Would a $11.50 minimum wage be fair as a Federal minimum wage? Some experts seem to think income inequality in the United States needs to come to an end…
As previously reported by The Inquisitr, the Washington, D.C. council approved the $11.50 minimum wage for just the city area, although some suggested a $10 minimum wage was a more reasonable middle ground.
The quickly rising cost of living caused by the slow devaluing of the US dollar has slowly squeezed American families to the breaking point. Previously released statistic statistics have shown that the average middle class income and net worth has gone down, not up, since the beginning of the Great Recession.
Some workers have begun to fight back. Recently, some Domino’s workers complained about their low wages and were fired, but the state helped them get their jobs back. And a $11.50 minimum wage is actually considered lowed by some, since fast-food worker strikes are demanding $15 an hour. And it’s not like that idea doesn’t have some support based upon the data. One study claimed McDonald’s could afford to pay $15 an hour to their workers with only a small increase to menu prices. Another Walmart study showed $12.50 hourly was reasonable for their workers.
But the only reason McDonald’s and Walmart could afford this was precisely because of their popularity. Their sales volume is so much higher compared to other fast food and retail chains, which means worker’s salaries are a relatively low percentage of overall sales income. Other companies might not realistically be able to afford such a large increase without largely affecting prices, which would make the increase in the Federal minimum wage self-defeating.
A $10 minimum wage in California is already a reality, and some wonder whether a $10 minimum wage in California could lead to a $9 Federal minimum wage as advocated by President Obama. Multiple states besides California have been proposing a $10 minimum wage that is higher than the Federal minimum wage of $7.25. This summer, Michigan pushed for a $10 minimum wage, and one Michigan restaurant already pays $12 hourly and is still profitable. Illinois already has the fourth highest state minimum wage of $8.25, but Illinois politicians want a $10 minimum in Illinois as well.
But would the $11.50 minimum wage work as a Federal minimum wage, or even be a fair wage based upon economic data? An analysis by economist John Schmitt at the Center for Economic and Policy Research shows that, if the minimum wage is indexed to the official Consumer Price Index (CPI-U), then the Federal minimum wage should be $10.52 an hour. If you use the current methodology (CPI-U-RS) for calculating inflation, then the Federal minimum wage should be $9.22. So, yes, unfortunately on a national level the $11.50 minimum wage is a bit too high.
Still, critics argue even the $10 minimum wage is a “jobs killer,” and claim a higher Federal minimum wage will result in a worsened unemployment rate. Businesses will supposedly respond to the $10 minimum wage by raising prices, cutting hours, and perhaps even cutting some jobs. Workers compensation payments will also go up. They also believe that since businesses are still coming to terms with Obamacare, that this isn’t the best time to implement a large hike in the Federal minimum wage
Some workers have begun to fight back. Recently, some Domino’s workers complained about their low wages and were fired, but the state helped them get their jobs back. And a $11.50 minimum wage is actually considered lowed by some, since fast-food worker strikes are demanding $15 an hour. And it’s not like that idea doesn’t have some support based upon the data. One study claimed McDonald’s could afford to pay $15 an hour to their workers with only a small increase to menu prices. Another Walmart study showed $12.50 hourly was reasonable for their workers.
But the only reason McDonald’s and Walmart could afford this was precisely because of their popularity. Their sales volume is so much higher compared to other fast food and retail chains, which means worker’s salaries are a relatively low percentage of overall sales income. Other companies might not realistically be able to afford such a large increase without largely affecting prices, which would make the increase in the Federal minimum wage self-defeating.
A $10 minimum wage in California is already a reality, and some wonder whether a $10 minimum wage in California could lead to a $9 Federal minimum wage as advocated by President Obama. Multiple states besides California have been proposing a $10 minimum wage that is higher than the Federal minimum wage of $7.25. This summer, Michigan pushed for a $10 minimum wage, and one Michigan restaurant already pays $12 hourly and is still profitable. Illinois already has the fourth highest state minimum wage of $8.25, but Illinois politicians want a $10 minimum in Illinois as well.
But would the $11.50 minimum wage work as a Federal minimum wage, or even be a fair wage based upon economic data? An analysis by economist John Schmitt at the Center for Economic and Policy Research shows that, if the minimum wage is indexed to the official Consumer Price Index (CPI-U), then the Federal minimum wage should be $10.52 an hour. If you use the current methodology (CPI-U-RS) for calculating inflation, then the Federal minimum wage should be $9.22. So, yes, unfortunately on a national level the $11.50 minimum wage is a bit too high.
Still, critics argue even the $10 minimum wage is a “jobs killer,” and claim a higher Federal minimum wage will result in a worsened unemployment rate. Businesses will supposedly respond to the $10 minimum wage by raising prices, cutting hours, and perhaps even cutting some jobs. Workers compensation payments will also go up. They also believe that since businesses are still coming to terms with Obamacare, that this isn’t the best time to implement a large hike in the Federal minimum wage
No comments:
Post a Comment