Saturday, January 13, 2007

You can’t handle the truth: The House passed a bill that would raise the minimum wage to $7.25 per hour on Wednesday. Over the next few weeks, as the Senate considers the law, we’re sure to hear much commentary about how minimum wage earners are not supporting families, and how it’s going to be an enormous hardship for businesses to pay more. But both the Times and the Washington Post are calling these commentators out on the mat. From the Times:

Nearly a decade ago, when voters in Washington approved a measure that would give the state’s lowest-paid workers a raise nearly every year, many business leaders predicted that small towns on this side of the state line would suffer.

But instead of shriveling up, small-business owners in Washington say they have prospered far beyond their expectations. In fact, as a significant increase in the national minimum wage heads toward law, businesses here at the dividing line between two economies — a real-life laboratory for the debate — have found that raising prices to compensate for higher wages does not necessarily lead to losses in jobs and profits.


Business owners say they have had to increase prices somewhat to keep up. But both states are among the nation’s leaders in the growth of jobs and personal income, suggesting that an increase in the minimum wage has not hurt the overall economy.

“We’re paying the highest wage we’ve ever had to pay, and our business is still up more than 11 percent over last year,” said Tom Singleton, who manages a Papa Murphy’s takeout pizza store here, with 13 employees.

His store is flooded with job applicants from Idaho, Mr. Singleton said. Like other business managers in Washington, he said he had less turnover because the jobs paid more.

By contrast, an Idaho restaurant owner, Rob Elder, said he paid more than the minimum wage because he could not find anyone to work for the Idaho minimum at his Post Falls restaurant, the Hot Rod Cafe.

“At $5.15 an hour, I get zero applicants — or maybe a guy with one leg who wouldn’t pass a drug test and wouldn’t show up on Saturday night because he wants to get drunk with his buddies,” Mr. Elder said.

[Times Link]

And from the Post, how even $7.25 an hour doesn’t exactly make life grand:

Robert Iles has his own version of a dollar’s meaning, learned last February when Bower took him aside and said he would be getting a pay raise to $7.25. “Okay,” Iles remembers replying, wanting to seem businesslike. “But inside I was doing the cha-cha-cha,” he said. “It was like going from lower class to lower middle class.”

Soon after, he bought his car, a used 2005 Dodge Neon, and just about every workday since then he has spent his lunch break in the driver’s seat, eating a bologna sandwich with the engine off to save gas, even in winter. An hour later, he was back behind the cash register, telling customers “Thank you and have a nice day” again and again.


Seven dollars and twenty-five cents an hour equals $15,080 per year, and out of that comes $313 for the car loan and $100 for car insurance, Iles said, going over his monthly bills. An additional $90 for the 1995 car with 135,000 miles on it that he is buying from a friend for his mother, $150 for the family phone bills, $35 on his credit card, $100 for gas, $100 toward the mortgage on the trailer. “That’s about it. Oh yeah, $20 in doctors’ bills,” he said, and totaled it up on fingers scarred by surgical stitches. Nine hundred and eight dollars. “I bring home 900 a month,” he said. “So I very rarely have any money for myself.”

[Post Link]

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