Minimum Wage as Economic Stimulus
The federal minimum wage will increase in a couple of weeks.
On July 24th, 2009 the federal minimum wage will increase from $6.55 an hour to $7.25 an hour. This amounts to an increase of 10.7%. How will this change affect you?
This change will raise hourly wages for millions of workers in 29 states that have minimum wages lower than $7.25 an hour. In some cases workers who already make more than the minimum wage will also get a pay bump because their coworkers who are making the current minimum wage are getting a federally mandated raise. However, this does not mean that every worker will end up with more money because businesses may be forced to cut hours to adjust to the change. For example, if a worker's hours are reduced by 15% then a 10.7% wage increase would not cover the shortfall.
Even at the site linked here the comments thread is eaten up with a lot of carping about how terrible this is considering the already bad condition of the economy. I can see it now. When the reality of the increase makes the news cycle there will be weeping, wailing and gnashing of teeth on the part of (still-employed but threatened) people who will not remember that this increase was scheduled years ago and is not yet another move on the part of the current administration to do something crazy.
It would not surprise me to hear that even as we speak some member of Congress (or in a Congressional staff position) is contemplating legislative measures to stop this already scheduled increase from happening.
The same people, mind you, are trying simultaneously to craft a new "stimulus" package, oblivious to the reality that the increase in the federal minimum wage is exactly that.
My time is limited this morning, but until I get back to this post, here are two related links to my old abandoned blog [another long story...don't try to leave any comments there because the place is in Google purgatory and no one can touch it, not even me, and I'm the one who put it there.] that bear directly on this idea.
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