Friday, July 25, 2008

me and Hill on the minimum wage

From Daniel Suddeath in the Jeff/NA News-Tribune...

For more on the minimum wage, check out our website...

For better or worse, the minimum wage rate will increase from $5.85 to $6.55 an hour in Indiana beginning Thursday.

Proponents of the wage jump say it will help working families, while those opposed believe it will put a greater strain on employers, possibly leading to cutbacks in the work force.

Congress approved the first minimum wage increase in a decade in 2007, as part of the Fair Minimum Wage Act, which boosts the minimum pay for workers from $5.15 to $7.25 an hour over two years across the nation.

“I am proud to be part of a Congress that has raised the minimum wage to benefit our hard-working families in Southern Indiana and throughout the nation,” stated Indiana’s 9th District Congressman Baron Hill in a news release.

“This increase will help nearly 13 million Americans and 354,000 Hoosiers.”...

Morton Marcus, an independent economist formerly with the Indiana University School of Business, said it’s too early to tell what the impact of raising the minimum wage will be.

“It’s the kind of thing that people like to speculate about,” he said. “Overall, the effects are going to be very minor....A lot of this stuff is just talk by people who have for years wanted to get rid of the minimum wage and the other side who say we ought to raise it,” he said.

Eric Schansberg, the Libertarian candidate for Indiana’s 9th District Congressional seat, said the increase could actually hurt the people it’s intended to help.

“From a worker’s perspective, if you keep your job then it’s a nice thing,” said Schansberg, who is an economics professor at Indiana University Southeast.

“But if businesses are forced to release workers, those who lost their jobs are worse off.”

While workers might make more, their employers could be forced to cut back, according to Schansberg.

“It’s never helpful to businesses to drive up their costs,” he said.

Schansberg believes the impact will be minimal for most, except for workers who are raising families on minimum-wage pay.

Lowering taxes will do more to help the working class than a minimum wage increase, he said....


• In 2007, 1.73 million workers made the federal minimum wage or less, of which 1.5 million made less than the federal minimum. The reason is because companies can pay workers as little as $2.13 an hour if their wage plus tips equals the minimum.

— The Associated Press