Why is the federal minimum wage so goddamn low?!?

[TheMojoPin]

The current federal minimum wage level is $5.15 an hour.

38 states (As well as Guam and Puerto Rico) use this as their minimum wage.

3 states (As well as the Virgin Islands) have minimum wage levels lower than the federal standard.

11 states have minimum wage levels higher than the federal standard.

7 states have NO minimum wage laws.

$5.15 is nothing. The majority of companies that have hourly pay systems use the federal standard to balance their starting wages. Most companies set their starting wages between $6 and $8. This is simply not enough to live on. HIGH SCHOOLERS scoff at this level of pay. How is a business supposed to maintain a stable supply of reliable employees if we simply can't pay them enough to live on their own? My business' starting rate is $7.00. I'm lucky if I can keep employees for six months. If promoted to a supervisor level, an employee normally receives a $.25 pay raise...and in rare cases $.50. Reviews for supervisors and "regular" employees are the same, and normally only result in a $.25 or $.50 pay raise. To receive the highest, a whopping $.75, the employee must be reviewed again by a representative from the regional office.

Why is the government so slow to keep the minimum wage at pace with the ever-shifting economy? More money means bigger paychecks which means more spending...this isn't a suprise...America is spend-crazy. Odds are if you give the average more money, they'll just turn right back around and spend it on something.



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[A.J.]

$5.15 is nothing. The majority of companies that have hourly pay systems use the federal standard to balance their starting wages. Most companies set their starting wages between $6 and $8. This is simply not enough to live on. HIGH SCHOOLERS scoff at this level of pay.

When I got my first non-under-the table job in high school, the minimum wage was $3.25. While it wasn't a lot of money, it was $3.25 more than $0.00.

So what should the minimum wage be: $10, $20, $100?

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[Heavy]

Mojo....people making this money have no skills or edjucation or experience doing anything worth getting paid for. Tell the fry guy working for you not expect more than .25 raise and get over it.

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[Captain Stubing]

While this explanantion is way oversimplified, there is a relationship between pay scales and employment. More pay/hour usually = less employees at that rate (or higher). So, it becomes a decision of whether you want more employment at a lower rate or less employment at a higher rate.
Most employees who make these lower rates are transitioning in life (H/S - college, between jobs, etc.) and are willing to work at that rate (otherwise, they'd all be unemployed).

Fezaesthesia - Prognosis poor...

[TooCute]

There has to be a minimum, and it makes sense that it's a minimum (and I meant that to sound redundant. Think about it.). $5.15 an hour might not pay the bills in NYC, but you could probably live pretty well for $5.15 in Nebraska.

btw I had a retail job in NYC once; they started me at $7.25 an hour. W/in 6 months I was at $8.50, and another 6 months later, when I told them I was going to quit because the job was boring they said "ok you only have to work 2 days a week, and we'll pay you $9.50 an hour" fantastic.

I got a job down the block teaching rock climbing for $30/person/hour with up to 6 people/hour, where I made my own schedule and a job at Crunch twice a week for a few hours teaching climbing there for not much money, but it included a free membership. I don't know why I didn't just do that all along!

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[TheMojoPin]

Hey, my first job only paid $4.75 an hour...

I guess it's mostly my company that ticks me off. They claim to NOT want high schoolers and college students and the like working at our bookstores, yet want to shell out a puny $7.00 or $7.25 to start with minimal chances of significant increase. Based on what people put in the "requested salary" sections on the applications, even just bumping the start to $8 instead of $7 would make a huge difference. To make someone a section head or supervisor is two to three times as much work, yet we expect people to be happy with just a quarter more. Some of these people almost have to do as much work as I do, and I'm making a good three times more than some of them!

And AJ, based on my own paltry and mathematical skills, my estimate for the current federal minimum wage whould be between $6.75 and $7.25 an hour.

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[A.J.]

And AJ, based on my own paltry and mathematical skills, my estimate for the current federal minimum wage whould be between $6.75 and $7.25 an hour.


I was posing a rhetorical question of course. I mean, where do you draw the line? TooCute was exactly right: that's why it's called a "minimum wage", not a "living wage".

I make well over the minimum wage but even I have trouble making ends meet even with living a very frugal lifestyle. I wish I made the money that rappers and pro athletes do so I could waste money on video games, cars and other crap.

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[furie]

There actually is a reason why it's so low. The GS scale. The GS scale is the pay table for most federal employees. it goes grade 1-15 with ten steps in each grade. GS 1 step 1 is mandated to be a certain percentage above minimum wage(i don't remember the formula). If you raise the minimum wage, you have to raise the pay of all the GS 1-1's. And you guessed it. GS 2's all the way to 15's have to be a certain amount above the 1's. so if you raise the minimum wage, you'd also be giving a raise to 90% of the federal government. That's a huge hunk of change that would have to be taken into account when figuring this out.

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[TheMojoPin]

So unless you work for the government, your pay scale is forever skewed unless the company or organization you work for keeps pace with what the federal government pays it's average employee? Man, no wonder my first federal job STARTED at basically $11 an hour...

And AJ, my estimates are based on me supporting the idea of a living wage...my numbers are an attempt at a "happy medium" between a minimum and living wage ("Living" being for average SINGLE person).

My biggest issue here is why the minimum wage seems to be so static in an economy that seems to fluctuate constantly. What's apropro one year could be horribly underestimated the next...and along those lines, it could end up being OVERestimated and have to be scaled back...you see what I'm saying? It seems like it should "roll with the punches"...not changing it multiple times a year...maybe just at a set time once each year...or every three or every five...just to keep up with the economic climate at the time.

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[angrymissy]

$5.25/hour * 40 hours a week = $210/week

now take out taxes (say at 18%) which leaves you with $172.20/week.

In my area, you can't get a studio apartment for less than $600/month (usually more like 800).

However, in upstate NY where some of my family lives, you can rent a 3 bedroom HOUSE for $400/month.

So basically its all relative to what area you live in. In a state like New York, the cost of living varies so greatly throughout the state, its hard to regulate the minumum wage.

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[TheMojoPin]

I'm not saying it can be perfect, but keeping the federal minimum wage at a competitive level basically forces companies to also keep their starting rates respectable...I'm just tired of seeing people having to do far too much work for far too little money. And I'm talking hard workers that bust their balls for something that won't even keep them in a home.

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[HordeKing1]

There is a very large movement to enact legislation to ammend the minimum wage laws to reflect a minimum living wage.

Current minimum wages leaves people below the federal poverty threshold.

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[Recyclerz]

Capt. Stubing has a legitimate point. Raising the minimum wage often has the perverse effect of raising unemployment because employers are discouraged from taking on marginal employees because of the increased cost (unless there is a booming economy, when the min. wage becomes irrelevant anyway since employers are willing to bid up wages to compete for scarce labor). [Ed. note: Yes, I know I'm a dweeb.]

A better way to ensure a basic living standard for the working poor is a reverse income tax with no minimum wage. The idea is as long as you are working at a legit job, the gov't. will subsidize you with some additional income to get your total comp to some agreed upon level, regardless of how shitty the pay rate is. It's not perfect but this is what should have been put into place to replace the old welfare state system instead of the stupid patchwork they passed, IMHO.

Teenagers would just get market wages without the subsidy. That's because they'll just spend the $ on beer, drugs and music. This way, they will appreciate it more when they get older and get better jobs paying OK money and can spend their shekels on taxes, mortgages, beer, drugs and music.

Of course, our friends in the Bush Administration are actively working not only to cut the taxes of the wealthy but also to raise the taxes on the poor. I shit you not.





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[Gvac]

I'm pretty much against the federal government telling people what they can and can't pay employees. If someone is willing to work for the wage being offered, who is the government to say you've got to pay them more?

If you were gettting a small business started and off the ground, chances are you wouldn't have the ability to pay them all that much money. If the minimum wage was increased, you'd probably have to let someone go. I don't see how it solves anything.

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[FiveB247]

The minimum wage is exactly what it says it is...the bare minimum. If we didn't employ that policy, millions of American would lose jobs to immigrants and illegals. It's sad but true.

[HordeKing1]

A better way to ensure a basic living standard for the working poor is a reverse income tax with no minimum wage. The idea is as long as you are working at a legit job, the gov't. will subsidize you with some additional income to get your total comp to some agreed upon level, regardless of how shitty the pay rate is.

There already are progressive and regressive taxes. There are tax incentives for low income families to work. The question is how far to carrry it. There's a common perception that the rich don't pay as much tax as a percentage of their income as do the poor.

Even though the rich are in the highest tax bracket, their exemptions and deductions actually allow them to pay less of a percentage of income than poor families. (This doesn't mean they don't pay a lot - they do. But in terms of percentages, as a general rule, it's lower than what people in lower tax brackets pay.)

There's an interesting book on this and related topics, which admitedly is on the boring side, but it had some interesting arguments. It's called Washington's New Poor Laws, and I think it was published in 2000 and written by a Dr. Gertrude Goldberg

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[furie]

just a quick poll, does anyone here make just minimum wage or less? students don't count.

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[kc7586]

damn the man!!!!!!!!!

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[epo]

You know who works for minimum wage? Students in Chicago.

[tanless1]

your right , and that has always botherd me.
the acediemia complians the most about the need for higher minimum wages , and yet they pay student shit. Because theyre a bastion of higher learning is thier excuse.
myself ? i do not pay minimum wage , i will however use temp agencies to minimise the liability as an employer... still the worker will make better than minimum.
we the people !!

[tanless1]

shit, this is an old thread- thanx epo.

[SP1!]

$6.55 per hour now, which is a little better but most of the people getting these wages are high school kids, hell my first job out of high school paid $10/hour while in college.

Minimum wage is by no means meant to be a livable wage, if you are making that much and are past your teens then you really fucked up and deserve that wage.

[TheMojoPin]

Minimum wage is by no means meant to be a livable wage, if you are making that much and are past your teens then you really fucked up and deserve that wage.

Classy.

A low and relatively stagnant minimum wage allows business to lowball what they pay. I'm not saying it has to be a living wage, but it ideally needs to be more flexible to keep businesses honest when it comes to starting wages.

[FezsAssistant]

It's low b/c it's not intended so support a whole family.
It was intended for high school kids, senior citizens and soccer moms to earn a couple of extra bucks.
Unfortunately, since we don't enforce our own laws, mexicans have come in and taken those jobs. We've also taught our kids that work is evil, people who work deserve to be heavily penalized and if you create youtube videos of yourself you can get famous and not have to work. If that doesn't pan out, ask for money from your evil parents who actually work at evil jobs.

[MHasegawa]

It's low b/c it's not intended so support a whole family.
It was intended for high school kids, senior citizens and soccer moms to earn a couple of extra bucks.
Unfortunately, since we don't enforce our own laws, mexicans have come in and taken those jobs. We've also taught our kids that work is evil, people who work deserve to be heavily penalized and if you create youtube videos of yourself you can get famous and not have to work. If that doesn't pan out, ask for money from your evil parents who actually work at evil jobs.




what?

[TheMojoPin]

You're completely making up why the minimum wage was created.

It was created so businesses couldn't legally pay people next to nothing or actually nothing.

It was not created for "high school kids, senior citizens and soccer moms."

[epo]

You're completely making up why the minimum wage was created.

It was created so businesses couldn't legally pay people next to nothing or actually nothing.

It was not created for "high school kids, senior citizens and soccer moms."

Facts hurt Mojo, facts hurt.

[jauble]

what?

maggie how did you do that, we make the same wage.

[underdog]

It's low b/c it's not intended so support a whole family.
It was intended for high school kids, senior citizens and soccer moms to earn a couple of extra bucks.
Unfortunately, since we don't enforce our own laws, mexicans have come in and taken those jobs. We've also taught our kids that work is evil, people who work deserve to be heavily penalized and if you create youtube videos of yourself you can get famous and not have to work. If that doesn't pan out, ask for money from your evil parents who actually work at evil jobs.

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[earthbrown]

You're completely making up why the minimum wage was created.

It was created so businesses couldn't legally pay people next to nothing or actually nothing.

It was not created for "high school kids, senior citizens and soccer moms."

Facts hurt Mojo, facts hurt.


Minimum wage is high enough, no need for McDonalds employees to be making $10/hr, especially cause they only 50% of the time get my order right.


K

[TheMojoPin]

Soooooo classy.

[earthbrown]

Soooooo classy.


Ok, lets see.... I own a company, I expect to make a 20% profit on my total sales vs expenses.

Now I am forced to pay employees more, thus lowering my percentage take, so I raise the prices to battle the wage increase, and on top of that now I need to raise it again, because the suppliers of my raw materials raised their prices too cause they were effected by minimum wage.

Its an evil cycle...


K

[TheMojoPin]

Yeah, poor you having to pay people a decent wage.

One of the most clearcut reasons for the weakened US economy over the last 40 years is the huge salary gulf that exploded over that time and the stagnation of wages compared to pricing.

Stagnating minimum wage indefinitely would be far more "evil" a cycle that'll just make things worse.

[Freakshow]

I blame the blacks.

[whiskyriver]

I blame the Whites

[SP1!]

Classy.

A low and relatively stagnant minimum wage allows business to lowball what they pay. I'm not saying it has to be a living wage, but it ideally needs to be more flexible to keep businesses honest when it comes to starting wages.

Yeah, poor you having to pay people a decent wage.

One of the most clearcut reasons for the weakened US economy over the last 40 years is the huge salary gulf that exploded over that time and the stagnation of wages compared to pricing.

Stagnating minimum wage indefinitely would be far more "evil" a cycle that'll just make things worse.

Name one field that is adversely affected by the minimum wage laws, prices are set by supply and demand with more experienced people getting higher pay. I can agree that it should be raised but far too many people say that it should be a livable wage, if that were to happen quite a few businesses would shut down since they couldnt afford the $18/hour it would cost for each employee.

You get paid what you deserve, plain and simple.

[TheMojoPin]

Name one field that is adversely affected by the minimum wage laws, prices are set by supply and demand with more experienced people getting higher pay. I can agree that it should be raised but far too many people say that it should be a livable wage, if that were to happen quite a few businesses would shut down since they couldnt afford the $18/hour it would cost for each employee.

You get paid what you deserve, plain and simple.

Where did I say we need a livable wage in what you quoted? My point has been that the minimum wage needs to be more flexible than it has been. It's a huge jump to go from that wanting a living wage. A living wage isn't realistic at this point.

And my statement wasn't talking about fields being adversely affected...it was talking about American spending power being affected. A relatively static minimum wage allowed many wages to be lowballed, creating a huge wage gap. Wages also stopped growing along with prices as they had in the previous 25 years.

[Brad in Bama]

I blame the blacks.

I blame the Whites


Will these two ever agree? It's point, counter point with Freakshow and Whiskyriver.

One of my favorite Ron and Earl bits.

[Brad in Bama]

Where did I say we need a livable wage in what you quoted? My point has been that the minimum wage needs to be more flexible than it has been. It's a huge jump to go from that wanting a living wage. A living wage isn't realistic at this point.

And my statement wasn't talking about fields being adversely affected...it was talking about American spending power being affected. A relatively static minimum wage allowed many wages to be lowballed, creating a huge wage gap. Wages also stopped growing along with prices as they had in the previous 25 years.

This is the thing that pisses me off the most. You're dead on with the wages and cost of living being so fucked up. I pay my workers pretty good by construction standards. It ranges from 15 to 20 per hr. At best after Uncle Sam gets his, they're only making 25k - 30k. So 4x minimum wage is still shit money when you get down to it. What it has done is basically eliminated most of Americans ability to save any substantial amount of money.

[Section 8]

Even though there is a Federal Minimum Wage, many states have their own Minimum Wage that supercedes the Federal. Here's the list (with shockers bolded):

Alabama $6.55 Alaska $7.15 Arkansas $6.25 Arizona $7.25 California $8.00

Colorado $7.28 Connecticut $8.00 Delaware $7.15 Washington, D.C. $7.55

Florida $7.21 Georgia $5.15 Hawaii $7.25 Idaho $6.55 Illinois $7.75

Indiana $6.55 Iowa $7.25 Kansas $2.65 Kentucky $6.55 Louisiana $6.55

Maine $7.25 Maryland $6.55 Massachusetts $8.00 Michigan $7.40 Minnesota $6.15

Mississippi $6.55 Missouri $7.05 Montana $6.90 Nebraska $6.55 Nevada $6.85

New Hampshire $7.25 New Jersey $7.15 New Mexico $7.50 New York $7.15

North Carolina $6.55 North Dakota $6.55 Ohio $7.30 Oklahoma $6.55

Oregon $8.40 Pennsylvania $7.15 Rhode Island $7.40 South Carolina $6.55

South Dakota $6.55 Tennessee $6.55 Texas $6.55 Utah $6.55 Vermont $8.06

Virginia $6.55 Washington $8.55 West Virginia $7.25 Wisconsin $6.50

Wyoming $5.15