Minimum Wage an Issue in 2014 Elections?

September 4, 2014 10:36 am

by Jon Richards · 37 comments

This morning, Atlanta’s WSB TV brings us news of demonstrators at a city Burger King rallying for an increase in the minimum wage. A similar effort is planned for noontime at a Ponce De Leon Avenue McDonalds.

Meanwhile, the Washington Examiner reports today that the minimum wage is turning into a wedge issue for Democrats in battleground states, including Georgia.

With polls indicating the Republican Party may retake the Senate in the November midterm elections, candidates such as Alison Lundergan Grimes in Kentucky and Michelle Nunn in Georgia pushed an increase in the minimum wage especially hard over the Labor Day weekend, since it is among the few issues where they hold a clear advantage.

The Democrats’ push builds on earlier efforts by liberal activists to raise the issue in battleground states, in effect priming the pump for the fall elections.

Democrats hope the minimum wage issue will drive turnout in states like Georgia, where a bill to raise the minimum wage introduced at the beginning of the year didn’t make it through the legislature.

{ 37 comments… read them below or add one }

John Konop September 4, 2014 at 10:50 am

A simple compromise raise the minimum wage above the poverty line and decrease taxes with the savings from less welfare. It would stimulate the economy with higher wages and tax savings from less welfare both being spent and or invested.

saltycracker September 4, 2014 at 12:21 pm

And the minimum wage to get above the poverty line is….?
The goal is to increase both to keep welfare coming isn’t it ?

John Konop September 4, 2014 at 1:35 pm

HUH? The idea is to decrease dependency on tax payers, stimulate the economy and increase demand with more dollars to spend by tax payers having lower taxes, working poor having more money to spend, while lower welfare cost.

The rate per hour would vary based on each state….

saltycracker September 4, 2014 at 4:57 pm

It was a snark but really, in Georgia the min. wage to meet your point is $7.50 (lower if “low” isn’t poverty)
Here is what I found:

Low income in Georgia is considered anyone making less than $15,600 annually for one person. The national poverty level is $10,400 for one person.

$15,600 annually at 40 hours a week for a full 52 weeks comes out to $7.50 hourly.

These answers are not the same for more than one person so should not be considered a “per person” calculation.

Low income table
1person = 16,400
2people = 21,400
3people = 26,400
4people = 31,800
5people = 37,200
6people = 42.600
7people = 48,000
8people = 53,400
Source(s):
United States Department of Health and Human Services
United States Department of Education
FAFSA

saltycracker September 4, 2014 at 5:07 pm

Shouldn’t we add in a defined list of public subsidies to determine a persons income level?

John Konop September 4, 2014 at 5:16 pm

Yes very good point!

Baker September 8, 2014 at 3:19 pm

I hesitated to weigh in on this one because my nature is to say minimum wage hikes are just inflationary and will mean fewer people working and fewer younger people getting a foundation for work in the future….however….

It would never happen but if by some way you were able to get Dems to agree to less welfare spending I say let’s do it. Everybody wants this so bad? (even though on paper it’ll do what I said above), okay fine, but let’s offset it….

…but the left would never agree to that.

Harry September 4, 2014 at 11:28 am

I’m guessing this action is limited to NE Atlanta.

Noway September 4, 2014 at 12:40 pm

Of course it will be. Class warfare, rich v poor, 1% v 99% are always used to stir up the have-nots.

Will Durant September 4, 2014 at 12:48 pm

The problem is the “have-nots” keep increasing. Even taking minimum wage out of the equation we are not told how many of the new jobs created in the “recovery” are McJobs without benefits. Without universal healthcare and some kind retirement plans beyond a dwindling Social Security, a job paying $25 per hour without benefits isn’t sufficient to keep one from being a “have-not”.

Harry September 4, 2014 at 1:53 pm

The have-nots keep increasing but the solution is not raising the minimum wage.

John Konop September 4, 2014 at 2:05 pm

Would it not better to lower welfare and taxes…..in trade for people working making money above the poverty line? Would this not promote self reliance over government hand outs?

Noway September 4, 2014 at 2:16 pm

John, you’re saying that raising the minimum wage would help in doing the things you just listed? Would it not also cut potential jobs by raising the cost to employers who offered them?

John Konop September 4, 2014 at 2:19 pm

Not combined with lower taxes less welfare ie more money to spend….and working former poor people having more money to spend….ie increase demand……..As Henry Ford said you need people to make enough money to buy the products they produce…

Three Jack September 4, 2014 at 2:38 pm

Which politician offered to lower taxes in exchange for higher fed min wage? I must have missed that part.

John Konop September 4, 2014 at 2:46 pm

Bart I agree it most be done together……

Three Jack September 4, 2014 at 5:34 pm

We actually disagree John, I oppose a fed min wage at any level. I was just trying to find out where you heard anybody offering such a compromise as I have only heard a bunch of dems pandering to their handout seeking base of voters.

John Konop September 4, 2014 at 6:30 pm

I am not aware of anyone….just thought of it on my own….

Harry September 4, 2014 at 2:17 pm

Unfortunately the tendency is for more people to look to government as their patron or savior. I’m not sure increasing the minimum wage would fix that.

John Konop September 4, 2014 at 2:20 pm

It would if it was above the poverty line….ie less welfare…

Harry September 4, 2014 at 2:41 pm

I guess that would work as long as there’s no inflation and they don’t raise the definition of poverty. Also, I understand that some (many) union contracts have their benefits set at a multiple of the minimum wage.

John Konop September 4, 2014 at 2:48 pm

We would see some inflation….which is why we need to off set it with tax cuts to make sure net spending power is the same or higher….

Harry September 4, 2014 at 3:18 pm

In order to have believable tax cuts they have to cut the federal budget. That’s not gonna happen in today’s world. We’re at the end of the rope, about to be the new Argentina.

Noway September 4, 2014 at 3:22 pm

+1

John Konop September 4, 2014 at 3:29 pm

The window rate for debt is cheap now….which is why the debt is declining on a % combined with economic growth…..If we can increase growth which this would do, it would lower the debt faster, and why we could afford the cuts at the rate we saved on welfare….

Harry September 4, 2014 at 3:34 pm

I don’t understand what you mean about debt declining as a % of economic growth? Economic growth has been almost nonexistent for the last years and will be for 2014 as well. Federal debt as a percentage of GDP has been increasing greatly.
http://research.stlouisfed.org/fred2/series/GFDEGDQ188S

John Konop September 4, 2014 at 3:42 pm

Harry

FYI..BTW growth is about 2 % we need 4 to 5% growth….

………..Since the recession ended four years ago, the federal budget deficit has topped $1 trillion every year. But now the government’s annual deficit is shrinking far faster than anyone in Washington expected, and perhaps even faster than many economists think is advisable for the health of the economy.

That is the thrust of a new report released Tuesday by the nonpartisan Congressional Budget Office, estimating that the deficit for this fiscal year, which ends on Sept. 30, will fall to about $642 billion, or 4 percent of the nation’s annual economic output, about $200 billion lower than the agency estimated just three months ago……

http://www.nytimes.com/2013/05/15/business/cbo-cuts-2013-deficit-estimate-by-24-percent.html?pagewanted=all&_r=0

Three Jack September 4, 2014 at 2:52 pm

The ONLY reason min wage is an issue this election cycle is because dems needed something/anything to divert attention from their failed run as a majority over the past few years. They know this cycle favored GOPers so come up with something that will attract mindless voters to the polls. Minimum wage, equal pay, FMLA all fit into this category and will continue to be used through November.

Unfortunately GOPers let it happen because they have no agenda at all other than be against everything. If the GOP or at least some candidates running under the banner had put forth a growth oriented agenda based on tax reform, they could have owned the debate. Now most candidates will be put in the untenable position of opposing higher wages, equal pay and more government mandated off time.

Harry September 4, 2014 at 4:25 pm

John,

The NYT article is dated May 24, 2013. The federal deficit for FYE 9/30/2013 was “only” $680 billion. The deficit was so “low” because Freddie and Fannie paid back a large part of their bailouts with found money which will not continue. Also, artificial Fed-fixed interest rates help the federal deficit but discourage savings for small-scale capital expansion, which has a direct impact on the employment rate and salaries. Also, the sequester helped the deficit! Meanwhile all components of US debt (public and private) keep expanding.

GDP growth for 2014 will likely be around 1% this year and 1.6% over the next decade. Productivity growth has been only 0.6% for the last 4 years.
http://www.nber.org/papers/w20423

There’s just no free lunch.

John Konop September 4, 2014 at 4:38 pm

Harry,

GDP growth was over 4 % the second quarter….the reason was because weather hurt the first quarter…when blended it is 2 %….I watch this like a hawk…..

U.S. second-quarter growth strengthens

…….Gross domestic product expanded at a 4.2 percent annual rate instead of the previously reported 4.0 percent pace, the Commerce Department said on Thursday.

Both business spending and exports were revised higher, while a buildup in business inventories was smaller than previously estimated – a mix of growth that provides a stronger underpinning for the remainder of the year.

Separate reports showing a second straight weekly decline in the number of Americans filing new claims for jobless benefits and a jump in home purchase contracts also suggested underlying momentum in the economy.

“The economy is in good shape and getting better,” said Joel Naroff, chief economist at Naroff Economic Advisers in Holland, Pennsylvania.

While the economy shrank at a 2.1 percent rate in the first quarter, economists expect growth of around 2 percent for the year as a whole, with GDP expanding about 3 percent in 2015……

http://wincountry.com/news/articles/2014/aug/28/second-quarter-gdp-growth-revised-up-to-42-percent/

Harry September 4, 2014 at 5:33 pm

The revised CBO growth rate for 2014 is just 1.5%. I posted the link here several days ago.
http://www.usatoday.com/story/money/business/2014/08/27/cbo-economic-forecast/14677485/

I don’t believe any estimates for 2015 and 2015; those are vapor. The actual (revised) GDP growth rate for 2013 was 1.9%, according to the Commerce Department , down from 2012’s 2.8%. But if you believe forecasts, the annual interest payments on the national debt is supposed to triple in the next several years. That will certainly ruffle some feathers in the henhouse, assuming they don’t invent some Chapter 13 workout for the Treasury which is exactly what will happen. Argentina is the future.

John Konop September 4, 2014 at 5:44 pm

Harry,

We both agree 2% is about right…..you know if it grows to 3 or 4% it will have a material positive effect…..back to the topic….what I proposed would grow GDP…..what am I missing?

Harry September 4, 2014 at 5:54 pm

Does increasing the minimum wage increase real GDP, after inflation? If businesses and consumers have to spend more money without a corresponding value add, thus leaving less income for other forms of more productive spending, I would question whether it will have a positive effect on GDP.

John Konop September 8, 2014 at 4:22 pm

If the tax breaks were given at the rate we were giving away welfare it should be a growth for GDP….logic being that if money goes to a person directly verse being given by welfare it is more efficient ie growth….

MikeS September 4, 2014 at 5:41 pm

Low skilled people earn more money by working more hours. I know a fellow who earned a good living by working 60 to 70 hrs a week in a factory. Tough, but that is what he had to do to earn an upper middle class life style.

The problem today is that federal regulations prevent many workers from working more than 26 or 30 hours. That makes it even harder for low skilled workers to feed their family. With less than 40 hr week, it is hard to learn the skills and work ethic needed to get ahead. We can squarely blame the executive branch of the Federal Government for this.

John Konop September 4, 2014 at 5:46 pm

………federal regulations prevent many workers from working more than 26 or 30 hours……

HUH? what rule is that? If so we are all violating a lot of rules….

saltycracker September 8, 2014 at 9:08 pm

Stating the obvious, less deficit spending just means your debt is increasing slower. But it is stIll rising. Something that was freaking us out 8 years ago until we started printing more more money and the world raised our credit card limit.

Lots of folks would like to worry about the debt as a percentage of GDP but some say that is a weak benchmark. The situation is much worse. When we look at debt to tax revenue we are nation with a problem #3 in the world.

http://www.forbes.com/sites/jeffreydorfman/2014/07/12/forget-debt-as-a-percent-of-gdp-its-really-much-worse/