Wage Rage

July 25, 2008

An increase in the federal minimum wage to $6.55 an hour took effect yesterday, and unlike last year's increase - the first one at the federal level in 11 years - this one affects Maryland workers (the state minimum wage is $6.15). Bloggers had plenty to say about a pay raise for workers on the job market's lowest rung.

"CNN reports: 'Rep. George Miller, a California Democrat who was one of the sponsors of the measure in the House, said up to 13 million workers benefited from the first increase under the bill, which brought the federal minimum wage to $5.85 per hour in July 2007.' Why stop there if so many people benefit? Why doesn't Congress raise the minimum wage to, say, $100 per hour? Maybe they're stopping at $7.25 per hour because minimum wage laws have costs as well as benefits. And the higher the minimum wage, the higher the costs. ... The unemployment rate for young people is already more than three times the national average. Making them more expensive to hire will not help. Still, let's assume Rep. Miller's '13 million benefit' figure is correct. Every cent of those benefits came from the pocket of someone who was priced out of a job. A minimum wage does not create wealth. At best, it is a wealth transfer program that takes money from the unemployed and gives it to the employed."

- Ryan Young on www.openmarket.org

"If you're an hourly employee making Maryland's minimum wage of $6.15, you're getting a raise. But don't expect it to matter much. Instead of making $6.15 an hour, you'll now be making $6.55 an hour. ... You're still basically in poverty, as defined by the federal government. ... You know what businesses always say about minimum wage increases. Something like, 'It's going to force me to lay off some workers because I won't be able to afford the wage increase.' ... I know times are tough, but if a wage increase of 40 cents per worker is going to break your business, you're probably going under anyway."

- Matt Simon on www.bthesite.com

"An increase in the minimum wage may mean small business owners will have to pay their employees more. Yet for the average owner, the absence of an increase might actually be worse. Let's suppose that most 'good' small-business owners give their employees a little more than the minimum wage. 'Bad' ones - and bigger competitors - seem less likely to do the same. So an increase in the minimum wage will keep those entities from getting too much of a financial edge over the good guys. ... And if nothing else, employees are almost guaranteed to be happy, perhaps making them work a little harder or act more cheerful when dealing with customers."

- Doug Caverly on www.smallbusinessnewz.com

"The Department of Labor hasn't been adequately protecting workers whose employers skimp on paychecks, don't pay overtime or don't pay a livable wage, according to a two-part Government Accountability Office report released last week. This has many experts worried, especially now that the federal minimum wage is $6.55 an hour. ... The Wage and Hour Division of the Labor Department, which is supposed to protect workers from substandard pay and working conditions, pursued about 30,000 enforcement actions in 2000, one-third fewer actions than the 47,000 the division followed in 1997, according to one GAO report. ... 'If there's no enforcement of that minimum wage floor, [the increase] doesn't mean anything,' said Cathy Ruckelshaus, litigation director for the National Employment Law Project, a national nonprofit that advocates for low-wage workers. ... Analysts estimate that nearly 6 million workers will eventually get a mandated raise thanks to the revised minimum wage. That is, assuming employers actually pay it."

- Robert Lewis on www.propublica.org

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