It's minimum wage increase day!
Filed under: Career, Recession
Today the federal minimum wage increased 70 cents to $6.55, as the second phase of a series of moves meant to bring the minimum wage up over a three year period. The "raise" will affect roughly 1.7 million workers or 2.3% of hourly workers, which means that collectively the cost of employing all minimum wage workers for one hour jumped $1.19 million today. Despite the increase, the new rate is still below the inflation-adjusted 1997 level of $7.02, and far below the inflation-adjusted level of $10.06 from 40 years ago, according to a Labor Department inflation calculator. And it obviously still leaves many families well under the poverty line.
You'd think that getting a 12% raise during poor economic times would be a great help for 850,000 people over 25 who are making minimum wage. Unfortunately the increase is often quickly passed to the items these same workers need to buy; including food and gasoline. Smaller Businesses will also feel the pinch as they struggle to cope with higher wages and customers who are sick of seeing prices go up time and time again.
Minimum wage earners won't be the only ones affected by the increased costs associated with paying a higher wage. Three-fifths of those earning at or below the minimum wage work in the leisure industry, the highest proportion of any industry! It is only a matter of time before these wage increases take an effect on the cost going to hotels, bars and restaurants, giving consumers even more incentive to take a staycation.
Five years ago, I would have been ecstatic to hear about a minimum wage increase; today as I hear the news I ponder the cuts that will have to be made to fill this large wage increase for the many student workers at my University and the changes that will take place for my many friends who own small businesses.The jury is still out on a minimum wage but I question the logic of mandating a 12% raise during a period of economic strife, especially when I only get 1% this year!
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Reader Comments (Page 1 of 1)
7-24-2008 @ 3:00PM
hurricane said...
Why should the poor care if your rich friends business loses a few dollars. The only problem is the capitalist pigs in this country have brainwashed the masses into believing that it's ok to have people making six dollars an hour. I will keep selling drugs to your kids before I take a six dollar an hour job.
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7-24-2008 @ 10:35PM
Josh Smith said...
My friends rich, that is rich. I don't understand why you think just because someone is a small business owner they are rich.
Isn't selling drugs a capitalistic endeavor itself?
7-24-2008 @ 3:23PM
Patty McAdams said...
Hurrah,for the dollar stores. I love them.I do the biggest part of my shopping there. Keep up the good work!!!
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7-24-2008 @ 4:38PM
Covergirl said...
AMEN TO HURRICANE!!!
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7-24-2008 @ 10:41PM
kimberly said...
what kind of moron are you. you have the nerve to compare your 1% raise, when im sure you income is well over the poverty level to the single mother not as fortunate as you and your friends to recieve higher education. and the sad thing is that the people who recieve minimium wage in this country are usually doig the jobs people like you think there to good to do. maybe you should remember the next time you eat out or use a public restroom or stop for coffee that the person doing this for you probably cant even afford to put food on the table so next time your feeling sorry for yourself because of your 1% raise maybe you should think about the people who have it far worse than you
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7-24-2008 @ 10:49PM
Josh Smith said...
Comparing a 1% raise is known as humor. Seriously though if the economy is tanking soo much, and businesses are already cutting back this increase could easily cost someone their job. Last I checked A paycheck was better than NO paycheck.
I think its funny that you think of minimum wage being paid for jobs I am to good to do since I have done all of those jobs. Don't be so quick to judge. Cleaning bathrooms suck and until you've had to clean up a dump some one took on the floor for minimum wage, don't go calling me pretentious!
Last year when this was on the ballot I voted YES to the increase, but at the time I didn't understand the long term implications nor did I know we would be in such a poor economic state when the second raise came in. I'm not against A minimum wage completely but I am troubled by this recent increase despite economic conditions.
7-25-2008 @ 10:34AM
Mark said...
Minimum wage is a *SHAM*! There should be no such thing as minimum wage - PERIOD. Additionally, minimum wage was *NEVER* meant to be a living wage. This is why you go to school. Learn a trade and or get your degree. I used to earn "minimum wage", however I have a brain and figured out that unless I learn something to become a value to an employer, I'll be making nothing for the rest of my life. I've learned a trade. I hold several certifications. Guess what I'm doing now? I'm going after my degree? WHY? I want to have greater earning potential! The argument that someone doesn't have enough money for school is RUBBISH. You guaranteed student loan - ANYONE get get that, and YOU GET YOUR @$$ IN SCHOOL!! If you don't want to do that, then live in poverty for the rest of your life!
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7-25-2008 @ 10:34AM
Ron said...
Well there "they" go again, I work real hard to get a .50 cent raise, working at the bottom over the last 3 years then the government gives all the new workers a minimum raise and now I make less than the new hires after doing this job and dedicating my efforts for long term employment. So my best bet is to quit and go work somewhere else to get a raise. What a great disincentive for long term health care benefits and seniority. Thanks demolibrobleedingoldfarts.
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7-25-2008 @ 6:13PM
AMIE said...
You're correct the only thing is that they don't have to start them at the rate that would make them get more than you, they just don't care they do that so you could quit. The company I work for did just that but Im not quitting they even cut my hours to 20 hrs a week and gave the new hire 37 and to add salt to my wounds I had to train each one. "way to go, justice,tranguility and happiness." The idea of free enterprise allows our american businesses do what ever they want. They hire when we don't need anymore help we just need them to give us the hours so we could make ends meet. This is so the national surveys show that our employment is up I'm sure they get something out of that, then everyone they hired quits as their hours are being cut. Vicious circle whille their pockets are getting filled. Thank goodness for unions that is the only organization that wouldn't let that happen to us. IAll they do is contribute to bankruptcy
7-25-2008 @ 11:56AM
peter king said...
I am an employer I own a business in ENGLAND we bit the bullet years ago and NOW our minimum wage is DOUBLE what is being proposed for the USof A. Minimum wage makes sense of people getting off their buts and getting out to work - BUT NOT AT THE PALTRY RATES YOU ARE TALKING ABOUT. Experience has proved that PROVIDED THE LAWS ON PAY ARE STRICTLY ENFORCED minimum wage DOES NOT shrink Jobs - think about it - if the rich get huge rises they salt them away or buy villas in the Sun. Extra cash paid out as minimum wage gets spent in the community and creates an updraft to enrich those who need it most. Come on OBAMA DOUBLE THE MINIMUM WAGE. x x x
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7-25-2008 @ 1:00PM
Teresa Cox said...
I like the idea in principal of a minimum wage, but I don't think
that the federal government should necessarily be the agency to set that wage.
I live and work in Maryland, where a typical home in my community runs for $250,000. Earning a wage of $6.55 an hour is not going to even rent me an efficiency apartment around here without a few roommates. I grew up in central Michigan, where the same typical house runs for $150,000. Earning $6.55 here means that I can rent my own apartment, maybe even a one bedroom as opposed to an efficiency.
I think the federal government should establish a formula for some percentage of the standard of living index that the states would then be compelled to use. The actually minimum wage would then be different for each state and recalculated every three or four years.
The point of minimum wage is to have a very little bit of fairness
and equity. Doesn't this method seem a little more likely to create that?
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7-25-2008 @ 6:12PM
Teresa Cox said...
I like the idea in principal of a minimum wage, but I don't think that the federal government should necessarily be the agency to set that wage.
I live and work in Maryland, where a typical home in my community runs for $250,000. Earning a wage of $6.55 an hour is not going to even rent me an efficiency apartment around here without a few roommates. I grew up in central Michigan, where the same typical house runs for $150,000. Earning $6.55 here means that I can rent my own apartment, maybe even a one bedroom as opposed to an efficiency.
I think the federal government should establish a formula for some percentage of the standard of living index that the states would then be compelled to use. The actually minimum wage would then be different for each state and recalculated every three or four years.
The point of minimum wage is to have a very little bit of fairness and equity. Doesn't this method seem a little more likely to create that?
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7-27-2008 @ 11:33PM
kimberly said...
this is for mark apparentley your as big a jack ass as josh first of all not everyone qualifies for loans that would pay all expenses of going school lets take text books for instance as well as transportation and the loss of wages you would face in order to show up for class everyday. also if everyone did as you said who would take your order at mcdonalds get your coffee at dunkin donuts or fill your gas tank. and if you would ever like to go to dinner again your going to need someone to wait on you so the next time you think about patting yourself on the back for no longer making minimium wage , remember that there was a time when you did and dont you wish someone valued your work a little more.
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7-28-2008 @ 8:33PM
Josh Smith said...
If you look hard enough you can find a school which ropes books in with tuition so you can use loans to pay for it.
As for working while in school who do you think makes up a large portion of minimum wage? You can go to school, take a full load of courses AND put in a 30-40 hour work week. It will likely suck but you CAN do it. I did, I know several of my classmates did too.
Guess what, that kid at McDonalds taking my order, going to school while he works there getting paid $3 more than minimum wage. Same with coffee!
7-28-2008 @ 8:25PM
Debbie said...
I work at a company which only gives nickel raises once a year and they feel justified in doing so- corp gets richer and we who work for them just get more broke as prices go up- it is hard to choose which way to go when it comes to feeding a family of four or going and paying bills which need to get paid if you want just the basic necessities of life- our country is crumbling more and more every day!
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