Rep. Vern Tincher announced plans of the state Democratic party to introduce legislation to raise the minimum wage from $5.15 to $7.25 over two years. Since the federal government hasn’t amended the federal law, Indiana Democrats intend to do it at the state level.
According to Rep. Troy “I’ll Never Vote For It” Woodruff:
A minimum wage is not going to help a family of four that are struggling to get by. We can give them a little more money in their pocket, but the reality is most businesses are already paying around $7.00 an hour.
. . .
“To be quite honest, it just wouldn`t have an impact on the economy one way or the other. I`m more concerned about finding real jobs that pay real living wages, not minumum wages.”
Tincher somewhat agrees, but says inflation alone warrants an increase.
“I think we need a reasonable minimum wage. $5.15 an hour generates just over $10,000 a year for a worker and no one can survive on $10,000 a year.”
But anyone making minimum wage will have to survive. At least until the Statehouse can re-consider.
On a professional level, I think the wage increase would help my collections business a bit – – at least so long as the feds don’t increase their minimum wage requirements. I do a lot of collections and, as such, have a lot of clients with judgments against people who don’t make very much money. The garnishment statute says that you can’t garnish wages that are below 30 times the federal minimum wage per week. So, at $5.15, that means anything below $154.50. So, legislation that helps get those folks above $154.50 per week without raising the floor of garnishable wages is likely to help pay those judgment debts a bit faster.
On a personal level, I think the $154.50 per week floor is ridiculously low. If you’re making $200 per week, you are subject to garnisment of $46.50 per week ($232.50 per month) and expected to live on the rest. Good luck with that.
Still, I’d be interested to know how many workers are making less than $7 per hour.
I’m starting to buy in to the Librtarian idea of not leaning on minimum wage so much.
The idea that a business will just increase the prices for everything to make up for the increase says that everyone, including those that minimum wage was intended to help, will pay more and their paycheck will be “worth” less.
It just seems to me a way of making some lawmakers look good. Then, when busineses increase the cost of goods to make up for the wage increase, they are the “Evil Corporations”.
Well, whatever the mechanism is, you’ve gotta get American buying power up. Earning power has been basically stagnant for the past 30 years even while productivity has increased significantly.
The arguments for a minimum wage are essentially arguments for welfare, and there is certainly a case that a humane society takes care of all its members. But at no time in the minimum wage debate do I see the suggestion that all labor is worth at least whatever the minimum wage is set at. The welfare of our neighbors is the responsibility of all of us, not just (or even primarily) “business”. I would favor no minimum wage but only if coupled with a negative income tax to assure that everyone has a living income and to maximize employment levels.
I suppose a considerable quatity of electrons (and photons) could be pushed across the ether delving into boosting American buying power. In the short run I suppose we can thank the Chinese for their seemingly unlimited willingness to buy US government bonds, thus keeping interest rates here low, which props up the prices of our houses, which we can borrow against and thereby keep buying. Our buying power stands to take a much bigger whack from deficit spending and the eventual partial collapse of our currency than anything the minimum wage could possibly address.
Unlike some I have never felt that the deficit was fully dealt with during the supposed golden years of the Clinton presidency/Gingrich Congress (though the spending is much more out of control now). The public surplus of the late nineties would never have been achieved without the stock market bubble. The private deficit grew worse.
Our “buying power” may in stagnating in substantial part under the weight of decades of heavy military spending and living beyond our means encouraged by Keynsian based demand side economic management.
My formal study of economics consists entirely of a 9 week class in high school, so there might be something very fundamental I’m missing. But, it seems like if we are able to produce more, we should be able to buy more (without going into debt to do it). But, that’s not the case. Since the 70s wages have been basically stagnant. What gives? And, is there a mechanism by which we can help workers realize the benefits of the gains in productivity?
(Note: I realize I’m straying afield from the minimum wage issue to a large extent.)
I love economics.
For me the minimum wage is an economics question, not a Social Engineering issue.
I think employers should have the ability to set their own wages. It is NOT the business of government to do it for them.
Few people make minimum wage today. Tha vast majority of the people making minimum wage are kids in high school who are working jobs that require few, if any, skills.
I am against raising the minimum wage.
That being said, I do think that States (like Indiana) should be able to raise the minimum wage if they feel it is necessary. I do NOT feel The Federal Government should ever have a minimum wage.
Mike Sylvester
Fort Wayne Libertarian
Mike Sylvester,
You have an interesting viewpoint; I have a couple of questions.
1) Why is having one level of State power imposing a minimum wage preferable to another level of State power? As I see it, the State is the State, and raising the minimum wage constitutes interference in the labor market regardless of what jurisdiction the State claims for itself.
2) If Indiana raising the minimum wage is acceptable and the Federal government doing the same is not, does that mean that you are opposed to the existence of a minimum wage in U.S. territories administered (more) directly by the Federal government? Examples include the District of Columbia, Puerto Rico, and the Northern Marianas.
To me, your premises sound laissez-faire capitalist, but your conclusions seem more consistent with anti-federalism. I do not quite see how you are getting from A to B; maybe you can help me out.
The States, as a legal matter, are free to regulate their economies unless Congress, acting under the Commerce Clause, has occupied the field. Ideologically a strong advocate of (a weak) federal system could consistently argue that the federal government ought to tolerate wide open capitalism in Texas at the same time it tolerated state socialism in New York. My impression of the Libertarian Party in this country is that it tends to take a strong “States’ Rights” stance and could consistently advocate pushing complete responsibility for minimum wage legislation at the State level on the theory that competition between the States would tend to result in minimum wage laws breaking down.
Paul,
That’s an intelligible stance, and consistent with the U.S. Constitution as I understand it, but it hardly seems consistent with anarcho-capitalist theory, which gives the LP much of intellectual lifeblood — at least as I understand the origins of the Party.
I think your impression is sound from an economic point of view — as long as labor markets are less fluid than capital markets, labor costs will race to the bottom.
However, if this is correct, and if it is the understanding of the Libertarian Party as well, I don’t understand why any LP libertarian would ever advocate a minimum wage law (or increase thereof) at any level of government.
If a minimum wage increase at the state level is desirable to an LP libertarian as a practical matter, perhaps as a short-term “band-aid” for amelioration of some more objectionable problem, then I’d like to hear what those problems are, how the minimum wage increase is supposed to solve them, and why it’s reasonable to expect them to go away before the distorting effects of the minimum wage increase either collapse of their own accord, or are repealed because the state is perceived as an unfriendly environment for business. (As you note, competitive pressures between the states should cause firms with a presence in multiple states to prefer states with lower labor costs.)
Mike Sylvester,
See above…care to enlighten me? :)