A major topic in recent political debate has been the U.S.’s federal food stamp program, which many Republicans claim is detrimental to the economy and many Democrats claim is necessary for the thousands of individuals that depend on the assistance each month.
According to the Center for American Progress, there may be another solution to the food funding issue. The think tank recently analyzed the effect raising the minimum wage would have on the Supplemental Nutrition Assistance Program (SNAP), finding that the federal government could potentially save $4.6 billion per year. That figure would be reached by raising the minimum wage to $10.10 per hour, the Wall Street Journal reports.
The study argues that spending less on benefits and requiring businesses (in addition to the government) to spend more on individuals could actually have a positive impact on the economy, rather than the relatively draining one some welfare programs can have. Those welfare programs, of course, are necessary, but it’s time that the government take an innovative approach to solving the economic problems as well as the social ones. The minimum wage increase offers an opportunity to exactly that.
Although $4.6 billion in one year seems like a large sum, the figure actually represents only 6% of the overall SNAP budget. For comparison, however, the updated farm bill that recently made its way through Congress included a 10 year plan to reduce food stamp spending by $8 billion overall.
Support for raising the minimum wage has been gaining momentum in recent years, with low wage restaurant workers protesting in order to gain a $15 wage. Vermont Gov. Peter Shumlin and Connecticut Gov. Dan Malloy recently wrote a CNN article claiming that they’re taking actions “to raise the minimum wage in [their] states to $10.10 an hour by 2017.”
Whether or not the slight wage increase will have a profound effect on food stamp benefits remains to be seen, but it certainly will benefit many individuals.
Gov. Rick Perry, R-Texas, told CNN Friday that the government shouldn't even set a minimum wage, let alone increase it.
Perry appeared on a "Crossfire" panel with Illinois Gov. Pat Quinn (D), who said Illnois is grateful to President Barack Obama for "saving the American auto industry" and creating jobs in his state.
"And I still haven't heard from Rick about the minimum wage," Quinn added.
“I don’t think — I don’t think it’s government’s business to be setting the minimum wage out there,” Perry said. “And even the CBO said if you want to get rid of a half a million jobs between now and 2016, raise the minimum wage.”
The report from the Congressional Budget Office projected that raising minimum wage would increase wages for 16.5 million people and reduce employment by an average of 500,000 workers.
“Here’s the issue, Pat, and you’ve got to believe this,” Perry continued. “At a time when jobs are at a premium in this country, the last thing you want to be doing is put policies into place that will kill jobs, and not only–”
“Putting purchasing power in the hands of consumers, they’re going to spend the money,” interrupted Quinn.
“And to tell the people that don’t have a job today, ‘I’m sorry but to help these folks over here, you’re not gonna have a job.’ That is the wrong message,” Perry said.
“The Federal Reserve Bank of Chicago says every dollar you raise on the minimum wage creates $2,800 in purchasing power. Seventy percent of our economy are consumers buying things,” Quinn argued.
President Barack Obama and congressional Democrats plan to make raising the minimum wage a key issue in the 2014 midterm elections, claiming it will help many low-income families. However, a report released by the nonpartisan Congressional Budget Office says that doing so may lead to job losses throughout the economy, according to a story in USA Today.
The president’s initial push was to raise the federal minimum wage from $7.25 an hour to $9, but he has since joined with Senate Democrats who want to raise it to $10.10. Such a hike could cost 500,000 jobs, says the CBO.
“The increase in the minimum wage would have two principal effects on low-wage workers,” the report is quoted as saying in the Washington Post. “The large majority would have higher wages and family income, but a much smaller group would be jobless and have much lower family income.”
An increase to $10.10 would affect about 16.5 million workers and pull some 900,000 families above the poverty line, says the report. The CBO points out that the numbers on job losses in the report are estimates and that the actual number could be “very slight” or as high as one million.
Republicans, zeroing in on the high numbers, sought to take away a top issue from the Democrats.
“Today’s CBO report shows that raising the minimum wage could destroy as many as one million jobs, a devastating blow to the very people that need help most,” Senate Minority Leader Mitch McConnell, R-Ky., said in a statement.
The report put the Obama administration on the defensive. Chief economist at the White House, Jason Furman, downplayed the seemingly more dire conclusions of the report. In a conference call with reporters he said, “estimates do not reflect the overall consensus view of economists, who have said the minimum wage would have little or no impact on employment.”
While a minimum wage increase may likely pass the Democrat-controlled Senate, it is unlikely to get through the GOP-controlled House of Representatives.
Going into the November midterms, Democrats have already decided it is an important, and likely safe, issue. A recent poll conducted by the Washington Post and ABC showed there is support for such an increase among two-thirds of voters. But Democrats may need to tread lightly following the CBO report, as an increasing number of voters become concerned about jobs. A Gallup poll this month said nearly 25 percent of voters mentioned unemployment. That number is up from 16 percent a month ago, said the Washington Post.
Sen. Mark Pryor (D-Ark.) says he opposes raising the federal minimum wage from $7.25 to $10.10 an hour because “it’s too much, too fast.”
“I know $10.10 still isn’t a whole lot of money, but I think it’s too much, too fast,” Sen. Pryor told Bloomberg News. “I’m not supportive of that.”
Sen. Pryor also gets donations from the National Retail Federation and the National Restaurant Association, which represent stores and restaurants.
Bloomberg News notes that the median household income in the state of Arkansas was $40,112 in 2012, while the nationwide median was $51,017.
A Quinnipiac University poll in Jaunary found that 71 percent of Americans support raising the minimum wage.
If the minimum wage were raised to $10.10, it would lift about 5 million Americans out of poverty, according to a recent study by University of Massachusetts-Amherst economist Arindrajit Dube, notes The Huffington Post.
While the State of the Union address always has the attention of the nation, President Obama’s latest stood in contrast to the tough year his administration faced. You know, the one that saw the government shut down, an unproductive Congress, and the troubled rollout of his signature health care plan. Of course, the State of the Union is the most deliberately crafted speech and was delivered by one of the best oratory Presidents in recent memory.
The speech—which clocked in at just over an hour—was packed with the hopes of President who feels as if he can no longer rely on the legislature. From the climate to the temperature of the economy, from immigration to retirement planning the President suggested that he was tired of waiting for them to get their legislative acts together and said he plans to use his Executive authority to address these problems. “America does not stand still,” He said, “and neither will I.”
The President called for action on the immigration issue, where a bipartisan bill died on arrival in the GOP-controlled House of Representatives. He also resurrected the idea of retirement accounts (in the form of a government bond) that has appeared in a number of budget requests but has never been acted on by the legislature.
With respect to the economy there is very little a President can do—yet still the narratives on both sides insist that it lives and dies by White House policy—and President Obama relied on tried-and-true aspirations that rarely manifest in reality. He called for more high-tech jobs and called for revisions to the tax code that are generally accepted by both parties (specifically an expansion of the Earned Income Tax Credit). Although his proposal to raise the minimum wage to over $10 has met with resistance from both sides.
Responding to his critics, President Obama also suggested that the U.S. reduce its surveillance programs and limit the use of drones. The speech ended with an emotional acknowledgement of Army Ranger Cory Remsburg who had lost vision in one eye as a result of the war in Afghanistan. Yet, the President doubled-down on his desire to leave “a small force of Americans” in Afghanistan for training and “counter-terrorism operations to pursue any remnants of al Qaeda.” Conspicuous by its absence was any reference to the controversy surrounding the cutting of military pensions.
The speech itself was a success; of course it is almost impossible for it to not have been. What bears watching is the President’s use of Executive power to address these issues. The expansion of White House powers has continued for at least the past 30 years, but rarely has a President faced such a hostile and unproductive Congress. Perhaps his threat of acting alone will spark action in the legislature, but with the mid-term elections upon us this seems unlikely.
Los Angeles will soon require the highest minimum wage in America if three city council members have their way.
"We know it will improve lives,” Councilman Mike Bonin said. “We know it will bring folks into the middle class.”
While the motion would only raise the minimum wage for hotel workers, Bonin added that he would like to implement the change citywide.
The change will begin in hotels, if passed, because the hotel industry is largest low-wage industry in the city. If the minimum wage were raised to $15 an hour, hotel workers would be able to avoid taking second jobs and relying on public assistance.
The effort, called Raise LA, has been underway for a year and led by nonprofit Los Angeles Alliance for a New Economy. Volunteers for the nonprofit have garnered support from more than 700 businesses.
Despite the monumental support, some hotel owners argue that the lodging business is still recovering from the recession and plan to lobby against the measure.
Executive director of the Hotel Association of Los Angeles Bob Amano argued that the raise would hurt business, force job cuts and create higher rates for customers. In effect, future development investors would be more frugal.
If the raise is enacted, it would not apply to LA hotels with union contracts, which has led Amano to believe the campaign is a ploy for hotels to sign union contracts.
“Is this about living wage or is this about gaining union membership?” Amano said.
The measure is expected to pass, as 14 of the 15 council members are Democrats and generally in favor of labor.
Illinois gubernatorial candidate Bruce Rauner is calling for a $1-an-hour cut in the state’s minimum wage, a move Democrats describe as “class warfare” targeting the state’s working poor.
Rauner, who would decrease the minimum wage from $8.25 to $7.25 if elected governor, insisted that the change would foster competition.
“I will advocate moving the Illinois minimum wage back to the national minimum wage,” Rauner said during a local radio broadcast report. “I think we’ve got to be competitive here in Illinois.”
The unusual stand puts Rauner at odds with the other three Republicans who plan to compete in the gubernatorial primary. Though Rauner’s competitors are uninterested in raising the state’s minimum wage, they have no interest in lowering it.
Rauner is even more unlike current Illinois Gov. Pat Quinn, who wants to raise the minimum wage to $10 an hour.
“We’re talking about people who are cleaning and busing tables, people who are caring for our elderly, people who are working in support of people with disabilities,” Quinn said. “To take $2,000 a year from those who are earning minimum wage is not only cruel and shameful, it also hurts our economy.”
Democrat Rep. Lou Lang criticized Rauner for the move on Tuesday, noting that he had seen plenty of anti-poverty plans but never pro-poverty plans.
Lang added that Rauner must be “delusional” if he believes the General Assembly would agree to the change, and that the age of robber barons has ended.
Thirteen states will be raising their minimum wage next week, leaving many to wonder if the others will soon follow their lead.
While Congress considers legislation to raise the federal minimum wage, a number of cities and counties across the country are not willing to wait.
Ten states have tied their minimum wages to the inflation index, guaranteeing that they rise with the cost of living each year. The federal minimum wage is not tied to the index, though Democrats in Congress and President Barack Obama have suggested that it should be.
A bill recently set forth by Sen. Tom Harkin and Rep. George Miller would raise the federal minimum wage to $10.10 and tie it to inflation.
Republicans on Capitol Hill have argued that increasing the minimum wage would be a job killer, and have shown great opposition to the bill proposed by Harkin and Miller.
Interestingly, the idea of raising the minimum wage polls well with Republicans who are not members of Congress, with two-thirds of respondents voting favorably. In a recent Washington Post/ABC News poll, half of Republicans who responded said the minimum wage should be raised.
The following is a list of states and counties that will be implementing a minimum wage increase next week, according to the Employment Policies Institute.
- Arizona: $7.80 to $7.90
- Colorado: $7.78 to $8.00
- Connecticut: $8.25 to $8.70
- Florida: $7.79 to $7.93
- Missouri: $7.35 to $7.50
- Montana: $7.80 to $7.90
- New Jersey: $7.25 to $8.25
- New York: $7.25 to $8.00
- Ohio: $7.85 to $7.95
- Oregon: $8.95 to $9.10
- Rhode Island: $7.75 to $8.00
- Vermont: $8.60 to $8.73
- Washington State: $9.19 to $9.32
- Albuquerque, N.M.: $8.50 to $8.60
- Bernalillo County, N.M.: $8.00 to $8.50
- San Francisco, Calif.: $10.55 to $10.74
- San Jose, Calif.: $10.00 to $10.15
- SeaTac, Wash.: $9.19 to $15.00
San Francisco Mayor Ed Lee made a big show of support for low-wage workers when he, this week, came out in support of a $15 an hour citywide minimum wage.
“San Francisco is an expensive place for working families. I believe the time has come to bring an increase in the minimum wage to the voters, and I will support a ballot initiative in 2014 that significantly raises the minimum wage to help San Francisco’s lowest paid workers keep pace with rising consumer costs,” said Lee in a statement.
“I will work closely with the Board of Supervisors, large and small businesses, other employers, nonprofit organizations, labor partners, and those who represent working families to make sure we do this in a way that is fair, supports our businesses and boosts wages for working people. The national debate stirred by fast food chain employees across our country for a $15 per hour minimum wage is worth evaluating, and I will ask this group for a thoughtful analysis of how an increase in the rate will affect our economy, businesses and workers.”
Mayor Lee went on to say that even though it would only be a few dollars increase from the city’s current $10.55 minimum wage (it is set to increase on January 1st to $10.74), he believes that even those few more dollars an hour would drastically help working families.
“San Francisco should lead by example,” exclaimed the mayor.
San Francisco already has the highest minimum wage in the country, but even so, Mayor Lee insists that it will help the city continue to prosper in many ways.
“Raising the minimum wage will not only help working families in San Francisco, but it will boost the local economy and drive consumer spending by putting money in the pockets of our lowest paid workers,” said Mayor Lee.
The federal minimum wage is currently at $7.25 an hour, but President Obama has expressed support in raising it to $10.10 per hour.
McDonalds Employees Must Work Four Months of Overtime to Earn What CEO Makes In One Hour, Report Says
A recent financial analysis reveals that a minimum-wage McDonald’s employee must work four months of overtime to earn what the company’s CEO makes in one hour.
The analysis, compiled by financial information company NerdWallet, examines the financial discrepancies between employees and CEOs of major companies. The report outlines the wage ratio between workers and CEOs of 10 major retail and fast food corporations, including McDonald’s, Starbucks and Wal-Mart.
According to the report, the CEOs earn 874 times more per hour than the average sales associate at their company.
The analysis assumes the average salary for a McDonald’s worker is about $7.73 per hour, although official figures for the company are not publicly available, reports the Huffington Post.
By comparison, the CEO of McDonald’s earns approximately $9,247 per hour.
NerdWallet calculates that it would take a McDonald’s employee approximately 3.86 months of overtime — or 1.5 times the normal pay rate — to earn what the CEO makes in a single hour.
According to Dana Lime, a senior analyst at NerdWallet and author of the report, a fast food employee working full-time still won’t come close to a CEO’s earnings.
“A lot of these companies are paying minimum wage or very slightly above that, and the disturbing fact is that even if a worker works 40 hours a week for a month, they’re never going to get close to what the CEO makes for one hour alone,” she said.
McDonald’s representatives commented that its employees are offered many opportunities for growth in the company, and that its minimum wage workers often work up the corporate ladder.
“McDonald’s offers competitive pay, benefits, and flexible schedules to employees,” said company spokesperson Heidi Barker Sa Shekhem, according to the Huffington Post. “We provide training and professional development for all of those who wish to take advantage of those opportunities.”
More than 50 percent of fast food workers nationwide rely on government assistance, the Huffington Post adds.
An outline of the report from NerdWallet can be seen below.