Dick Meister: Good news for our neediest workers

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By Dick Meister

Bay Guardian columnist Dick Meister, former labor editor of the SF Chronicle and KQED-TV Newsroom has covered labor and politics for more than a half-century. Contact him through his website, www.dickmeister.com, which includes more than 350 of his columns.

Here's some good news for the new year: Ten states are set to raise their minimum wage rates on January first.

The National Employment Law Project (NELP) calculates that the increased rates will boost the pay of more than 850,000  low-income  workers in Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Rhode Island, Vermont and Washington.

The rates, raised in accord with state laws requiring automatic adjustments to keep pace with the rising cost of living, will go up by 10 to 35 cents an hour depending on the state. NELP figures that will mean $190 to $510 more a year for the four million workers who are paid at the minimum in those states.

That may not seem like much in today's economy, but most of the workers are living at or near the poverty level, and it will mean a lot to them and their families. Another 140,000 needy low-paid workers will get indirect raises as pay rates are adjusted upward to reflect the new minimum wage in their states.

Nineteen states, including California, plus the District of Columbia will now have rates higher than the federal minimum. But though the increases in state minimum wages are vital, what's needed now is also to raise the federal minimum so that all minimum wage workers are paid at a higher and uniform rate.  The federal rate has remained at $7.25 an hour  – about $15,000 a year for the average minimum wage worker – since it was set in 2007, although inflation has continued to erode its purchasing power

A bill now pending in Congress would raise the federal rate to $9.80 an hour by 2014, set the rate for tipped workers at 70 percent of that, and provide for the rates to rise to match future increases in the cost of living.

Federal action is badly needed, notes NELP's executive director, Christine Owens, to "make sure workers earn wages that will at the very least support their basic needs. But earning an income that meets basic needs shouldn't depend on the state where a working family lives."

OK, but won't increasing the pay of minimum wage workers discourage employers from hiring more workers and thus weaken the economy and hurt jobless workers? That's often claimed by fiscal conservatives, but it's simply not so.

NELP cites a large body of research clearly showing that "raising the minimum wage is an effective way to boost the incomes of low-paid workers without reducing employment." NELP notes in particular research showing that "even during times of high unemployment, minimum wage increases did not lead to job loss."

On the contrary. NELP estimates that increased spending by workers paid at the new state minimums will pump an estimated $183 million into the economy, creating the equivalent of more than 100,000 full-time jobs. Other estimates indicate that every dollar increase in wages for workers at the minimum rate would trigger more than $3000 in new spending.

But can employers afford to pay a higher minimum? Wouldn't it be a burden on small businesses, as those opposing a raise often claim? No. NELP found that more than two-thirds of minimum wage workers are employed by large companies, and that many of the companies could easily afford a raise, especially since they "have fully recovered from the recession and are enjoying strong profits."

There's no excuse for inaction.  Ten states have done the right thing for their neediest working citizens. It's time for Congress and President Obama to do their part.

Bay Guardian columnist Dick Meister, former labor editor of the SF Chronicle and KQED-TV Newsroom has covered labor and politics for more than a half-century. Contact him through his website, www.dickmeister.com, which includes more than 350 of his columns.

Comments

worth, regardless of some bureaucrat's view of how much money people need. If the federal government want to boost the income of the lowest paid, then they can use tax credits, assuming the voters support that. Making employers pay what the government should be paying for doesn't worl because, as is well known, employers simply hire less, or hire people overseas, or outsource, or find some illegals who will work cheap.

The way to boost the incomes of the poor is to have a thriving business climate, not to meddle in the relationship between a business and it's human resources.

Posted by Guest on Dec. 29, 2012 @ 9:45 am

should be paid a lot, while high-earners should be paid a little.

It's called class warfare, or just plain old envy.

Posted by Anonymous on Dec. 30, 2012 @ 12:42 pm

he heard on Fox News on the comment pages here.

Warren Buffett: "It's class warfare and my class is winning."

99%er: "They only call it class warfare when we fight back."

Posted by Eddie on Dec. 30, 2012 @ 10:24 pm

your own class. He won't be hit by higher taxes because most of his Berkshire stock is in a trust AND because Berkshire doesn't pay any dividends, preferring instead to indefinitely defer any taxes by rolling up all eanrings and gains within the Berkshire vehicle.

Likewise, the billionaire Soros promotes socialism while hiding his billions in offshore trusts.

Hypocrites, both of them.

Posted by Anonymous on Dec. 31, 2012 @ 10:00 am

Seems at odds with your constant extolation of the "wealth creators."

Like most Americans, you have fallen prey to the propaganda of the ruling elites and thus focus your venom at those below you in the economic class system rather than upwards where it rightfully belongs.

Posted by Eddie on Dec. 31, 2012 @ 12:04 pm

But being an inevstment genius doesn't make one an expert on everything, including politics.

I have no problem with those richer than I. In fact, it encourages me. I'll never adopt the politics of envy.

Posted by Guest on Dec. 31, 2012 @ 2:15 pm

Didn't Reagan and Bush both sign increases to the minimum wage into law?

Posted by marcos on Dec. 30, 2012 @ 11:09 pm
Posted by Anonymous on Dec. 31, 2012 @ 9:58 am

Just more enlightened than you. It's saying a lot that the trolls on this board are more extreme than even Reagan and Bush. But I guess that just speaks to how far off the deep end the American right has fallen.

Posted by Greg on Dec. 31, 2012 @ 12:38 pm

I am holding you up as a hypocrite, as a radical libertarian, not a conservative.

Posted by marcos on Dec. 31, 2012 @ 1:45 pm

You are the voice of intolerance here.

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