They Built That — On Minimum Wage

If for no other reason, the Republican party's ABSOLUTE REFUSAL to raise the federal minimum wage should be the best reason for why the GOP should lose the 2016 congressional elections. Republican voters (who might earn more) should understand that, by setting the ground floor for the lowest federally mandated minimum wage, that also puts great pressure on their employers to raise their wages as well. How can their bosses explain to a factory worker in Tennessee (or elsewhere) that McDonalds employees are earning more than they are?

If other businesses (big and small) in other countries can pay their workers better, then why can't our job creators compete with their wages? Across the pond in the UK (England, Scotland, Wales and Northern Ireland) the minimum wage is £6.50 an hour for those 21 years old and over. That's $10.44 an hour in U.S. dollars, and $3.19 more than the current minimum wage is in the U.S. (What's up with that? Do the Brits work harder and longer than we do?)

And our neighbor directly to the north (in the maple leaf country of Canada) has several provinces whose legally mandated minimum wages range from $10.00 to $11.00 per hour, but there's also a movement to raise it higher — to $15 an hour — in part, because of the influence of Seattle Washington when they raised their city's minimum wage to $15 an hour.

And then there's the almighty and "exceptional" United States of America (King of the Hill and Master of the Universe) who's had a minimum wage of $7.25 an hour ($2.13 for tipped workers) for the past 5 years. But our job creators have been attempting to convince these workers that they should be very, very grateful — because all the way across the Pacific Ocean on the island nation of Japan, their peons earn a minimum wage of  ¥764 per hour (converted from Yens, that's only $7.10 an hour in American money.)

But what's far worse — just to the southwest of Japan is another island nation, the country of Taiwan (officially called The Republic of China), who have a minimum wage of only $3.88 an hour. Egads! And the U.S. offshored a lot of good jobs to them too.

Southeast Asia

But all told, the minimum wage in Taiwan (at $3.88 an hour) isn't really so bad. Just 110 miles away across the Formosa Strait on the mainland of China (officially called The People's Republic of China), the wages are a lot, lot lower. A Taiwanese multinational corporation called Foxconn (Apple's go-to contractor) has 13 factories in nine cities in the country of China. Foxconn's largest factory is in the Chinese city of Shenzhen, which is immediately north of Hong Kong (where the riots are currently happening) and has a population of approximately 15 million people (almost double that of New York City).

There is no "national" minimum wage in China. The minimum wage is set locally and ranges from ¥830 ($135) per month to ¥7.50 ($1.22) per hour in the Guangxi Zhuang Autonomous Region — and from ¥1,820 ($296) per month to ¥17 ($2.77) per hour in Shanghai. That's why Foxconn operates their factories in places like China, rather than in Taiwan (where Foxconn is headquartered).

But according to many very wealthy CEOs, because wages are getting "too high" in China, many of their companies are looking for even cheaper sources of labor. On the southern border of China is the country of Vietnam (where over 58,000 American soldiers had died in war). Vietnam's minimum wage will soon increase from $14 to $18 per month in 2015 (No, that's not a typo — a month, not an hour.) The American sneaker-maker (and tax dodger) Nike has 777 factories in 43 Countries employing over 1 million workers. Just in Vietnam alone Nike has 71 factories with over 311,000 workers.

The Republicans have always said that if the U.S. were more like Europe (because, for some reason, Europeans are Socialists) that would be a "bad thing". So let's look at some of the minimum wages in the Old World (where all the Euro-Commies live):

In Germany the minimum wage is €8.50 and hour (Euros) — which is $10.73 an hour in U.S. dollars. That's more than the "proposed" $10.10 an hour for the U.S. that the Republicans refuse to pass, because American companies like Walmart, McDonalds and Amazon don't want to pay thousands of their temporary and/or part-time workers a living wage (even though they've all been raking in record profits for years). But even if the GOP agreed to $10.10 an hour, that would STILL BE LESS than what the Germans currently earn. Is the GOP telling us that American companies can't do better than our former enemy in WWII? 

That's why the Republicans call them "Socialists" — because European countries (in truly democratic societies) make their job creators pay their workers a real living wage. Now let's look at the minimum wages in some other countries in the EuroZone:

  • The very liberal Netherlands (whose capital is Amsterdam) pays their workers at least $11.06 an hour, their national minimum wage.
  • And Ireland (who has the third most bars per capita) pays their workers a minimum of $11.09 an hour.
  • In San Marino (an microstate inside Italy) pays their workers a minimum of $11.49 an hour.
  • Belgium pays their workers a minimum wage of $11.69 an hour.
  • France (who the Republicans always make fun of) pays their little French fries $12.35 an hour (much more than the cheapskates in the GOP would ever pay them.)
  • In Monaco (another microstate, but located on the French Riviera) pays a minimum wage of $12.83 an hour.
  • The itty bitty teeny weeny little country of Luxembourg (where Mitt Romney likes to do his banking) can manage to pay their workers a bare minimum of $14.24 an hour (no thanks to people like Mitt Romney).

And what about our friends "Down Under?" In New Zealand the minimum wage is $11.59 an hour for those under 18 years old, but it goes even higher to $14.25 for those over 18 years old. Wow! But in Australia it's a whopping $16.87 per hour!!! So if Crocodile Dundee had never become so rich and famous in Hollywood (and hadn't dodged his taxes), at least he wouldn't have to worry about starving to death — or having to work two jobs just to pay his rent.

In Denmark there's no legally mandated minimum wage, but the average minimum wage for all private and public sector collective bargaining agreements was approximately $20 per hour according to the U.S. State Department last year.

But yet, in the good ole U.S.A. — this "exceptional" country — in this "land of opportunity", our "job creators" only want to pay their hard-working American Patriots a minimum wage of $7.25 hour. Why is that? Maybe it's because they believe "they built that"?

The Republicans today aren't like they used to be — just the opposite. Abraham Lincoln, the first Republican President, gave the First Annual Message to Congress on December 3, 1861:

"Labor is prior to, and independent of capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration." 

Teddy Roosevelt, giving a speech before the convention of the National Progressive Party in August 1912 after serving as the eighth Republican President:

"We hold that minimum wage commissions should be established in the Nation ... We stand for a living wage. Wages are subnormal if they fail to provide a living ... We wish to control big business so as to secure among other things good wages for the wage-workers and reasonable prices for the consumers. Wherever in any business the prosperity of the business man is obtained by lowering the wages of his workmen and charging an excessive price to the consumers we wish to interfere and stop such practices ... we desire that business shall prosper; but it should be so supervised as to make prosperity also take the shape of good wages to the wage-worker and reasonable prices to the consumer ... Wherever nowadays an industry is to be protected it should be on the theory that such protection will serve to keep up the wages and the standard of living of the wage-worker in that industry with full regard for the interest of the consumer ... There is no warrant for protection unless a legitimate share of the benefits gets into the pay envelope of the wage-worker ... The cost of living in this country has risen during the last few years out of all proportion to the increase in the rate of most salaries and wages..."

The last "liberal" Republican President was Richard Nixon: "In the 1950s and 1960s, before Nixon took office, minimum wage stayed on track with productivity. However, that pattern fell off in the next decade. After six years of stagnant wages and escalating costs of living, the Nixon administration stepped in -- In 1974 Nixon signed an amendment to the Fair Labor Standards Act. That law raised wages by more than 40 percent."

Whereas, Ronald Reagan's administration is the only one not to have raised the minimum wage. At least after lowering the capital gains tax rate for the very wealthy, George W. Bush had also raised the minimum wage (in 3 increments — $5.85 in 2007, $6.55 in 2008 and $7.25 in 2009).

It's time for our leaders to stand up for working Americans; but as we've seen with THIS Congress, most Republicans are against raising the federal minimum it's up to Republican voters to vote them out.



Raise the Federal minimum wage

I think this is probably the best thing Congress could do for workers immediately. I do not know the breakdown of the vote though. You need to check to see if it is all Republicans, I sincerely doubt it, plus there are assuredly some Democrats who won't raise it as well.

Excellent article. It is high

Excellent article. It is high time we get past the labels that stop us from doing the right thing. We need real talent in business who are not afraid to produce without some special protection but instead on the merits of good service real rewards to the employees for real efforts to satisfying the needs of their customers. Our business people have become too much a community of whiners who would rather complain of this and that rather than go forward with real innovation, who take care of their employees to inspire them to give of their best each day. That is what the true American spirit is, let's get back to basics. Any elementary school kid could tell us how to do it.

Minimum Wage

This clueless government that sheds millions wastefully and cannot balance its OWN budget is going to bully business owners that HAVE TO balance their budgets? Business owners have to be accountable. Big government does not. They should clean up their own houses before taking more small businesses out of profitability. As if the maddening stack of regulations a business has to face isn't enough of an incentive to close their doors.
The robotics are coming and so is more efficiency. Are you going to unionize the robots?

Rebuttal to Rebuttal for Minimum Wage

I might even suggest a two-tiered federal minimum wage: one for small businesses (e.g. mom-and-pop stores) with an "x" number of employees and/or only has "x" in annual revenues; and one for large businesses (e.g. multinational corporations who use slave labor overseas.)

In 1989 I ran a neighborhood video store with 3 employees and paid them $9 an hour — and I survived quite comfortably. In today's dollars, that would be over $17 an hour.

We always hear employers complaining that if we raise the minimum wage, they would have to either cut worker's hours, lay off workers, hire fewer workers, or raise prices. But I have never heard one CEO of a multinational say they would have to pay themselves $5 million-a-year less in stock-options, buy one less mansion, or settle for a smaller private jet. If a business owner can't afford to pay their employees a living wage, then they shouldn't be in business. PERIOD.

Business owners always have to be accountable (to government and their customers), just as their employees always have to be accountable to their bosses. And comparing national debt and household debt is comparing apples and oranges. But I agree, just as in business models, there's always room for improvement for better government as well.

And past history shows us what a lack of "a maddening stack of regulations" will get us: unsafe working conditions, tax evasion, a poisonous environment, dangerous products, price manipulation and slave wages. Left to their own devices, we know what unregulated businesses are capable of (even small businesses like a mom-and-pop restaurant need health inspectors, or you might get food poisoning). Read: Capitalism Requires Government

Nixon and the minimum wage forced upon his administration

Nixon twice vetoed minimum wage increases, after taking a huge illegal donation from Ray Kroc of MacDonald's. To say "The Nixon Administration stepped in..." is an absurd characterization of what took place politically.

6 Democrats Betrayed Workers on Minimum Wage

I did a post earlier on this:

* John Barrow (Georgia- 12th District)
* Jim Matheson- (Utah- 4th District)
* Mike McIntyre (North Carolina- 7th District)
* Bill Owens- (New York- 21st District)
* Colin Peterson- (Minnesota- 7th District)
* Kurt Schrader- (Oregon- 5th District)

Minimum Wage Updates

CNN: "[Democratic] Senator Tom Harkin and [Democratic] Representative George Miller have offered legislation to increase the national minimum wage to $10.10  [but] the Republican leadership of the House of Representatives won't even bring the minimum wage bill up for a vote. And this past spring, it was filibustered [by the GOP] in the Senate; a minority of [GOP] senators refused to even debate this proposal that a strong majority of the American people clearly support." (CNN left out a few party affiliations, so I filled them in for you.)

LA Times: The Democratic mayor of L.A. proposed a minimum wage of $13.25 an hour by 2017. But some City Council members are advocating a higher wage floor that would reach $15.25 by 2019.

New York Times: "26 states and the District of Columbia have, or soon will have, raised their minimum wage above the paltry federal minimum of $7.25 an hour. Even so, these more robust state minimums tend to cluster around $8 to $10 an hour, which is better than $7.25, but still lower than the $11 to $18 an hour that is needed to bring minimum wages in line with relevant benchmarks, including the cost of living, average wages and labor productivity. That is where cities have come in...In San Francisco, the push is for $15 an hour by 2018. In Oakland the goal is $12.25 an hour by 2015. In Los Angeles the City Council has called for $13.25 an hour by 2017 and for a study to chart a path to $15.25 by 2019. In Chicago, city aldermen have proposed $15 by 2016 for large employers, significantly higher than the $13 by 2018 championed by Mayor Rahm Emanuel. New York City Mayor Bill de Blasio recently issued an executive order to require businesses that receive substantial city subsidies to pay a “living wage” of at least $13.13 an hour if they don’t offer benefits, or $11.50 if they do.

Courier-Journal: To date 14 U.S. cities and counties have raised their minimum wage above their state's minimum, joining 25 states plus the District of Columbia that now have a higher minimum than the federal floor of $7.25  ... Minimum-wage increases are often met with claims about big job loss. But a growing body of research shows that reasonable minimum-wage increases have little to no negative effect on employment, including at the local level.

PolitiFact: Minimum-wage hikes may or may not cause faster job growth, but it appears they do not to hamper job creation either.

Bloomberg News: "Incoming NRF chief wants retailers to curtail opposition to minimum wage increases ... Wal-Mart, the world's largest retailer, has said it has a neutral stance on minimum-wage legislation ... Brooke Buchanan, a spokeswoman for Bentonville, Arkansas-based Wal-Mart, didn't immediately respond to a request for comment." (I'd say Brooke was conspicuously silent.) Why Does Minimum Wage Have a New Supporter? (A related article)

A CBO report issued earlier this year says gradually raising the minimum wage to $10.10-per-hour: "Real income would increase, on net, by $5 billion for families whose income will be below the poverty threshold under current law, boosting their average family income by about 3 percent and moving about 900,000 people, on net, above the poverty threshold." (Only 900,000? Then maybe $10.10 isn't enough. Let's raise it to $15 — and index it to inflation — and then let's see what happens.)

The Big Mac index

American Exceptionalism: 2 charts in the 2 links below shows that America isn't even close to being #1

The Big Mac index

Minimum Wage Statistics

From the Guardian:

Businesses Agree — It’s Time To Raise the Minimum Wage

Does the author understand

Does the author understand that an "Employer" has additional cost other than the direct wage of an employee? Just because an employee is paid $8 an hour that does not equal the employers total cost for that employee. The employer also has to pay Fica/Medicare, Federal Unemployment, State Unemployment, Workers Compensation Insurance, Malpractice Insurance. Those costs can range from 15-30% of the direct wage, or another $1.20-3.20 an hour. In addition many employers provide Health Insurance and Paid Leave. To be fair the author should compare the "Total Cost of Employment" to the other countries around the world. It may be that an employer in England doesn't have the added "payroll cost" that an employer in the US has. Just a thought.

No good alternatives

While I think that raising minimum wages would be beneficial in the short term, and the relative depression of minimum wages is symptomatic of the systematic economic disembowelment of the USA, by itself it will not help much in the long run.

The problem is the positive feedback loop between the monied interests and the politicians.

I don't trust the Democrats on minimum wage, as both parties raise issues which play to their base, which they count on the other party to keep them from doing. A lot of what goes on in the political scene is like Wrestlemania.

I don't trust the Republicans on immigration, for the same reason.

I do have to admit that those on the left seem more able to identify with the plight of others, and appear more compassionate. This irritates me, but I have to admit it is true. Comparing the politics and policies of the folks who own Wal-Mart with those who run Costco, (if you are of a conservative bent) is downright embarrassing.

I would be pleased to vote for a political party which would advance an economic policy which results in the demand for labor increasing to such an extent that it makes the minimum wage irrelevant.
That would include
1. Effective prevention of illegal labor.
That would create significant demand for low to medium skill workers who are US citizens or legal residents. The primary beneficiaries would be those demographics which currently suffer very high unemployment, and also the working poor. The working poor would benefit from the relative shortage of people capable of working, which would raise wages according to the basic principle of supply and demand.
2. Reasonably high tariffs
Tariffs would give an advantage to domestic production, which would encourage local innovation. They also would to some extent offset the advantage businesses with global scale have with respect to their smaller competitors. This would result in more demand for skilled and unskilled workers, which would raise real wage rates. While in the short term this would raise the price of imported goods, the effect on cost would be more nearly neutral, as (if the increase in cost of the imported goods is just the tariff) then there is tax revenue of the full amount of the tariff. This is a tax paid only by those who buy imported goods, and can offset other taxes.
3. Strong incentives for US industrial development.

I don't think either party is interested in those things.

That said, I remain mostly a social issues voter, as those things are perhaps more important, and also there is an apparent difference between the parties on those issues. I have been poor, and what passes for poor in the US isn't that bad.

Serious issues with this article

I think this article hits on an important topic.

However, the raw numbers for hourly wages are largely irrelevant unless the differences in cost of living are factored in. Cost of living is different in nearly every local market, and it's hard to account for that, but essential for this discussion.

Secondly, the cost (or value) of money goes down over time due to inflation. Therefore, it is also highly relevant to see how wages change over time in real terms. At a minimum, any economy worth its salt should be able to provide constant real wages over time. What we see in the US is that minimum wages have gone down for the last 40 years. This shows how we are letting our economy simply produce more poverty over time. That is what should really get people angry, because minimum wage is a political choice made by our government. Why should minimum wage ever go down in real terms? That is tantamount to undermining the entire concept of the minimum wage.

Yes, but more …

Why does the author only want to help minimum wage earners in such a small way? It's like he's saying to min wage earners, "I am on your team, I want you to go from groveling in near poverty to groveling 10% less in near poverty." Why not raise the minimum wage to $40 dollars an hour? This is still less than $100,000 per year by a long shot which isn't much purchasing capacity. If you want to champion the cause for lower income people, then do it. Paying them $4 more per hour? Please. Don't waste your readers' time.