# 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:** 5
**Author:** ![amarone](https://avatars.discourse-cdn.com/v4/letter/a/e0b2c6/32.png) [@amarone](https://boards.straightdope.com/u/amarone)\ **Post date:** [June 8, 2012, 3:07am UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/81 "2012-06-08T03:07:56Z")
> [@Evil\_Economist](#): > > 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. From that list, the average unemployment in states with a minimum wage of $8.00+ is 8.4%; for those with $7.26 - $7.99 it is 7.9%; and those that stick to the Federal minimum of $7.25 have average unemployment of 6.7% ---
**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 8, 2012, 3:13am UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/82 "2012-06-08T03:13:49Z")
> [@Evil\_Economist](#): > > Is this as honest a response as all your others? It was an answer appropriate to the question. ---
**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 8, 2012, 3:15am UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/83 "2012-06-08T03:15:42Z")
> [@Evil\_Economist](#): > > And…how do we know there’s no long term benefits? 'Cause I have some actual cites, that I can actually link to, that other people can actually read, that you don’t have to pay for, that say there \*\*are \*\*long-term benefits. Eh. My cites are good enough for this forum. > [@](#): > > Are we arguing political viability now? Isn’t that a different question? It’s an additional question. > [@](#): > > Is it an amazing coincidence that it’s $7.25 now? Not $7.24 or 7.26? you want to argue that it should be $10.01, go right ahead. I bet the cite for that is in that book. You want to argue that it shouldn’t be $7.25 right now? ---
**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 8, 2012, 3:48am UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/84 "2012-06-08T03:48:06Z")
> [@amarone](#): > > From that list, the average unemployment in states with a minimum wage of $8.00+ is 8.4%; for those with $7.26 - $7.99 it is 7.9%; and those that stick to the Federal minimum of $7.25 have average unemployment of 6.7% Unfortunately the analysis isn’t that straightforward; if it was, these arguments around the impact of minimum wages on unemployment wouldn’t go on so long (well, they would here, but not in academia)–the minimum wage isn’t the only (or even a particularly large) driver of unemployment rates, so you have to do some pretty sophisticated analysis to pull out the impact of minimum wages on unemployment. The Card paper I linked to earlier has a great example of the kind of “natural experiment” that had to be found to do a comparative analysis. ---
**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 8, 2012, 4:07am UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/85 "2012-06-08T04:07:10Z")
> [@Evil\_Economist](#): > > Unfortunately the analysis isn’t that straightforward; if it was, these arguments around the impact of minimum wages on unemployment wouldn’t go on so long (well, they would here, but not in academia)–the minimum wage isn’t the only (or even a particularly large) driver of unemployment rates, so you have to do some pretty sophisticated analysis to pull out the impact of minimum wages on unemployment. The Card paper I linked to earlier has a great example of the kind of “natural experiment” that had to be found to do a comparative analysis. From the Wikipedia article: “Among those paid by the hour in 2009, 980,000 were reported as earning exactly the prevailing Federal minimum wage. Nearly 2.6 million were reported as earning wages below the minimum. Together, these 3.6 million workers with wages at or below the minimum made up 4.9 percent of all hourly-paid workers.” Hourly workers are a fraction of the total workforce (a large fraction, granted), so the total impact of a minimum wage increase is, at the margin, small. And note that those currently paid below the minimum (probably mostly waitstaff) would probably be unaffected by the wage increase. I don’t know how many workers are paid between $7.25 and $10.00, or how those workers are distributed within that range; those numbers probably exist, but I’m not willing to search for them right now. Those are figures you would need before you could give any estimate of the cost of a minimum wage increase. The benefits of a minimum wage increase are even harder to quantify; you have increased demand for products (more people with more money to spend), you have productivity increases from lower turnover, etc. There will never be a way to accurately measure these impacts; we have to make estimates powered by natural experiments, but even the outcomes of these experiments aren’t clear. Unfortunately, on top of the factual uncertainty you have people staking out political positions on the issue, and that leads to a real mess. The only thing you can say for sure is that the real answer isn’t simple. ---
**Author:** ![kayaker](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kayaker/32/441_2.png) [@kayaker](https://boards.straightdope.com/u/kayaker)\ **Post date:** [June 8, 2012, 10:55am UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/86 "2012-06-08T10:55:48Z")
> [@even\_sven](#): > > It seems to me on a grand economic scale, this would be a good thing for the American economy. Here you are, apparently a grand master widget-maker, able to do the work of two men and half men in ten hours. But you aren’t doing that- instead you are hiring inefficient widget makers who make their widgets slowly. Your labor is not being used to its maximum potential and neither is theirs. Except I don’t make widgets, I provide a service. My minimum wage employees are unable, due to lack of an advanced degree, to provide the same service. Instead, they provide support to me. They are not inefficient. I’d prefer to labor as few hours a week as possible. I’m 53. I work in a rural area because I prefer that to city dwelling, but the overall economy here sucks. A significant rise in the minimum wage means I’d have to let a few people go, and work more hours myself. Or retire early.☹ ---
**Author:** ![Maastricht](https://avatars.discourse-cdn.com/v4/letter/m/a88e57/32.png) [@Maastricht](https://boards.straightdope.com/u/Maastricht)\ **Post date:** [June 8, 2012, 11:13am UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/87 "2012-06-08T11:13:49Z")
I don’t have an opinion yet on this matter. But I can tell how it is in the Netherlands. Minimum wage here is about the same or lower then in the US, but the cost to employers is higher due to the added taxes. As a result, employers hire less staff. They certainly hire less staff for what I would call frivolous jobs. Walmart greeters, or any shop greeters? Dutch stores don’t have them, wouldn’t want them. People standing outside a store with a sign pointing to the nearest fast food venue, like I saw in Phoenix in 2004? No one here would either offer that job or take it. The greeter would be replaced with a sign; the man with the sign would be replaced with one of those clever revolvign signs. The people that would be performing the jobs in the US would here be sitting at home with unenployment benefits. I don’t know which is better. I suppose having a job, any job, is better for most people; but a job as living sign? Tho old man I saw doing that would be better off at home helping his daughters tend his grandchildren, I would think. ---
**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 8, 2012, 12:47pm UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/88 "2012-06-08T12:47:27Z")
> [@Maastricht](#): > > I don’t have an opinion yet on this matter. But I can tell how it is in the Netherlands. Minimum wage here is about the same or lower then in the US, but the cost to employers is higher due to the added taxes. > > As a result, employers hire less staff. They certainly hire less staff for what I would call frivolous jobs. Walmart greeters, or any shop greeters? Dutch stores don’t have them, wouldn’t want them. People standing outside a store with a sign pointing to the nearest fast food venue, like I saw in Phoenix in 2004? No one here would either offer that job or take it. > The greeter would be replaced with a sign; the man with the sign would be replaced with one of those clever revolvign signs. > > The people that would be performing the jobs in the US would here be sitting at home with unenployment benefits. > > I don’t know which is better. I suppose having a job, any job, is better for most people; but a job as living sign? Tho old man I saw doing that would be better off at home helping his daughters tend his grandchildren, I would think. I don’t know much about the Netherlands, but I did a web search. My numbers may be wrong, so anyone interested please verify. Minimum wage in NL is [EU66.77/day](http://en.wikipedia.org/wiki/List_of_minimum_wages_by_country) or about $10.39/hour. Tax costs to the employer are about [18%](http://www.scribd.com/doc/17839104/Employer-Cost-in-Netherlands-2009) of the salary, so cost to the employer is about $12.27/hour. The [unemployment rate](http://www.google.com/publicdata/explore?ds=z8o7pt6rd5uqa6_&met_y=unemployment_rate&idim=country:nl&fdim_y=seasonality:sa&dl=en&hl=en&q=netherlands+unemployment+rate) is about 5%. These numbers don’t sound awful to me. ---
**Author:** ![Ludovic](https://avatars.discourse-cdn.com/v4/letter/l/7ab992/32.png) [@Ludovic](https://boards.straightdope.com/u/Ludovic)\ **Post date:** [June 8, 2012, 12:55pm UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/89 "2012-06-08T12:55:26Z")
> [@](#): > > People standing outside a store with a sign pointing to the nearest fast food venue, like I saw in Phoenix in 2004? No one here would either offer that job or take it. And this is a bad thing how? They are worse than telemarketers since they endanger traffic with their antics. ETA: which isn’t to say that it isn’t good for the economy to have a better distribution of money. But you’d get that by simply paying them for doing nothing, which would get money into the economy while not detracting from the usefulness of public roads. ---
**Author:** ![Skammer](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/skammer/32/143_2.png) [@Skammer](https://boards.straightdope.com/u/Skammer)\ **Post date:** [June 8, 2012, 1:29pm UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/90 "2012-06-08T13:29:44Z")
> [@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. > [@The\_Tao\_s\_Revenge](#): > > 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? No, but they’ll suddenly become worth more. Let’s say we currently pay store associates $7.50/hour, and assistant managers $10/hour. If associates are suddenly making $10, we’re not going to be able to get people to do the assistant manager job for the same amount of pay. The market suddenly demands $12. > [@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? I understand; and I’m not saying we _shouldn’t_ raise the minimum. I’m just pointing out the affect on one industry (retail) if we raise it all at once – we can’t make it up by closing stores or by laying off staff (we already maintain a minimum staff in each store), so the only other way to make up a few million dollars a week would be to raise prices. Competitively it might not hurt because our competitors will have to do the same thing; but I can’t tell you what the effect of across-the-board higher prices would be. Oh, I thought of one more way we could save money – hire more part-time workers without benefits and reduce benefits for full-time workers. We’d probably do that before raising prices, as long as unemployment stays high enough to guarantee a steady stream of applicants anyway. But who is that good for other than our stockholders? ---
**Author:** ![Skammer](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/skammer/32/143_2.png) [@Skammer](https://boards.straightdope.com/u/Skammer)\ **Post date:** [June 8, 2012, 1:34pm UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/91 "2012-06-08T13:34:22Z")
Sorry **Jas09** , you asked me what my company did last time it was raised, but I’m sorry I don’t know. It was well before my time here, and this is the first place I’ve worked with a significant employee base at the minimum wage. ---
**Author:** ![Wesley\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wesley_clark/32/20581_2.png) [@Wesley\_Clark](https://boards.straightdope.com/u/Wesley_Clark)\ **Post date:** [June 9, 2012, 3:53pm UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/92 "2012-06-09T15:53:46Z")
> [@Typo\_Negative](#): > > I’m all for a minimum wage hike…but this will never go through. Never, never, never. Boehner will strip naked and do a pole dance on the House Floor before this goes through. > > To get the minimum wage up, you will have to go in smaller increments. The last time the dems got the minimum wage up was in 2007, they got it up by tying it to an Iraq war funding bill. Something similar could happen in the future, just tie it to a different bill. ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [June 11, 2012, 6:44pm UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/93 "2012-06-11T18:44:58Z")
> [@BrainGlutton](#): > > [And indexing future increases to the Consumer Price Index.](http://thehill.com/blogs/floor-action/house/231417-house-dems-propose-10hour-minimum-wage) > > …Debate points obvious: > > 1. Is this a good idea? What economic impact would it have? > > 2. Any breath of a chance of even getting it to a floor vote in a Pub-controlled House? 1. Depends. I know econominsts whose entire careers seem to revolve around the minimum wage and its not as simple as you learn in econ 101. Price floors generally are bad but a price floor on labor acts differently than a price floor on sugar. 2. No. > [@John\_Mace](#): > > A MW increase is a tax increase, thinly disguised. The one thing it has going for it is low (really low) administration costs. Not going to happen in an election year during bad economic times, but the Dems might be smart to be able to say Republicans voted against it, at least in some districts. That is, if it gets out of committee, which I doubt. I always thought the minumum wage was a price floor not a tax. > [@John\_Mace](#): > > Not really. It can generally be passed along to consumers, since everyone is affected the same by it. McDonalds and Burger King probably have very similar labor costs. > > It’s a tax paid for by consumers, mostly. Well, that’s a featuer not a bug. People have spoken favorably about wage driven inflation. Unless you believe that a higher minimum wage is going to drive jobs out of the oountry it is likely to lead to some wage driven inflation which is probably good for 99% of Americans. > [@](#): > > I don’t know about that. Economists have models they can use for this sort of thing. If the increase is large enough, it can be estimated. > > And I hope no one is advocating doing something for which we don’t know the cost, or at least that we can’t take a stab at… If the minimum wage gets driven up, it has an impact on other wages. We aren’t keeping jobs in the USA with low wages. > [@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. Its still not a tax any more than a price floor on sugar is a tax. The mere fact that it dissuades economic behaviour doesn’t make it a tax. A price floor on sugar might make manufacturers turn to corn syrup anda higher minimum wage might make employers turn to automation but there are significant differences between ability to subsitute corn syrup for sugar and automation for labor. Automation isn’t being held back because the minimum wage is too low. Raising wage levels would be useful right now because it would get people to start spending money which would get businesses to start expanding their operations and hiring people. Employers aren’t going to hire more employee no matter how cheap they are if they don’t need them. We need to create a situation where employers need to hire more employees, they’re not going to do it out of the goodness of their hearts, and why should they. Increasing minimum wages might be one way of doing that. ---
**Author:** ![UltraVires](https://avatars.discourse-cdn.com/v4/letter/u/ecccb3/32.png) [@UltraVires](https://boards.straightdope.com/u/UltraVires)\ **Post date:** [June 12, 2012, 1:12am UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/94 "2012-06-12T01:12:56Z")
If raising the minimum wage is so great, why not make it $100 an hour and we would all be rich? Even the most hard core liberals agree that is absurd, so they would admit that there is a sweet spot in between $7.25 and $100/hr that is good. Why is it $10? I’m all for helping the working class out, but it seems to me like the people most in need of help are not minimum wage workers, those are largely high school kids working for beer money. Why base an economic package on a 16 year old’s pay? The people really hurting are the ones making in the high $20k’s per year. Those people that make too much for EITC and Medicaid, but not enough to live off of. That works out to around $14/hr. If you raise the current minimum from $7.25 to $10, those people get screwed even HARDER. ---
**Author:** ![Peremensoe](https://avatars.discourse-cdn.com/v4/letter/p/ce7236/32.png) [@Peremensoe](https://boards.straightdope.com/u/Peremensoe)\ **Post date:** [June 12, 2012, 1:46am UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/95 "2012-06-12T01:46:12Z")
> [@The\_Tao\_s\_Revenge](#): > > Are you currently paying them less than they’re worth to you? All employers pay all employees less than they are worth, to the extent that they can determine what that is. This is axiomatic; therein lies the profit. ---
**Author:** ![carnivorousplant](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/carnivorousplant/32/3563_2.png) [@carnivorousplant](https://boards.straightdope.com/u/carnivorousplant)\ **Post date:** [June 12, 2012, 1:52am UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/96 "2012-06-12T01:52:07Z")
> [@jtgain](#): > > The people really hurting are the ones making in the high $20k’s per year. Those people that make too much for EITC and Medicaid, but not enough to live off of. That works out to around $14/hr. If you raise the current minimum from $7.25 to $10, those people get screwed even HARDER. By G-d, you’re right! We should lower the minimum wage. Help those poor, beer drinking people out! ---
**Author:** ![Peremensoe](https://avatars.discourse-cdn.com/v4/letter/p/ce7236/32.png) [@Peremensoe](https://boards.straightdope.com/u/Peremensoe)\ **Post date:** [June 12, 2012, 1:54am UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/97 "2012-06-12T01:54:22Z")
> [@Skammer](#): > > I understand; and I’m not saying we _shouldn’t_ raise the minimum. I’m just pointing out the affect on one industry (retail) if we raise it all at once – we can’t make it up by closing stores or by laying off staff (we already maintain a minimum staff in each store), so the only other way to make up a few million dollars a week would be to raise prices. The _only_ other way? How about cutting upper-level salaries? Reducing profits? Sure it hurts, but if that’s what it takes to stay in business I’m pretty sure ways can be found. ---
**Author:** ![kayaker](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kayaker/32/441_2.png) [@kayaker](https://boards.straightdope.com/u/kayaker)\ **Post date:** [June 12, 2012, 1:57am UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/98 "2012-06-12T01:57:05Z")
> [@Peremensoe](#): > > The _only_ other way? How about cutting upper-level salaries? Reducing profits? Sure it hurts, but it if that’s what it takes to stay in business I’m pretty sure ways can be found. There comes a point where, when reducing profits, where a business pays the owner about what he could make working for someone else, with none of the headaches of being a boss. So the business folds. Go for it. ---
**Author:** ![carnivorousplant](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/carnivorousplant/32/3563_2.png) [@carnivorousplant](https://boards.straightdope.com/u/carnivorousplant)\ **Post date:** [June 12, 2012, 2:00am UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/99 "2012-06-12T02:00:58Z")
I am reminded of Governor Huckabee signing a minimum wage bill in Arkansas. In defending his denial of an annual MW raise he blurted out in a radio interview, “Well, why don’t we make it **TEN DOLLARS**?!” An effort to deny every possible cent to the poor, and yet keep them alive and shopping at Wal-Mart. "Huckabee supported raising the minimum wage in Arkansas from $5.15 to $6.25 an hour, but it was done “as a safeguard against a proposed constitutional amendment that would have increased the minimum wage yearly for inflation.” [Link.](http://glassbooth.org/explore/index/mike-huckabee/7/trade-and-economics/6/) ---
**Author:** ![Peremensoe](https://avatars.discourse-cdn.com/v4/letter/p/ce7236/32.png) [@Peremensoe](https://boards.straightdope.com/u/Peremensoe)\ **Post date:** [June 12, 2012, 2:07am UTC](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401/100 "2012-06-12T02:07:06Z")
> [@kayaker](#): > > There comes a point where, when reducing profits, where a business pays the owner about what he could make working for someone else, with none of the headaches of being a boss. So the business folds. Go for it. What? If a business is really that close to that profitability line–and the boss really does suffer those headaches so much more than he enjoys the commensurate freedoms–why shouldn’t he make this choice? What’s to regret? [Previous page](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401.md?page=4) [Next page](https://boards.straightdope.com/t/house-dems-propose-raising-minimum-wage-from-7-25-hr-to-10/624401.md?page=6)