I had a conversation today with Ms. Anne, a lovely and well-known Vanderbilt Dining worker who is one of the leading voices in the OUR Vanderbilt movement, which is currently fighting for an increase in the minimum wage for Vanderbilt workers. She had just returned from the weekly union negotiation meeting with the University and was obviously tired and unsettled. She talked about her struggle comprehending with the polar opposite views of many of the decision makers in the room. To her, being "pro labor" was absolutely the most logical, ethical stance. I decided to do a little research about the Living Wage movement after speaking with her.
There are many valid concerns with raising the minimum wage to meet a "livable standard." A widely published professor at MIT developed a Living Wage calculator that breaks down the minimum monthly expenses of various household sizes for survival and suggests a wage rate that will satisfy those needs after taxes. In Metro Nashville, which has a flat minimum wage rate of $7.25, the living wage rate is calculated to be $22.07. If living wage advocates want to decrease this huge gap, they have a long way to go.
Opponents of raising the minimum wage have three major concerns: employment effects, price effects, and distorted distribution of benefits. Numerous studies (see Center for Economic and Policy Research report) have debunked the notion that increasing the minimum wage will simply cause employment to decrease as firms substitute labor for capital or simply hire less labor. One preventative factor could be higher prices offsetting increased labor costs, which may in fact hurt those the policy was intended to help. Lastly, David Neumark (see the Wall Street Journal link) explores the counterintuitive distributive effects of a rise in the minimum wage. He suggests that a good portion of those earning below the proposed minimum wage rate are actually not poor. Data from the Census Bureau shows us that only 17% of minimum wage earners in the early 2000s were in poor families. This means that a rise in the minimum wage might disproportionately benefit families who are not income poor.
It's proponents argue a higher minimum wage will help stimulate the economy by increasing disposable income. However, an Economic Policy Institute report finds that a minimum wage increase to $9.00 would only increase total spending by $10 to $20 billion. Proponents also assert that raising the minimum wage will improve labor productivity by decreasing labor turnover.
Christina Romer in her article for the New York Times writes that increasing the minimum wage is merely one policy option aimed at improving the lives of the poor, and it is not the best option. It is likely to benefit many poor families, but it does not accurately target poor families to create an efficient use of dollars.
-http://livingwage.mit.edu/
-http://www.nytimes.com/2013/03/03/business/the-minimum-wage-employment-and-income-distribution.html?pagewanted=all
-http://online.wsj.com/articles/who-really-gets-the-minimum-wage-1404683348
-http://www.cepr.net/documents/publications/min-wage-2013-02.pdf
There are many valid concerns with raising the minimum wage to meet a "livable standard." A widely published professor at MIT developed a Living Wage calculator that breaks down the minimum monthly expenses of various household sizes for survival and suggests a wage rate that will satisfy those needs after taxes. In Metro Nashville, which has a flat minimum wage rate of $7.25, the living wage rate is calculated to be $22.07. If living wage advocates want to decrease this huge gap, they have a long way to go.
It's proponents argue a higher minimum wage will help stimulate the economy by increasing disposable income. However, an Economic Policy Institute report finds that a minimum wage increase to $9.00 would only increase total spending by $10 to $20 billion. Proponents also assert that raising the minimum wage will improve labor productivity by decreasing labor turnover.
Christina Romer in her article for the New York Times writes that increasing the minimum wage is merely one policy option aimed at improving the lives of the poor, and it is not the best option. It is likely to benefit many poor families, but it does not accurately target poor families to create an efficient use of dollars.
-http://livingwage.mit.edu/
-http://www.nytimes.com/2013/03/03/business/the-minimum-wage-employment-and-income-distribution.html?pagewanted=all
-http://online.wsj.com/articles/who-really-gets-the-minimum-wage-1404683348
-http://www.cepr.net/documents/publications/min-wage-2013-02.pdf
No comments:
Post a Comment