Magazine article Workforce

You Do Want a Higher Minimum Wage

Magazine article Workforce

You Do Want a Higher Minimum Wage

Article excerpt

Think Twice

Would you think I'm nuts if I told you that a minimum-wage increase this summer could be good for your business? Probably. After all, opposition to the wage floor has been the linchpin of 63 years of HR and business lobbying. The minimum wage's existence has led directly or indirectly to an entire industry of powerful lobbying groups that many of you are involved in-the National Federation of Independent Business, the U.S. Chamber of Commerce, the National Retail Federation, and so on.

These groups believe the minimum wage is the devit's evil twin. Philosophically, it represents everything they oppose. Businesspeople believe that government shouldn't set a company's wages. On top of that, they argue that the wage floor costs jobs, not just at McDonald's and Kmart, but also for those without minimum-wage employees, because the whole wage scale is ratcheted up when entry-level wages rise artificially.

Republicans in Washington understand the laws of economics (if the price of labor goes up, you will be able to afford less of it), and therefore agree with the business lobbyists. So do most sane economists.

Democrats, on the other hand, note that-adjusted for inflation-the $5.15 minimum wage is far below what it was in the 1960s. The minimum wage has varied from a maximum of 76 percent of the poverty level in 1968 to only about 50 percent of the poverty level now. This comes at a time when CEOs get $37 million for quitting.

Democrats also argue that $5.15 is so paltry that a person who's supporting herself on $10,300 a year (what you earn working full-time at the minimum) isn't going to be able to eat in your restaurants and shop in your stores. And if she's supporting a family-- fuhgeddaboutit.

Most voters agree with the Democrats. The President and Congress want to get re-elected, so they're going to have to vote to raise the wage floor. The final vote could be counted this summer, and would likely increase the minimum by $1 to $6.15, over the course of a year or two. But in raising the minimum wage, the Republicans don't want to alienate their supporters-businesses.

Ahhhh. That's the kicker. The Republicans will add loads of sweeteners to the bill to help you to swallow the bitter minimum-wage potion. …

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