U.S. Minimum Wage Goes Up to $5.85

RedGlitter · Post by **RedGlitter** » Sat Jul 21, 2007 2:14 pm

Updated: 57 minutes ago

WASHINGTON - Fast-food waitress Fawn Townsend of Raleigh, N.C., knows exactly what she is going to do if her salary goes up with Tuesday’s increase in the federal minimum wage: start saving for a car so she can find a second job to make ends meet.

“My goal personally is to get a vehicle so I can independently go back and forth to work and maybe pick up extra work so I can have that extra income, because minimum wage is not cutting it,” said Townsend, who is 24 and single.

“Being a single person, you can’t pay all your bills with one minimum wage job.”

Many lawmakers, along with advocates for low-wage workers, are celebrating the first increase in the federal minimum wage in a decade. Yet many acknowledge that raising it from $5.15 an hour to $5.85 will provide only meager help for some of the lowest paid workers.About 1.7 million people made $5.15 or less in 2006, according to the Labor Department’s Bureau of Labor Statistics.

“The reality for a minimum wage worker is that every penny makes a difference because low-wage workers make the choice between putting food on the table and paying for electricity or buying clothes for their children,” said Beth Shulman, former vice president of the United Food and Commercial Workers Union.

“Saying that, it’s clear going up to $5.85 is not enough to really make sure that people really can afford the things that all families need,” said Shulman, author of “The Betrayal of Work: How Low-Wage Jobs Fail 30 Million Americans.”

Wage boost

Minimum wage workers will get an additional 70-cent boost each summer for the next two years, ending in 2009 at $7.25 an hour. That comes to just above $15,000 yearly before taxes for a 52-week work year.

Now, someone in such a job and earning $5.85 an hour would bring home $12,168 a year before taxes. The federal poverty level for singles is $10,210, couples is $13,690 and $17,170 for families of three.

House votes to increase minimum wage

“In the wealthiest country in the history of the world, it is an outrage that anyone who works full time would still wind up in poverty,” said Rep. George Miller, D-Calif., chairman of the House Education and Labor Committee. “Everyone who puts in an honest day’s work should receive a fair day’s pay.”

Poverty and the minimum wage are becoming a major issue in the Democratic presidential race. John Edwards and Barack Obama are emphasizing raising the minimum wage during their tours of impoverished areas.

Edwards, who said he wants to eliminate poverty within a generation, favors raising the minimum wage to $9.50. Obama is advocating a “living wage” that would go up as inflation rises and he has promised to eliminate the phrase “working poor.”

'A long overdue step'

More than two dozen states and the District of Columbia already have minimum wages higher than the federal one. Even in those states, an increase in the federal minimum wage probably will have a ripple effect, increasing the salaries of Townsend and others.North Carolina raised its minimum wage from $5.15 to $6.15 in January.

“It’s a long overdue first step,” said Cindia Cameron, the national organizing director of 9to5, the National Association of Working Women. Minimum wage workers typically are young, single and female and are often black or Hispanic.

Even then when the full increase is enacted, minimum wage workers will be just scraping by. “It’s not enough money to meet your basic needs, I’m talking about your rent, your gas, and gas to get back and forth to work,” said Sonya Murphy, head organizer of the Mississippi Association of Community Organizations for Reform Now, or ACORN.But at the same time, employers who pay many of these low-wage workers say increasing the minimum wage only means they have to raise the prices of the products, cut back on employees’ hours or let some workers go.

“When you go into the grocery story now, you may be checking your own groceries, you may be bagging your own groceries,” said Jill Jenkins, chief economist for the Employment Policies Institute. “All of these things are because of mandated wage hikes. When you have to pay more, employers begin to find other options to keep costs down.”

Industry woes

According to the National Restaurant Association, the last minimum wage increase cost the restaurant industry more than 146,000 jobs and restaurant owners put off plans to hire an additional 106,000 employees.

At $7.25 an hour, the most likely response from restaurants will be “increases in menu prices, elimination of some positions and reduction of staff hours to try and offset some of the increased labor costs,” said Brendan Flanagan, the association’s vice president of federal relations.

Others say the effect on the economy will be negligible.

A PNC Economic Outlook survey done in April showed three out of four small- and middle-market business owners said raising the minimum wage would have little or no impact on their businesses. “In a tighter labor market, they already raised wages to be competitive,” said Stuart Hoffman, chief economist for PNC Financial Services Group.

Chookie · Post by **Chookie** » Sat Jul 21, 2007 2:42 pm

The minimum wage in the UK is stuctured on the basis of age, as follows (from IR documents issued last year):-

* £5.35 ($11.00) per hour for workers aged 22 years and older

* A development rate of £4.45 ($9.15) per hour for workers aged 18-21 inclusive

* £3.30 ($6.79) per hour for all workers under the age of 18, who are no longer of compulsory school age.

Paying as little as £5.85 (£2.85), is unconsionable.

RedGlitter · Post by **RedGlitter** » Sat Jul 21, 2007 2:46 pm

I had no idea they paid according to age!

Why is this and do you agree with it?

Thanks for the info, Chookie.

Chookie · Post by **Chookie** » Sat Jul 21, 2007 2:57 pm

I think the fact that employers in the US can pay less than "minimum wage" contributes greatly to absolute poverty I saw in both rural (Louisiana) and urban (Chicago) localities.

I know that poverty is supposed to be relative but I have to say, right now, I've seen poverty in Bangladesh, Africa and Scotland, but I'd never seen anything to compare what I've seen in the States.

I do agree with the age discrimination in this case, purely because of the lack of experience which comes with being young.

RedGlitter · Post by **RedGlitter** » Sat Jul 21, 2007 5:21 pm

Chookie;665005 wrote:

I know that poverty is supposed to be relative but I have to say, right now, I've seen poverty in Bangladesh, Africa and Scotland, but I'd never seen anything to compare what I've seen in the States.

This blows me away. I haven't had opportunity to see other countries except for Mexico and so I only know what I see on TV, read about or hear about from others who have traveled. That you've found U.S. poverty worse than "third world" countries amazes (and upsets) me. Yet we're *supposed* to be the "richest" nation. Hmph.

KB. · Post by **KB.** » Sat Jul 21, 2007 7:49 pm

They can only "legally" avoid paying the minimum wage if other forms of compensation are available i. e. tips and commission. Best job I have ever had didn't pay me one red cent per hour, yet I made an easy 6 figures doing it. I have worked this bullshit hourly wage type job for too long, and can not wait to be rid of the yoke of it. I would rather starve and get paid for what I actually do, in which case I would never starve, than to be underpaid with an hourly wage. Screw a hourly wage, or a salary. I can not wait to get back to a commissioned job.

RedGlitter · Post by **RedGlitter** » Sat Jul 21, 2007 7:56 pm

I worked on commission too for a few years and maybe I was wimpy but I went back to the security of a weekly paycheck. The commission was great when my sales would hold but it was the not knowing, the insecurity of it that lured me back to the 9 to 5.

Accountable · Post by **Accountable** » Sat Jul 21, 2007 7:59 pm

That's the spirit KB!!

Chookie, I'm from rural Louisiana & don't know what you're talking about. Where did you visit?

Richard Bell · Post by **Richard Bell** » Sat Jul 21, 2007 8:00 pm

The minimum wage in Ontario is currently CAN$8.00/hr. (US$7.64).

It's supposed to be $10.00 within a couple years, assuming the atavistic Conservative SOBs don't regain power. Those b@stards kept it at $6.85 for eight years, refusing to raise it one cent.

Meanwhile, the Ontario Legislature voted themselves a pay increase from $88,771 per annum to $110,775, a 25% raise. :-5

Accountable · Post by **Accountable** » Sat Jul 21, 2007 8:06 pm

Basic question: What is the purpose of the minimum wage?

Nomad · Post by **Nomad** » Sun Jul 22, 2007 9:26 am

Accountable;665147 wrote: Basic question: What is the purpose of the minimum wage?

KB. · Post by **KB.** » Sun Jul 22, 2007 9:32 am

It's purpose is to protect vulnerable low wage workers from exploitation; that was its intended purpose anyway.

Chookie · Post by **Chookie** » Sun Jul 22, 2007 1:37 pm

Accountable, I was in a Evangeline Parish for a while - work related.

This bit I pinched from Wiki, so it may not be all that accurate, but it chills me:-

Poverty in the United States of people whose annual family income is less than a "poverty line" set by the U.S. government. Poverty is a condition in which a person or community is deprived of or lacks the essentials for a minimum standard of well being and life. An absolute poverty measure was developed in the mid 1960s as part of President Lyndon B. Johnson's War on poverty. Based on this measure, the poverty line is set at approximately three times the annual cost of a nutritionally adequate diet. It varies by family size and is updated yearly to reflect changes in the consumer price index.[2][3]

Currently roughly 13% of the US population fall below the federal poverty threshold. There is however some controversy regarding the federal poverty line, arguing that it either understates or overstates the problem of poverty. The poverty rate in the United States is one of the highest among the post-industrialized developed world.[4] It should be noted that poverty rates only provide a snap-shot of the percentage of persons who are currently poor. Poverty in the U.S. is cyclical in nature, with individuals rising above and falling below the poverty threshold from time to time; as a result, far more than 13% of the population fall below the poverty line at some point over a given period of years

Accountable · Post by **Accountable** » Sun Jul 22, 2007 2:35 pm

Chookie;665667 wrote: Accountable, I was in a Evangeline Parish for a while - work related.

This bit I pinched from Wiki, so it may not be all that accurate, but it chills me:-
Sorry, I don't know your frame of reference, so I can't relate to your chills.

I've lived below or near this arbitrary poverty line all my life, but I've never felt poor except when the rare well-to-do comes around to look on with pity, say "poor you", then go home to God only knows what wasteful oppulence.

BTS · Post by **BTS** » Sun Jul 22, 2007 3:30 pm

Chookie;665005 wrote: I know that poverty is supposed to be relative but I have to say, right now, I've seen poverty in Bangladesh, Africa and Scotland, but I'd never seen anything to compare what I've seen in the States.

QUOTE:

AccountableThat's the spirit KB!!

Chookie, I'm from rural Louisiana & don't know what you're talking about. Where did you visit?

Your Reply

Quote:

Poverty in the United States of people whose annual family income is less than a "poverty line" set by the U.S. government. Poverty is a condition in which a person or community is deprived of or lacks the essentials for a minimum standard of well being and life. An absolute poverty measure was developed in the mid 1960s as part of President Lyndon B. Johnson's War on poverty. Based on this measure, the poverty line is set at approximately three times the annual cost of a nutritionally adequate diet. It varies by family size and is updated yearly to reflect changes in the consumer price index.[2][3]

Currently roughly 13% of the US population fall below the federal poverty threshold. There is however some controversy regarding the federal poverty line, arguing that it either understates or overstates the problem of poverty. The poverty rate in the United States is one of the highest among the post-industrialized developed world.[4] It should be noted that poverty rates only provide a snap-shot of the percentage of persons who are currently poor. Poverty in the U.S. is cyclical in nature, with individuals rising above and falling below the poverty threshold from time to time; as a result, far more than 13% of the population fall below the poverty line at some point over a given period of years

I have to call BS here.

You state that poverty is worse in 3 other countries than it is in the USA.

And where you saw it with your own eyes............ Then you cite a lame wiki article............

Tell us ALL what you saw not what someone else SAYS you thought you saw....

Did it look like this?

315 million people – one in two of people in Sub Saharan Africa survive on less than one dollar per day.

184 million people – 33% of the African population – suffer from malnutrition

Less than 50% of Africa’s population has access to hospitals or doctors

Is this what you saw out by Chicago?

RedGlitter · Post by **RedGlitter** » Sun Jul 22, 2007 3:45 pm

Nomad;665480 wrote:

EXACTLY.

This petty pay increase is not going to help people scrabble off the poverty line. It doesn't offset the cost of living. So what's it really about then?