On January 1, 2012 Washington State’s minimum wage will increase to $9.04. Once again Washington State will lead the nation in having the highest minimum wage. Oregon’s minimum wage will increase to $8.80.
The minimum wage level of Washington State, Oregon and 8 other state’s is indexed to inflation and the consumer price index. In 1998 Washington voters passed Initiative 688. It was the first state to index it’s minimum wage to inflation and set the standard for other states to follow rather than every few years waging battles to try to increase the minimum wage when inflation went up. The other eight states are Arizona, Colorado, Florida, Missouri, Montana, Nevada, Ohio, and Vermont.
As CNNMoney notes, “Minimum wage rates in Arizona, Colorado, Florida, Montana, Ohio, Oregon, Vermont and Washington will rise between 28 and 37 cents per hour on Jan. 1 …Rates in these states will range from $7.64 per hour (in Colorado), to $9.04 (in Washington) in 2012.” Nevada does not raise its minimum wage until July 1st and Missouri, even with an adjustment, does not exceed the Federal minimum wage.
Increasing the minimum wage has positive effects on the economy. As CNNMoney noted:
”The small boosts for 2012 are estimated to tack an extra $582 to $770 a year onto the paychecks of full-time workers, according to the National Employment Law Project, a non-profit advocacy group.
What’s more, the increases could be a mini-boost for the economy. The expected rise in consumer spending as a result of the wage increases would add $366 million to the nation’s gross domestic product and lead to the creation of more than 3,000 full-time jobs.”
The Economic Policy Institute calculates the actual impact in even broader terms.
Across these eight states, an estimated 1,045,000 workers will be “directly affected.” These are workers whose current wages are between the existing state minimum wage and the new Jan. 1 minimum wage. In addition, another 394,000 workers will be “indirectly affected” by the increase. These indirectly-affected workers are those whose current wages are just above the new Jan. 1 minimum, and are likely to also see a wage increase as employers adjust their overall pay structures to reflect the new minimum (the “spillover” effect).
Despite the benefits of indexing the minimum wage to inflation, the national minimum wage is not indexed to inflation. Thus as the cost of goods like food and gas go up, the buying ability of minimum wage workers decreases. The current Federal wage is currently only $7.25. That’s just a little over $15,000 a year.
The federal minimum wage needs to be indexed to inflation. Congress has a dismal record of increasing the minimum wage. From 1997 to 2007, the minimum wage was stuck at $5.15 despite increases in inflation. In legislation passed in 2007 it went up to $5.85 in June 2007, then to $6.55 in June 2008 and then to $7.25 in June 2009. No further increase have been made in the last 2 1/2 years.
Barack Obama, as part of his transition team agenda, said he would work to raise the minimum wage and index it to inflation. We need to hold him to his promise and to put Democrats and Republicans on the spot as to standing up for helping low income workers make it in this economy. Republicans will voice all their usual objections but there is no better way to convince voters of whose interests they really represent than to challenge them to support working Americans by raising the minimum wage for the lowest paid workers.
And progressives in the states that have initiatives would be wise to run minimum wage initiatives with an inflation index in 2012. With all the attention on the vast disparity of wealth distribution in this country that has gotten worse, its time to put on the ballot measures that work to redress this imbalance and that point out the differences between the goals of Republicans and Democrats. Democrats have joined with Labor in working to help raise the pay of lower wage earners. Republicans have not.
In a guest column in today’s Seattle Times, the Washington Policy Center spouts nonsense that Washington State’s minimum wage’s minimal increase of 12 cents next year is going to push young people out of the work force. It’s nonsense because it’s not backed up by any facts. The author selectively uses numbers to try to imply that it is somehow causal. Just citing numbers doesn’t prove anything.
The headline in the print edition claims “Minimum-wage increase pushes young people out of work force” The Internet accessible copy states “Washington minimum wage is on the rise and hurting young people’s prospects”. Neither headline is supported by any facts.
This column by the free market think tank Washington Policy Center is just another example of the selective use of numbers by the right wing to distort what is happening. It is an attempt to distort policy discussions by throwing in numbers to try to imply a factual basis for conclusions that are not supported by any facts.
The author trys to make his case based on a number that the unemployment figure for 16 to 24 year olds is 20% and that somehow this is related to having a minimum wage. No reference is cited for the numbers used.
I question including 16 – 18 year olds in unemployment figures. These people should be in school. What 16 year old do you know who is a high school graduate? Hence they are unskilled workers, undereducated, competing in a high unemployment market against people with a high school education or previous experience.
Check out the unemployment numbers yourself and you’ll see very different figures and age breakdowns from those cited by the Washington Policy Center. The national tables break out 16 -19 year olds as a separate category which makes more sense than breaking out 16 to 24 year olds.
.Here is the most recent Economic News Release from the Bureau of Labor Statistics entitled “Employment Status of the Civilian Population by race, sex and age.”
Checking the reference above the Bureau of Labor Statistics breaks out the black or African American population and cites ages 16 – 19 both sexes unemployment rate of 48% for Oct 2010.
For black men 20 and over the rate is 16.3%.
For whites, both sexes, aged 16 -19, the unemployment rate is 23.6%
For white men, 20 years or older the unemployment rate is 8.9%.
What does all this have to do with the minimum wage? The author’s claim raising the minimum wage is somehow contributing to high unemployment for youth is not supported by the use of the data they cite or data from the Bureau of Labor Statistics. It is pure speculation not backed up by any facts. The Washington Policy Center is a free market think tank and opposes government regulations and laws like setting a minimum wage.
The reality is that many people are unemployed. If employers have an option of hiring a high school graduate or an older person with experience versus a 16 year old, they are going to probably hire the high school graduate or experienced person.
Young people are better off going to school. They will have higher incomes over their lifetimes. Most minimum wage jobs are dead ends or last resorts.
The headline of this article is not supported by any facts.
More likely, lack of an education or high school diploma and lack of job skills keeps young people out of the work force, especially in a market where there is high unemployment in general and more skilled older people are out of work and competing for the same job.
Besides any other considerations, the reality is that a the minimum wage of $8.67/hour translates to just $346.80 per week or $18,364 per year if you work every week or get any paid time off, like a vacation. This is gross pay, not net. It is pre-tax and pre-social security. Hardly overwhelming.
“It’s part of the crap you can expect from the party of Karl Rove.It’s totally taken out of context.” That was my wife’s reaction to hearing Republican Mike McGavick’s new radio ad on KIRO this morning. I couldn’t have said it better.
In the radio ad McGavick accuses Senator Maria Cantwell of voting against this state’s soon to expire sales tax deduction on our Federal income tax. He basically accuses her of stealing a $550 sales tax deduction from Washington families. It’s desperation politics time I guess.
As the Seattle PI notes this morning in an editorial, the real vote was also on reducing the minimum wage for tip workers in this state and reducing the Federal estate tax on multimillionaires. But McGavick fails to mention this saying only that “she disagreed with parts of the bill”. In Washington State thousands of restaurant workers and others that rely on tips to get by, would have seen a real reduction in their actual take home pay as they saw their minimum wage go down under one of the “parts” of this bill.
My analogy of McGavick’s ad is, its like someone calling to say your son is coming home from the war, but neglects to say he is also dead. If this is the type of Senator that McGavick will be, then we can expect he will never tell us the full story. We can’t expect him to tell us the truth as a Senator because he can’t do it now. By the way, he did say that he approved the ad.
McGavick claims Cantwell’s vote (against decreasing the minimum wage for thousands of Washington State workers) was part of the partisan nonsense that causes people to vote against families of your own state.
Well you have that right Mike. The partisan Republican run Congress, that does not consult with the Democrats, is not interested in helping working families or they would have run the sales tax deduction as a separate bill. One also might wonder why they didn’t make the sales tax deduction permanent in the first place. Likewise they could have run increasing the minimum wage as a separate bill and allowed for amendments. They were previously unable to pass the inheritance tax bill on its own. And Republicans have repeatedly stopped any vote on the minimum wage year after year.
Why are they having to vote on it again except for partisan Republican advantage to do things like helping the National Restaurant Association lower what their workers make or helping their wealthy patron donors avoid paying tax on appreciated property or stocks by allowing them to transfer it tax free when someone dies.
If you really want to avoid further partisan Republican steamrolling over American families and voters, then do as McGavick suggests. Lets end this one party rule and boot the Republicans out of Congress. It time to get back to the business of America and really help families with education, health care and jobs that pay a living wage, rather than worrying about things like whether “under God” is in our Pledge of Allegiance.
McGavick is right on ending strident partisanship in Congress. However electing another Republican to the Senate is not the way to do it.
Would a true blue Democrat vote to cut wages below the current minimum wage for workers in Washington State? The Republicans in the US House of Representatives have prepared a Faustian bargain for Democratic Senators in Washington State and 6 other states with their just passed H.B. 5970. While the bill purports to raise the minimum wage, for many workers in Washington State it does the opposite.
We posted on this bill yesterday noting that Washington State’s 3 Republican Congressman (Reichert, McMorris and Hastings) voted for H.B. 5970. On the surface it seems to raise the minimum wage over 3 years but the details say otherwise for many workers in Washington State.
As Rose Eisenbrey of Counterpunch notes:
“The Estate Tax and Extension of Tax Relief Act of 2006, H.R. 5970, which passed the House on July 29, raises the minimum wage for most employees. But for many employees in seven states, H.R. 5970 means a wage cut. Section 402 of the bill strikes down state laws that require employers to pay a full minimum wage without relying on tips from customers to reach the minimum level.1 States that have those laws will see the minimum wage for tipped employees fall as much as $5.50 per hour.
Seven states-Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington-exclude, in the words of H.R. 5970, ” all of a tipped employee’s tips from being considered as wages in determining if such tipped employee has been paid the applicable minimum wage rate.” According to Section 402, therefore, the “minimum wage rate provisions” of those state laws may not be enforced “with respect to tipped employees.” Tipped employees (defined as any employee who earns more than $30 per month in tips) would be left without any minimum wage protection under state law in those seven states.
In most cases, the tipped employees would be subject to the federal minimum wage law, which allows employers to pay as little as $2.13 an hour and to rely on customers’ tips to make up the rest of the $5.15 minimum wage. This is known as a “tip credit.” Thus, in Washington, tipped employees would see their minimum wage cut from its current $7.63 an hour (plus tips) to $5.15 an hour (including tips). Employers would see their minimum wage obligation to tipped employees fall by $5.50 an hour-from $7.63 an hour to $2.13 an hour (assuming $3.02 in customer tips). For example, an employee who is currently paid the state minimum age of $7.63 an hour and receives $3.02 in tips earns a total of $10.65 per hour. Under the House-passed bill, the employer would be permitted to pay only $2.13 an hour and count the customers’ tips to make up the rest of the $5.15 federal minimum wage. The employee would lose $5.50 per hour in pay.”
The bill also raises the tax exemption on estate taxes to $5 million per person. Stashed away in the bill is a provision to keep the sales tax exemption on Federal income taxes and provisions to aid timber companies.
While some of the provisions in this bill might tempt some to support it, it is a lose/lose for Washington State voters and workers. We already have the highest minimum wage in the country at $7.63 an hour, so we gain nothing here. As noted above, Washington workers actually lose.ose.
And loss of the estate tax dollars means a huge cut in Federal tax dollars for services that benefit lower income people. The estate tax affects a few thousand people who are millionaires.
The vote should be an easy one for Cantwell and Murray. Whatever benefits are in the bill are more than offset by lowering the minimum hourly wage for many Washington workers.
Our three Washington State Republican Representatives in Congress just voted to cut the minimum wage in 7 states, including Washington.
In an editorial today, the Seattle PI called the Republican House of Representatives a “Reverse Robin Hood” in passing a new law that “would rob wages from the poor to benefit the rich”
Just before Congress left for its August recess the House approved a bill to raise the the national minimum wage to $7.25 an hour – coupling it with increased cuts in the estate tax.
But as the PI notes:
“For workers in seven states — including Washington — the bill actually is a pay cut for many employees because it requires that tips now be calculated into the minimum wage. Current state law excludes tips.
The bill “is the first time in history that the federal government has acted to put a ceiling on minimum wage levels, rather than establishing a national floor from which the states can make improvements,” says Ross Eisenbrey, vice president of the Economic Policy Institute.
The new federal law would mandate that the minimum wage be as little as $2.13 for workers who get tips, calling it a “tip credit.” Folks who earn minimum wage are now paid $7.63 an hour in Washington state — plus tips. Thus the new law could reduce the hourly wage as much as $5.50 an hour. Washington Republican Reps. Dave Reichert, Cathy McMorris and Doc Hastings voted yea — and against current state law.”
The New York Times yesterday editorialized on the trading of a minimum wage increase for the estate tax cuts as “Fooling the Voters” and called it “an attempt at extortion.”
“…a $2.10 an hour increase in the minimum wage, to be phased in over three years; and a multibillion-dollar estate-tax cut. That’s the deal House Republicans are really offering a few more dollars for 6.6 million working Americans; billions more for some 8,000 of the wealthiest families.”
“There is no way to justify providing yet another enormous tax shelter to the nation’s wealthiest heirs in the face of huge budget deficits, growing income inequality and looming government obligations for Social Security and Medicare
The Washington Post likewise noted what was at stake here:
“Appended to the minimum wage hike that the vast majority of them opposed was a provision genuinely dear to their hearts: a cut in the estate tax that chiefly benefits the super-rich and that will reduce government revenue over the next decade, according to the Center on Budget and Policy Priorities, by $753 billion. The shortfall could well lead to offsetting cuts in programs that benefit the same working poor that the minimum-wage increase would help. But who cares about the poor? The whole point of the exercise was to come up with a bill that might force some Democrats to vote for an estate tax cut they would otherwise oppose, and enable Republicans to claim they weren’t really the Dickensian grotesques that many of them in fact are.
Which may be why the Republicans’ midnight orations in favor of raising the wage bore minimal resemblance to, say, the Sermon on the Mount. Their tone was best captured by Tennessee Rep. Zach Wamp, a Mayberry Machiavelli if ever there was one, who could not restrain himself from telling House Democrats, “You have seen us really outfox you on this issue tonight.
Wamp’s taunt can serve as the credo for this entire Republican Congress, which legislates only when, and because, it can outfox the Democrats. It is the credo of the Bush administration as well, which views even its signature policy — its war on terrorism — as its foremost wedge issue against the Democrats. Combine this hyper-partisan ethos with a far-right ideology that sees no role for the government even as our corporate welfare state crumbles and our planet turns to toast, and you get a more do-nothing government than Harry Truman could have even imagined.”
I particularly liked the part about being outfoxed. Haven’t I heard something like that recently from Eyman’s cronie when he called the press to a press conference on turning in the anti-discrimination referendum but was really promoting his anti-transportation Initiative 917. The press didn’t like that.
No one likes to be toyed with and made fun of. The American public doesn’t either. Congress has serious business to do to attend to the needs of America. Republicans are enjoying playing games and avoiding big issues. They would rather vote on the words “under God” in the pledge of allegiance than try to figure out how to end the war in Iraq. They would rather play games than increase fuel efficiency standards for cars or consider other ways to reduce energy demand.
Come November, voters will remember the Republican machine helping the super rich and corporate America while ignoring health care and education. Republicans continue to show their true colors. Voters only need to open their eyes.
Talk about out of his mind – How stupid do you think the American people are Mr President?
The NY Times yesterday carried an article entitled, “Bush Promotes Health Accounts at Wendy’s” Bush spoke at Wendy’s corporate Headquarters not a local Wendy’s restaurant. Bush campaigned for expanding what are called Health Savings Plans. Currently these plans only cover catastrophic health care costs, with the first $1050 picked up by the policy holder. Up to $5000 a year can be put in this account. This may be of some interest to people like John T Schuessler, the Chairman of the Board of Wendy’s although I doubt it. Last years annual report said that he received a salary of $1,047,730 plus “restricted stock awards” and other compensation totaling another $6,325,914.
Let’s look at the other end of Wendy’s employees – the crew that serves the food. I called several local Wendy’s in Seattle to see what I would get per hour if I went to work for them. I was told that wages stared at minimum wage. Fortunately I’m in Washington State which has the highest state minimum wage in the country – $7.63. Now if I worked 40 hours a week for 52 weeks I would receive a gross pay of $15, 870. Eventually I was told I could get as much as $9.25 an hour. I’m truly lucky I live in Washington state with its high minimum wage..
When I checked with the Restaurant Association on line they had a map of state minimum wages across the country. Turns out 33 states minimum wage is only $5.15 an hour or only $10,712 a year and while I didn’t check what people make at Wendy’s in these states I would bet you that its not going to be much above the minimum wage.
Next I was curious as to what are the Federal Guidelines for poverty in the US. For 1 person it’s considered $9800, for a family of 2 it’s $13,200, for a family of 3 it’s $16,000 and a family of 4 it’s $20,000. I have a family of 4 so if I went to work for Wendy’s I would be working and earning below the poverty level.
When I asked Wendy’s if there were any benefits, they said no. Now I could see why Wendy’s would be supportive of Health Savings Plans. Their crew employees make poverty level wages
and are paid no benefits. So instead of the President asking Wendy’s how they can expect their bottom level employees to live a decent life working 40 hours a week and being paid poverty level wages and no benefits, he says that they could put some of their poverty level wages in a health savings account. Then they would have health care. Right? I guess that’s instead of paying rent or buying groceries or buying a toy or two if they have kids.
According to the NY times article it seems Bush is willing to put the blame on poverty level workers for having no health care, not the company or the US Government and the fact that the Federal minimum wage has not increased in 9 years. It’s all individual responsibility he says.
In answering critics of his plan Bush responded. “It’s kind of basically saying, ‘If you’re not making a lot of money, you can’t make decisions for yourself,’ ” Mr. Bush told Wendy’s employees assembled in the company’s lobby. “That’s kind of a Washington attitude, isn’t it. ‘We’ll decide for you, you can’t figure it out yourself.’ I think a lot of folks here at Wendy’s would argue that point of view is just simply backwards and not true.”
Yeh I see your point Mr. President. What’s the matter with minimum wage worker’s at places like Wendys in America? Really, how hard of a decision is it to make? You’re living at poverty level and you expect to have health care when you are having problems subtracting your rent and food and water and heat and electricity and still having more than a few dollars to live on? Heaven forbid you should get sick and need medicine. You should just count your blessings that people like Chairman Schuessler have a job for you at all.
Tags2008 Elections August 18 2009 Primary Barack Obama BIAW Bush campaign disclosure campaign finance Chris Gregoire congress Democrats Dino Rossi elections endorsements fuel efficiency standards George Bush global warming Governor Gregoire Hillary Clinton I-1033 Ingraham High School initiative 1033 Initiative 1053 initiatives John McCain King County Democrats No on 1033 No on I-1033 Peter Goldmark Presidential election Property Taxes Public Disclosure Commission Republicans Save the Trees - Seattle Seattle City Council Seattle School Board Seattle School District Senator Cantwell Tim Eyman Trees Urban Forestry US Senate US Supreme Court Washington State Washington State Legislature Washington State Supreme Court
- Monster tornado rips through Moore, Oklahoma, killing at least thirty-seven people
- Christy Clark declares victory in B.C., but trails the NDP’s David Eby in her own riding
- Not-so liberal Liberals projected to win in British Columbia; score huge upset over NDP
- The Tyee: British Columbia’s New Democratic Party poised for a landslide victory tonight
- B.C. Journal: A Tsawwassen sunset