Take a Stand: Minimum wage is too low

By Graham Kreicker

Lawrence Journal World (KS), April 27, 2008

The April 1 Journal-World carried a column by Kansas University business professor Mark Hirschey called “Inconvenient truth about minimum wage.” Since it was April Fools’ Day and the article gave many anecdotes but few “facts,” we’re not certain it was altogether serious. In case it was, we’re responding with some facts of our own.

Henry Ford had the novel idea that anyone building his cars should be able to afford to buy one. But most employers never bought this idea, and the period after Ford’s death was wracked by some of the worst labor strife in our history. Since those early days, every time a minimum wage has been implemented or increased, businessmen have screamed that the sky was falling. But the sky hasn’t fallen.

Here are 10 historical facts about minimum wages:

1. We had no minimum wage law until the Fair Labor Standards Act passed in 1938.

2. Since then, in terms of actual buying power, the value of the minimum wage peaked in 1968 — when it was just $1.58 per hour! Last year, according to the U.S. census, an equivalent minimum wage, in constant dollars, would have been $9.47.

3. Thanks in part to the minimum wage law, the American working class turned into a giant “middle class.” For many years, this middle class enjoyed relative prosperity and could afford to buy products from the very businesses that had worried so much about minimum wage laws — and which now profited from them!

4. Minimum wage laws don’t cause job loss. More than half the states have minimum wage rates that exceed the federal level, and none have suffered job loss as a result.

5. The growth in productivity of American workers has always outstripped any increases in wages and benefits.

6. Corporate earnings and profits have soared during the minimum wage era. Over 10-year, 25-year, and 50-year periods, the best place to invest has been the stock market. Minimum wages clearly do not hold back corporate growth and profits.

7. Over the same period, pay for corporate CEOs has soared to obscene levels — nearly 500 times the average wage — even when companies they “led” fell into bankruptcy.

8. The economic expansion that ended a few months ago was the first in our history that saw an actual decline in median income. Workers are suffering!

9. The Kansas minimum wage is $2.65 for firms not covered by the federal law. That means that today 17,000 Kansans earn less than the federal minimum wage! Does that mean that our state legislature wants workers who are employed full-time to earn under half of what it would take to rise to the federal poverty line?

10. In economic development, Kansas ranks near the bottom. States with much higher state minimum wages have zoomed past us in terms of economic growth. Our lowest-in-the-nation minimum wage law is a joke — but sadly, the joke is on us.

These are the actual facts about minimum and maximum wages.

Hirschey reminisced about the great low-wage jobs he held as a kid. State law now prohibits kids from working in many of those jobs — but, ironically, allows parents who are trying to raise kids to work the same kinds of jobs, for pennies.

Arguments against making the minimum wage a living wage are based on the faulty claim that it will hurt corporate profits and result in higher unemployment. But history shows that dividing the pie more equitably will neither bankrupt corporations nor cost us jobs. It will, rather, improve life for all employees and their families.

Graham Kreicker, a Lawrence resident, wrote this column on behalf of the Grassroots Action board.

Originally published at: http://www2.ljworld.com/news/2008/apr/27/take_stand_minimum_wage_too_low/

>>> Download full April newsletter

Download fact sheet on Kansas

Good:

“State Republicans Vote to Exploit Minimum Wage Workers,” Iola Register, by the editor and publisher, Emerson Lynn Jr.

More good:

Letter: “Fair wage helps all,” Topeka Capital-Journal, by Claude Lee, a retired judge from the Kansas Department of Labor

Bad:

“Inconvenient truth about minimum wage,” Lawrence Journal-World, by Mark Hirschey, professor of business at the University of Kansas

If this bill is going to survive the session, we need an immediate showing of community support! We are asking all of you who support this cause to contact the Chair of the Senate Commerce Committee right away and respectfully ask that Senate Bill 466 be passed out of committee THIS WEEK! We already have the support of Senators Kelly and Barone, and obviously Senator Reitz, who proposed the bill. If you can, please contact the others as well. (contact list below)

Bills that begin in either Legislative House or the other must be considered and passed by their House of Origin (in this case the Senate) and sent to the other House for consideration no later than Saturday March 1st (also known as the “Turnaround date”). Bills not passed by their House of Origin by that date are essentially defeated for this session and would have to be rewritten and re-introduced the following year. Holding the bill in Committee past the turnaround date would effectively killing it for this session without forcing Legislators to go on record by voting it up or down.

A few phone calls/emails will only take minutes of your time.

Thank you!

The Chair of the Kansas Senate Commerce Committee:

Senator Karin Brownlee (R) D-23
Room Number 121 East
State Capitol -136-N Topeka, KS 66612-1504
(785)-296-7358
HOTLINE: 1-800-432-3924
FAX: (785)-368-7119
EMAIL:brownlee@senate.state.ks.us

R - Roger P Reitz – Member, Manhattan
Sponsor of SB 466; Co-sponsored SB 337 in 2007
Capitol Office
Room: 261E
Phone: 785-296-7360
Email: reitz@senate.state.ks.us

R - Nick Jordan - Co-Chair, Shawnee
Capitol Office
Room: 221E
Phone: 785-296-7362
Email: jordan@senate.state.ks.us

D - Laura Kelly – Member, Topeka
Capitol Office
Room: 401S
Phone: 785-296-7365
Email: kelly@senate.state.ks.us

R - Ruth Teichman – Member, Stafford
Capitol Office
Room: 241E
Phone: 785-296-7394
Email: teichman@senate.state.ks.us

R - Susan Wagle – Member, Wichita
Capitol Office
Room: 221E
Phone: 785-296-7386
Email: wagle@senate.state.ks.us

R - Jean Kurtis Schodorf – Member, Wichita
Capitol Office
Room: 241E
Phone: 785-296-7391
Email: schodorf@senate.state.ks.us

R - Jay Scott Emler – Member, Lindsborg
Capitol Office
Room: 449N
Phone: 785-296-7354
Email: emler@senate.state.ks.us

D - Jim Barone - Ranking Minority, Frontenac
Capitol Office
Room: 181E
Phone: 785-296-7370
Email: barone@senate.state.ks.us

The Kansas minimum wage of $2.65 per hour applies to workers in job categories not protected by the Federal minimum wage ($5.85). The study documents this under-examined category of workers at the lowest end of the wage spectrum.

To help determine how minimum wage increases would affect Kansas businesses and local economies, the study draws on evidence from states and cities that have raised their minimum wages above the Federal level. Such locally driven increases became common over the past decade, due largely to the stagnation of the Federal minimum wage at $5.15 an hour. Eroded by inflation, and having lost nearly 20% of its purchasing power, the Federal minimum was finally increased in July 2007 to $5.85 an hour. Even so, 33 states have already raised their statewide minimum wages above the current $5.85 level.

Selected findings:

o Kansas has the lowest minimum wage in the nation. The Kansas law has no effect on workers covered by the federal law, but covers certain employees exempt from the federal law. These include childcare workers, companions to the elderly or infirm, and employees of private firms grossing less than $500,000/year and not engaged in interstate commerce.

o A total of 17,000 Kansas workers received less than the $5.15 minimum wage in 2006. Researchers note that this figure will have risen as a result of the recent Federal minimum wage increase. There are an unknown number of workers not covered by federal law who received between $5.15 and $5.85 an hour.

o A minimum wage increase would have no substantial long-term effects on output, employment or profits. Short-run adjustments in prices, made by businesses reliant on low-wage workers, are likely to be much too small to have significant impacts on the overall price levels, and will not cause an ongoing inflationary spiral. The long-term benefits of greater consumer purchasing power, higher sales tax revenue, less turnover and absenteeism, a more productive workforce and a higher overall cash flow in the local economy are likely to compensate for a modest wage increase among the lowest paid workers in the Kansas economy.

o Historically, there has been a correlation between minimum wage increases and economic development. The Fiscal Policy Institute found that, in the five years following the Federal minimum wage increase of 1996-97, small businesses actually grew faster in states with higher minimum wages than in states with lower minimum wages (small businesses are defined as having fewer than 50 employees).

o In 2004 Kansas had an estimated 300,000 persons in poverty – about 100,000 of whom were children and 30,000 of whom were over 65. More than 20,000 (of working age) had severe disabilities and did not work.

The Ad Astra study was commissioned by the Kansas Action Network (KAN), a coalition for workers’ rights, social justice and economic fairness. KAN board member, Tawny Stottlemire, noted that, “Kansans have always valued a strong work ethic and believed that if you work hard and play by the rules, you’re going to be able to earn a decent living. Today, our state poverty rate of 12.5% exceeds the national average and our state minimum wage is less than half that of the Federal minimum wage. These realities are way out of sync with the values of our citizenry.”

KAN is currently engaged in a statewide campaign to “Raise the Wage” in Kansas. The project is coordinating campaigns in Wichita, Kansas City and Topeka, and at the state level. Stottlemire added that, “Without an adequate state minimum wage in place, there will be workers who slip through the cracks. Kansas needs to protect and value all of its workers. As long as there is a state law allowing employers to pay $2.65 per hour – some will. None should.”

Download Ad Astra Institute’s full report >>

“Impacts of Minimum Wage Increases in Kansas: A Background Report”

For more information contact Heidi Zeller, the KAN organizer for Raise the Wage, at 785.760.2764 or raisethewagekansas@gmail.com. Additional information about the campaign is available at www.raisethewagekansas.org. For more information on KAN, visit www.ksactionnet.org.

The Lawrence-based Ad Astra Institute is a nonpartisan, not-for-profit think tank dedicated to promoting the health and prosperity of Kansas families and the communities in which they live. Inspired by the Kansas state motto, Ad Astra Per Aspera (’to the stars through difficulties’), AAI believes the challenges facing our state can be met with solutions that are both pragmatic and progressive. adastrainstitute.org.

Wichita-Hutchinson Labor Federation
3219 W. Central
Wichita, KS 67203

2212 E. Central, Wichita 67214

Thursday, November 1:

6:30 p.m.
Raise the Wage general meeting

Our Steering Committee will meet one hour earlier at the same location.

Additionally, Kansas Action Network will hold its next board & general meeting beginning at 1:00pm, also at KANSEL. All Raise the Wage participants are welcome to attend.

Below that, see related story, “Kansans make more than Oklahoma, Nebraska peers” (Oct. 18)
The many comments posted to the online version take issue with the claim stated in its title.

Minimum wage may turn into city issue

BY DAN VOORHIS
The Wichita Eagle

A coalition of labor and community groups has gathered more than 1,300 signatures in an attempt to create a Wichita minimum wage.They will present the petition to the Wichita City Council at some point in the future in hopes it will pass an ordinance mandating a wage to match the federal minimum wage. (more…)

WASHINGTON - People who tend to the elderly, change diapers and serve up food and drinks have the highest rates of depression among U.S. workers.

Overall, 7 percent of full-time workers battled depression in the past year, according to a government report available Saturday.

Women were more likely than men to have had a major bout of depression, and younger workers had higher rates of depression than their older colleagues.

Almost 11 percent of personal care workers - which includes child care and helping the elderly and severely disabled with their daily needs - reported depression lasting two weeks or longer. (more…)