why should the government raise minimum wage
President Obama and congressional Democrats are pressing to
increase the federal minimum wage to $10. 10 an hour. Here are nine
reasons why thatБs a bad idea. 2. 06. 18
2. 04. 18 1. 26. 18 MORE ARTICLES BY 12. 11. 17 4:00 pm 12. 04. 17 3:20 pm 11. 13. 17 5:00 pm 1. ItБs a big country. The costs of living, especially housing, vary widely in America from state to state and city to city. If the point of raising the minimum wage is to provide a Бliving wage,Б why should the minimum wage in low-cost areas such as Texas or Oklahoma be the same as in high-cost areas such as San Francisco or Manhattan? 2. The states are already taking care of it. and the District of Columbia already have minimum wages higher than the current federal minimum of $7. 25 an hour. 3. Private industry and the free market are already taking care of it. Even low-skill, entry level positions in many areas already pay higher than minimum wage. 4. As an anti-poverty tool, it is a blunt instrument. A by David Henderson by the chairman of the Harvard Economics Department, Greg Mankiw, points out that a lot of minimum wage earners are second or third-job holders in households with other income. That could include a teenage summer employee whose parents both have jobs. Other minimum wage workers may include retirees with income from savings and Social Security who own their homes mortgage-free. 5. ItБs not clear that itБs constitutional. The Supreme Court, in its opinion in the 1923 case Adkins v. ChildrenБs Hospital of District of Columbia, made a strong argument that a minimum wage was a violation of the constitutionally guaranteed freedom of contract embedded in the Fifth AmendmentБs language about due process and the deprivation of liberty and property: БTo the extent that the sum fixed exceeds the fair value of the services rendered, it amounts to a compulsory exaction from the employer for the support of a partially indigent person, for whose condition thereб rests upon him no peculiar responsibility, and therefore, in effect, arbitrarily shifts to his shoulders a burden which, if it belongs to anybody, belongs to society as a whole.
Б The Court later, in the 1937 case West Coast Hotel v. Parrish, reversed Adkins by a five to four margin. But maybe the court was right the first time around. 6. Even if the freedom of contract isnБt protected by the Constitution, itБs a natural right that should not be infringed. As President Kennedy in his inaugural address, Бthe rights of man come not from the generosity of the state but from the hand of God. Б If two free people want to enter into a voluntary, consensual agreement that doesnБt infringe on anyone elseБs rights, why should the government stop them? If someone wants to work for $5 an hour, and someone wants to hire that person for that much, and no one is forcing either one of them to enter into the agreement, by what authority does government step in and stop them? 7. It would eliminate jobs. Ordering businesses to pay entry-level workers more will make them hire fewer of them, and consider replacing more workers with robots or computers. ThatБs good if you are in the robot or computer business, but not so good if you are trying to combat unemployment. The nonpartisan Congressional Budget Office estimated that President ObamaБs proposed $10. 10 wage, once fully implemented, Бwould reduce total employment by about 500,000 workers. Б 8. It would reduce the incentive for low-wage workers to get an education and move up to a higher-paying job. The lower the minimum wage, the more eager a minimum wage worker would be to enroll in a community college course at night, improve his or her skills, and apply for a higher-paying job. Making the entry-level jobs higher paying increases the risk that workers will get stuck in them for longer instead of moving on to something more rewarding. 9. ItБs a sneaky way to increase welfare spending and raise taxes. Raising taxes to spend more on welfare is a political loser. But raising the minimum wage puts money in the pockets of working poor people, at the expense of business owners (and of consumers who would pay in the form of higher prices).
If politicians want to increase the earned income tax credit or other work-related welfare benefits, they should do the hard work of building political support for such policies, rather than choosing the roundabout approach of a minimum wage increase. CANBERRA -- As, Australia's trade unions and the federal Labor party are opening up a new front in the industrial relations argument with a new push to raise the minimum wage. Australian Council of Trade Unions secretary Sally McManus will use her National Press Club speech on Wednesday to officially call for a $45-a-week boost to the minimum wage. The ACTU said it would be "an historic increase" and bring the annual minimum wage to $37,420. "Building economic security for the lowest paid workers in our society is at the core of the ACTU's objectives, and increasing the minimum wage is one of the most effective tools available to achieve this goal," McManus said. Today we will urge the Fair Work Commission for a $45-a-week increase in the minimum wage. Australian Unions (@unionsaustralia) "Australia's minimum wage has been forced down to dangerously low levels when compared to average wages -- stifling economic security for workers and further entrenching inequality which is now at a 70-year high. " The minimum wage is currently $17. 70 per hour or $672. 70 per 38-hour week, according to. The ACTU will push to raise that to $18. 89 per hour or $717. 70 per week. "According to the OECD, the benchmark for an effective minimum wage is 60 percent of average wages. Our claim will move us towards this target," McManus said. Labor is currently pushing the Coalition government to oppose the recent Fair Work Commission decision to cut weekend and holiday penalty rates for workers in the retail, hospitality, fast food and pharmacy industries. Labor, the Greens and crossbenchers are rallying behind a bill that would legally protect penalty rates from being lowered, and while recent backflips by the likes of Derryn Hinch and One Nation mean the legislation will likely pass the Senate, the Government's lower-house majority means the bill has little chance of coming into law.
Labor leader Bill Shorten has thrown his weight behind the minimum wage boost, saying he would make a submission to that effect this week. Labor will make a submission today for a fair increase to the minimum wage. Families need a pay rise not a pay cut. Bill Shorten (@billshortenmp) Brendan O'Connor, Labor's shadow minister for employment and workplace relations, was at pains during a Wednesday press conference to stress the minimum wage push isn't meant to offset the penalty rates cut, due to come into effect on July 1, but said workers needed more help. "We've got inequality in this country at a 75-year high, we've got people struggling, the lowest wage growth in a generation. We'd hope the Commission takes the advice we've made to it, in arguing that we don't want to see a decline in. the proportion of the wage to the average wage," he said. O'Connor declined to specifically back the ACTU's push for a $45 wage hike, saying Labor had not decided on a reasonable boost to the minimum wage, but said the number needed to rise. "It's higher than the claims they've made in the past," he said of the ACTU's number. "We want them to understand we need a decent working wage and we don't want a working poor in this country. As to what dollar figure or percentage they come up with, we want to make sure they have regard for people struggling and wage growth is so low. " O'Connor said Labor would keep pushing to protect penalty rates, despite the prospect of losing the fight in the House of Representatives. "We're never going to give up on supporting these workers, we're never going to give up on this Private Members' Bill currently before the House and the Senate," he said. Click below to follow HuffPost Australia Politics on Facebook! ALSO ON HUFFPOST AUSTRALIA
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