Wednesday, September 06, 2006

Cook County asks 5 million residents whether to raise the minimum wage to $7.50

I haven't seen this reported elsewhere (I first heard about it from the Blagojevich campaign), and I think it's very smart politics: the Cook County Board has placed an advisory referendum on the November ballot asking voters if they want to raise the minimum wage from $6.50 to $7.50 an hour.

One of the Democrats' signature issues in 2002 and in the 2003 General Assembly was raising the minimum wage past the federal minimum of $5.15 (that's $10,300.00 annual pre-tax income, and if that's not a poverty-wage, I'm not sure what is) to $6.50 an hour. It has been a triumph for the state and I'm sure has resulted in a large influx of wealth into our state as the extra $2,000 in purchasing power that mininum wage workers enjoy has been multiplied throughout our economy, not to mention the upward pressure on wages it has brought to hundreds of thousands of jobs.

Upward pressure on wages -- what a concept!

It's especially appropriate after Labor Day weekend (and thank you to labor unions for giving me the power to have the day off on Monday -- what a concept it must have been 80 years ago to demand a day off from work to honor labor!) the unending need to shift power to low-income workers both because it's the right thing to do and because it's good for our economy.

I've heard enough about the 'job-killing' minimum wage and I don't buy it. There isn't evidence to support the argument. And if opponents of a decent minimum wage are serious, then they should be for lowering the minimum wage to, say, $1 an hour. Or we can match the Chinese and go to $1 per day. That's the logic. If you oppose raising the minimum wage because it somehow impoverishes the working poor, then you are for lowering the minimum wage, because *that's* really going to bring jobs to those that need them!

It's funny: those who think that paying poor people less will mean they get more money also think that cutting taxes will mean the goverment will get more money too. I wonder if those people apply the concept to their own lives and tell their bosses that they don't want a raise, because they want to make more money. Oh wait: they probably are the bosses.....

I think this is exclusively a practical question. At some point (probably at the lowest 20% of income -- just shy of $10/hour, around the poverty level), there will be fewer jobs created. But there's a lot of wiggle room before that point, and the benefits that come to Illinois workers (and thus, the Illinois economy from all that new income, often paid by out-of-state owners of publicly-traded corporations) outweigh the costs of the relatively few lost jobs.

I don't know what other premise anyone could accept besides a ruthlessly pragmatic assessment to determine their support or opposition to a minimum wage increase. If it's *ideological*, then please. That's empty. The only ideological position that makes any sense is to abolish the minimum wage (and thus, to be for Chinese wages of $1 per day). What's the logical reason to oppose a $7.50 minimum wage and reluctantly support a $5.15 minimum wage? If it's a border question (gas stations and hot dog shops are all going to move to Indiana and Kentucky!) then it's really a pragmatic assessment: how many jobs will Illinois really lose to the poverty-wage states on our borders versus how much more income will flow to Illinois low-income workers?

Since we have no evidence that firmly supports either proposition (and if anyone's got some, I'd like to read it -- applied only that documents actual job losses, theoretical constructs don't count), there's no pragmatic reason to support the lower wage over the higher wage.

Anyway, I think it's a smart issue to draw attention to for the Blagojevich campaign and the Democratic Party, and if I were Judy Baar Topinka, I'd be promising to support a minimum wage increase to $7.50 sooner rather than later. Whoever figured out to ask the County Board to put this on the ballot should get a raise.

5 comments:

Steve Bartin said...

Dan:

This is a subject which all in Cook County should be interested in.According to Census Estimates, since 2000 Cook County is the number county in all of the United States for population loss.Between 2000-2005, Cook County lost 73,000 people.A new Brookings Institute study on the Great Lakes region estimates that the Chicago area lost 109,900 jobs between 2000 and 2005.Few regions of the country can say that.High taxes,regulation,and corruption have made this area one of the worst in the country to do business.Last week the AP reported on a new Census study that said since Bush took office in 2001 only three states in America lost jobs:they were Ohio,Michigan and Illinois.So,Dan,to think Cook County can raise the cost of anything and not pay the price is not being realistic.

AntiLabel said...

Increasing the minimum wage certainly gives those at the low end some additional disposable income, e. g. $5.15 to $6.50, a 23% increase and $6.50 to $7.50 a 14% increase.

However, where do these people spend most of their income? Convenience stores, dollar stores, and fast food restaurants (the places where they work). These businesses raise their prices to help pay for the increased labor cost and it becomes a vicious cycle.

In addition, though the low wage earners do get some increase, the biggest winner is the public sector. With an increase of $5.15 per hour to $6.50 each wage earner pays 318% more federal income tax, while with $6.50 to $7.50 the federal income tax payment increases 56%.

These workers are likely to be the recipients of many public services, but that is a pretty steep price to pay.

Perhaps maximium prices would help more than minimum wages?

WhatTheHelen said...

Steve,

People aren't leaving Cook County because of high taxes and regulation. Corruption, perhaps.

Actually, come to think of it, people like their own corruption. What they don't like is other people's corruption if those other people seem to be getting more return for their dollar or patronage than they are themselves.

People are leaving the rust belt because the manufacturing jobs are being obliviated. Ford Motor is being decimated. GM nearly went bankrupt. We ship all our union and manufacturing jobs overseas without proving enough new industries at home to pick up the slack.

People are leaving the Chicago area because airlines are going down the tubes.

People are leaving because the winters are awful and they'd rather go to warm weather states like Florida, Nevada, or Arizona.

Steve Bartin said...

Helen:

I'm glad you, as a political leader, at least accept the facts that Chicago is losing jobs and population.Let's face it,Chicago is a high cost town.High sales and property taxes leave less money for poor people.Poor people can't afford to pay for overpriced union workers.Not everyone can be in a union.Helen, maybe you could start some council hearings on how why Chicago needs to have such a high sales tax? If Chicago is going to have a bad public school system why not have low property taxes instead of high ones? As far a corruption goes, how does someone like William Hanhardt make it to be Chief of Detectives?

respectful said...

Argument by extension works both ways. Why not raise the minimum wage to $15 plus benefits in big box stores? Twenty bucks would do even more to move service employees out of poverty. If $7.50 is good, $25 would be better, right?