HuffPo.com: Elizabeth Warren: Minimum Wage Would Be $22 An Hour If It Had Kept Up With Productivity

[Ellis]

Sen. Elizabeth Warren (D-Mass.) made a case for increasing the minimum wage last week during a Senate Committee on Health, Education, Labor and Pensions hearing, in which she cited a study that suggested the federal minimum wage would have stood at nearly $22 an hour today if it had kept up with increased rates in worker productivity.

"If we started in 1960 and we said that as productivity goes up, that is as workers are producing more, then the minimum wage is going to go up the same. And if that were the case then the minimum wage today would be about $22 an hour," she said, speaking to Dr. Arindrajit Dube, a University of Massachusetts Amherst professor who has studied the economic impacts of minimum wage. "So my question is Mr. Dube, with a minimum wage of $7.25 an hour, what happened to the other $14.75? It sure didn't go to the worker."

Dube went on to note that if minimum wage incomes had grown over that period at the same pace as it had for the top 1 percent of income earners, the minimum wage would actually be closer to $33 an hour than the current $7.25.

It didn't appear that Warren was actually trying to make the case for a $22 an hour minimum wage, but rather highlighting the results of a recent study that showed flat minimum wage growth over the past 40-plus years coinciding with surging inequality across a number of economic indicators.

Warren went on to argue that raising the federal minimum wage to over $10 an hour in incremental steps over the next two years -- a cause championed by President Barack Obama in his State of the Union address and since taken up in the Senate -- would not be as damaging for businesses as some critics have argued.

More video and related articles at link: http://www.huffingtonpost.com/2013/03/18/elizabeth-warren-minimum-wage_n_2900984.html

Really curious to hear what many of you have to say about this...

[rictus58]

We all know by now, those that run companies will ultimately KEEP their salary. They won't willingly give up money. The people hurt will be the workers. Maybe in incrimental steps it would be easier to protect the working class...

[AsburySkinsFan]

Oh but we all know that raising the minimum wage will increase the price of everything else......

....what they don't tell you is that this is only true because those at he top of the food chain insist on the same-or greater levels of profits. It is also considered blasphemy to suggest that a business should actually consider making less profit in order to pay low wage employees more.

[deejaydana]

What many times gets lost in this debate is the transitory nature of minimum wage jobs: they're intended for the younger demographic and statistically these people, by and large, don't stay at this pay rate or in these jobs, for an extended period of time.

[rictus58]

What many times gets lost in this debate is the transitory nature of minimum wage jobs: they're intended for the younger demographic and statistically these people, by and large, don't stay at this pay rate or in these jobs, for an extended period of time.

well then...that makes it perfectly ok.

[deejaydana]

well then...that makes it perfectly ok.

Thanks for adding nothing of merit to this thread. My post is not a call for stating minimum wage is something folks can live on but at least it's an attempt to get dialogue going.

[Bliz]

What many times gets lost in this debate is the transitory nature of minimum wage jobs: they're intended for the younger demographic and statistically these people, by and large, don't stay at this pay rate or in these jobs, for an extended period of time.

$22/hr if full time is a $44,000/yr job. There are plenty of college graduates in professional settings who are making about that much, and okay with it. And it's well above the poverty line. Min wage shouldn't be anywhere near that. I'm less interested in "productivity" (how does one measure the productivity of a fast food worker or something anyway?) or in how much the wages of the 1% have increased, than what it would be if it had simply kept up with inflation.

[AsburySkinsFan]

What many times gets lost in this debate is the transitory nature of minimum wage jobs: they're intended for the younger demographic and statistically these people, by and large, don't stay at this pay rate or in these jobs, for an extended period of time.

Ahhh so all of those people who work at McDonalds at noon throughout the week during the school year are teenagers. I see.

[deejaydana]

Ahhh so all of those people who work at McDonalds at noon throughout the week during the school year are teenagers. I see.

So they should be rewarded for being older then? See, we can play this silly game all day long. Those with wits and some motivation at the very least obtain management positions and make notably more than $7.25 an hour.

[AsburySkinsFan]

So they should be rewarded for being older then? See, we can play this silly game all day long. Those with wits and some motivation at the very least obtain management positions and make notably more than $7.25 an hour.

I am simply pointing out the stupid notion that minimum wage jobs are for teenagers, I hear this all the time and it is always a lie. The Right loves to say that raising the minimum wage produces inflation, while at the same time they ignore that inflation is happening and that today it takes a minimum wage worker more than 30 minutes to buy a gallon of gas, when 15 years ago it only took 15 minutes of work to buy that same gallon. And if you honestly see working at the minimum wage as a reward then you have got something seriously screwed up in your brain.

BTW, if you want to see the single greatest cause for the upward distribution of wealth as illustrated in the video posted a week or so ago....it is right here in this minimum wage discussion.

[rictus58]

Thanks for adding nothing of merit to this thread. My post is not a call for stating minimum wage is something folks can live on but at least it's an attempt to get dialogue going.

Added about as much worthwile substance as the post I responded to. I think you drastically underestimate the number of people who are working for min. wage, and their ability to actually move up professionally.

Tell me, making $7.25/hr....how exactly is one suppossed to better themselves? You certainly cannot afford an education on that kind of pay after all your monthly expenses.

[deejaydana]

Asbury,

I'm not sure why you do these mental gymnastics to believe I view a minimum wage job as a "reward" of any kind. What in any of the posts I've contributed reflects that? Nothing of course. With very little determination, even in this crap economy, a fairly motivated person can obtain a job that pays above the minimum wage. Of course immigrants (those that are in the midst of obtaining English as well as cultural skills) are going to find the path to rising above this pay rate a bit longer slog. I just wish ivory tower people like Warren, who is a blatantly dishonest person, had even a whiff of economic training with all her years spent in academia.

[AsburySkinsFan]

Asbury,

I'm not sure why you do these mental gymnastics to believe I view a minimum wage job as a "reward" of any kind. What in any of the posts I've contributed reflects that? Nothing of course.

Bullcrap. I disproved your absurd notion that minimum wages are for young people, and you responded with the idea that raising the minimum wage because older workers work at that level is a reward and I'm the one who is doing mental gymnastics... Your notion that minimum wage is for young workers is the lie that your entire reward notion is predicated upon. So of course you see raising the minimum wage as a reward. The minimum wage hasn't even kept up with inflation for crying out loud, and yet you want to preach pulling up bootstraps.

With very little determination, even in this crap economy, a fairly motivated person can obtain a job that pays above the minimum wage. [/Quote]

How long has it been since you had to work for minimum wage? You are so disconnected with the realities of that life that you don't even realize how absurd your ideas are.

Of course immigrants (those that are in the midst of obtaining English as well as cultural skills) are going to find the path to rising above this pay rate a bit longer slog. I just wish ivory tower people like Warren, who is a blatantly dishonest person, had even a whiff of economic training with all her years spent in academia.

I trust Warren far more than I trust your opinion or anyone on the Right.

[Lombardi's_kid_brother]

I love Elizabeth Warren. Just absolutely love her. I wish we had 60 of her in the Senate and 300 of her in the House.

[deejaydana]

^^^^^ I feel sorry for anyone who thinks they know somebody on the internet based upon posting about a given issue. We sit at odds on this issue (apparently) but I'm not about to come on here and tell you about your life when I can't possibly know the first thing about it. Maybe a switch to decaf would help you amigo. I'll respect your view even if I don't believe in it. One thing I won't do is get upset about it.

[AsburySkinsFan]

^^^^^ I feel sorry for anyone who thinks they know somebody on the internet based upon posting about a given issue. We sit at odds on this issue (apparently) but I'm not about to come on here and tell you about your life when I can't possibly know the first thing about it. Maybe a switch to decaf would help you amigo. I'll respect your view even if I don't believe in it. One thing I won't do is get upset about it.

Don't feel sorry for me. Feel sorry for the people who need to be rewarded with a wage that keeps up with inflation...and feel sorry for the people who believe who see providing that wage is a reward.

[Jumbo]

You are so disconnected with the realities of that life that you don't even realize how absurd your ideas are.

Asbury, lighten up on the demeaning personal assumptions.

[AsburySkinsFan]

Asbury, lighten up on the demeaning personal assumptions.

Trust me, I've washed my hands of this. So sick of the myth that not being poor has an easy fix.

[Corcaigh]

Using averages doesn't serve well here. Those making minimum wage performing low-skilled jobs are likely not three times more productive than their peers a few decades ago.

What is likely is that the huge gains in the productivity of the workforce overall have been disproportionately enjoyed by those toward the top. And it depends on the type of business, and the culture of the company. In companies where highly skilled people are employed, the wealth is typically shared to a much greater degree than in low-skill industries. By any reasonable comparison, my 21 year old daughter fresh out of college, has a significantly better starting salary than I did because her company recognizes that value skews to the skilled employee. And they don't have as much admin and overhead as was common a few decades ago.

[Jumbo]

Trust me, I've washed my hands of this. So sick of the myth that not being poor has an easy fix.

Myths can suck.

Especially if they're not classical. :pfft:

[Hubbs]

Bullcrap. I disproved your absurd notion that minimum wages are for young people

I'm not entirely sure that you did. What you did is disprove the notion that minimum wages are for minors, or at least minors who aren't old enough to drop out of school. Now, does that mean that the average person flipping burgers is only 18 years old, or 19, or 20? Obviously not, because we can see that's not true. But minimum wages are only one factor in that discussion. (By the way, I'm not saying this because I'm against raising the federal minimum wage. I've wrestled in my head with this particular issue for years, and I'm still not entirely sure how I feel, but I actually tend to lean towards raising it, as much as that might irk people who have a similar libertarian bent. I'm just pointing out that when it comes to economics, it's extremely difficult to make sweeping claims either direction based on one factor alone. I would point out, for example, that based on the limited information we have, there seem to be some strong indicators suggesting that true immigration reform would immediately turn a lot of jobs that we currently consider to pay at or near a minimum wage-level into jobs that pay significantly more than that. I would also point out that not even "flipping burgers" is necessarily an extremely low-paying job. Flipping burgers at a fast food place [the ones that actually have people flipping burgers] might give you the experience to flip burgers at a high-end burger joint that pays enough to let you go to culinary school when you're not at work, which in turn could give you the training to become a sous chef, and yada yada yada. Point is, the fact that all of the factors that affect our economic system have produced a situation in which a lot of "not-young" people are doing the basics at fast food joints doesn't necessarily mean that raising the federal minimum wage is the best way to solve the problem, or even that it would solve the problem at all—and, again, I say this as someone who leans in favor of it.)

I trust Warren far more than I trust your opinion or anyone on the Right.

Well, that seems like a healthy way to keep challenging your own thoughts.

[johnbent]

$22/hr if full time is a $44,000/yr job. There are plenty of college graduates in professional settings who are making about that much, and okay with it. And it's well above the poverty line. Min wage shouldn't be anywhere near that. I'm less interested in "productivity" (how does one measure the productivity of a fast food worker or something anyway?) or in how much the wages of the 1% have increased, than what it would be if it had simply kept up with inflation.

Why shouldn't minimum wage be anywhere near that? Because they didn't go to college? Perhaps college grads should make more. Shouldn't people working fulltime earn a living wage? How would it hurt society for our working poor to be comfortable?

[Kilmer17]

Myths can suck.

Especially if they're not classical. :pfft:

Dionysus would like a word with some of you.

[Forehead]

It sounds nice and all, but I'm not sure how businesses would swallow the extra costs. McDonald's is one thing, they're a giant corporation that's really profitable. But I'm thinking back to some of the jobs I held when I was younger.

Video store employee - I made about $7.25 an hour, but I was a manager. There were maybe six to eight of us at that location, though most of them were making minimum, which I think was $5.50 or so at the time (1999). $7.25/hour is $15,080 a year. $22 an hour is $45,760/year. The owner was a second generation immigrant who worked hard and opened two locations, so I'll conservatively estimate that he had 12 or so employees making near minimum wage. Again, these are estimates, but you're talking about tripling this guys payroll costs, incrementally, by more than $350,000/year by the end of year two.

Translation: One local business closed, 12 kids looking for new jobs. I mean, his business closed years later anyway, I think Netflix probably did him in, but at the time, it's not like he could have raised his movie rental prices to $10/night to make up the costs, he would have been out of business anyway.

Really, I would like to see the minimum wage raised some, but how many small businesses could truly eat those kinds of costs? And how many larger ones would want to, without cutting jobs? How tripling the minimum wage so quickly not cause a bunch of problems?

[Bliz]

Why shouldn't minimum wage be anywhere near that? Because they didn't go to college? Perhaps college grads should make more. Shouldn't people working fulltime earn a living wage? How would it hurt society for our working poor to be comfortable?

It has nothing to do with going to college. I was just illustrating a point about what that salary level is like in current society. The working poor can be "comfortable" on MUCH less than $44,000/yr. And yes, while it would be lovely if everyone was just making more money (except for that inflation issue), we're talking about real life. We can set a minimum wage. We can't just "decide" that everyone will make more money.

It hurts society because as in everything else there is a balance of competing interests. If you set the number too high, you not only run into problems like Forehead described, you also create disincentives that discourage people from pursuing a higher education and a (for lack of a better word) higher or more sophisticated level of employment. Why would you go to college, get a BBA and work in marketing or human resources or whatever for $50,000/yr if you could make $44,000/yr working a register at the grocery store straight out of high school? As a society, we want that minimum wage number to be in the sweet spot, that ideal zone where it's high enough that people working that job can afford the basic necessities, but low enough that they're encouraged to move on to bigger and better things.