Wednesday, February 13, 2013

President Obama to Raise Minimum Wage?

President Obama to Raise Minimum Wage?

 President Barack Obama has declared in Tuesday night’s State of the Union Address that he shall be pushing for a significant increase in the federal minimum wage, a change which has long been overdue. Right now the minimum wage is not nearly a living wage, but a poverty wage. Congress has only approved a raise in the federal minimum wage three times in the last three decades. Now the federal minimum is stagnant at $7.25 an hour. That amounts to a grand total of $15,080 a year (about 1,256 a month) if you work 40 hours every week with no sick days or vacation time. That is not nearly enough for even one person to afford rent, food, utilities, gas, car insurance, and other necessary daily expenditures.

       In no state in the country is it possible to pay for a basic but safe two bedroom apartment and the utilities on a full time job at minimum wage. An individual trying to live off of minimum faces absolute destitution in the event of a broken car, missed work, an injury, or a health problem. This is one of the primary reasons why there are now over 45 million people in the United States who are living below the poverty line, and there are over 50 million people without any health insurance. Despite belief to the contrary, most people in poverty are either disabled or they work very hard and are known as the “working poor”.
        If minimum wage had increased at the same rate of economic inflation to keep up with the cost of living than it would be $10.58 an hour today, which is just over 22,000 dollars a year at 40 hours a week.  Almost two thousand dollars a month would make it possible for a single person on their own to budget very tightly and have enough to cover all their usual expenses without government assistance, except for particularly expensive places like New York City or Los Angeles.
         It is significant to note, however, that if minimum wage grew at the same rate that CEO salaries and profits have for the last forty years that our minimum wage would be closer to twenty three dollars an hour. In truth, that is what corporations, from all of their historically momentous growth of wealth over the decades, can really afford to pay their workers, but they choose not to. The profits from the one hundred richest people in this country are now enough to eliminate poverty worldwide, four times over. There is no genuine reason for minimum wage to not be far above even ten dollars an hour, except for the greed of our so called “job-creators” and their refusal to risk any decrease to their next billion dollar Christmas bonus.
       Tipped employees have a separate federal minimum, which is at $2.13 an hour and has remained unchanged for over twenty years. According to the Fair Labor Standards Act, an employer is exempt from having to pay the usual minimum wage if the employee makes thirty dollars or more a month in tips. It is also legal to pay someone who is under the age of twenty a starting wage of $4.24 an hour for the first three months they work for an employer. There are also exceptions allowing employers to pay less than minimum if the worker is a full time student, a student learner, or has a disability.
        The good news is that states do have the power to raise their state minimum wage through state legislation, and employers have to adhere to the higher standard in those states. In November of 2012, ten states voted to increase their minimum wage, including Washington, Vermont, Oregon, and Ohio. The state with the highest minimum wage in the country is the state of Washington with a rate of $9.19 an hour. Thirty one states, however, still cling to the federal minimum of $7.25. There are some states wherein certain occupations can legally get away with paying LESS than the federal minimum. In Arkansas they can pay their employees $6.25 an hour if the employer has four or more employees. Employers in Georgia sometimes pay $5.15 an hour if they have six or more workers. In 2011 there were 2.2 million workers making less than the federal minimum.
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       The Chamber of Commerce and the National Restaurant Association (of course) protest the very idea of raising minimum wage at all and insist that it will lead to employers cutting hours to make up for the difference. However, this would be foolish and counter-intuitive because businesses always maintain precisely the number of employees they need to keep up with demand, failing to do so would cut more deeply into profits than would raises for employees. There are no employers who are going to hire someone new when they do not need the extra help, even if they have the money to do so, and employers are certainly not going to fire people and cut hours, leaving them short-handed, as long as demand remains steady. So it is the level of demand (the customers) that enables a business to grow and keeps it lucrative and operating. Of course, the best way to maintain a stable customer base is to make sure that as many people as possible are receiving a living wage, which enables them to purchase this country’s endless array of goods and services and keeps our economy from collapsing.
         President Obama is hoping for a federal minimum wage hike to $9 an hour, which is down from the $9.50 he initially proposed, and much further down than the $10 minimum Clinton tried for in the 90’s. Of course a raise of $1.75 would be helpful, but it is still not going to get most people out of poverty, and may do us little good in the long run if we do not have an indexed minimum wage. An index rate is a minimum wage which automatically increases to keep up with the rising cost of living from inflation. Otherwise, we may find ourselves in this same position five or ten years from now, fighting to raise wages again because no one can make a living working full time. Obama said “If you work full time, you shouldn’t be in poverty”. It is hard to imagine someone disagreeing with that statement…but alas, they exist.
         The President stated that “[Raising minimum wage is] not a Democratic thing or a Republican thing”, and went on to say that it was the job of both sides to restore balance and security to the country. He received applause for his usual attempt at bipartisan peacemaking, but the reality is that no matter what Obama does to improve the country, Republicans are going to oppose it. President Obama’s desire to appease and win over the congressional republicans quickly became a tiresome failure, now it is a play at absurdity. It is time to end the game of bipartisan politics and take the path of progressive leadership for which we elected this president in the first place.
         Republican politicians have no stake in the struggling workers of the country, and they have no interest in improving their circumstances. It is against their interests to eliminate poverty for millions of people, thereby empowering those people to seek better opportunities. Republicans and their rich CEO overlords want to have a huge pool of oppressed, uneducated, desperate workers who are willing to do any job for as little pay as the employers can possibly manage. That way they always have a hefty pool of obedient workers who are less likely to complain or make demands. This pattern of thought is apparent in the less intellectually adept republicans who allow such intentions to become blatantly obvious, like Michelle Bachmann who said that we could practically end unemployment if we did away with minimum wage laws entirely so we could hire people at “whatever level”.
         If we want to avoid absolute economic destruction we have to invest in our workers. Employee’s clock out of work and immediately become consumers, and our country has a consumer based economy. It is time to strengthen our country by strengthening our people and raise the minimum wage to a living wage.  In the event that President Obama succeeds at raising the rate to nine dollars an hour, it must only serve as a starting point. It is only impossible to make a difference if we insist that failure is the only possibility. Obama is certainly right in that no one who works full time should have to wallow in poverty with little chance of getting ahead. 
“A market where chief executive officers make 262 times that of the average worker and 821 times that of the minimum-wage worker is not a market that is working well. And it is surely not working well enough to build a solid middle class.”       ~Marcy Kaptur

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