Minimum Wage: Who Decided Workers Sho...

Minimum Wage: Who Decided Workers Should Fall Behind?

Posted in the Minneapolis Forum

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Awful Truth

Saint Paul, MN

#1 Feb 19, 2013
Dean Baker
Co-director, CEPR; author,'The End of Loser Liberalism: Making Markets Progressive'

It was encouraging to see President Obama propose an increase in the minimum wage in his State of the Union address, even if the $9.00 target did not seem especially ambitious. If the $9.00 minimum wage were in effect this year, the inflation-adjusted value of the minimum wage would still be more than two percent lower than it had been in the late 1960s. And this proposed target would not even be reached until 2015, when inflation is predicted to lower the value by another 6 percent.

While giving a raise worth more than $3,000 a year to the country's lowest paid workers is definitely a good thing, it is hard to get too excited about a situation in which these workers will still be earning less than their counterparts did almost 50 years ago. By targeting wage levels that roughly move in step with inflation we have implemented a policy that workers at the bottom will receive none of the benefits of economic growth through time. In other words, if we hold the purchasing power of the minimum wage fixed through time, as the country as a whole gets richer, minimum wage workers will fall ever further behind.

It is important to realize that this was not always the case. The federal minimum wage was first put in place in 1938. From that year until 1968 when its value peaked, the purchasing power of the minimum wage increased by more than 140 percent. As a result, minimum wage workers saw a sharp increase in their living standards. Over this 30 year period, low wage workers shared in the gains of the economy as a whole as the minimum wage rose in step with productivity growth.

If workers at the bottom had continued to share in the economy's growth in the years since 1968 as they had in the three decades before 1968, we would be looking at a very different economy and society. If the minimum wage had risen in step with productivity growth it would be over $16.50 an hour today.That is higher than the hourly wages earned by 40 percent of men and half of women.

It shouldn't seem strange that the wages of workers at the bottom rise in step with productivity, after all they do for many other workers even when the work has not in any direct way become more complex. For example, when a realtor is selling a $400,000 home rather than a $200,000 home it does not necessarily require any greater effort or skills. In fact, if we were talking about the years of the housing bubble, it may just be the case that the same home had doubled in price. Yet, the commission will be twice as much.

There would be similar stories in many other occupations where the growth of the economy by itself would tend to make wages rise. It is not obviously more difficult or time-consuming to sell 1,000 shares of stock or credit default swaps at prices that are twice as high, yet the commissions going to the brokers are likely to be twice as large.

More at http://www.huffingtonpost.com/dean-baker/mini...
non-starter

Saint Paul, MN

#2 Feb 19, 2013
Who decided workers should fall behind? The workers of course. By not making themselves attractive to employers that hire for better paying positions. Your only job security is your knowledge base, so you better make sure you not only get a good education or vo-tech skill, but keep up with changes in the marketplace as those jobs and requirements evolve. What are you Jumbo, some kind of Luddite?

Smart Liberal

“The one and only Smart Liberal”

Since: Aug 12

Former MN Tax Payer

#3 Feb 19, 2013
non-starter wrote:
Who decided workers should fall behind? The workers of course. By not making themselves attractive to employers that hire for better paying positions. Your only job security is your knowledge base, so you better make sure you not only get a good education or vo-tech skill, but keep up with changes in the marketplace as those jobs and requirements evolve. What are you Jumbo, some kind of Luddite?
Holy crap! Why don't the Libs understand what you wrote? It ain't tough.

If you want to make more money, improve your skill set so you are worth more to your employer, or a prospective employer.

It really is pretty simple.
Awful Truth

Saint Paul, MN

#4 Feb 19, 2013
Keep up the good work destroying the middle class, Smart Liberal.

No one deserves to make more than minimum wage, right? And the best first step towards this is to eliminate all unions, public and private!

And while we're at it, let's eliminate that minimum wage - employers should be free to pay whatever the market will bear.

And no more of this hoity-toity holiday and paid time off crap - a worker should get paid for the work he does, and that's all.

Amnd those overtime laws are forcing good jobs overseas - employers should not have to pay a premium regardless of how many hours are worked.

One more good thing, without unions workers will be afraid to speak up about safety hazards, so we won't need agencies like OSHA.
Awful Truth

Saint Paul, MN

#5 Feb 19, 2013
Smart Liberal wrote:
<quoted text>
Holy crap! Why don't the Libs understand what you wrote? It ain't tough.
If you want to make more money, improve your skill set so you are worth more to your employer, or a prospective employer.
It really is pretty simple.
So what happens to the people that don't have the skill set? Maybe they were born with an IQ of 80, let's say.

They don't deserve to make a living wage? They should live in poverty and squalor all their lives with their children destined to the same fate?

Is that how your religion teaches you to treat the less fortunate? Eff them, they don't deserve any dignity or enough to eat and drink and a decent place to live?

Is that what you learned from your parents and what little exposure to religion you had?
non-starter

Saint Paul, MN

#6 Feb 19, 2013
Awful Truth wrote:
<quoted text>
So what happens to the people that don't have the skill set? Maybe they were born with an IQ of 80, let's say.
They don't deserve to make a living wage? They should live in poverty and squalor all their lives with their children destined to the same fate?
Is that how your religion teaches you to treat the less fortunate? Eff them, they don't deserve any dignity or enough to eat and drink and a decent place to live?
Is that what you learned from your parents and what little exposure to religion you had?
So what you are saying is that most union workers have an IQ of 80 or less?

Since: Oct 08

Location hidden

#7 Feb 19, 2013
A minimum wage job, such as flipping burgers or part time Janitorial work, or as a greeter at Walmart, was not designed to support one's family. In most cases, they were created as an entry level into the job market, or to give a kid a working experience and a little cash in his/her pocket. As Non and SL said, Education, Knowledge, skills. People pay more for what you know versus what you can do.

Since: Oct 08

Location hidden

#8 Feb 19, 2013
Awful Truth wrote:
<quoted text>
So what happens to the people that don't have the skill set? Maybe they were born with an IQ of 80, let's say.
They don't deserve to make a living wage? They should live in poverty and squalor all their lives with their children destined to the same fate?
Is that how your religion teaches you to treat the less fortunate? Eff them, they don't deserve any dignity or enough to eat and drink and a decent place to live?
Is that what you learned from your parents and what little exposure to religion you had?
First of all, if you are making minimum wage, you shouldn't have a family or kids to support!
Awful Truth

Saint Paul, MN

#9 Feb 19, 2013
Niether of the Above wrote:
<quoted text>First of all, if you are making minimum wage, you shouldn't have a family or kids to support!
Did you read that in your Bible?

Maybe someone forgot to tell Mary and Joseph that because they were so poor, they couldn't have children.

Marrying and having a family should be a basic human right. Period.
Awful Truth

Saint Paul, MN

#10 Feb 19, 2013
Here's something for you to ponder, Niether:

More Than One-Fourth Of Private-Sector Workers Make Less Than $10 Per Hour: Report

Ever considered what it's like to live on anything less than a living wage?

Many private-sector workers know how it feels. That's because nearly one in four makes less than $10 per hour, a report by the National Employment Law Project shows. Just over half of low-wage workers are employed in industries such as food service, accommodation, retail, administration services and arts and recreation.

Overall, U.S. employment rose by 2.3 percent between February 2010 and February 2012, the report notes. However, a disproportionate number of jobs were created in low-wage industries. According to the NELP, the food service, accommodation, retail trade industries have all seen greater rises in employment than the U.S. economy overall; in fact, employment in the food service industry has risen by 5.1 percent over that span.

The disproportionate number of jobs created in low wage industries led slowed overall wage growth. Between June 2011 and June 2012, real weekly earnings rose by only 0.6 percent, the Bureau of Labor Statistics reports.

Such stagnant wages, in turn, result in less consumer spending, The Guardian note. And that makes any sort of sustained economic recovery that much more difficult.

The Center for American Progress, a left-of-center public policy group, has argued that a higher minimum wage would pump more money into the economy without cutting into job growth.

The more-money part seems about right. The national minimum wage has lost 30 percent of its purchasing power since 1968, the NELP report finds. U.S. unemployment was pegged at 3.6 percent in 1968.
non-starter

Saint Paul, MN

#11 Feb 19, 2013
Awful Truth wrote:
<quoted text>
Did you read that in your Bible?
Maybe someone forgot to tell Mary and Joseph that because they were so poor, they couldn't have children.
Marrying and having a family should be a basic human right. Period.
I missed that day in my basic human rights class, that you should be irresponsible and commit to things you can't afford.
Awful Truth

Minneapolis, MN

#12 Feb 19, 2013
Awful Truth wrote:
Here's something for you to ponder, Niether:
More Than One-Fourth Of Private-Sector Workers Make Less Than $10 Per Hour: Report
Ever considered what it's like to live on anything less than a living wage?
Many private-sector workers know how it feels. That's because nearly one in four makes less than $10 per hour, a report by the National Employment Law Project shows. Just over half of low-wage workers are employed in industries such as food service, accommodation, retail, administration services and arts and recreation.
Overall, U.S. employment rose by 2.3 percent between February 2010 and February 2012, the report notes. However, a disproportionate number of jobs were created in low-wage industries. According to the NELP, the food service, accommodation, retail trade industries have all seen greater rises in employment than the U.S. economy overall; in fact, employment in the food service industry has risen by 5.1 percent over that span.
The disproportionate number of jobs created in low wage industries led slowed overall wage growth. Between June 2011 and June 2012, real weekly earnings rose by only 0.6 percent, the Bureau of Labor Statistics reports.
Such stagnant wages, in turn, result in less consumer spending, The Guardian note. And that makes any sort of sustained economic recovery that much more difficult.
The Center for American Progress, a left-of-center public policy group, has argued that a higher minimum wage would pump more money into the economy without cutting into job growth.
The more-money part seems about right. The national minimum wage has lost 30 percent of its purchasing power since 1968, the NELP report finds. U.S. unemployment was pegged at 3.6 percent in 1968.
It looks like someone is pissed that he can only get a minimum wage job.
non-starter

Saint Paul, MN

#13 Feb 19, 2013
Awful Truth wrote:
Here's something for you to ponder, Niether:
More Than One-Fourth Of Private-Sector Workers Make Less Than $10 Per Hour: Report
Ever considered what it's like to live on anything less than a living wage?
Many private-sector workers know how it feels. That's because nearly one in four makes less than $10 per hour, a report by the National Employment Law Project shows. Just over half of low-wage workers are employed in industries such as food service, accommodation, retail, administration services and arts and recreation.
Overall, U.S. employment rose by 2.3 percent between February 2010 and February 2012, the report notes. However, a disproportionate number of jobs were created in low-wage industries. According to the NELP, the food service, accommodation, retail trade industries have all seen greater rises in employment than the U.S. economy overall; in fact, employment in the food service industry has risen by 5.1 percent over that span.
The disproportionate number of jobs created in low wage industries led slowed overall wage growth. Between June 2011 and June 2012, real weekly earnings rose by only 0.6 percent, the Bureau of Labor Statistics reports.
Such stagnant wages, in turn, result in less consumer spending, The Guardian note. And that makes any sort of sustained economic recovery that much more difficult.
The Center for American Progress, a left-of-center public policy group, has argued that a higher minimum wage would pump more money into the economy without cutting into job growth.
The more-money part seems about right. The national minimum wage has lost 30 percent of its purchasing power since 1968, the NELP report finds. U.S. unemployment was pegged at 3.6 percent in 1968.
I suppose free cell phones, high speed free internet access, cheap cigarrettes and booze, free health care, and cash payments for staying home are basic human rights too?

Since: Oct 08

Location hidden

#14 Feb 19, 2013
Awful Truth wrote:
<quoted text>
Did you read that in your Bible?
Maybe someone forgot to tell Mary and Joseph that because they were so poor, they couldn't have children.
Marrying and having a family should be a basic human right. Period.
Where in the Bible does it indicate the wealth or non- wealth of Joseph and Mary? Where in the Bible does it say anythng about their lifestyle? If you are going to take on the responsiblity of raising a family you better have the financial where withall to provide for that family. Having kids, just because you can, is not only irresponsible, but negligent.
no ame

Blue Bell, PA

#15 Feb 19, 2013
OK, so you up the minimum wage to whatever. What about those that actually have skills in demand enough to get them something a little above minimum wage? Do you also give them a raise, or do you go on paying them what you just started paying unskilled workers? OK, so now you give them a raise also. What about the worker that has skills and has put in the time to have a wage better than those you just gave a raise to? Now what about them?

And, maybe if we didn't have 11 or 12 million illegial aliens in this country driving down the labor demand, we wouldn't have 11 thousand new food stamp recipients every day!
redeemer

Minneapolis, MN

#16 Feb 19, 2013
Niether of the Above wrote:
<quoted text>Where in the Bible does it indicate the wealth or non- wealth of Joseph and Mary? Where in the Bible does it say anythng about their lifestyle? If you are going to take on the responsiblity of raising a family you better have the financial where withall to provide for that family. Having kids, just because you can, is not only irresponsible, but negligent.
Being a shepard,was a corporate job you know.

Since: Oct 08

Location hidden

#17 Feb 19, 2013
Awful Truth wrote:
Here's something for you to ponder, Niether:
More Than One-Fourth Of Private-Sector Workers Make Less Than $10 Per Hour: Report
Ever considered what it's like to live on anything less than a living wage?
Many private-sector workers know how it feels. That's because nearly one in four makes less than $10 per hour, a report by the National Employment Law Project shows. Just over half of low-wage workers are employed in industries such as food service, accommodation, retail, administration services and arts and recreation.
Overall, U.S. employment rose by 2.3 percent between February 2010 and February 2012, the report notes. However, a disproportionate number of jobs were created in low-wage industries. According to the NELP, the food service, accommodation, retail trade industries have all seen greater rises in employment than the U.S. economy overall; in fact, employment in the food service industry has risen by 5.1 percent over that span.
The disproportionate number of jobs created in low wage industries led slowed overall wage growth. Between June 2011 and June 2012, real weekly earnings rose by only 0.6 percent, the Bureau of Labor Statistics reports.
Such stagnant wages, in turn, result in less consumer spending, The Guardian note. And that makes any sort of sustained economic recovery that much more difficult.
The Center for American Progress, a left-of-center public policy group, has argued that a higher minimum wage would pump more money into the economy without cutting into job growth.
The more-money part seems about right. The national minimum wage has lost 30 percent of its purchasing power since 1968, the NELP report finds. U.S. unemployment was pegged at 3.6 percent in 1968.
First of all, this follows logically, the supply and demand equation that has fueled the capitalistic venture for years. The higher paying jobs, through attrition or taxation have left the US for greener pastures. Along with the tremendous influx of immigrants, legal and otherwise, have created a huge work pool for those lower paying jobs. The demand for jobs is great and the supply of workers far exceeds the need, hence the market place,(supply and demand) dictate the wages! Even with the increases in those industries normally considered entry level industries, the supply far outstrips the demand. So the study is accurate as far as it tells the story. What it fails to address is the loss of high paying jobs to other countires, the emergance of China as a powerful economic jugernaut that will dominate the manufacturing world for years to come, and the failure of the US Government, under both of the Bushes, Clinton and the current resident of the White House, to address the money manipulation of China's leaders, and prevent the talent and technology lost to other countries. Adding to the mininum wage, will not increase anyone's prosperity or grow the economy. But you can live in that world if you wish. I choose not to.

Since: Oct 08

Location hidden

#18 Feb 19, 2013
redeemer wrote:
<quoted text>
Being a shepard,was a corporate job you know.
Well he does have a big flock!

Smart Liberal

“The one and only Smart Liberal”

Since: Aug 12

Former MN Tax Payer

#19 Feb 19, 2013
Thanks to NotA, non, and no for their contributions above. Even though Dumbo's comments were aimed at me, I really have no need to say anything further other than...

Improve your skill set in an area where there is a demand. Then you can make more money.
Awful Truth

Saint Paul, MN

#20 Feb 19, 2013
Smart Liberal wrote:
Thanks to NotA, non, and no for their contributions above. Even though Dumbo's comments were aimed at me, I really have no need to say anything further other than...
Improve your skill set in an area where there is a demand. Then you can make more money.
Enjoy your eternity in hell, which is where the bible says you are heading.

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