Isabel Fajardo's List: APE11 living wage

• • the beginning of the comparisons between living wage and minimum wage?
• The strong bipartisan support for increasing the federal minimum wage to $7.25 an hour from the current $5.15--a 41 percent increase--is a sad example of how interest-group politics and the public's ignorance of economics can combine to give us laws that manage to be both inefficient and inegalitarian
• The movement for a living wage is often dated from the 1996 strike by Yale students on behalf of higher wages for cafeteria workers.
• • minimum wage doesn't fit everyone's statuses and circumstances
• Depending on the region, the minimum "living" wage is usually calculated to be in the range of $8-$10 per hour, although some advocates call for $12-$15 per hour with perhaps a sliding scale for family size.
• An increase in the minimum wage raises the costs of fast foods and other goods produced with large inputs of unskilled labor.
• The higher prices reduce the producers' output and thus their demand for labor
• And poor families are disproportionately hurt by the rise in the price of fast foods and other goods produced with low-skilled labor because they spend a relatively large fraction of their incomes on such goods.
• The concept of a living wage, of course, has long roots in Catholic social teaching.
• A newly efficient energy sector was arguably a critical prerequisite for the economic expansion that was triggered in the early 1980s.
• As a means of raising people from poverty or near poverty, the minimum wage is inferior to the earned income tax credit (EITC), which compensates for low wages without interfering with the labor market or conferring windfalls on the nonpoor.
• So why push to increase the minimum wage rather than the EITC?
• If you artificially increase the price of labor, low-skilled people will be priced out of the market, marginal businesses will fail, and total employment will be reduced, say opponents. Since living-wage advocates want far more aggressive price increases, the impact will be that much more dire. The models churn out precise computations of the number of jobs that will be lost--131,000 to 222,000 in the state of Florida alone, says our "Entry-Level Employment Think Tank."
• • benefits for some, negative consequences for others
• Vermont anti-living-wage group, who worried that raising the pay of poor people would cause them to lose welfare benefits.
• One consequence was that the department was fiercely resistant to opening jobs to other ethnic groups.
• Maybe some jobs will be lost by enacting living-wage laws, but there are undoubtedly many people, like mothers with young children, who would gladly choose not to be in the work force if their spouses got reasonable paychecks.
• the smaller the scope of a minimum-wage increase, the more easily it is evaded, though possibly at great social cost

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• Employed wage and salary workers paid hourly rates with earnings at or below the prevailing Federal minimum wage, 2007 annual averages:
  

   
   
  1. by selected characteristics
   
  2. by census region and division
   
  3. by State
   
  4. by major occupation group
   
  5. by major industry group
   
  6. by educational attainment
   
  7. by age and sex
   
  8. by marital status, age, and sex
   
  9. by usual hours worked per week
   
  10.  by sex (1979-2007 annual averages)
• • categorized in different aspects, shows differences between sexes, age, etc

• stores such as Wal-Mart and Target to pay wages of at least $10 an hour plus $3 in fringe benefits by the middle of 2010
• a big factor is each state’s minimum wage
• While their average wage is significantly higher, $10 to $15 an hour depending on the state, the fact that some are earning under $7 an hour is surprising. Let's hope the one filling your next prescription is not too tired from working two jobs to make ends meet...
• • the struggle to make ends meet with minimum wage
• the median wage is only a little above $10 in some states.
• Supporters of living wage laws say that the current minimum wage simply does not keep up with the cost of living.
• Opponents of living wage laws insist that raising the minimum wage will eliminate many jobs and lead to dire consequences.
• a higher hourly wage mandated by a living wage law will eliminate some jobs, but how many?
• Fortunately for more than 95% of the people who visit PayScale, even a $10 an hour minimum wage would not be a raise. How does you salary measure up? Is it minimum, living, or above?

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• The strong bipartisan support for increasing the federal minimum wage to $7.25 an hour from the current $5.15--a 41 percent increase--is a sad example of how interest-group politics and the public's ignorance of economics can combine to give us laws that manage to be both inefficient and inegalitarian.
•  An increase in the minimum wage raises the costs of fast foods and other goods produced with large inputs of unskilled labor.
• The higher prices reduce the producers' output and thus their demand for labor.
• That increase has the same misallocative effect as monopoly pricing.
• The losers are therefore likely to lose more than the gainers gain; they are also likely to be poorer than the gainers
• • disadvantages?
• So why push to increase the minimum wage rather than the EITC?
• Moreover, poor people tend not to vote; the number of nonpoor who would directly benefit from an increase in the minimum wage, when combined with the number of nonpoor workers whose incomes would rise because of reduced competition from minimum-wage workers, probably exceeds the number of nonpoor who would lose jobs.
• Fewer jobs would be available to low-skilled workers in the city, and families with modest incomes who seek low prices rather than elaborate service would be hurt more than the affluent by the increase in prices and reduced availability of big-box outlets
• • social cost = not being able to live off of minimum wage
• the smaller the scope of a minimum-wage increase, the more easily it is evaded, though possibly at great social cost.

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• Minimum wages are set both nationally and statewide. The minimum wage gives employers a guideline as to the legal minimum amount paid to employees. In 1968 the minimum wage served to keep 86% of workers and their families above the poverty line for a family of four. Today that percentage has dropped to 64%, in effect leaving 36% of wage earners living at or below the poverty line.
• Living wage for this family in an urban area such as Los Angeles is $34.07.  The minimum wage is $8.00 and the poverty wage is $9.83. In a more rural area of California the numbers change to $25.01 for a living wage, $8.00 for the minimum wage and $9.83 for the poverty wage.  It certainly proves that a single income family is a thing of the past.
• • minimum wages are unrealistic
• When workers aren't paid enough wages to live decently in the community they live in, they are forced to seek public assistance such as food stamps, medical insurance and subsidized housing.
• This puts a strain on tax payers who end up paying to support their underpaid neighbors.
• However, in the more expensive Urban areas, it would still be insufficient to meet the cost of living which can be $18.00 per hour or more

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