Saturday, June 03, 2006

Raising the Federal Minimum Wage Makes Sense

Some have said that Michael Arcuri's proposal to raise the federal minimum wage to $7.25 makes no sense as a campaign issue in the New York 24th District race for Congress, because New York State already has a good minimum wage that will rise to $7.15 next January.

These detractors are missing the larger picture.

First of all, raising the federal minimum wage is the right thing to do. No matter where they live, Americans deserve to get a fair wage.

Secondly, raising the federal minimum wage will help workers in New York State, because the minimum wage in New York State will soon be raised to $7.15. How is this possible? Having a wide gap between the New York State minimum wage and the minimum wage in other states acts as an incentive for businesses to relocate to other states. That hurts workers in the other states and in New York State. Having a better minimum wage across America that meets the New York State standard benefits workers and businesses that want to stay in New York State alike.

Mike Arcuri knows this, and that's why he's made his proposal. The other day, Arcuri explained, "We don't want to create an incentive for businesses and jobs to leave the state because the minimum wage is lower in other places."

Politicians like Ray Meier who oppose raising the minimum wage will only benefit big businesses in states like Mississippi and Arkansas that don't value working families. Let's not let New York slide down to the low standards of those states. Ray Meier has no place representing New York's 24th District in the US House of Representatives. Let him go down to Toadsuck, Arkansas and run for Congress there.

3 comments:

Anonymous said...

"Having a wide gap between the New York State minimum wage and the minimum wage in other states acts as an incentive for businesses to relocate to other states."

First off, no business that pays the minimum wage is going to relocate anywhere but China.

Secondly, while the office is national, the campaign is local, so the 10 cent difference is almost meaningless.

Third, nobody can live on $7.25 an hour anyway in New York, so it's not an issue that really moves taxpayers or voters. It's an issue that the unions really like.

Fourth, it's a campaign move designed to shore up the Working Families Pary (aka union) support by the candidate who had made some early missteps to put liberals (which is where most union activists fall) down.

Fifth, pushing up the cost of labor in states like New York where taxes and energy costs are already drastically affecting small business and the retail sector isn't particularly helpful in maintaining those small business and retail jobs or stable retail prices. Believe it or not, there is a downside to the timing of raising the minimum wage.

Sixth, there are a whole lot of more important issues to focus on that voters will respond to. Since the Working Families folks had been leaning to Les Roberts, this is just a move to solidify their support for Arcuri. It's not the heart of a political campaign.

24 Independent said...

I'll address your points, anonymous reader:

1. The level of the minimum wage affects ALL wages. When the minimum wage rises, so do the wages of those who make more than the minimum wage.

2. A congressional campaign that is run on local issues is as vapid as a member of Congress who only casts votes with local interest in mind. Also, as I've said, the point isn't a ten cent increase, but rather to end the disparity between New York State wages and wages in other states

3. People do live on $7.25 in New York State. If you don't like that fact, maybe you'd like to see the minimum wage higher. How high?

4. Clearly, with the Working Families Party giving their endorsement shortly after this press conference, the two are connected. From what I've heard, the leadership of the Working Families Party has been disturbed by some of Arcuri's indications that he'd prefer to support policies that tilt to the right. But, whatever the motivation, supporting a minimum wage increase is the right thing to do, and we should praise Arcuri for this decision.

5. It is silly beyond silly to compare the increase in energy costs to the increase in minimum wages. In the last two years, the price of crude oil has doubled. Even with a federal minimum wage increase to $7.25 in 2007, it would be between 17 and 26 years since the minimum wage would have doubled. In 1981, the minimum wage was $3.35. In 1990, that was at long last increased to $3.80.

Then what about health care costs? Health care costs have increased and impacted businesses much more than increases in the minimum wage.

If you want to help business, reform the health care system so that medical coverage is not tied to employment, and support the Apollo Energy Initiative.

Some businesses do tend to move to places with lower minimum wages, not because the minimum wage decrease saves them much money, but because a low minimum wage is an indication to them of lax enforcement of other labor standards that they're hoping to abuse. Let's not encourage this system of businesses and state economies racing toward the economic and ethical bottom.

6. Maybe this issue isn't important to you, but from the way that you talk about the issues, you sound like a right-leaning voter anyway. I say that standing up for issues like increasing the federal minimum wage could help to establish in voters minds that he cares about more than just his own ambition.

Anonymous said...

Hey Jon, I know you like to argue, but my points still stand. I'll give you a couple of counters too.

"1. The level of the minimum wage affects ALL wages. When the minimum wage rises, so do the wages of those who make more than the minimum wage."

Not by much. In fact, many business which had employees above the minimum wage had to start paying experienced workers minimum wage when the level rose because they couldn't afford to pay more. Many employers did not increase wages across the board by the amount of the minimum wage increase.

"3. People do live on $7.25 in New York State. If you don't like that fact, maybe you'd like to see the minimum wage higher. How high?"

People try to live on $7.25 in NY, but they can't. You'd be amazed at the number of young people who have ruined credit by skipping out on their utility bills, repoed cars, and hospitals coming after them with judgements to collect money they don't have to pay for a visit to the emergency room. It's not just college grads leaving NY for better jobs, it's a lot of young people leaving because they can't live on the paltry wages. The problem is the employers can't pay more either. The damn cost of living here is so high compared to many other states that there is no way to prosper much less simply survive.

Of course the minimum wage needed to go up, because wage disparity is enormous, but the bigger issue is the cost of living needs to go down. We need a simple and cheap health care system that covers everyone - perhaps the new Massachusetts model will work. We need lower property taxes so apartments (not covered by STAR tax relief) are not as expensive. We need lower sales taxes on cars and car licensing fees so transportation is not so expensive.

"5. It is silly beyond silly to compare the increase in energy costs to the increase in minimum wages."

Who's comparing? I was talking about timing. Retail businesses, where most of your minimum wage earners are, are getting hit with higher energy costs, higher property taxes (no STAR relief, no PILOTS and rate increases double inflation or more every year), higher insurance costs and now higher wages (which means higher costs for manditory payrol taxes) on top of it. Which means they raise prices to the extent they can which is inflationary and costs the minimum wage earner even more to buy those same services.

The fact is Jon, without some sort of cost control for things like taxes, health care and energy the minimum wages increase disappear in the hands of the recipients while the number of new job opportunities disappears.

Now let me give you one more point to chew on, a new one. If the federal minimum wage were to increase, but the cost of living in New York stays the same and continues to increase at a rate faster than inflation, what is the result? Pretty simple. The relative opportunities in the Carolinas and Florida look even better than they do now and we get an even larger exodus of our young population.

The federal minimum wage is a soundbite issue. I don't want a soundbite congressman. I want leadership which recognizes the complexities of the issues and finds solutions that don't simply shift the problem to a different place. We have a huge problem with income disparity and regressive taxation and an unsustainable level of energy consumption in this country. And the American public, at least the New York public, is a lot more sophisticated than the damn politicians we've elected to this point. Let's not continue with the same class of representation. Let's expect more.