Friday, January 26, 2007

Ted Kennedy, Labor and the Minimum Wage

Heard Senator Ted "King" Kennedy on the Senate floor discussing Republicans attempts to kill the vote on the minimum wage (hat tip to Crooks and Liars, your source for all progressive video)

The Liberal War Horse as a passion for the poor and less fortunate that has not dimmed in the last 40 years. Living proof that being wealthy and still favoring the less fortunate are not incompatible.

One of the most persistent talking points by conservatives is that a higher minimum wage destroys small business by forcing them to cut employees because they have to pay out a higher payroll or otherwise be forced to raise prices, and this would lead to an inability to compete with businesses who could pay a lower wage. But is it true? Evidence shows that it is not.

I live in Washington, a progressive state who citizens made the choice 10 years ago to tie minimum age with inflation. As indicated by this chart from Department of Labor, minimum wage was :

Sep 3, 1964 -------$1.15
Sep 3, 1965 -------$1.25

However, the Inflation Calculator at the Bureau of Labor and Statistics shows that you would need to earn $8.00 per hour in 2006 to have the same buying power 40 years ago:

Because of this, Washington pays a minimum wage of $7.93.

Now we come across the following article by Egan of the NY Times (free registration required):

For $7.93 an Hour, It’s Worth a Trip Across a State Line

Across the boarder at Idaho, minimum wage is at the Federal level, $5.15 an hour. 10 years ago the business leaders predicted that small towns on the Washington side of the state line would suffer. But according to Egan:

...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...

...the state’s major business lobby, the Association of Washington Business, is no longer fighting the minimum-wage law, which is adjusted every year in line with the consumer price index.

...During a recession five years ago, the same group had argued that Washington’s high minimum wage law would send businesses fleeing to Idaho. The group sent out a news release with a criticism of the law from John Fazzari, who owns a family-run pizza business in Clarkston, Wash., just minutes from the Idaho town of Lewiston.
But now Mr. Fazzari says business has never been better, and he has no desire to move to Idaho.
“To tell you the truth, my business is fantastic,” he said in an interview. “I’ve never done as much business in my life.”

So, why are the Republicans so intent on amending to death a bill that actual evidence shows will help rather then hurt the both business and labor?

I suspect it is an irrational hatred of all things related to Roosevelt's New Deal coupled with an almost religious belief that even when presented with evidence, they will still worship at the alter of the market place. And the market place hates regulation.

The alternative is that the Philosophy of the Republican Party circa 2007 is an absolute hatred for the plight of the worker, an a desire to keep the average Joe poor and downtrodden. But that would be cynical of me, wouldn't it.

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