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More Increases to Minimum Wage on the Cards

This article was written by in Career and Work. 3 comments.

Last Tuesday, the federal minimum wage officially increased to $5.85 per hour and will be $7.25 by 2009. Senator Ted Kennedy and other Democrats are already talking about increasing the minimum wage further beyond 2009, to $9.50 by 2011 or 2012.

Liana Fox of the labor-backed Economic Policy Institute said part of the reason for Kennedy’s initiative is that by July of 2009, when the federal minimum is $7.25, 12 states with their own minimum wage law will be over $7.25.

Many states simply keep their minimum wages indexed to inflation or another cost of living measurement. That’s a good tactic for the federal government, as well. Nevertheless, I find it unlikely this will pass Congress so soon after the Fair Minimum Wage Act of 2007.

Minimum Wage $9.50? Democrats Say Maybe [CNN]

Published or updated July 29, 2007. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 3 comments… read them below or add one }

avatar Compounding

Well, the idea of the minimum wage is obsolete, anyway, by the market. Why should anyway have to pay more for something than what is worth, to them? And if someone gets a job somewhere, they are obviously entering that job in agreement with its pay, else they wouldn’t take the job. Further, low pay should be a stimulus to do something to increase your pay, like going to school, finding a more productive way to do a job, etc. That provides true value, and it creates a cycle that is natural and good for the economy. Young workers with no experience or skill will have jobs that are attainable, and then they will see that they do not want to do these jobs for the rest of their lives and go to school.

Further, the facts about who makes the minimum wage speak for themselves.

The true motivation is vote buying by corrupt politicians. They do not care about anyone… pretending to care is their “brand” and they are just pushing a product to people who will buy it, with a vote. The labor unions typically have contracts that have their members’ pay indexed to the minimum wage, so they want a minimum wage increase. They lobby the politicians and get them to spin it as “helping the less fortunate.”

It is fraud, really. And if it really worked, how they sold it, then it would still be fraud. I mean, if it worked, why wouldn’t they either A) set it to something that would have a very dramatic and long-lasting impact, like $25/hour, or B) set it to be indexed to inflation? The answer: they wouldn’t be able to use it, again, in the future to buy more votes. Politicians don’t want to fix problems… they want to prolong them. It is their nature.

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avatar Luke Landes

I find myself agreeing with a bit of what Compounding says — the minimum wage should have been indexed to inflation from the beginning. Whether it’s labor unions, small businesses, or big corporations, all lobbyists will try to persuade politicians — on both sides of the aisle — in support of their sides of the issues. In the case of labor unions “vs.” corporations, if one side backs down, then the relative balance of power shifts in favor of the other — so it must perpetuate until there is a major reformation of the way government operates.

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avatar David B

Compounding: I agree with what you said, see my similar comments in the first link given in this article. The people who are raising the minimum wage know that it is not an effective way to “help the poor.” Why else would Pelosi try to exclude companies in her own district from being burdened with it? (see:http://www.nysun.com/article/46644)
She must be at least somewhat aware of the consequences that we have been describing. She’s trying to balance the handouts she give to big labor with the companies in her home district. Big labor will win every time.

I also agree with your statements that the relationship between an employer and an employee is a voluntary interaction. No one forces anyone to take a job that pays too little. Both parties always benefit, if they didn’t than one would choose not to participate.

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