This week: Minimum Wage Debate

Harry Goldstein's recent column on the minimum wage inspired a tidal wave of mail to Tripod and to our intrepid columnist. Many thanked Harry and Tripod for taking a stand on the issue of the working poor in America. An equal number said that Goldstein's economics were naïve -- that a raise in the minimum wage could send business teetering to the brink of collapse. Which is it then? Are working people just a bunch of whiners? Can CEOs pulling down multimillion dollar packages at companies posting record profits really be sent packing for the poorhouse by a Federally-mandated raise in the minimum wage? Where do YOU stand on this issue?

Read what others have said.

See what Tripod members had to say about the tech stock roller coaster in the last survey. For other past survey results, check our survey archive.

A new Work & Money survey is published each Wednesday.

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formicacid: I like the minimum wage going up - it means I get a raise. But how will this affect my employers and others in similar situations?
Stores that will have to budget more money towards workers' salaries will have to get this money from somewhere -- perhaps from the CEO's annual raise (sorry, only %15 raise this year) or more likely by raising prices of goods sold.
Then, if people are willing to pay higher prices, the company stays in business. Otherwise the public will realize they don't really need said product, or someone will sell the product with less overhead costs (and thus at a lower price for the public). Such is survival of the fittest.
Minimum wage had to go up sometime; if not this year then next. And of course people will always complain both ways about it. Who's right: the person who proves a raise is bad or the one who proves it's good? Both are, for there are good and bad results from this raise.

ericmr: I think it's about time that the minimum wage went up. However, that will inevitably cause the price of consumer goods to go up. If they would raise the minimum wage and freeze the prices on things then we would see the what it feels like to have extra money. I also think that if they do a wage increase with a price freeze that they wouldn't have to make a 90 cent increase, but maybe as little as 5 cents an hour.

DillWeed: Duh! They've been squabbling for years over a government-mandated jump in minimum wage. Do you really think that the Congress is going to even consider a price freeze? Get real!

dante: The minimum wage has not kept up with the increase in cost of living. Prices have risen while income has not. Therefore, it makes sense that the minimum wage should be raised. Most companies' profits are such that an increase in the minimum wage won't affect them greatly, because there are only a few people earning minimum wage for long periods of time. Usually people get a raise above that pretty quickly if they add value. Like Tripod mentioned in some article, CEO's salaries are going through the roof while record amounts of people are being "downsized". It just doesn't make sense.

pawlo: I would consider it far more worthwhile to obtain lower taxes than higher wages. Lower taxes would affect everyone, from the poor to the biggest companies. If a company pay less in tax, it could expand more and eventually raise the wages.

xiola: You say that the raise in the minimum is partly justified by the excesses of corporate America. Not all of us are temp paper pushers in Big Business, Incorporated. Many of us work in restaurants and small start-up companies easily crushed by the bigger people. There are many small, struggling business out there, and the owners will have to chop workers if the minimum wage goes up. I'm for a raise, but there are consequences that we will have to face.

tmcmahon: I am all for a raise to the minimum wage. My only beef is that minimum wage has gone up from $3.35 to $5.15 faster than most corporate pay positions. Most companies only give a 2 to 3% raise ANNUALLY!!!! If you are gonna raise the minimum, how about helping out the rest of us who are in the middle by putting a freeze on the allowable rate of increase in consumer goods. Allowing for only an average of 3% increase in domestic goods would help keep me in the black.

stampme: Price freezes are not a solution -- if wages go up (along with employers' expenses) and the prices are frozen, more jobs will be lost. While CEOs often have obscene salaries, they aren't likely to take a loss -- no matter what. Minimum wage hikes hurt those without skills, who have little to offer an employer who needs to get something for his investment.

jaysen: My first job paid $1.75 per hour.When I look back now, having become increasing more aware of my own mortality, I ask myself how I could have given up four weekday afternoons and every Saturday of my last 2 1/2 years of high school for that kind of money. I did, though. I think $1.75 was right around the mimimum at the time. Nowadays minimum wage seems almost like charity work. I hear a lot these days about the power of the marketplace and how it forces innovation. The cost of labor is only one of many cost considerations when laying out a business plan. It seems to me that if you can't operate a business, pay a wage which is at least poverty level, and turn an acceptable profit, something needs to change. It's interesting that the small business advocacy groups which we hear so much from when the minimum wage is up for review don't go running of to Washington every summer when the fuel prices are raised. This goes for many other fixed costs as well; maybe they grumble to themselves, but they accept it and move on.
In all fairness, there are other government mandated costs associated with employing people that must be considered. It may not be fair to demand that employers be responsible for all the associated costs involved with providing a living wage to workers. I think that the government needs to look at tax incentives as well.

Tearlach: A wage increase is good, but consider that approximately nine cents of that will go to paying more social security tax, and for the average person, federal taxes will increase by fifteen cents and state taxes will eat another portion. To cover the increased wage costs, manufacturers will raise prices, leaving the low-end wage earner with approximately a five cent loss in earning power. Can the working poor really afford this minimum wage increase? I think not! Consider also that the average increase of thirty-six dollars a week will push most workers into a higher tax bracket and the wage increase will be lost to taxes and higher prices!

GrandAdmiralPetry: The minimum wage in America has fallen far behind the actual cost of living: real estate and housing have easily quadrupled in a quarter century, the cost of food has trebled -- even cow-milk for babies' formula -- but the minimum wage has only doubled.

Clearly, minimum wage must be reconstituted (else its not minimum wage, but a return to semi-slavery). My (political) proposal is for a direct increase in minimum wage to $10/hour, 20 hours minimum, and a (new) minimum pay of $7/hour, 20 hours maximum: by limiting time spent at minimum pay, we can allow for 'easy' part-time 'check-out' jobs, and experimental jobs, and 'kids' jobs (part-time) -- while preventing lock-down-security: a minimum-payee at half-time is guaranteed the other half of the day to work elsewhere, and find better employment (even at wage-risk) without losing all pay per week. Any employer who wants more time from minimum-wagees can expect to pay a decent wage that does not destitute the worker in the long-run.

M.S.: Raise the wage!! (Every other thing goes up, up, up... why not survival money for lower middle class wage slaves, STUDENTS, et. al?

clarkeish: A minimum wage is established for the simple goal of ensuring that all workers will be able to live on the compensation they receive for their labor. Minimum wages have been established because it has been found that businesses are perfectly happy to pay some workers at sub-survival rates. It is generally believed that working people should survive (somehow it's not universally believed that ALL people should survive).

If you establish a minimum wage but make no arrangements to raise it at a rate related to the rise in the cost of living, then over time the minimum wage becomes a token insufficient to support the worker; this is the case today. In this situation there actually is no minimum wage since businesses are once again free to pay their workers less than is necessary for life, but are now in the happier position of being able to say that they're providing their workers with the legally mandated minimum (and so are obviously not avaricious exploitive bastards). A static minimum wage benefits business in the same way that cigarette-package warnings help tobacco companies defend themselves from lawsuits since they can say "But look -- we're doing what the law requires. You don't think we should do more than the law requires, do you?"

A minimum wage of $5/hr at 40hrs/wk would get you $10,000 a year (gross). You could survive on that (without dependents and outside a city), but I don't think anyone believes you can have a life on that. You can just survive -- barely. If you think the minimum wage should not be raised it's because you believe it's acceptable for some people not to survive, let alone live. I don't know why some of you think that, but apparently you do. I think that's strange.

2molliee: The difference between minimun wage and what the CEO earns is outrageous and a disgrace to our country. If the CEOs want to increase their profit margins they should consider lowering their own wages instead of those of their workers. This type of inequity usually preceed revolts -- I say CEOs beware! You could be on the brink of destruction.

cylee: Most responsible employers pay more than minimum wage. The companies that do not are often the big corporations with the high-priced CEOs. They need to be stopped. As a state employee, I have not had a raise in five years and was recently charged for insurance. No gain -- instead, a loss. Our managers are getting paid 400 % more than the people (ourselves) who make the system work. My wages are the same I was making in the private sector 16 years ago. I am single and I can't make it.

noahlamy: Regardless of what Republicans say, the minimum wage increase isn't going to put anyone out of business. Minimum wage paychecks do not make up a significant portion of payrolls let alone overall business expenses. And as for the major companies, don't make me laugh. Major corporations spend more on executive auto leasing and housekeeping in the executive suites than they do for minimum wage payrolls. Don't ask me to feel sorry for guys pulling down 6 to 8 figures who claim they can't afford to pay a full time worker 200 bucks a week.

Now that you've read through the responses, add a few thoughts of your own.