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Sen. Brown Stumps for ‘Fair Minimum Wage Bill’
BOARDMAN, Ohio -- U.S. Sen. Sherrod Brown, D-Ohio, is seeking popular support for his bill to raise the national minimum wage in three steps to $10.10 an hour from $7.25. His bill, the Fair Minimum Wage Act, calls for a minimum wage of $8.20 an hour this year, $9.15 next year and $10.10 in 2015.
With the Yankee Kitchen as a backdrop and the endorsement of restaurant owners Phil and Elias Raptis and a waitress of 18 years, Vicki Walter, Brown met with reporters Monday morning to present the case for an increase in the minimum wage.
Also present to support Brown were two small-business owners in Boardman. One, Larry McBride, owner of Boardman Cleaning Service, says he has more than 100 customers and the starting wage for his five employees is $10 an hour
The senator’s measure has drawn the support of a dozen of Brown’s colleagues, he said. Even should the Senate, controlled by the Democratic Party, pass Brown’s proposal, it would still need passage in the House of Representatives, controlled by the Republicans.
The senator said it’s not farfetched for the House to pass an increase in the minimum wage -- it would be the first in six years -- noting that President George W. Bush, a Republican, in 2007 signed the measure to set the minimum at $7.25 when it reached his desk with bipartisan support.
If the minimum wage had kept pace with inflation since 2007, Brown said, it would stand in the neighborhood of $10.10 today.
He is advocating passage, the senator said, because 1.3 million Ohioans would benefit. At $7.25 an hour, a full-time worker would gross just more than $15,000 a year, well below the poverty line. Even at $10.10, a full-time worker would gross just above $21,000, still below the U.S. poverty line for a family of four.
Should President Obama sign the Brown bill, the senator asserted it would add 140,000 jobs to the national economy and more than $30 billion to the gross domestic product -- “the economy” -- of $14 trillion. That’s just more than 0.2% the GDP would grow in his scenario should his measure pass.
Brown and his staff lacked data or statistics on how many Americans hold full-time minimum wage jobs. Of those paid minimum wage, “80% are adults,” he responded, and stated that many paid minimum wage hold two such jobs.
The Economic Policy Institute, a source of much of Brown’s economic projections, sees passage as resulting in 30 million Americans affected over the next three years, being paid $51 billion more than they are today. GDP would increase by $32.6 billion (Even in a $14 trillion economy, that’s only 0.233%.) David Cooper and Doug Hall say 55% of those affected would be women and that 88% of the workers affected would be 20 year old and older. Roughly 44% have some college education.
The policy institute breaks down by state those who would benefit. Of the Ohio workforce of 4.86 million in 2015, 943,000 would be directly affected by the increase and 327,000 indirectly affected. Indirectly means a member of the family is paid minimum wage or that one of the jobs of the breadwinner pays minimum wage.
Of those 20 and older in the state workforce of 4.65 million in 2015, 784,000 would be directly affected and 207,000 indirectly.
Of those younger than 20, 214,000 would be affected, 159,000 directly and 21,000 indirectly.
And 23.2% of children in the state would be affected by a parent or parents benefiting from a higher minimum wage, directly or indirectly.
Brown dismissed suggestions that employers would be reluctant to hire or add to their workforces because of the increase in their labor costs. And he was equally dismissive that teenagers without a job would have a tougher time finding work.
Many economists see minimum wage laws as having minimal effect on the economy and hurting unskilled workers and those with few skills. Among them, George Stigler, who won the Nobel Memorial Prize for Economics in 1982.
Stigler sees minimum wage laws as hurting those they are meant to help. If minimum wages are high enough to be effective, he wrote, “It increases unemployment, particularly among workers with low skills, productivity or the handicapped, thereby harming less-skilled workers and possibly excluding some workers from the labor market. [Minimum wage laws] may be more costly and less effective than other methods of reducing poverty.”
Stigler offered four reasons:
- “Employment may fall more in proportion to raises, thereby reducing overall earnings.”
- Minimum wage laws exempt some sectors of the economy and partially exempt some occupations, such as servers, whose members rely on tips for a major part of their income. Those who work in exempt sectors or partially exempt occupations may seek employment where minimum wage laws govern all of their pay and increase the compensation employers pay.
- Minimum wage laws can affect family income distribution. Adults will have fewer but better jobs while teenagers can’t find work.
- Last, when the government forbids employers to pay below minimum wage, it is simultaneously forbidding workers to sell their labor for less than minimum wage and it’s not economical for an employer to pay more than a job is worth.
Copyright 2013 The Business Journal, Youngstown, Ohio.
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