US Minimum Wage Hikes - Helping Or Hurting Workers?

 @angeloyoung_a.young@ibtimes.com
on June 12 2012 4:07 PM

The debate over minimum wages -- does raising the minimum wage put more money in workers' pockets or just leave more of them jobless? -- is heating up at the state and federal level.

Rep. George Miller, the top Democrat on the House Education and Workforce Committee, is preparing legislation that would gradually increase the current $7.25 an hour federal minimum wage, which has been in effect since 2009, a more moderate approach to the one offered by Rep. Jesse Jackson, Jr., (D-Ill.) asking for an immediate federal increase to $10 an hour.

We can't say when the legislation will come out. We're currently seeking co-sponsors for the bill, Aaron Albright, a representative for Miller's office, said Tuesday.

Meanwhile, New York, New Jersey and Missouri are considering legislation that would have them join the 18 states that currently require minimum wages above the federal mandate, ranging from $7.40 an hour in Michigan to $9.04 in Washington. Three states --  Connecticut, Illinois and Massachusetts -- are considering increasing their minimum wage rates that are already higher than the federal mandate.  

Advocates for increasing minimum wages say it helps the country's most vulnerable workers, prevents employee turnaround and puts more money in the pockets of people who spend all of their income on the cost of living.

Those that oppose wage increases argue that higher payroll costs harms the employment rate, does nothing to lower poverty and disproportionately punishes small businesses with high overhead costs and lower profit margins.

Some cities and municipalities, too, offer alternative rates that are higher than their statewide minimum, most notably Santa Fe, with the nation's highest minimum wage of $10.29 an hour.

The debate has drawn the usual lines, pitting those who link raising wages to poverty reduction and those who say freezing wages prevents job losses.

The lynchpin of the argument is that raising the wage elevates people out of poverty. But the conclusion -- based on a lot of research by economists -- is that people who benefit the most from the minimum-wage increase are young adults in families that are above poverty, said Michael Saltsman, research fellow at the Employment Policies Institute in Washington, D.C. We support targeting low-income families with the Earned Income Tax Credit instead of an employer wage mandate.

But Tsedeye Gebreselassie, staff attorney for the National Employment Law Project in New York, said the current legislation in New York to establish an $8.50 an hour statewide minimum wage would benefit more than young people still living at home.

The vast majority of people who would benefit from a minimum wage increase are adults. In New York, for example, 84 percent of people who would be directly affected by the proposed legislation to raise the minimum wage to $8.50 are over the age of 20, she said. And as our economy continues its shift toward low-wage jobs -- with the job growth since the recession being disproportionately driven by low-wage jobs like home health care, child care and retail -- we need a strong wage floor to make sure the workers and their families that are relying on these jobs more than ever can support themselves.

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