Topic: Minimum wage boost first in 10 years
Wage will rise in three steps, from $5.15 to $7.25 an hour, but advocates and critics still disagree on the benefits to low-wage workers.
NEW YORK (CNNMoney.com) -- The first minimum wage increase in 10 years takes effect Tuesday, to $5.85 from $5.15 an hour, with two more steps over the next two years taking base pay for millions of workers to $7.25.
But the increase in the federal minimum wage - signed into law in May after a lengthy battle between Democrats in Congress and President Bush and Senate Republicans - still sparks heated debate.
The Fair Minimum Wage Act of 2007 raises the wage in the 18 states that haven't already boosted their minimum wage. The District of Columbia has also raised its minimum wage.
About 13 million workers, or 10 percent of the nation's work force, will benefit from an increase in the minimum wage, the labor-backed Economic Policy Institute said. Of those 13 million, 5.6 million would be directly affected, while 7.4 million low-wage workers will see the spillover effect on their wages.
Wage-hike advocates hailed the increase.
"Yes, I'm glad it's back up, but it's too late now for all sorts of working poor who couldn't pay the rent, or had to cut back groceries for the kids," said author and labor advocate Thomas Geoghegan. "It's a disgrace that we let the minimum wage drop, in real terms, for so long."
The EPI's Liana Fox conceded that the increase doesn't affect 90 percent of the nation's workers but said it was important because the minimum wage is at a 52-year low when adjusted for inflation.
"It's a basic wage floor," said Fox, who noted that other costs have risen since the federal wage was last increased in 1997. The minimum wage was first enacted in 1938.
Steven Davis, of the Chicago School of Business, who is also a visiting scholar at the right-leaning American Enterprise Institute, said increases in the minimum wage can cause employers to respond by looking to reduce labor costs.
"If you subsidize employers to use low-skill workers, they'll seek to use more," he said.
Davis suggests reducing the payroll tax on earnings for both workers and employers.
The "biggest tax paid by low-wage workers is payroll tax not income," said Davis, who noted that the Earned Income Tax Credit is designed to level the playing field for low-wage workers.
"I view that program as a better way of achieving the goal" of easing the burden on low-wage workers.
Fox, however, said the increase in the minimum wage was necessary. "We know there are situations where the free market failed and the low-wage labor market is one of those situations," she said.
"You may be able to get someone to work for 10 cents an hour, but we've decided as a society that that's not a desirable situation," she said.
Geoghegan is more blunt: A raised minimum wage "means, if people live better, there is less disorder and public-squalor blowback. Instead with the drop [in low-end wages], we had a very slow motion Katrina type disaster, a wreckage that the media can't video so we can see it."
As somebody who's made minimum wage at all the waitressing gigs I've had over the years this is interesting to me.
Something that always puzzled me however, and I'm looking for anybody who might have the answer why, is how come the state of Florida was paying wait staff only $2.10 an hour when I worked there back in 2002??! If the Federal minimum was/is $5.15, how were they allowed to pay people 2 bucks an hour?? It was SHOCKING to me when I arrived in Florida and landed a waitressing gig only to be told that the minimum is $2.10. If it has something to do with being a server and making tips, then I'm confused because back in California as a waitress I made $5.15 an hour, plus tips, in 1997.
The weird part was I didn't get angry about it all back then. But just reading this article tonight really pissed me off about how low the minimum wage rates have been for so long, how the hell they expected people to live on that.
I'll leave off with an amusing anecdote about my waitressing gig in Florida...
So there we were, me and about four or five others servers at 11 a.m. at this particular restaurant attached to a hotel on the A1A. The place is dead, nothing happening, so the GM named Jeff has everybody running around in the meantime, cleaning up the kitchen, stocking up on all the dishes, stocking up the deserts and salad bar, making silverware roll up things where you wrap the fork and knife in a paper napkin and then use this sticker thing with the restaurant name and logo to seal it, etc. Etc. Everybody bustling about, to and fro, cleaning and stocking like this for an hour. Not Jeff though, of course. He was hiding somewhere, maybe in the back office, I don't know. And the place looked great too, it's amazing what five or six people can do when there's no tables interrupting. At 12 p.m. Jeff comes into the kitchen and announces, well, it's dead. Okay, time to cut the floor! And he sends everybody home save for two people. (I was one of the ones he kept on.)
Everybody's casual and mellow, wiping their hands, taking off their aprons, getting ready to leave, totally understanding of the situation. These things happen you know. Sometimes it's just dead like that.
Meanwhile I look around at everybody getting ready to leave, like, "WAIT A MINUTE!!! WTF?!?!" And I protest to everybody....
"Hey! Do you realize what just happened here?!?"
They look at me, puzzled. Apparently not. So I explain.
"Jeff just brought all of you in here and had you running around for an hour cleaning his kitchen for him.....for $2.10!!!! And now he's sending you home!"
Looks of "heeeeeyyyyy....wait a minute...." dawned on their faces. None of them had even seen it that way. And a few got mad! As they rightly should have been. Not that they said anything to Jeff about it, most wouldn't out of fear of losing their job (a total bunk job that's not worth it) but I at least felt better that they finally realized how they'd - knowingly - been exploited. For a total of $2.10.
At the time I wasn't pissed about it, only because I was one of two that Jeff kept on the floor so I did go on to make some tips later in the afternoon, but had I been one of the ones that was cut, I probably would have been very aggravated. I ended up quitting within a month anyway once tourist season died and moved on to an office gig where everybody was underpaid and exploited by three Canadian pod people. But that's another story. ![]()
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"I get by with a little help from my (higher density) friends."
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