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Christian Science Monitor reports: “New efforts surface to raise minimum wage.”
“Ted Kennedy hopes to put his Republican colleagues in the Senate in an awkward spot. Any day now he intends to attach a raise in the national minimum wage to a must-pass appropriations bill. If it reaches the floor, senators will have to register their vote on a measure popular with a large majority of Americans - but opposed by groups representing restaurants, hotels, retail stores, health services, and other major employers of low-wage workers.”
Minimum wage has been $5.15 an hour since 1997. The Kennedy proposal raises it 75 cents six months after passage, and another 75 cents a year after that.
Of course, instead of dealing with it on its own merits, Kennedy wants to maximize the political gamesmanship:
“It may be affixed to an appropriations bill that contains a hike in pay for members of Congress. ‘That seems to be a likely candidate,’ says Jim Manley, press secretary to Mr. Kennedy.”
“Economists always note that nothing is free in economics. If wages are raised by law, the extra costs must be covered somehow. It could be that prices of goods and services rise, or that profits diminish, or that fewer minimum-wage workers are hired. Possibly, some cost could be covered by lower turnover of low-wage workers and by greater productivity.”
“The Employment Policies Institute (EPI) in Washington, sponsored by industries heavily using low-wage workers, has in the past argued that minimum-wage hikes destroy jobs. But economists have had a difficult time detecting detrimental effects from moderate boosts in the minimum wage. A study of all 50 states and D.C. over a period of 19 years could find ‘no statistically significant relationship between the value of the minimum wage and employment growth in industries reliant on low-wage workers.’”
“The EPI now maintains that if the minimum wage is raised, it attracts more skilled, better-educated workers to take over those now better-paying jobs. ‘Low-skilled workers are pushed out of the market,’ says Craig Garthwait, EPI’s director of research. Since single mothers and others moving out of welfare often take minimum-wage jobs, they may face fewer job openings. ‘All the success we have seen in welfare reform could disappear,’ Mr. Garthwait adds.”
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