A Civilian Criticism of the Wage Hike















This is very similar to the last article in that it voices concerns of Tara Dennis, a low-wage worker, over the increase of the minimum wage. Her concerns are not, however, based on the fact that a wage hike drives prices up. She seems to think of it more as a too-little, too-late situation.

Wages for unskilled work positions have increased beyond the federal minimum wage in the past decade, but have not grown nearly as fast as the cost of living. A spokesman for the Economic Policy Institute chimes in that the policy being proposed by the Democratic Congress is actually very modest, considering the huge gap between cost of living and annual minimum wage income. The increase would only raise wages for 4% of the work force.

By 2009, when the Democrats would like the wage to be at $7.25, this wage would have the spending power that $6.75 has today. The wage increase is, according to the article, a largely symbolic political effort, rather than an actual way to get people out of poverty. The nation's highest minimum wage is in Washington--a full-time worker there will make $16,515 a year before taxes. However, the federal poverty level for a family of three is $16,600.

The woman I mentioned up at the start is quoted later on, saying that it ended up being cheaper for her to be unemployed, where she could receive food stamps, subsidized housing, and be available to watch her kids instead of putting them in daycare.

Another compelling point made is that about 28% of the homeless people in Louisville, KY's homeless shelters are employed. This is a tough statistic to nail down, however, because it is hard to gauge how many homeless people go to shelters and how many remain out on the streets, so I'm not sure how much stock to put in it.

25% of minimum wage earners are teenagers, while 50% are over the age of 25. This statistic helps prove my point that of the already-small population paid the minimum wage, a large chunk are not of voting age and another chunk (the remaining 25% between the ages of 19-25) is of generation Y, known for its political apathy. This is part of why wages have not budged and why it has been nearly impossible to make any federal headway with this public policy topic.

Senator Statement on Economic Losses of Minimum Wake Hike


This is a statement issued by U.S. Senator Mike Enzi (R-WY) as a response to senators offering up politically-driven, unrelated amendments to the welfare reform bill (TANF-Temporary Assistance for Needy Families) as it passed through the Senate in April, 2004. One such amendment involved a minimum wage increase and this is his case against such an increase.

He begins with a hard-hitting statement that gets straight to the core of the problem with politics:

"There's an effort underway to put up a smoke screen of unrelated amendments that mask election year politics in misleading rhetoric. It's time for us to look beyond the smoke screen and see who is really helped – and hurt – by Senator Kennedy's amendment to raise the Federal minimum wage."

He is right in stating that they are trying to use amendments as a means to achieving election-year ends. There has been an outpouring of public support for a minimum wage increase, and the supporters in the Senate, in spite of some alternative motivations, will have a happy group of constituents if they pass this increase, and this will of course help them in the polls.

I don't know if I agree with him on the economic side, though. He uses basic supply and demand reasoning to claim that a price increase always results in a fall in demand. In this case, we are looking at the labor market and with the price of labor rising, he believes the demand for labor will fall. He then goes on to say that it hurts small businesses especially, which is backed by a letter he cites from a constituent: "I have made it a habit from time to time to ask an employer if raising the minimum wage makes a difference to his business. No matter if he pays one person or dozens, the answer is always the same. ‘There are X number of dollars in the budget and I can't exceed that amount. If it means cutting hours or firing workers, I have to do it to stay within the budget.'" Smaller businesses have smaller budgets, so I think Enzi is trying to claim that this would cause them to incur a bigger loss. I fail to see the logic there, though--if they have a smaller budget, they also probably have fewer employees, therefore the wage increase would affect both large and small businesses proportionately. The only difference I see is that larger businesses may have more wiggle room in their budget, but Enzi does not use this reasoning. Perhaps it is just implied.

There is also the claim that grocery prices will rise almost immediately after a wage increase, and not only will this bring minimum wage earners back down, it will also cause regular-wage earners to absorb these new costs, technically resulting in a pay-cut for them. This is not necessarily true--other articles I have read say that part of the reason a minimum wage increase would be so costly is because employers would have to raise the pay of all workers to maintain levels of superiority. The public largely supports this bill, and every single public newspaper article I read talked about an increase in all wages at these types of businesses, not just the minimum wages. People may not be so supportive if Enzi's opinions were published in a newspaper--I don't think the supporters have considered their responsibility for absorbing these costs in the form of price increases.

Given that the minimum wage debate stems from the growing wealth gap in the United States, it is worth it to look at exactly who is in support of it, who ignores it, and who is against it. The wealthiest people have huge disposable incomes, and if the minimum wage caused their steak dinner to increase from $50 to $75, it may not cause more than a grumble of complaint, if even that. In the articles I have read, the wealthy do not land on an obvious side of the debate--some CEOs think a wage increase is a good idea, while some wealthy politicians are opposed. When the latter group refrains from passing minimum wage increases, I don't think it is because they are afraid their meals will start costing more--I think they just don't care enough about a law that affects such a small group of people. The attention the minimum wage has garnered in recent years is not due to an increase in minimum wage earners, but an increase in the number of citizens aware of this problem. More people care about the issue, so politicians can no longer pass it off as something that affects a minute percentage of the population. More of the population is catching on and more are demanding action.

From what Enzi writes, however, it seems like poor people should not be asking for a bill like this. He says that poor people would shoulder the cost of resulting high prices, but didn't he already say that regular wage earners would shoulder the cost? It makes more sense for him to say that those who do not earn the minimum shoulder more of the cost, because they are not getting a legally mandated pay increase. However, they would probably get some form of pay increase so the resulting cost would fall upon both groups equally.

I do agree with Enzi, however, when he discusses the variations in prices across the nation. I think that the fact that half of the country has raised their wage shows that they are responding to their own state's price levels. (On a side note, it is a little confusing that big cities like New York and Chicago have not been catching up to others like Santa Fe). I think the legislation is getting pushed through on a federal level because, although states have taken it upon themselves to adjust their own wages, $5.15 is no longer a realistic wage in any state. States will continue to set their own according to their own guidelines, but people are realizing that with inflation, no one can earn $5.15 at a full-time job and get by, and people are seeing how unjust and nonsensical that is.

A lot of states are beginning to set wages that are indexed for inflation. I do not know enough about economics to say what would happen if they tried this on the federal level, but it seems as if it could be a possible solution to this never-ending debate over when and by how much to increase the federal minimum wage.

Pelosi to Fast-Track Minimum Wage Increase

This is another article about the possibility of a federal minimum wage increase as the 110th Congress convenes for the first time in January, 2007. This article says the bill they will promote was proposed by George Miller (D-CA), the incoming chairman of the House Education and the Workforce Committee. It appears to make the same proposals as Kennedy's failed bill earlier.

According to Pelosi's spokesman Brendan Daly and lobbyists, the bill will go straight to the House floor, bypassing the Education and Workforce committees. Pelosi prefers a stand-alone minimum wage bill that is not tied to other legislative efforts, something that has complicated the passing of such an increase in the past. It seems like these other bills are tacked on not only to achieve compromise or bipartisan support, but in general to make the group affected by the bill more broad. There is a strong feeling of support from community groups like ACORN for a minimum wage increase, but in reality a very small portion of the population gets paid the minimum wage, and a large chunk of that population may not even vote yet.

The article provides a good brief summary of the issues being debated. Proponents argue that it will aid the working poor, while business groups counter that it could lead to higher prices for goods and services and force companies to cut low-skilled jobs that will make it difficult for people to get entry-level jobs. Economically speaking, an increase in the price of labor would either have to occur with a subsequent decrease in supply or an increase in demand. Assuming that demand for labor stays the same (or even decreases, as is predicted by some) the supply will have to increase and this will cut back on the number of jobs available.

Senate lobbyists also think the bill will be advanced thru committees, where they will try to make the bill more appealing to proponents. For example, they may include a proposal of faster depreciation of restaurant buildings. This would not be ideal for Pelosi, who wanted this bill to stand alone, but it may be necessary to garner the necessary support.

Illinois Senator Recalls Minimum Wage Increase Bill

This is an article giving an update on the Illinois minimum wage increase situation. Apparently, the bill had been approved by the House and Senate and was on its way to the governor when a senator said she would like to make changes to the bill.

The Senate also created a supplemental spending bill that contains money to give lawmakers and other state officials a 15.6% pay raise, but this won't have the opportunity to be approved until January. This bill will most likely go through quietly and quickly, not garnering nearly as much media attention as the minimum wage.


Senator Kimberly Lightford was the main sponsor of the minimum wage bill, and is recalling it, so to speak, in order to tweak a provision that allows employers to pay their teenage workers .50¢ below the minimum wage. I happen to think this is a great provision, especially if the arguments given supporters have been about the wages needed to take care of a family and stay out of poverty. Teenagers working minimum wage jobs are probably not often concerned about staying above the poverty line.


Lightford removed the provision when the Senate first passed the bill, but Madigan put it back in when the House approved of the bill. Madigan was hoping to appease those businesses upset about the minimum wage hike, and I understand his logic there but I don't agree with another provision that allows employers to pay .50¢ below the minimum wage for a worker's first three months at a job. It is, after all, a minimum, and if they are eligible for a raise after three months, pay them more than the minimum wage. This could also cause a loophole where employers fire workers after their first three months, but I am not sure how likely this is because wasting that time to train would decrease productivity and likely be bad for business. Lightford is hoping to work on amendments during the spring session.

With the sudden last-minute change made by a Senator, the House now needs to look over the bill again. This back and forth may keep the increase from passing until after a federal increase occurs, a plan of action that a Republican senator voiced support for in the article. Lightford is a Democrat and her motives for stalling the legislation probably do not have to do with waiting for a federal bill; her moral sticking points and, in my opinion, pickiness is making it difficult to pass the bill. I hope that someone proposes the compromise of allowing the teenager provision and getting rid of the three-month provision.

The article made no mention of Chicago's struggles with the Big Box Ordinance just a few months ago, and I wonder what impact that may have had on the passing or perhaps expediting of this legislation. If my theory about inaction when it affects such a small group of people applies at all here, it would seem like the larger state government is taking on an issue that couldn't gather enough steam on a city level. That's not to say the big box issue didn't pack a punch, because they did establish quite a movement, but Mayor Daley's comments about handing it over to larger government bodies to deal with may have inspired those bodies to take action.

Illinois to Raise Minimum Wage to $8.25

This is an Associated Press article about the proposal [SB1275] to increase the Illinois state minimum wage by $1 as of July 2007, and eventually to $8.25 in 2010. The bill also allows the state's minimum wages to keep pace with inflation. It was approved by the Senate but not the House when this was written.

The article starts off sounding incredibly biased, but is really just trying to paint a picture of this battle from both sides. Those in support believe it affects people who are trying to support families, and the increase would make for healthier children and better family environment. Those in opposition argue that it affects those in households making more than 55,000 a year, mainly teenagers.

Estimates from the governor's office claim that 308,000 Ilinoisans make the minimum wage and an additional 339,000 people making just above the minimum wage that would also likely see increases. The state population is 12,763,371.

The bill might get stuck in the House until next year because the Speaker Michael Madigan hasn't shown any interest in expediting it during the fall session. People have taken issue with the bill's provisions that allow for the wage to increase with inflation, and restaurant owners also feel it shouldn't affect waiters, who make most of their money in tips anyways. This must be why the main opposition to a federal increase was quoted as coming from the National Restaurant Association in past articles.

People express a lot of opposition based on the negative effects on business and the economy, but there has actually been a substantial amount of economic growth--more people are working and unemployment rates dropped. The following diagram shows the percentages of people who get paid the minimum wage in each individual state. Under10% of Illinois workers would be affected by this legislation.



I think that by far the most interesting and meaningful debate on this topic is who gets affected--teenagers or low-income families. Some policies get passed so quickly while others get stuck, and minimum wage policies seem to have a sticking tendency. How else to explain the decade without a federal increase? I think this is largely because of who is affected--it is difficult to get legislation moving if it only affects a small portion of the population. It gets even harder if part of the group being affected doesn't care or doesn't vote [teenagers].

The Class Implications of a Minimum Wage

This is an opinion piece from the Washington Post, discussing the subject of class in politics that the Wal-Mart debate raises.

The concerns over minimum wages have always brought along discussions of poverty and the increasing social gap between rich and poor.



An interesting fact: A McKinsey company study concluded that Wal-Mart accounted for 13 percent of the nation's productivity gains in the second half of the 1990s, which probably made Wal-Mart about as important as the Federal Reserve in holding down inflation.

Another: Wal-Mart saves shoppers more than $200 billion a year, dwarfing such government programs as food stamps ($28.6 billion) and the earned-income tax credit ($34.6 billion).

Apparently, the Democratic struggle to increase the wages at stores like Wal-Mart stem from these private sector retailers' lack of unions. Workers have no means within the company of expressing concerns over hours or wages, so many think the government needs to step in and protect them.

It seems silly that people expect Wal-Mart to be more open to high wages than they are to unions. The writer of this article doesn't see what's so bad about Wal-Mart, and even likens it to other American images like baseball, apple pie and Chevrolet. I think he is taking the anti-liberal argument a little too far here, but I do understand the comparison to Chevy and I agree that this is an example of liberalism as condescension. The spin of the minimum wage into a moral issue does show a philosophic and almost intellectual distaste for the upper-class. There is no hiding that this a crusade against the privileged, and we might have a class battle on our hands.

Santa Fe, San Francisco Mayors to Speak in Support of Big Box laws

This is an article from the Chicago Tribune, put online by the Chicago Federation of Labor, about their decision to bring in mayors who have passed big box ordinances successfully.

I mentioned this before, that those in support of the ordinance brought in Santa Fe and San Francisco's mayors to talk about the success of big box laws in their cities.

I think this is interesting to see after the veto went through, because these people came and spoke to the aldermen, further convincing them to support the measure, while Mayor Daley remained pretty steadfast in his choice to veto it. This article was published prior to the veto and quotes the mayor saying that the law would prevent big stores from locating in the city. I wonder why he chose to ignore that this didn't occur in other big cities like San Francisco--I'm sure Wal-Mart made similar threats in those cities, but they developed there anyways because they need to expand outside of suburbs and had no success overseas. Daley probably spoke with those other mayors, so I wonder why they were unable to convince him that his fears were unfounded.

Democratic Congress Plans to Raise Federal Wage

This article from a Minnesota newspaper discusses Congress's plans for a federal increase in the minimum wage now that they have a democratic majority in favor of the increase.


I can't help but notice the parallel between the decade of stagnation in the federal minimum wage and the 12 years of Republican control in Congress. The last wage increase did occur under a Republican Congress, though, in 1996. Nancy Pelosi is quoted saying that a federal minimum wage increase is among the Democrats' top priorities and will be accomplished within their first 100 hours in power. They hope to pass Ted Kennedy's [D-Mass.] 2005 bill proposal for an incremental increase over two years to $8.25/hour. In January, Kennedy will become the Chairman of the Senate Committee on Health, Education, Labor, and Pensions, a role even more suited to making changes in the labor field.


Main opposition comes from the National Restaurant Association, who conducted a survey showing that nearly 90% of restaurants would raise menu prices in response to the higher minimum wage. This is so frustrating because the whole reason the minimum wage needs to increase is because of the inflation and expansion of prices that has already occurred--people are so upset because their wages are not keeping up with the rapid growth of the economy. Restaurants think they need to increase their wages because their profits have already increased due to economic growth. The owners are used to taking home larger paychecks and are not willing to make cutbacks of their own salaries to help their workers keep up with already-rising costs.


The AFL-CIO, America's Labor Movement, have been a major force in this effort, staging support rallies outside of Congress.

The Bush administration has released some predictably vague rhetoric on this topic--just like in Chicago with Daley, Bush has the power to issue a veto even if Congress votes unanimously for this bill. The article says that Bush would be under immense pressure to sign it, but Daley was also under pressure. His decision affects many groups, but he is not running for re-election. In fact, it might be beneficial for him to sign the bill because his administration could surely spin any anger back towards the Democratic Congress, thus benefiting the campaign of 2008's Republican candidate.

Daley's Decision May Cost Him February Re-Election

This article discusses the career implications of Mayor Daley's decision to veto the Big Box Ordinance, and the possible negative impacts it could have on his re-election in the future.


It discusses the previous success of the mayor with the City Council and his ability to work well with them. It brings up the unease that has plagued Chicago recently, however, with federal corruption charges against his patronage chief, who was convicted for doling out political hires. Daley, despite investigation, is said to be in the clear. He has had a good relationship with his City Council because they agree often, which is why this was the first we have seen of his veto power in the 17 years he has been in office. The aldermen voted largely for this ordinance which they knew Daley to be against, a very rare occurrence. This may have been due to a decrease in trust of government in both Chicago and the United States recently.

People are less willing to blindly trust their leader as more stories of corruption appear in the news every day. This came in the season leading up to the Congressional elections, a time when many politicians were being exposed on several counts of misbehavior and further decreasing public trust in elected officials. Daley has definitely felt some of that backlash.

Daley is quoted in the article saying that he thinks these issues should be handled by the state and federal governments, and not on a city-by-city basis. This is unique thinking for a man who has spoken out about starting programs on his own in the past. The article very briefly hints that the three aldermen who changed their minds about the ordinance were most likely "nudged" by Daley to wrestle the appropriate votes out of them. Other keyplayers are the Chicago Coalition for the Homeless, a group that has joined rallies to take the fight to state and federal officials. The backers of the measure aren't letting it die and hope to get in on a referendum in the February elections.

Mayor Daley's decision to use his veto doesn't seem like the behavior of a man running for a 6th term in February, although he has recently bragged about all the successes he brought to Chicago's school system, crime rate, and greening efforts. He has not been an oppressive leader at all, and perhaps this is part of his downfall--the article mentions the fact that city aldermen are more afraid of community groups than they are of the mayor. Shifting emotions about the Daley lineage may result in a turnover come February, when some big names are considering running for his position--Democratic Congressmen Jesse Jackson Jr. and Luis Gutierrez are among the contenders. Jackson supports the ordinance, among other issues that the city has grappled with in recent years.

The article seems to be written objectively until the final lines, when the writer says, "If Jackson can pull it off, then Daley might finally know a little bit of what it feels like so often for many of the minimum wage workers the retail measure was aimed at--out of a job and unable to call the shots." This is an awkwardly worded attempt at cleverness, and I thought for sure it was a quote until I noticed the lack of quotation marks. It's a strange thing for a supposedly objective reporter to say that, and it reveals some of the bias that political magazines like TIME can carry.

Mayor Daley Vetoes Big Box Ordinance

This CNN article raises Mayor Daley's decision to veto the big box ordinance, which he issues on September 11, 2006. He supported it with what he had been saying all along about driving big retailers out of the area, cutting back on job opportunities and low-cost shopping opportunities for the poor communities, and growth and development over all.

Daley points out here that the ordinance is well-intentioned, and he does appreciate the need to give decent wages, but he also acknowledges that some people need jobs badly enough to not mind getting paid less than $10/hour. Economically speaking, I agree that that large of an increase would have some detrimental effects. I hope that the issue isn't dead, though. If a federal increase is not on the way, I hope that Illinois will at least work on a raise.

This Crains article discusses Mayor Daley's veto. It was his first veto in 17 years, stemming back to before the federal minimum wage increase in 1997. People are accusing him of favoring businesses over residents, and that is kind of a tough call. When you take into consideration things like campaign finance and the pressure that I'm sure he feels from those large retailers, it would seem like a corrupt decision. But I don't think that he is without other support. His official statement, quoted in multiple articles, was this:

"I understand and share a desire to ensure that everyone who works in the city of Chicago earns a decent wage. But I do not believe that this ordinance, well-intentioned as it may be, would achieve that end. Rather, I believe it would drive jobs and businesses from our city, penalizing neighborhoods that need additional economic activity the most. In light of this, I believe it is my duty to veto this ordinance.”

I don't think he is constantly adhering only to his monetary backers, or else we would have seen a veto sometime in the past 17 years. There is good reasoning behind letting these stores into the city, and I think other negotiations should be worked on. It does offer an interesting look at democracy, though. The people here clearly spoke out and a majority of Chicagoans were in favor of this ordinance, but corporations and those in power shot down what the people came together to propose. The possibility of an override does give one last chance for a majority to speak out, a system of checks and balances arranged so that the mayoral veto is not the end-all, be-all. I don't think that the city aldermen dislike Daley, though--he has usually been a very popular political figure and I think he would be able to persuade at least a few people to come to his side.

The VP of the National Retail Association called this a triumph of reason over politics. This seems pretty backward to me--yes, the veto was backed by reason. But it was also completely powered by politics, and the influence money has on politics.

This Chicago Tribune article discusses Daley's decision to veto the bill. One alderman is quoted here saying:
"My decision is based on Mayor Daley's track record. Chicago has never looked better."
This is evidence of Daley's popularity, and the effect that has on support for his veto. Other politicians issuing this veto may have been looking at a career-ending decision, but people really begin to look at the other side of things when a politician that they respect or usually stand behind does something like this. It is fascinating that he can simply change minds so easily just by issuing a decision like this.


This article talks about the existing stores in the city, rather than the decrease in incoming business due to the ordinance. Over 40 existing retail stores would have been affected by this ordinance. On the topic of incoming business, though, the threats to Daley seem even more apparent here--Wal-Mart had promised at least five new Chicago stores if the ordinance was repealed. This would have surely had an enormous influence on his decision, and shows the power that words alone can have over the decisions of a large governmental body--Wal-Mart's rhetoric must have scared and enticed Daley and had a huge impact on his veto.

This is a New York Times opinion piece on Daley's veto. This article actually says that Wal-Mart plans to expand into Santa Fe, which is hypocritical when you think about the fact that Santa Fe's minimum wage is $9.50--if they are willing to pay that, what difference does the extra .50 make to them in Chicago? Especially because Chicago is a larger city than Santa Fe and would probably bring in more money in the long run.

According to this reporter, the proponents of a living wage have the moral high ground, but can this translate to a political high ground? Morality dominates politics in some arenas such as abortion, but it varies greatly dependent on the situation.

Target Threatens to Leave Chicago with the Passage of Big Box Ordinance



This is an article from Time magazine about Target's decision to scrap plans to build new stores in Chicago.
It discusses Target's Jobs and Opportunity Zone Initiative, a campaign to open 50 stores in bad neighborhoods.
It brings up a group of keyplayers not previously mentioned, and that is the shareholders for large-scale retailers. The big stores have to satisfy these people by growing and expanding, and they need to move into new areas to accomplish that. They are probably thinking, though, that this growth will not occur if they enter big cities while increasing their wages at the same time. It seems like they need an economist to come in and punch out some numbers for them--if they increased their pay, would they have to increase their prices equally in order to see growth? Or could they leave prices and increase pay and still see some growth? It is impossible to predict the future, but Chicago would not be the first city to do this. They could look to San Francisco and see that it has not been a problem.

If the urban market is rumored to be so lucrative, it seems like they could bring stores there, increase wages by a small amount, and still turn a profit and please their shareholders. I wonder what the shareholders opinions are on the minimum wage topic--on the one hand, they would be against it because it decreases their profit, but on the other hand, it is becoming quite a moral dispute.

Where the battle stands right now is phrased perfectly in the closing of the article--Wal-Mart and Target's threats to stay in the suburbs for now while Mayor Daley makes his decision is just an economic game of chicken. Hopefully he will see that he has enough power to make a different decision than what money would dictate here.

Chicagoans Discuss Ordinance and Its Implications for the City


http://www.pbs.org/pov/pov2006/wagingaliving/special_goodman_chi.html

This is a transcript from a PBS documentary interview with Chicago city aldermen Ed Smith, chair of Chicago's Black Caucus, and Joe Moore, chief sponsor of the measure. It also includes ACORN activist Shiren Rattigan-Ouni and Chicago resident Toni Foulkes. They are discussing how they see the big box ordinance affecting the city.

First, I want to share this quote from Moore:
"Unlike us elected officials, Wal-Mart doesn't have to file campaign disclosure reports. But I can tell you that there were full-page newspaper ads financed by Wal-Mart, television ads financed by Wal-Mart. And they made some campaign contributions as well that may or may not have helped them along the way. The bottom line is we were very well organized, but ours is a grassroots effort, theirs was a "throw money at us" effort."

This provides direct evidence of what I have suspected to be the case all along--that Wal-Mart makes campaign contributions that sway policy-makers to vote in their favor. Money is power, but it would be great if those people in power would realize that they have tools to influence those with money, also. It is stated throughout the interview that Wal-Mart has saturated the suburbs and needs to come to the city in order to keep turning a profit and expanding their business. They need it. This means that Chicago can make whatever law it wants to and they will eventually have to adhere to it. It seems like amount of wage increase is a workable item in this debate, and with both sides holding power, a successful negotiation could take place.



Rattigan-Ouni brings up the struggle between media and money vs. people and workers. She talks about money and people as the two ways of obtaining power in America, a perspective that struck a chord with me as I just finished writing my paper on the power of money in American politics. She has more hope for the power of the people than I did in my paper, but the work that ACORN has done does inject some more hope into the effect a grassroots campaign can have on a policy issue like this.

Moore uses an example of FDR's New Deal and Fair Labor Standards Act following the Great Depression to show that a government hand in the economy can cause great economic expansion, despite naysayers. He remarks that we are currently killing the American dream and that people called FDR a socialist at the time, but that didn't stop him from making the necessary changes. He is suggesting we push past any accusations of socialism to prove that this will have a positive affect on the economy.

Foulkes makes a claim that if Wal-Mart was left to its own devices, it would be paying workers as much as they pay them in other countries--she is attempting to strike somewhat of an emotional chord, since many people in the U.S. are against the sweat-shop manufacturing that goes on overseas. This doesn't work, though, because even if the minimum wage is low in the United States, Wal-Mart would never be allowed to pay its workers the penny wages that Foulkes talks about.

The interviewer Amy Goodman brings up an article she read in the Chicago Defender, which discusses a Chicago reverend's opposition to this bill on the grounds that it is equally immoral to deprive people of jobs as it is to pay unfair wages. He makes a good point that some people, probably a lot of people, would be thrilled to take that job for $7-8/hour. I don't necessarily think that is as strong of a moral issue, but it is certainly worth considering. $8/hour is not an unfair wage to a lot of people.

The argument made again and again, however, is that Wal-Mart has the means to be paying more than that $8/hour. They made $11.4 billion in PROFITS last year. And the growing income gap is not helped by the Wal-Mart CEO making $34,999,999 while their average employee makes $16,000.

I can't help but notice everyone's' silence on the factor of prejudice in this issue, not simply in this interview but in all of these articles. The income gap has certainly done a good job of fostering racial and economic typecasting, and the people who make laws are mostly privileged, white, and upper-middle class. Because of stereotypes and assumption, people are prejudiced against low-level unskilled workers. The privileged do not want to support ordinances for poor people, because they assume that poor people are criminals, or that they are poor because they do not work hard enough. Faulkes states in the article that the people getting jobs at Wal-Mart are not felons, they are people who work very hard to try to support families. I think it would be beneficial if the minimum wage campaigns tried to get that fact out there. Working on economic and many other prejudices would help with all the issues I have raised--immigration, poverty, schooling. I realize it may be a bit idealistic, but I am not saying that a) we can solve prejudice quickly, or that b) it is the miracle cure for all of these issues. But it couldn't hurt.

Stores Rethink Plans to Build in Chicago After Being Boxed Out

http://www.time.com/time/magazine/article/0,9171,1226139,00.html

This is yet another article on the decision to pass a big box ordinance. This is from Time magazine, discussing the decisions of some big box stores to stay out of Chicago after their city council passed the ordinance.

This article restates what previous ones have brought up--that big box stores are making a big deal now, but will eventually have to compromise. Their desire to build in Chicago will outweigh the wage battles, especially economically speaking. The untapped spending in Chicago's many up-and-coming neighborhoods will be enough to outweigh the cost of a few extra dollars.

The article talked to Sante Fe's mayor, David Coss, who said that the city has only seen strong growth since its wage increase. He mentions that this growth has been seen in big box stores, but says nothing about small businesses.


The CFO of CostCo makes the statement that paying their workers $10 does not make them any less competitive. This raises a sticking point, though--CostCo already has a competitive edge by offering unique products with their model of bulk-buying for less. Stores like Target and Wal-Mart are in competition with each other and neither possess a unique asset so they are naturally worried about how their prices will compare to the other's.

I would like to see which store puts more money into government lobbying and campaign financing, and also which corporations CostCo is tied to and how they interact with political figures.

Chicago City Council Passes Big Box Ordinance

This article from the New York Times talks about Chicago City Council's decision to pass the Big Box Ordinance. While the City Council passed it, Mayor Daley was silent on whether or not he would use his veto and the Illinois Retail Merchants Association is claiming the ordinance is unconstitutional, violating equal protection rights and causing illegal discrimination. Retailers have bombarded alderman with petitions, letters, and phone calls, as well as unions and community groups. Those supporting it use CostCo as an example of a large store who pays $10/hour and does not have to raise prices of goods. They also use San Francisco and Santa Fe as examples of states who passed Big Box ordinances and did not see a decrease in the amount of retailers coming to the city.



This political battle got a little dirty. Wal-Mart made some pretty blatant threats when the City Council acted, probably directed at Mayor Daley in an effort to provoke a veto of the bill. They said that Chicago would be essentially closed for business, and that they would reconsider opening any other stores there in the future.

This article offers a labor perspective on the decision to pass the Big Box Ordinance. It says that Spokane, Washington is attempting to put a similar measure on their 2007 ballot. Other Big Box laws have simply banned large-scale retailers or put non-wage regulations on them. This is bound to have political implications because the larger the business, the more corporate clout they possess, and this, more often than not, translates into political power. Wal-Mart is certainly reacting--the article states that they are suing the states that currently have big box laws, even ones that do not involve wage.

The article concludes with an interesting choice of words--the reporter says that the Senate voting down the "package" bill to reduce the estate tax served to keep alive the state campaigns, which will provide larger increases. This shows some preference for the state campaigns over a federal one, due to the higher wages and likelihood of success on the state level.

This article offers yet another take on Chicago's decision to pass the Big Box Ordinance.

The bill passed through the City Council 35-14, and it takes 34 votes to override a veto, so if Mayor Daley chose to use his veto, he would have to convince two aldermen to change their votes. According to the article, Mayor Daley has said that the insertion of big box stores into the city's poorest neighborhoods will spur development and job opportunities for the lower class. In my experience, Daley is a widely respected and liked figure in Chicago politics--he has done good things for the city in the past and I don't think he would have any difficulty showing people his side of things and persuading them to see things differently.

There is an interesting quote in here from Jerry Roper, president of the Chicagoland Chamber of Commerce. He said, "The aldermen who voted in support of this...helped put the sign up really big that development in Chicago is dead." An alderman who voted against the measure says that this would hurt the economy that they are trying to help.

Wal-Mart has said that they do not pay anyone less then $7.25/hour, a wage that is already far ahead of the federal minimum. I think that the $10 requirement, with additional benefits, is a little too idealistic. A spokesperson for Wal-Mart said that they would just focus on serving the city's residents from suburban locations, but this raises another policy issue--gas prices. People don't want to have to commute to their grocery store. They shouldn't have to--and all that does is add another expenditure to their dwindling monetary situation. This may seem far-fetched, but it could be possible that those in political power are purposefully choosing to ignore this side-effect, because they are heavily invested in the oil business.

Illinois Rises Above Federal Minimum Wage

http://www.ibjonline.com/print_illinois_minimum_wage.html

This is an article about the last time the minimum wage was increased on a state level in Illinois. In light of the proposed Big Box Ordinance for living wages in Chicago, I thought it would be beneficial to find some information about where the state itself stands on the issue of a minimum wage.

The article reiterates that retail and food service will feel the impact of this increase the most, a concern we've seen expressed in many articles so far. Apparently Illinois was the first Midwestern state to set a wage above the federal. This is interesting considering the low level of immigration in the Midwest compared to other U.S. regions.

The article says that the state of Washington (in addition to Vermont) also has a cost-of-living adjustment built into their minimum wage bill to keep up with inflation, something that was originally in the Illinois bill but was pushed out during negotiations.

The article offers a different take on the type of workers holding down minimum wage jobs. Apparently, a large proportion of minimum wage workers in Southern Illinois are students at the nearby college, and Madison County Employment and Training Director David Stoecklin is quoted saying that these jobs are important entry-level steps for young people to get into the workforce. The funny thing is, these are the people who remain politically apathetic. No one quoted in these articles so far has been a student or teenager--all of the human interest storylines have involved poverty-stricken adults struggling to support their families. This may be another political spin tactic, as those people do attract more sympathy than upper-middle class students. Or perhaps it really is that the latter group does not care about starting salaries at jobs they won't keep for long.

Senate Doesn't Pass Wage Bill, Estate Tax

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/08/04/MNGIDKB4Q21.DTL

This is an article about the failure of Congress to pass a bill requiring an increase in the federal minimum wage. It discusses the trade-offs made between an estate tax bill and the minimum wage bill, neither of which passed.

I spoke in an earlier entry about efforts to lump the minimum wage demands with other, seemingly dry economic topics, and that is precisely what occurred with this attempted trifecta bill, which tried to offer something to satisfy everyone. It called for a Republican-backed cut in estate taxes for the wealthiest families, the minimum wage increase, and business tax cuts that appealed to both sides.

While Republicans may have been willing to allow an increase in the minimum wage, Democrats couldn't let the proposed taxes happen and saddle lower-class Americans with debt just as their increased wages attempt to take them out of it. The article focuses on the mid-term elections, and Republicans being more open to a wage increase as a means of garnering public support for their campaigns.

This all reminds me so much of the conversations we have in class about spin and public image. This issue got especially hot prior to the elections. Apparently, this bill featured a host of specific tax breaks aimed at specific senators in order to gain their vote. Republicans didn't want to be vulnerable to criticism about treatment of the poor, but they also didn't want to concede without getting something in return. They tried to make this bill look like something that benefited poor people, when the truth is the taxes they were hoping for would benefit the richest people in the country more so than the wage provision would benefit the poor.

I find it so funny that this bill is referred to as a "package" in the article--it goes to show that politics can be largely about compromise, one branch or party needing to barter with votes and laws in order to achieve success in any one area. It is hard to accomplish policy that responds solely to public opinion because the partisan conflicts get in the way and policies end up grouped together as part of a package deal.

Minimum Wage Issue Sidestepped in Congress

http://www.commondreams.org/headlines06/0109-08.htm

This is an article about the minimum wage issue being ignored in Congress lately, namely in 2004-2005. It discusses the possibility of a Democratic turnover in the midterm elections and how this would effect the movement of a minimum wage increase bill through Congress.

Vermont is going to begin indexing their minimum wage for inflation in 2007. This makes sense in theory. The point is also raised here, however, that rising health care costs and competition from overseas firms are already hurting the economy here and that a higher minimum wage would cause more damage. The embedded contradiction is that while these other costs increase for firms, they often get passed onto consumers anyways, and consumers cannot afford those increases if their pay is remaining stagnant.


We see support from the non-profit think tank, the Economic Policy Institute, in this article as well as the last. This group is in Washington and has had some impact on Congress--Ted Kennedy, Democratic Senator from Massachusetts, proposed the Fair Minimum Wage Act of 2005, which increases the federal minimum wage over a two year period to $7.25.

I am not in favor of the huge increases occurring in Santa Fe, although I do think that individual state ordinances have been working quite well. That said, this increase of a few dollars to keep up with the rising cost of living is something the whole country needs. State-by-state increases do work, but the article points out that they create incentives for firms to move across states and leave workers behind.

I have heard people argue that raising the minimum wage is unnecessary, since those who get paid a minimum are not supporting families, but merely high school teenagers at their first jobs. This article claims that this is a false assumption--apparently, over a third of adults aged 25-54 in minimum wage jobs remain in those jobs for at least three years. Additionally, minimum wage workers earned an average of 68% of their total family income.

I think this issue has strong ties to the immigration debate that comes up in class and in the world frequently. The people living in cities like Santa Fe who are being paid the minimum wage are not high school students at all--a lot of them are probably immigrants. This would explain why they account for so much of the family income while working a stereotypically unskilled job like restaurant service or construction. The stagnation of the federal wage may be because of the immigrant workers' reluctance to speak out against the government. I think that in the coming years, as these two debates heat up, we might see some parallel shifts occurring and it will be interesting to watch how one affects the other.

ACORN's Living Wage Campaign


This is a New York Times Magazine article about the community activist group, ACORN, and their efforts to create ballot initiatives for minimum wage increases on the state and city level. They actually also work on living wage campaigns, which are efforts to change the wages of a certain type of worker, but not necessarily the lowest-paid people in the workforce. What is happening in Chicago is a great example of a fight for a living wage. They do not want to change the city's minimum, but are instead fighting to set a mandate for how much big companies like Wal-Mart have to pay their workers.

This article informs us that the minimum wage prior to the 1997 increase was $4.25, and that a grass-roots group composed of religious communities and labor unions got the City Council of Baltimore to raise the wage of the city's contract workers from the current minimum in 1995 to $6.10. This was in response to those with full-time jobs attending the city's soup kitchens and essentially living in poverty while still holding full-time jobs. This relates back to the first article I introduced, which showed that having a full-time minimum wage job has never been enough to raise someone out of poverty.

The ACORN group touts 134 living wage campaign victories, a huge number considering its humble beginnings. This reminds me of the readings we have done in class on the Civil Rights Movement, and actually makes me feel hopeful about making a difference. This hope has been lowered, though, with all of our conversations about political apathy and inactivity in our generation. Unfortunately, the generation working for ACORN and struggling for a wage that rises with living costs is probably not made up of middle-to-upper class undergrads, the very people currently plagued with inaction. It also doesn't help that the number of people directly affected by the minimum wage has been falling in recent years, as shown in the following diagram.




The article raises the interesting point that economic justice should come in a sweeping movement from Washington, yet has taken the form of low-level collectivity and community, solving the problem from the bottom up. This may not be conventional, but it is one of the only ways a difference has been made in recent history, and hopefully the grassroots nature [and success] of this campaign is a sign that it might be going somewhere.

This is an issue that Democrats hope to use as a new point of moral unification in the party. ACORN workers also hope that raising awareness and support for this issue will boost turnout for candidates who support it. They hope that the alarming moral concern will arise from the gap between rich and poor that exists in the U.S., something everyone can recognize. It is really fascinating that the article brings up Clinton's motivation for changing the minimum wage in 1997, and that was due to poll results showing that America was largely in favor of an increase. Our current administration could learn a bit from that.

The issue of a living wage has been around since the 19th century, according to this article, which also says that Massachusetts enacted a minimum wage of .25¢ in 1912, decades before the federal government enacted theirs. ACORN is not the only group attempting to revive this issue--the National Council of Churches and Industrial Areas Foundation are getting involved. It is interesting that this is viewed as a point of party disparity when the religious groups are getting entangled, as religion and government usually coincide more on the Republican side.

Those in opposition may not be Republicans, but there are certainly some economists on that side. Keynesian economists who believe in a strong government role in fiscal policy would support the minimum wage, but others believe that the market should be left to set wages, not policy. The argument on this side is that forced wages crowd teenagers, low-wage employees, and small businesses out of the market. However, specific research and case studies have since been done to prove this theory wrong and made converts out of many economists. The Economic Policy Institute now endorses wage regulations, and the CEO of Wal-Mart even recently spoke in favor of increasing the minimum wage. He does not pay his workers the minimum, though, and wouldn't be negatively affected by this increase--he may even see a boost in business due to the increased consumption by Wal-Mart's low-class shoppers.


Unemployment may arise in Santa Fe, however, due to the ordinance's provision that stores with under 25 employees do not have to pay the minimum wage, which provides an incentive to hire fewer workers. The article cites the example of Great Britain, who raised their minimum wage and actually experienced lower unemployment. Another concern brought up here is the ripple effect on wages within a business--if lower level employees are getting a pay increase, businesses may raise the wage of higher-level employees to maintain seniority in the workplace.

I talked in an earlier entry about the issue of inaction and apathy in my generation. I think that the strong human-interest aspect and moral spin of the minimum wage topic will have more of an affect on people than lumping it with other economic issues such as health care and retirement. Unfortunately, younger people aren't paying very much attention to these issues--they appear rather dry. Garnering moral support may be a more effective way of getting peoples' attention. My generation has other issues that come into play here, things we have talked about in class. The article "Bowling Alone" talks about our declining social capital and the parallel of a decline in time spent with family. Experiments done since the implementation of No Child Left Behind have shown that kids who spend more time talking to their parents absorb more information and learn things faster. If so many parents are working for low wages and working extreme hours to make ends meet, they are not taking time out to talk to their kids. Decreasing poverty is the key to solving a lot of other problems that plague the U.S.

That said, it concerns me that they want to set the wages so high in Sante Fe. Increasing to $10.50 by 2008 seems like a bit much. The article raises the possibility that ACORN is setting high wages to gain public support in their campaigning, but it seems like that support would be cancelled out by the lack of support from the government--it is very likely that they aren't taking this issue seriously because they find that kind of increase preposterous.

The article does go a good job of showing that all states react differently to wage increases, and whatever economists assume will happen is not necessarily going to be the case. While a federal consensus may seem like the right way for our country to set economic policy, it might make more sense to operate on a state-by-state basis. Some things might really be better off left to the state, as they do vary so much. With Robert Putnam's article in mind, perhaps this issue is exactly what state and city councils need to rally together and get that civic engagement back to a healthy level.

Public Opinion Polls

Two separate polls showing public support for an increase in the minimum wage.

The first, a Newsweek poll conducted by Princeton Survey Research Associates International on Nov. 9-10. N=1,006 adults nationwide. MoE ± 3, showed that 68% feel that the minimum wage should be one of the government's top priorities, 21% felt it should be a lower priority, 10% felt nothing should be done at all, and 1% were unsure.

A Pew Research Center survey conducted by Princeton Survey Research Associates International on Jan 4-8, 2006, N=approx. 750 adults nationwide. MoE ± 4, showed 47% saying that a minimum wage increase should be a top priority, 34% saying it should be a lower priority, 10% saying it is not too important, 6% saying nothing should be done, and 3% unsure.

Not to be redundant, but I am again baffled by the inattentiveness of the government to this issue. Obviously a majority has expressed concern, so why has nothing been done about it?



It is interesting, however, the way the numbers are distributed. The poor are more plentiful than the rich in this country, possibly explaining why these opinion polls represent a larger proportion of people who desire an increase in the minimum wage. The smaller percentages who see it as a lesser issue are those people making large amounts of money and to these people, a minimum wage is inconsequential.

We have talked a lot in class about the power of corporations and corporate lobbyists, and I think that is probably the answer to my inquiries about inaction on this issue. The stores that employ full-time, low-income workers are frequently big businesses, such as Target or Wal-Mart, and these stores can get quite political with their geographical placement and effect on the economy. If producer costs are already increasing as the economy develops, they aren't going to want the added cost of paying higher wages. The next logical step would be taking the issue to governmental bodies, who then keep any legislation from passing. I know that Chicago has been dealing with some issues with Wal-Mart and Target, companies that are able to put immense pressure on not only local small businesses, but also the city council and mayor. Hopefully our mayor will arrive at a less corrupt decision and outcome than the federal government has.

History of the Minimum Wage

http://oregonstate.edu/instruct/anth484/minwage.html

This research, done by Oregon State University, gives a brief overview of the minimum wage in the United States since its incipience. It uses graphs taken from the U.S. Bureau of the Census, U.S. Department of Labour, and the Bureau of Labor Statistics.

It states that Washington has the highest minimum wage in the country at $7.63 as of January 2006, a full $2.48 more than the federal minimum wage, which is going through the longest period of stagnation in the history of the minimum wage.


It seems so odd to me that as many as 28 states can change their laws, and yet the federal government doesn't respond. We talk about the problem of poverty as an issue in this country, yet ignore the fact that one of our federal laws nearly force people to remain below the poverty line. This is shown by charts in the article, which exemplify that minimum wage levels have never been sufficient to raise a family out of poverty. The minimum wage reached its highest point in real 2005 dollars in 1968, when the wage was 1.60 (9.20 adjusted for inflation). Even this wage doesn't reach the poverty level income, and it doesn't even come close in other years.

Through what we have been talking about in class, I get that it can be very difficult to pass a piece of legislation, but I don't see how the wage increased exponentially for so long and has now remained stuck while the economy continues to go forward. More people are falling behind and it seems like this should be at the forefront of policymakers' minds. Having more people below the poverty line will only cause more problems in the end.