# House Dems propose raising minimum wage from $7.25/hr to $10 **URL:** \ **Category:** Great Debates\ **Created:** [June 7, 2012, 4:58pm UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401 "2012-06-07T16:58:50Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![The\_Tao\_s\_Revenge](https://avatars.discourse-cdn.com/v4/letter/t/73ab20/32.png) [@The\_Tao\_s\_Revenge](https://boards.straightdope.com/u/The_Tao_s_Revenge)\ **Post date:** [June 7, 2012, 10:02pm UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/41 "2012-06-07T22:02:55Z")
> [@Skammer](#): > > And that’s not even taking into consideration all the other hourly workers making $10-$12/hour who will also want a commensurate raise. But if they’re only being paid what they’re worth, why would you give them a raise? Are you currently paying them less than they’re worth to you? ---
**Author:** ![TriPolar](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tripolar/32/3008_2.png) [@TriPolar](https://boards.straightdope.com/u/TriPolar)\ **Post date:** [June 7, 2012, 10:06pm UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/42 "2012-06-07T22:06:11Z")
> [@John\_Mace](#): > > No, it’s paid to the workers. How do you get that minimum wage increases are a payment to business? It functions as a tax which is paid directly to the workers, and like any tax it suppresses demand for the thing that that has been taxed. In this case, low skill work. I was speaking of the additional costs passed on to the consumer. And it’s still a cost, not a tax. From the employer point of view it’s a cost. From the employee point of view it’s just pay. No minimum wage employee feels like they’re taxing their employer. I don’t think we’re arguing about anything but the semantics of tax and cost here. Which is silly 🙂 ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [June 7, 2012, 10:11pm UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/43 "2012-06-07T22:11:31Z")
> [@TriPolar](#): > > I was speaking of the additional costs passed on to the consumer. And it’s still a cost, not a tax. From the employer point of view it’s a cost. From the employee point of view it’s just pay. No minimum wage employee feels like they’re taxing their employer. And how would we accomplish the same goal otherwise? Tax some people and give it (as pay) to the worker. Quack, quack! > [@](#): > > I don’t think we’re arguing about anything but the semantics of tax and cost here. Which is silly 🙂 I guess it can be both a floor wax and a dessert toping. ---
**Author:** ![Jas09](https://avatars.discourse-cdn.com/v4/letter/j/d07c76/32.png) [@Jas09](https://boards.straightdope.com/u/Jas09)\ **Post date:** [June 7, 2012, 10:25pm UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/44 "2012-06-07T22:25:24Z")
> [@Skammer](#): > > You have to count all the workers who earn less than $10/hour. Of my company’s approximately 93,000 employees, about 68,000 make less than $10/hour. The average is $7.99. So the proposed hike would cost us an average of $2.01 per hour for each of those employees. > > If the average workweek for those employees is 20 hours, thats 20 \* $2.01 \* 68,000 = $2.7 million _per week_. And that’s not even taking into consideration all the other hourly workers making $10-$12/hour who will also want a commensurate raise. Understood. I’m not saying I support a rise to $10. I’m just saying that many of these arguments were made when we went from ~$5 to ~$7 and very few of them have come to pass. There wasn’t rampant inflation and there wasn’t a crowding out of low-wage workers (although I’ll happy listen to arguments that there was). Maybe you can pass along some information about how it worked for your company last time? Did it have to lay off a bunch of people or was the prevailing wage higher than the new minimum? The minimum wage in 1979 was $2.90. In 2012 dollars it would be ~$9.20 if it kept up with the CPI. ETA: In 1956 it was $1.00. That’s about $8.50 today. ---
**Author:** ![TriPolar](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tripolar/32/3008_2.png) [@TriPolar](https://boards.straightdope.com/u/TriPolar)\ **Post date:** [June 7, 2012, 10:26pm UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/45 "2012-06-07T22:26:15Z")
> [@John\_Mace](#): > > And how would we accomplish the same goal otherwise? Tax some people and give it (as pay) to the worker. Quack, quack! We do that now with EIC. Which may get worse or better with a MW increase. I don’t know the details. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [June 7, 2012, 10:31pm UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/46 "2012-06-07T22:31:22Z")
> [@Jas09](#): > > Understood. I’m not saying I support a rise to $10. I’m just saying that many of these arguments were made when we went from ~$5 to ~$7 and very few of them have come to pass. There wasn’t rampant inflation and there wasn’t a crowding out of low-wage workers (although I’ll happy listen to arguments that there was). Maybe you can pass along some information about how it worked for your company last time? Did it have to lay off a bunch of people or was the prevailing wage higher than the new minimum? > > The minimum wage in 1979 was $2.90. In 2012 dollars it would be ~$9.20 if it kept up with the CPI. Who is talking about “rampant inflation” and how would you know what jobs were being “crowded out”? Unemployment is very high right now. Do you really want to do something that will likely make it higher? And, of course, this wage hike will only go into effect after the election. Wonder why these Dems didn’t propose something last year that would have gone into effect this year? ---
**Author:** ![Jas09](https://avatars.discourse-cdn.com/v4/letter/j/d07c76/32.png) [@Jas09](https://boards.straightdope.com/u/Jas09)\ **Post date:** [June 7, 2012, 10:56pm UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/47 "2012-06-07T22:56:15Z")
Well, at least one presidential candidate was calling for minimum wage increases 4 months ago: [Romney supports automatic hikes in minimum wage | Fox News](http://www.foxnews.com/us/2012/02/01/romney-supports-automatic-hikes-in-minimum-wage/) Obama promised to raise it to $9.50 by now, and failed miserably. I guess I really don’t see how a $2/hour hike for 5% of 60% of the country’s workers could have much effect on unemployment, but I’m not an economist. I think I personally am a fan of the Romney plan. No more big jumps, no more political footballs, just take the current rate and bump it by the CPI as needed. ---
**Author:** ![elucidator](https://avatars.discourse-cdn.com/v4/letter/e/8edcca/32.png) [@elucidator](https://boards.straightdope.com/u/elucidator)\ **Post date:** [June 7, 2012, 10:57pm UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/48 "2012-06-07T22:57:53Z")
Whether this is empty grandstanding or a meaningful gesture probably depends on which Congressgit is voting. I can see a Blue Dog Dem shoring up his lefty credentials voting for it, knowing its going nowhere. And a sincere progressive could also vote for it, to set down a marker. ---
**Author:** ![Evil\_Economist](https://avatars.discourse-cdn.com/v4/letter/e/c89c15/32.png) [@Evil\_Economist](https://boards.straightdope.com/u/Evil_Economist)\ **Post date:** [June 7, 2012, 10:58pm UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/49 "2012-06-07T22:58:43Z")
> [@John\_Mace](#): > > Who is talking about “rampant inflation” and how would you know what jobs were being “crowded out”? Unemployment is very high right now. Do you really want to do something that will likely make it higher? Minimum wage increases have two effects; the overlooked effect is that the extra income earned by low-income workers results in more demand for products, which would increase employment. In fact, I can think of a couple of full-blown peer-reviewed economics studies that showed either a positive increase in employment or no negative impact in employment from increases in minimum wages. In fact, given that we’re in a recession (insert caveat here), increasing minimum wages would probably one of the best things we could do to help the economiy recover. Better than paying people to dig ditches and fill them in again (which would also help the economy, due to the current unusual circumstances). Anyway, my point is, when you say “Unemployment is very high right now. Do you really want to do something that will likely make it higher?” you should probably come up with some sort of cite for your claim that it will make unemployment higher. I’ll let you know right now that you’ll have a damn hard time finding one. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [June 7, 2012, 11:03pm UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/50 "2012-06-07T23:03:51Z")
> [@Evil\_Economist](#): > > Minimum wage increases have two effects; the overlooked effect is that the extra income earned by low-income workers results in more demand for products, which would increase employment. In fact, I can think of a couple of full-blown peer-reviewed economics studies that showed either a positive increase in employment or no negative impact in employment from increases in minimum wages. > > In fact, given that we’re in a recession (insert caveat here), increasing minimum wages would probably one of the best things we could do to help the economiy recover. Better than paying people to dig ditches and fill them in again (which would also help the economy, due to the current unusual circumstances). > > Anyway, my point is, when you say “Unemployment is very high right now. Do you really want to do something that will likely make it higher?” you should probably come up with some sort of cite for your claim that it will make unemployment higher. I’ll let you know right now that you’ll have a damn hard time finding one. Depends on the increase, and this is a pretty big one. I think the burden of proof is on those making the suggestion. Show me the economic models that predict no increase in the unemployment rate if we raise the national MW to $10. AFAIK, there have been no studies on the national level of what such a raise would do, but I would expect there to be some economic models we could use. And surely you are not going to suggest that any arbitrary increase in the MW will not adversely affect the unemployment rate. Are you? ---
**Author:** ![TriPolar](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tripolar/32/3008_2.png) [@TriPolar](https://boards.straightdope.com/u/TriPolar)\ **Post date:** [June 7, 2012, 11:07pm UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/51 "2012-06-07T23:07:53Z")
> [@Evil\_Economist](#): > > Minimum wage increases have two effects; the overlooked effect is that the extra income earned by low-income workers results in more demand for products, which would increase employment. In fact, I can think of a couple of full-blown peer-reviewed economics studies that showed either a positive increase in employment or no negative impact in employment from increases in minimum wages. Could you cite one of those studies? Do they simply assume all MW employees will get the increase without any layoffs or reduction in hours? ---
**Author:** ![BrainGlutton](https://avatars.discourse-cdn.com/v4/letter/b/82dd89/32.png) [@BrainGlutton](https://boards.straightdope.com/u/BrainGlutton)\ **Post date:** [June 7, 2012, 11:13pm UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/52 "2012-06-07T23:13:59Z")
> [@Evil\_Economist](#): > > Minimum wage increases have two effects; the overlooked effect is that the extra income earned by low-income workers results in more demand for products, which would increase employment. In fact, I can think of a couple of full-blown peer-reviewed economics studies that showed either a positive increase in employment or no negative impact in employment from increases in minimum wages. Please link them. ---
**Author:** ![Evil\_Economist](https://avatars.discourse-cdn.com/v4/letter/e/c89c15/32.png) [@Evil\_Economist](https://boards.straightdope.com/u/Evil_Economist)\ **Post date:** [June 7, 2012, 11:15pm UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/53 "2012-06-07T23:15:29Z")
> [@John\_Mace](#): > > AFAIK, there have been no studies on the national level of what such a raise would do [Here](http://eprints.ucl.ac.uk/16931/1/16931.pdf)you go. Now, you could probably raise some objections to this study, but now the onus is on you–find a national level study showing decreases in employment from increases in minimum wage. > [@](#): > > Depends on the increase, and this is a pretty big one. I think the burden of proof is on those making the suggestion. Show me the economic models that predict no increase in the unemployment rate if we raise the national MW to $10. You’re asking for a lot of specifics here. In real terms this isn’t a big increase; remember, the minimum wage has been eroded by inflation, and has been close to $10 (in real terms) before. So what you’re asking is “show me that bringing the minimum wage back to where it used to be wouldn’t increase unemployment.” But no, I can’t show you a study showing specifically that increasing the minimum wage to $10 wouldn’t decrease employment. > [@](#): > > And surely you are not going to suggest that any arbitrary increase in the MW will not adversely affect the unemployment rate. Are you? Don’t know, you tell me; did I say that? Are we going to have an excluded middle argument here? ---
**Author:** ![Evil\_Economist](https://avatars.discourse-cdn.com/v4/letter/e/c89c15/32.png) [@Evil\_Economist](https://boards.straightdope.com/u/Evil_Economist)\ **Post date:** [June 7, 2012, 11:17pm UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/54 "2012-06-07T23:17:56Z")
> [@TriPolar](#): > > Could you cite one of those studies? Do they simply assume all MW employees will get the increase without any layoffs or reduction in hours? > [@BrainGlutton](#): > > Please link them. [Here’s the classic](http://davidcard.berkeley.edu/papers/njmin-aer.pdf), read by every labor economist who graduated in the last 20 years. Krueger and Card did a half-dozen of these studies. They later amended their results to show no impact on unemployment from the increases in minimum wage (down from the decreases in unemployment shown in the initial study), but this is still a classic. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [June 7, 2012, 11:17pm UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/55 "2012-06-07T23:17:58Z")
> [@Evil\_Economist](#): > > I’ll let you know right now that you’ll have a damn hard time finding one. Actually, it took me about 20 seconds. If you want to get into a dueling cites contest, I’ll let you know. ---
**Author:** ![Evil\_Economist](https://avatars.discourse-cdn.com/v4/letter/e/c89c15/32.png) [@Evil\_Economist](https://boards.straightdope.com/u/Evil_Economist)\ **Post date:** [June 7, 2012, 11:21pm UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/56 "2012-06-07T23:21:59Z")
> [@John\_Mace](#): > > Actually, it took me about 20 seconds. If you want to get into a dueling cites contest, I’ll let you know. We can do that. Hell, I can find you a list. But you’d better read them damn carefully, cause I bet I can find better studies showing the opposite of every study you list. In fact I can find plenty of studies showing no impact. And if no impact was the actual result, then don’t you think you’d have some studies finding small statistical negative impact, some showing small statistical positive impact, and some showing no impact? ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [June 7, 2012, 11:25pm UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/57 "2012-06-07T23:25:25Z")
[Here you go](http://mitpress.mit.edu/catalog/item/default.asp?ttype=2&tid=11659) > [@](#): > > Minimum Wages > David Neumark and William L. Wascher > > \ > > In this book, David Neumark and William Wascher offer a comprehensive overview of the evidence on the economic effects of minimum wages. Synthesizing nearly two decades of their own research and reviewing other research… > > \ > > Neumark and Wascher argue that minimum wages do not achieve the main goals set forth by their supporters. They reduce employment opportunities for less-skilled workers and tend to reduce their earnings… > > \ > > David Neumark is Professor of Economics at the University of California, Irvine. He is also a Research Associate at the National Bureau of Economic Research, a Senior Fellow at the Public Policy Institute of California, and a Research Fellow at the Institute for the Study of Labor. > > William L. Wascher is Senior Associate Director in the Division of Research and Statistics at the Federal Reserve Board. ---
**Author:** ![Evil\_Economist](https://avatars.discourse-cdn.com/v4/letter/e/c89c15/32.png) [@Evil\_Economist](https://boards.straightdope.com/u/Evil_Economist)\ **Post date:** [June 7, 2012, 11:29pm UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/58 "2012-06-07T23:29:19Z")
> [@John\_Mace](#): > > [Here you go](http://mitpress.mit.edu/catalog/item/default.asp?ttype=2&tid=11659) Ummmm…you haven’t linked to a peer-reviewed study, you’ve linked to a book.If you want to get into a cite war you’re going to have to try harder. Here, I’ll go for you: [Eat this EE](http://info.worldbank.org/etools/docs/library/251018/day5w12663April3Se1.pdf)! OK, now you go for me. ---
**Author:** ![Oakminster](https://avatars.discourse-cdn.com/v4/letter/o/77aa72/32.png) [@Oakminster](https://boards.straightdope.com/u/Oakminster)\ **Post date:** [June 7, 2012, 11:34pm UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/59 "2012-06-07T23:34:58Z")
As a matter of policy, I think the proposal is a bad idea and dead on arrival in the House. Nothing of any consequence is likely to become law before the election. As a matter of political strategy, I think it is probably a good move on the part of Dems. The country is hurting. This measure would ease some of that pain, and is likely to be popular with the masses. It could be an effective campaign weapon against the GoP in some districts, and may lead to a smaller increase in the minimum wage after the election. ---
**Author:** ![Evil\_Economist](https://avatars.discourse-cdn.com/v4/letter/e/c89c15/32.png) [@Evil\_Economist](https://boards.straightdope.com/u/Evil_Economist)\ **Post date:** [June 7, 2012, 11:36pm UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/60 "2012-06-07T23:36:57Z")
> [@John\_Mace](#): > > Depends on the increase, and this is a pretty big one. I think the burden of proof is on those making the suggestion. Show me the economic models that predict no increase in the unemployment rate if we raise the national MW to $10. By the way, the minimum wage in Washington is[$9.04](http://en.wikipedia.org/wiki/List_of_U.S._minimum_wages), and it’s [tied to the CPI](http://en.wikipedia.org/wiki/List_of_U.S._minimum_wages), and its [8.1% unemployment rate](http://www.bls.gov/web/laus/laumstrk.htm) is better than 15 other states with lower minimum wages. [Previous page](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401.md?page=2) [Next page](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401.md?page=4)