rumitoid

Copy and paste from http://news.yahoo.com/politicians-experts-split-over-fair-070803059.html

WASHINGTON (AP) -- The federal minimum wage has left three-person families below the poverty level since 1980. It's also well shy of the peak of its buying power almost half a century ago.
Is the current $7.25 hourly minimum fair? Is now the time to raise it, and, if so, by how much?
There is no objective answer. It depends on the political slant of lawmakers or the views of economists being asked.
Economic data over the minimum wage's 76-year history doesn't provide definitive help, either. It shows erosion over time in the plight of minimum-wage earners, reflecting what the nation's political system has produced, not necessarily what's fair.
Democrats backed by President Barack Obama are preparing to force election-year votes on gradually increasing today's minimum to $10.10 by 2016, an effort that seems likely to fail in Congress. Republicans generally oppose the proposal, saying it would cost too many jobs.
As a Senate clash over the issue approaches — perhaps this week — here's a look at the equity questions the dispute raises.

Q: What should be the minimum wage's goal?
A: Along with labor and liberal groups, Sen. Tom Harkin, D-Iowa, sponsor of the $10.10 push, says the aim should be to boost low-earners and their families over the poverty line.
As recently as 1979, when minimum-wage workers earned $2.90 hourly, they made an annual $6,032 for a 40-hour work week. That exceeded that year's federal poverty line of $5,784 for a family of three.
The following year, when the hourly minimum rose to $3.10, a full-time worker earned $6,448. But that dipped below that year's $6,565 poverty level for the same-sized family, and it's stayed beneath the threshold since.
The current $7.25 minimum leaves that worker earning $15,080, well below the 2013 poverty level of $18,552 for a family of three. By reaching $10.10 in 2016, minimum-wage workers would earn $21,008 — surpassing the nonpartisan Congressional Budget Office's poverty level projection for that year by around $2,300.

Q: What do Republicans say?
A: Many don't offer an alternative figure and say their counterproposal remains a work in progress.
Sen. John Thune, R-S.D., a leading GOP opponent of Harkin's bill, says an increase to $10.10 is unfair to low-wage workers because it would cost too many of them their jobs — around 500,000, according to a Congressional Budget Office report in February. That same report said 16.5 million low-paid workers would see higher earnings, and about 900,000 people would be lifted over the poverty threshold.
Thune says that while the federal minimum wage isn't going away, regional economies and hiring markets vary so much that states should be allowed to set their own minimum wage levels. All but five states already have minimums, but currently the law requires that the federal level prevail if it is higher than a state's.
Republicans and conservatives also say the focus should be on creating a stronger economy with more jobs and better educated workers who can demand higher wages and not have to rely on a federal minimum.

Q: Historically, has the minimum wage had the same buying power for workers?
A: No. Since it stays stagnant unless Congress votes to change it, its buying power has fluctuated widely and today is well below its peak.
The federal minimum wage first took effect in 1938 and was 25 cents. That was worth about $4.06 in today's dollars, its lowest value, according to the nonpartisan Congressional Research Service, which analyzes issues for lawmakers.
The minimum wage crested in value in 1968, when it was $1.60 but had $10.69 in buying power in today's dollars. That was well above today's $7.25.
The peaks and valleys of the minimum wage tend to reflect the political party in power. It didn't change during the 1980s under Republican President Ronald Reagan. The last increase was enacted under President George W. Bush in 2007 after Democrats took control of Congress.

Q: How has the minimum wage compared with workers' average earnings over the years?
A: By that measure, too, the minimum wage has taken some hits in recent years. It's another comparison that supporters cite to argue that it's time to boost the federal minimum.
According to the Congressional Research Service, minimum-wage earners fared best in 1968 compared with their co-workers in private industry. That year, the federal minimum of $1.60 was 54 percent of average private sector earnings of $2.95.
It's eroded since then. The current $7.25 federal minimum was just 36 percent of the $20.31 average in the private sector in November.

Q: Do conservatives concede that point?
A: No. They argue that if the real goal is improving the plight of low-income workers, it would be more efficient to increase the earned income tax credit. That program — started under GOP President Gerald Ford and expanded by Reagan — provides tax breaks to lower-earning families, including government cash payments if their credit exceeds taxes owed.
Conservatives say the credit is more effective because it wouldn't cost jobs and virtually all the money would go to poorer people. Because some minimum-wage workers are members of higher-earning families, about 30 percent of the higher earnings from an increased minimum wage would go to families making over triple the poverty level, the Congressional Budget Office estimates.
One problem: While a minimum-wage increase would be paid by employers, enlarging the earned income tax credit, a $60 billion program, would cost federal taxpayers. That's an additional drain on the Treasury that some Republicans oppose

bmac32 Loc: West Florida

I still say why up minimum wage, it has never worked for long. Hold wages right where they and lower prices across the board, say 6% and adjust that was required.

Dave Loc: Upstate New York

Let's get away from what politicians on either side say - and let's focus on simple realities we all should know:

- a private employer cannot hire people where the total cost to employee them (which is wages and all the associated statutory costs like FICA, medicare, etc) is higher than the market value of what the person hires generates.

- when cost go up, employers do either one or a combination of the following:
- move the work to a location where the cost isn't as high, and/or
- employ capital that replaces the labor (the higher the labor cost the more cost effective automation)
- failing all else, raise the price of the goods or services provided.

Each of those options will reduce the number of these low skilled jobs.

Market forces respond to the law of supply and demand - the more people seeking low skilled jobs, all else equal, the lower the market will value these jobs.

In addition to the effect of reducing the number of jobs, government policy and failures has increased the labor pool of those who would aspire to these jobs - by importing millions of people with low skills, and by social programs that cause the collapse of those elements that foster individual responsibility - thereby generating millions more unskilled people into the work force each year.

The unintended consequences of liberal well intended social engineering making or creating problems that then lead to further social engineering with the commensurate unintended consequences creating more wards of the government - a permanent underclass that can be counted on to vote for more liberals to foster more of the same.

The one lesson I learned in my life is Einstein was correct - continue doing the same thing expecting different results is insane - to not define the core cause of a problem will generate for sure actions to deal with the symptoms.

Nickolai

We can be certain our conservative friends won't be happy until they can take the country back to the day's when working people lived in company towns and were paid in script that could only be spent at the company store with Charles and David Koch running the show.

Dave Loc: Upstate New York

Is your grasp on reality the same for all things, or is this the only area where your flights of fancy miss the mark so much.

Perhaps you think what happened in coal mining towns was actually what happened everywhere in America, and perhaps your aversion to the Koch brothers is based on some specific policy they represent that you know about and oppose - or far more likely - your hatred on them is based on something some left wing propaganda outfit issued to you.

Nickolai

I don't hate any body. But in addition to company towns there were Hoovervilles when I was a kid and of course tennament houses. And lets not forget the Hobo jungles where teenage hookers risked disease, pregnacy, and death for as little as a dime. Ah-- the day's of laissez fair

Dave Loc: Upstate New York

Sounds like a lot of hate, particularly if you blame all this human misery on conservatives. Perhaps if you'd widen your vision you'd see that free market capitalism has provided a higher standard of living for more people in more places than any other known form of economic activity -and the widen yet again and realize conservatives, at heart, are advocates for free market capitalism.

But, then, assigning blame for misery to philosophies and hating those who practice it is far easier - your choice.

bmac32 Loc: West Florida

They'd likely do better than George Soros!

rumitoid

Balderdash, based on false dichotomies and premises.

BigMike Loc: yerington nv

Perhaps if we quit letting the Fed create money out of nothing to provide taxpayer paid bailouts for business and banks that are poorly run and government programs we can't afford our money would cease LOSING ITS VALUE! If $1.60 in 1968 is worth $10.60 now that's about 900% the value of money has gone down. Raise the minimum wage if you want. It will be for nothing if we don't curb our spending and take the power of currency creation from the Fed.

Dave Loc: Upstate New York

I see - you can't respond to the simple stated realities so just declare it all balderdash and stew in your self regarding intellectualism. Predictable arrogance.

bmac32 Loc: West Florida

The liberals idea is more never less and they don't seem to care who pays for it as long as they get more.

BigMike Loc: yerington nv

Yes...if what they're doing doesn't work they must not be doing it enough!

bmac32 Loc: West Florida

Brain power is not their strong suit and never has been but you money is.

rumitoid

Yes, your are right; my apologies. You made some points well considering. My bad.