Friday, July 24, 2009

Minimum Wage's Increase

I remember being 16 years old, working at Wendy's and feeling like I was queen of the world on payday with my part-time, minimum wage paycheck. I was lucky...I worked fast food but Wendy's doesn't have waitresses, so I wasn't hoping for good tips while earning only $2.13 per hour.

In going online, it looks like Iowa's minimum wage in 1990 was equal to the federal rate, of $3.85. Looking back, that just doesn't seem possible.

"Today, the federal minimum wage goes up to $7.25 an hour. That comes out to a bit more than 12 cents a minute - or $15,080 a year." Patrick Wilson and Philip Walzer's article in The Virginian-Pilot earlier today (07/24/09) brought back those feelings of youthful abandon with the paycheck, and at the same time, reminded me at how good I've become at budgeting, especially while on unemployment. I guess that really proves you're never too old to learn something new, or that unemployment doesn't have to be a horrible, dry time in your life.

I've been spoiled with my various jobs since high school (at least up until getting laid off in May). It's mind boggling to think people had to survive on $7.13 or so per hour. And to top it off, if you're working at a minimum wage job, you're not getting benefits. It's fine for a teenager, living at home with Mom and Dad, but grown adults need and deserve better. Because let's be honest here...if you're earning minimum wage, you probably don't have a lot of bills for things like cable or cell phones. You're making do with the basics.

Wikipedia had an interesting bit of history about how minimum wage came to be. "Minimum wages were first proposed as a way to control the proliferation of sweat shops in manufacturing industries. The sweat shops employed large numbers of women and young workers, paying them what were considered to be substandard wages. The sweatshop owners were thought to have unfair bargaining power over their workers, and a minimum wage was proposed as a means to make them pay 'fairly.'"

Sure, a mandatory increase in federal minimum wage is going to hurt employers, especially during a recession, but I really can't feel any sympathy for them. It's not out of spite, but rather happiness for those who are getting the increase.

Wilson and Walzer ended their article with this nugget: "U.S. Labor Secretary Hilda Solis, in a conference call with reporters Thursday, said there's scant evidence the minimum-wage increase will lead to significant job loss. She cited an estimate from the Economic Policy Institute, a Washington research group, that it will generate $5.5 billion in consumer spending over the next year." I think Solis might have her head up her rear end. Scant evidence? Who has she talked to, to get that information? The reporters talked to four people, employers and an economist (his quote is below), and they all said it's going to hurt to have to pay more. I tend to agree with them.

"Some economists worry that plenty more owners, already strapped with declining incomes, will lay off low-paid help rather than pay the raises.

"Unfortunately, this is bad timing for the economy," said Peter Shaw, a business professor at Tidewater Community College."

I personally think the economy will kind of level out at where it is now, for quite some time before it gets any better. I think it's going to both good and rough, increasing minimum wage, but it needs to be done. It's like a necessary evil.

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