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Host: Scott LaMar

Smart Talk: Minimum wage debate heats up

Written by Scott LaMar, Smart Talk Host/Executive Producer | Feb 10, 2015 3:51 PM
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What to look for on Smart Talk Wednesday, February 11, 2015:

The federal minimum wage was signed into law by President Franklin Roosevelt in 1938.  The first minimum wage was 25 cents an hour.  Even then it was controversial.

Adjusting for inflation, in today's dollars, the minimum wage would be just over $4 an hour.

The federal and Pennsylvania's minimum wage is $7.25 an hour.   Pennsylvania's minimum wage hasn't changed since 2009.  There are 29 other states with higher minimum wages.

Supporters of raising the minimum wage rallied at the state capitol in Harrisburg this week vowing an all-out push to increase the minimum to $10.10 an hour.  

Those who want to increase the minimum wage say it currently is not enough to live or raise a family on.  They add that it would also put more money back into a recovering economy by giving low-income earners more money to spend.

Opponents counter that forcing employers to pay workers more would cost jobs.  They say better and more job training would help workers get the skills they need to compete for higher paying jobs.

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Suzanne Collins and Mark Price

We'll delve into the minimum wage issue on Wednesday's Smart Talk with Suzanne Collins, the Communications Director for the National Federation of Indpendent Business in Pennsylvania and Dr. Mark Price, an economist with the Keystone Research Center. 

For more information on the topics mentioned during the show:

Keystone Research's article "Stuck on the Bottom Rung of the Wage Ladder" and current research on the minimum wage.

The National Federation of Independent Business Research Foundation's study on three minimum wage bills in the PA legislature last year.

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  • John H. img 2015-02-11 09:19

    This conversation reminds me of the time a small business owner pulled onto the property in a brand new Corvette. He went on to tell his employees that, that was their pay raises sitting out there.

    • Mark Price img 2015-02-11 10:56

      Hi John, there are always going to be a few bad apples among employers of all sizes just as there are among workers. A minimum wage with its purchasing power restored is a limited but still valuable way of making sure more of the occasional "Corvette" shows up in peoples paychecks instead.

  • Radio Smart Talk img 2015-02-11 09:24

    Thomas writes:

    in my view, you DO NOT raise the minimum wage, you need to create middle class jobs in industry. we need semi-skilled or skilled blue collar jobs. not service jobs.

    minimum wage WAS NEVER a wage to live on, it was an entry level job that in my view only three groups where paid, summer high school jobs, workers who where just looking for extra money, and older workers that just wanted something to do.

    you need to raise the bar, not lower it. and by raising the minimum wage that is what you are doing.

    continue along this line, and w will be the highest paid third world nation.

    • Mark Price img 2015-02-11 10:52

      Hi Thomas, I think we can both agree the economy doesn't do a good job producing enough middle class jobs. There will however always be low wage jobs and all we are asking is that the purchasing power of those minimum wage jobs be adjusted on a more regular basis to take into account the impact of inflation. $10.10 certainly is unlikely to be a living wage for many people but it is closer to the purchasing power the minimum wage used to have.

  • ZeroGravity img 2015-02-11 09:31

    $7.25 is an offensively low wage to pay people. The only way businesses big and small can pay such a low wage is that these employees have to use taxpayer funded welfare, food stamps, medicaid, and other social safety net services. We taxpayers subsidize these businesses to pay their employees peanuts.

    • Mark Price img 2015-02-11 11:02

      Hi Zerogravity, there is certainly a great concern that large low wage employers impose large costs on taxpayers. Here is a study from California that attempts to sort that impact out. http://laborcenter.berkeley.edu/pdf/2004/walmart.pdf

  • Radio Smart Talk img 2015-02-11 09:33

    Nick emails:

    Could the guests comment on the idea of min wage being tied to inflation or median household or individual income or another such economic measure. Thank you.

    • Mark Price img 2015-02-11 11:12

      Hi anonymous e-mailer, I think our immediate challenge is getting the minimum wage pegged to inflation. So far 13 states including Ohio and New Jersey now adjust the minimum wage each year by a few cents to track with inflation. Median wages have grown faster than inflation (although not by much) so what you suggest is a higher bar than being debated in Harrisburg currently. Here is handy comparison of the median wage in each state and the minimum wage. http://equitablegrowth.org/research/minimum-versus-median-wage-by-state/

  • bullington222 img 2015-02-11 09:38

    if a company cannot afford to pay workers, they need to change their business plans. the daycare in altoona, need to stop limit their services to how much they can manage. If they can't take more kids, other people will have the opportunity to provide day care. businesses cannot scrape by on the backs of human labor, that is slavery.

  • Radio Smart Talk img 2015-02-11 09:39

    Lee writes:

    The NFIB hears a lot of stories from their members, but they are personal anecdotes, not studies. If I owned a burger shop and was the only one to raise my wages, I would lose customers and perhaps close. However, if everyone raised rates all burgers would increase in price. Remember that if people then stopped buying burgers, they would increase their purchase of macaroni -- they would not stop eating. The State or federal gov't has to think about the macroeconomic effects of the minimum wage, not an individual business.

    • Mark Price img 2015-02-11 11:19

      Hi Lee, I certainly agree. Here is a accessible review of the healthy debate in the economics profession about employment impacts. http://www.cepr.net/documents/publications/min-wage-2013-02.pdf#!

  • Radio Smart Talk img 2015-02-11 09:48

    Mike writes:

    I don’t totally agree with yet another government mandate with a minimum wage increase. It will impact small employers the greatest! Why not tie it to employer size and match it to other Federal mandates (COBRA, “Obamacare”) and adjust it incrementally for a 2-5 year phase-in period to match a Federal guideline (like Social Security increases each year)?

    • Mark Price img 2015-02-11 11:26

      Hi Mike, I appreciate your points. The last increase in the Pennsylvania minimum wage did have slower phase in for smaller employers and I'm sure something like that will be debated in Harrisburg over the next few weeks. I of course don't think such exemptions are good idea, simple rules are easier to enforce.

  • Lisa img 2015-02-11 09:49

    I am shocked to hear that the minimum tip wage is 2.83/hr. When I waitressed my way through college over 20 years ago, the minimum tip wage was 2.01/hr. That is a very small increase over the years. That said, I made decent money at a place that could comparably be compared to Mel's diner and averaged at the time, $7.00/hr, in tips. Most people I worked with only claimed they made enough tips to be paid the equivalent of minimum wage at that time $3.25, thereby not paying taxes fully owed on what was actually earned. If the numbers used to determine what tip earners are making is based on what they claim on taxes, then I would estimate those numbers are way too low.

    • Mark Price img 2015-02-11 11:31

      Hi Lisa, apologies for sharing a link to a study but it does a great job explaining the history of the tipped minimum wage in the U.S. and how it has changed http://www.epi.org/publication/waiting-for-change-tipped-minimum-wage/. In PA the tipped minimum today is $2.83 and in the U.S. it is $2.13. Over time the tipped minimum hasn't been increased as much as the minimum wage. Here is a review of who tipped workers are in PA http://keystoneresearch.org/sites/default/files/Nickel-Dimed-Tipped-Minimum-Wage-9-17-2013.pdf

  • bullington222 img 2015-02-11 09:54

    businesses should stop paying healthcare. if an employer pays their employee enough to purchase their own insurance on the exchange they do not pay a fine. businesses should not be responsible for healthcare.

  • bullington222 img 2015-02-11 09:57

    even with training, people will always be at a minimum level, and those people always deserve a fair pay. no one owns anothers labor, it must be paid for to that laborer.

    • Mark Price img 2015-02-11 11:36

      Hi Bullington222, this is a great point that I failed to get out on air. There will always be low wage jobs. Today they are cleaning hotel rooms, caring for children, making fast food,...etc. In the future there will certainly be new low paying jobs and some of today's low paying jobs may disappear but there will always be low paying jobs. What's wrong today is we are allowing low paying jobs to pay even less over time pushing people who work into poverty and onto public assistance. Training can make all workers more efficient but training as you note isn't a solution to a falling wage floor.

  • Dr. M. img 2015-02-11 10:07

    Suppose the government would give employers an additional tax credit for hiring workers especially handicapped workers. Might that not encourage more hiring and higher wages. I would exempt family members and corporate officers. This might work better than a decreased corporate tax rate.

    • Mark Price img 2015-02-11 11:45

      Hi Dr. M, what you suggest is more typically referred to as a wage subsidy where an employer gets a cash subsidy to offset the wage cost of certain workers. There is a lot of interest in using wage subsidies to create employment opportunities for hard to employ workers. That said it's not really a solution to the problem introduced by the fact that the minimum wage today has much less purchasing power than it used to. But certainly wage subsidies are a great tool to help people who traditionally struggle to find employment to get a chance to build a work history. See page 79 for discussion of how wage subsidies can be used to help create more employment in the economy http://www.cepr.net/documents/Getting-Back-to-Full-Employment_20131118.pdf

  • Brian Usher img 2015-02-11 10:20

    I don't work for the PA. min. wage but just a bit above it. It's very hard to keep A car on the road just to get to work.Employers like when you have A car. I also work for A local collage. They pay there students 10.00 and hour to do the same job as me. I work for another company that's contracted by the collage. We do the same work yet make much less. I'm also in my 40's... so stop talking about teens working for min. wage. That's just A bunch of hoopla. I know allot of people that are in there 40 + that work for less then 10.00 an hour. Most of them should be retired.They want to retire but cannot afford it. I was A skilled printer for over 20 years of my life. Printing is A dying art. All my skill are useless now. I can't afford to be retrained with my income. In my opinion. You need to pay people enough to live on. No less then 10.00 an hour. Tip workers should quit there jobs. There being EXPLOITED... They really are. Here's A tip....Dont ever work for tips.

    • Mark Price img 2015-02-11 11:49

      Hi Brian, thanks for the comments! To follow up, here is a by the numbers look at who would benefit from an increase to $10.10 http://keystoneresearch.org/sites/default/files/KRC_Demographics_1010_0.pdf and here is a discussion of the "hoopla" which far too often gets in the way of a healthy debate http://thirdandstate.org/2014/april/guide-creative-use-numbers-business-lobby

  • orebert1 img 2015-02-11 10:23

    You never actually hear a debate on this show. It seems to be an agreeable, feel good, sponsored bunch of goop. Props to Dr. Price for standing up against the other guest and effectively blowing off the sugar coating.

  • Mindy Jones img 2015-02-11 20:07

    Has there ever been consideration to require employers to give raises based on specific performance? This alternative to raising the minimum wage would most likely increase worker commitment and drive to do better as an employee. If so, how easy or difficult do you think this would be to regulate?

  • garrie keyman img 2015-02-11 20:23

    Who we really need to hear from are people living on less than ten dollars an hour, more people like the college educated woman who called in to say she earned $8.44 an hour in a social work job assisting individuals with special needs, or the person in earlier comments trying to explain how hard it is to keep a car on the road while earning less than ten dollars an hour.

    I doubt either of these guests -- and likely no guest ever on your show -- is a minimum wage earner, themself. Begin a targeted Story Corps style collection of tales from people trying to subsist on seven dollars an hour, so people can hear it from the horses' mouths.

    Your female guest suggested the underpaid social worker simply "find another job," as if it is a snap to do so -- and further suggested getting training. But that caller had already gone to the expense and effort of obtaining a BA. We are not talking about a slacker, here. perhaps it is the female panalist who needs a new job -- one at seven bucks an hour. Then we would soon hear her tune change. I guarantee you.

    People earning eight dollars an hour cannot AFFORD to pay for more education, to pay for training. At least not until colleges stop paying their presidents millions while milking students' families and paying adjuncts shameful wages. We live in a robber baron society and raising the minimum wage is a reasonable, if meager, attempt to rectify the rampant inequality at play.

    Hmm. Let me guess....the woman panelist is a Republican and the male a Democrat.

  • garrie keyman img 2015-02-11 20:28

    Who we really need to hear from are people living on less than ten dollars an hour, more people like the college educated woman who called in to say she earned $8.44 an hour in a social work job assisting individuals with special needs, or the person in earlier comments trying to explain how hard it is to keep a car on the road while earning less than ten dollars an hour.

    I doubt either of these guests -- and likely no guest ever on your show -- is a minimum wage earner, themself. Begin a targeted Story Corps style collection of tales from people trying to subsist on seven dollars an hour, so people can hear it from the horses' mouths.

    Your female guest suggested the underpaid social worker simply "find another job," as if it is a snap to do so -- and further suggested getting training. But that caller had already gone to the expense and effort of obtaining a BA. We are not talking about a slacker, here. perhaps it is the female panalist who needs a new job -- one at seven bucks an hour. Then we would soon hear her tune change. I guarantee you.

    People earning eight dollars an hour cannot AFFORD to pay for more education, to pay for training. At least not until colleges stop paying their presidents millions while milking students' families and paying adjuncts shameful wages. We live in a robber baron society and raising the minimum wage is a reasonable, if meager, attempt to rectify the rampant inequality at play.

    Hmm. Let me guess....the woman panelist is a Republican and the male a Democrat.

  • Larry img 2015-02-16 07:27

    Better yet.

    All wages should be tied to executive pay!

  • rhottenstein img 2015-02-16 19:14

    As the writer of the op-ed in the LNP I want to make it clear that no-one at my business makes minimum wages except the servers. Servers are a commissioned employee like a car salesperson is and the difference is in their draw. The cash wage freeze instituted over 20 years ago is balanced out with tipped income. Most of our servers make in excess of $30.00 per hour. When this change comes (if it does) it will mean an increase in prices at mybusiness of 10% minimum. I will lose business and many others will lose jobs. Minimum wage in y business does not exist for hourly workers because the economy of scale won't permit me to hire at that wage.

  • Bruce Berry img 2015-03-29 11:31

    As a person who has worked minimum wage jobs in the past, I always viewed them as temporary, a way to make money while working toward something better. For example I worked a minimum wage job while attending college in hopes that after graduation I would be able to find a higher paying job. I never once thought that my wages were ‘unfair’. I didn’t think the company I worked for owed me more for my labor. If I wanted to make more money I need a better job. Bruce from SterlingStore company.

  • webbrowan img 2015-12-14 23:59

    I don't see why it's wrong for the state to follow the federal minimum wage rate. There are countries that don't even get a minimum wage rate at all! It may not be enough for a person to raise their family on if that family doesn't take the right measures. But with proper management of finances, I'm sure things aren't quite as bad as people make it out to be!