart before the horse. The Obama administration loves to do this pretending they're solving problems. Actually, their notions are doomed to fail because they are not feasible.
Without repealing Free Trade and restoring our manufacturing base, as well as instituting Single Payer Health Care in order to stimulate the economy, raising minimum wage is only going to hurt companies and cost jobs. Especially with the backwards approach to health care that Obamacare provides, increasing wages is impossible.
I'm sick and tired of these bunch of political phonies staging gallant new laws that don't have the chance for success of a pig in a glamour contest just to look like they're doing something. Lets see this group of flunky politicians suggest repealing Free Trade, establishing Single Payer Health Care, or legislating Campaign Finance Reform. These are the issues that need to be addressed immediately. Anything else is simply theater.
record corp profits and the working class have to drink pabst? i've laid so many golden egz my egg layer is killing me. It will not be very pretty when America really hits rock bottom.....hm, what country are we turning into?
Kend if your out there somewhere, I would like to clarify my feelings regarding a comment you made. You wrote that, "I am not very well liked on this blog so I get picked on a lot." Listen, my own sister idolizes Glenn Beck. I don't agree with her politics but I still love her. You are not disliked as a person, it's your ideas that are disliked by some of us.
Well it would appear that Professor Ravi Batra disagrees with my criticism. Perhaps he is right. On his site he theoretically states:
"This numerical example uses fictional values, but makes it clear that raising the minimum wage to catch up with hugely enhanced productivity over several decades is the only way to create full employment, when the economy can no longer generate more debt, or when extra debt is politically unfeasible. Closing the trade gap will also help, but may be inadequate to recall all laid off workers."
If you can show me where the money comes from to pay the additional wages without laying off workers I might agree. I'm still holding my ground. I hope I'm wrong!
"Those who produce should have, but we know that those who produce the most- that is, those who work the hardest, and at the most difficult and most menial tasks, have the least." ...Eugene Debs
Remember what I suggested a few days ago, if they won't pay you what your worth.."SLOW DOWN..The hours are long the pay is small, so take your time and buck them all."
"4 hours work for 8 hours pay puts more workers on the job everyday."
Does $7.25 an hour even cover the cost of a car and gas to get to work?
In my opinion taxation is the only way, at the moment anyway, to recoup and recycle some of this stolen money back into the economy and hands of the rightful owners.
~ cont ~ I should elaborate. He achieved this conclusion with an analysis that productivity and wage must raise simultaneously so that demand equals production. When production goes up and wages go down national debt increases to consume the extra production and prevent unemployment. Of course, national debt cannot increase for ever so the system needs serious restructuring. Dr. Batra believes raising wages alone could help reverse this trend. Don't get me wrong. I think his theory is sound. I just wonder about his solution.
DAnneMarc: What about the Govt. as job creator of last resort? It's a time tested remedy. Remember, when demand for workers goes up so do wages. High unemployment is what the so called job creators love. They can get away with just about anything, including justification for low minimum wages. Don't fall for it. Close the loopholes and reinvest in America. Patty Murray's budget is the answer.
2950-10K ~ Good point! Reducing production is as important as raising wages in Dr. Batra's theory. I don't think he's rignt about changing trade policys not being that much of a factor. I think generating local revenue is essential to any financial recovery plan along with raising wages and reducing production. People need to pay more for quality and own less as well. I don't think pay raises alone will do anything but increase unemployment. In the long run, however, it might work if it can be sustained.
2950-10K ~ Absolutely! I'm totally for the Govt. creating as many jobs as possible; but, useful, productive jobs. Construction, maintenance, essential services are fine, however, prison gaurds, solders, and members of the DHS, FBI, and CIA are not.
In Reply to jmanstro post #35 yesterday: Not sure you will see this but feel the need to reply anyway.
You my friend did a fine job in reply to my blunt oversimplification of a very complex socioeconomic problem. So the question I'm left with after your thought provoking reply is, how do we reach and sustain proper humanitarian economic balance in a world where money is the real power? We all know much of this power is currently in the hands of an immoral few who can't seem to get enough of that same medium which equates to even more power.
I submit to you that in 1980 the pendulum swung so hard to the right that it actually split and got stuck in the mahogoney. How do we pry it out just to get it to swing again?
One thing in your reply that I've thought a lot about in relation to Democratic Socialism is the statement about reasonable reward for achievement. We need laws that cap the profits made off the backs of workers. No man is worth in one hour what his employee spends an entire year working his butt off for.
Yes, my post yesterday was an emotional response, but I still consider myself a proud socialist, just add democratic back to it. Thanks for your balanced, knowledgeable, and sensible reply.
DAnneMarc: I'm not convinced defense spending will be cut as a result of the sequester. I've got a feeling that Cantor is spinning his webs as I type. His Virginians stand to lose a big chunk of this out of control govt. spending. It's the kind of out of control socialist spending that Cantor embraces. Just don't tell the Tea Party!
10k and DAnne i dont beleive the Government is a good job creator because like I said before sooner or later you run out of other people's money. Look at Greece. But I will say I like the thinking of demand for workers drivers up wages. How is the hard part. First of all deport all illegals. there is 30 or 40 million more job vacancies. Put import taxes on countries like China who are cheating with a artificially low dollar. Become energy self sufficient in North America and get us the hell of the Middle East and bring all of those jobs back home. Not to mention the brave men and Women who are serving there. Reduce all of the red tape to get a business started, I have done this in both Canada and the US and it is enough to drive you insane. Reduce corporate taxes yours are the highest in the world you are driving companies to the Caymens. I could go on and on but think I said enough so make Simone swear at me already.
So 10K you where calling my ideas a "prick" not me. I feel so much better. You hurt my one only feeling. LOL. Don't worry about it Buddy I know.
I have always said it would be fun to get a bunch of us together and have a few beers it would a fun and interesting time.
2950-10K ~ Like Thom says, "Everything you know is wrong!" I wouldn't be surprised if the entire Military budget is increased. I know that's not what we were told sequester is about; but, do you really trust these morons to tell the truth.
I haven't read the Sequester bill; but, Loren Bliss has. According to his web site Sequester is going to target Medicare for horrible cuts. I know that's supposed to be off the table, but according to Bliss it's another deception--one that will directly result in the deaths of thousands. Supposedly, part of the bill will bump poor seniors from Medicare to Medicaid at a certain age. They will be responsible for massive co-pays and will have their homes and assets seized after they die. I sincerely hope he's wrong!
Kend ~ I agree with everything you've said except lowering corporate taxes and the Government not being a good job creator. Prevent the corps. form going to the Cayman's with jail time and then tax them. After all, they owe their success to the Government's infrastructure. They need to pay their fair share to maintain it. Take the tax revenue and hire maintenance and construction workers. Simple cause and effect.
Aside from that you make some really great points. Especially about starting a new business. I drew up a business plan once and drowned in the Red Tape. Starting a business just was too much. I really do admire your ability to successfully do so. You must know a couple of great lawyers and accountants. Permits, licenses, legal fees, insurance, in addition to the simple operating costs and responsibilities were incredibly discouraging. Too much. Maybe I was just too young at the time. Maybe I'll give it another shot someday.
Ending the wars and free trade are also great suggestions. I have mixed feelings about deporting people; especially, ones that may have family here. Immigration is a sensitive subject that should be dealt with humanely. Splitting up a family to create one job is too high of a price to pay in my book.
Finally, you're best idea yet, getting together for beers. Now you're talking! Cheers!
DAnne. You have the highest corperate tax rates in the world. As a Canadian I love it you chase corperations right into my country. I know it doesn't seem right but it is a fact. You can't throw them in jail they are doing nothing wrong. You have to change the tax law to make it illegal first to throw them in jail.
They don't owe there success to the government for the infrastructure, they helped pay for it. Try replacing the word government with tax payer Because thats who pays. Corperations are tax payers just like you and I. The government doesn't make any money, tax payers do.
Dont give up on the business thing it can be very rewarding.
The first annual Thom Hartmann blog party is getting closer.
Kend ~ Very well! You've given me food for thought. Something to sleep on. I'll agree to research coorporate taxes in the US as compared to the rest of the world before I respond again. You may have a good point; and, I hate to be wrong. Good night, Kend.
The problem that I have with minimum wage is that the poverty level, or the point that you get off welfare and become a tax payer once again or for the first time is $23,460.00. This takes a 40 hr. per week job and $11.28 per hr. and that will take you to just $2.40 above the poverty level. So you start at a $11.28 minimum wage and add a cola raise per year to just keep ahead of the poverty levels. By doing so and enforcing the law from Clintons years that is, you must have a job in order to draw any welfare, will lower the amount of welfare precipitation. Now we begin to once again have a lower to middle class tax base, add that to the 60 billion dollars from the expired Bush welfare for the wealthy/corporations and now we once again also have a upper class tax base.
Now if like our President is asking for, we (eliminate all loop holes, Stop all pork barrel spanding, put big fines on all off shore accounts, stop products coming to our shores from any USA company that has moved work and jobs off shore, use 1/2 of the money saved to begin rebuilding our infrastructure and the other 1/2 to begin paying off our debt.) can begin to right the ship/USA that the right has almost sunk.
Like it on not, we are in a World economy. We must export as will as import, We will import as long as we need oil. We must be competitive with third world countries. Raising the mimimum wage will only drive more jobs to computers, heavy machinery, and forign workers. Only with extreme inflation and a cheap Dollar, can a high mimimum wage work. This, of course, means higher prices which the workers as well everyone else must pay, thus canceling out any net benefits.
If our number one export is fuel, why do you think we need oil?
To be fair to Senator Warren, she was NOT advocating "tripling" the minimum wage; she would only commit to supporting the current Obama Administration proposal to raise the minimum to $9.00/hr incrementally, then index it to inflation. The "$22/hr" wage based on productivity projections was simply an example....unfortunately.