Minimum wage war faces little resistance
November 17, 2006
A Democrat-controlled Congress is expected to raise the federal minimum wage when the new session begins in January.
This increase in minimum wage, considered long overdue by some, will be the first since 1997.
Six states voted to boost state minimum wages in last week’s midterm election, and with President Bush and several prominent Republican congressmen pledging to work with Democrats on increasing the minimum wage, support for such an increase is overwhelming.
“It had support from some Republicans even last year, so I think that it will probably happen,” said Dirk Deam, senior lecturer of political science.
Deam said incoming Speaker of the House Nancy Pelosi, D-Calif., and other Democrats are encouraging party collaboration by planning to address this issue during the first 100 hours that the new Congress is in session.
“If you look at down the list of things that they’ve talked about addressing, they share in common an opportunity to show bipartisanship,” Deam said.
The gap between the minimum wage and national average of hourly earnings has widened significantly. Since September 1997, the purchasing power of the minimum wage has deteriorated by 20 percent, according to the current employment situation summary released by the U.S. Department of Labor. Deam suggested this may mean that it is time for a change.
“Even though the Republicans have stalled on the issue,” Deam said, “minimum wage has kind of gotten out of whack with the general income of the country.”
There has been some concern voiced by critics of boosting the minimum wage, saying it would cause smaller businesses to hire fewer to compensate for the more expensive employment cost.
Arne Hallam, professor and chairman of the economics department, said raising the minimum wage wouldn’t affect small businesses as much as they would think.
“If your business is small enough, you don’t have to pay the minimum wage, so right now about two-thirds of the people who are at or below the minimum wage are exempt from the minimum wage law,” Hallam said.
Since most workers are already paid well above the minimum wage, not many will see an increase in pay, Hallam said.
“The impact of a modest minimum wage increase would be almost negligible,” Hallam said. “Some teenagers would get a raise, and that would be about it. The minimum wage is now so low, relative to the average for even low-skilled workers, that the proportion of workers that would be directly affected would be small.”
Thomas Chacko, professor and chairman of the management department, agreed there would be minimal economic drawbacks of a higher minimum wage.
“Most of the data shows no significant problems with raising the minimum wage,” Chacko said.
Chacko said one of the main benefits of this measure would be to increase the individual earning power and bringing the minimum wage closer to the living wage.
“It has the benefits for individuals, families and society, and I think that there is an obligation to provide a living wage,” Chacko said.