All Gov – by Noel BrinkerhoffIf President Barack Obama can convince Congress (particularly Republicans) to support his proposed increase in the minimum wage, the effects will be substantial.
It is estimated that nearly 25 million Americans earn less than $10.10 an hour at their jobs. Obama is urging Congress to raise the federal minimum wage to that rate, from its current $7.25, by 2016.
Those who would experience the biggest bumps in their paychecks would be the 3.5 million workers who make $7.25 an hour or less (federal law allows tipped employees to be paid less than $7.25).
But while a nearly $3 per hour increase might seem like a lot of money, the increase would still leave many Americans struggling to get out of poverty. For instance, a single mother with two children earning $9 an hour at a full-time job makes only $18,720, which puts her below the poverty line.
The Center for Economic Policy Research estimates that more than half of all workers making $9 or less an hour are 25 or older. At one time it was assumed that most earning that little were teenagers, but no more. Today, only 17% of them are under 20, compared to 28% in 2000.
“Minimum-wage and low-wage workers are older and more educated than 10 or 20 years ago, yet they’re making wages below where they were 10 or 20 years ago after inflation,” John Schmitt, senior economist at the research center, told The New York Times. “If you look back several decades, workers near the minimum wage were more likely to be teenagers—that’s the stereotype people had. It’s definitely not accurate anymore.”
Opponents of Obama’s plan jumped on an analysis released by the Congressional Budget Office (CBO), which concluded that raising the minimum wage to $10.10 could result in half a million job losses.
The CBO also said in its report that “as with any such estimates, however, the actual losses could be smaller or larger; in CBO’s assessment, there is about a two-thirds chance that the effect would be in the range between a very slight reduction in employment and a reduction in employment of one million workers.”
Some economists said it’s unlikely there would be any job losses, citing problems with the CBO’s methodology, and many said the improved financial condition of those who receive raises would pump enough money back into the economy as a whole to outweigh any job losses.
-Noel Brinkerhoff
Just think of the extra money that people will be paying when/if the minimum wage does go up.
With the extra taxes the politicions could afford to give themselves their raises along with their nice vacations – like the one that michelle is going on with her kids and mother to china – they always seem to think they deserve.
Yea just think about all the money that they will get with the extra tax dollars that will be paid. Isn`t it something like 30% – or a $3.00 increase in minimum wage would be a $1.00 increase in taxes paid out by the minimum wage earner. That would amount to a good chunk on money for the govt. to use as they see fit – like their vacations and fancy WH parties like they have thrown in the past many times over.