Liberals Laud Obama’s Minimum Wage Move

Democratic lawmakers hail it as 'an important step' in fighting income inequality

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Democratic lawmakers on Wednesday applauded low-wage federal contract workers, saying their months of protest had paved the way for President Barack Obama’s upcoming executive order to raise the minimum wage for new contractors.

Echoing Obama’s State of the Union address Tuesday night, Reps. Keith Ellison of Minnesota and Raúl Grijalva of Arizona, who chair the Congressional Progressive Caucus, congratulated those who had pressed the administration for months to raise the minimum wage for new federal contracts from $7.25 an hour to $10.10 an hour.

“If there’s one lesson, it’s the importance of organizing,” Ellison said during a conference call with workers. “It was very valuable to our members to stand… with workers who were striking for pay.”

Grijalva called Obama’s action “an important step in dealing with [inequality] issues.”

“The precedent of saying these are public dollars and they’re going to be used for public good… opens up other possibilities,” he said.

Over the past seven months, low-wage workers on federal contracts joined the labor-backed campaign Good Jobs Nation in organized protests demanding wages higher than the average of $8 an hour that almost two million federal contractors receive. The workers, some of whom the government pays less than Washington D.C.’s local minimum wage, staged demonstrations at Union Station, the Ronald Reagan Building, the former U.S. Postal Office, and a handful of Smithsonian museums. From the beginning, the campaign called for Obama to change the minimum wage by executive order.

“Obama finally picked up that pen and did his thing,” said Melissa Roseboro, an employee the Air and Space Museum’s McDonald’s restaurant. “I’ll finally be able to pay my bills.”

Obama’s order, which has not yet been issued but was announced during his State of the Union address, will apply only to new contracts, not to workers operating under existing contracts or to the federal minimum wage for public and private sector workers at large. Republicans have reacted coolly to the move and have warned that raising the minimum wage for all workers, as Obama wants to, will hurt the economy.

“When you raise the cost of something, you get less of it,” House Speaker John Boehner said Tuesday. “And we know from increases in the minimum wage in the past that hundreds of thousands of low-income Americans have lost their jobs. And so the very people the president purports to help are the ones who are going to get hurt by this.”

Louis Chiliquinga, who also works at the McDonald’s at the Air and Space Museum, called the previously sporadic 10-cent raises “an offense to the dignity of the workers.”

“Workers need to believe in our fight” he said. “Our first victory isn’t perfect, but if other workers think these results are not enough, its because they haven’t fought hard enough.”

Although details of the coming executive order remain to be seen, Amy Traub, a senior policy analyst at the liberal policy group Demos, predicted it will impact hundreds of thousands of workers over the next few years. Obama’s move, she said, “offers huge potential for fostering good jobs.”

“Raising wages on the low end puts that money into the pockets of working people that will spend it on their needs,” she said.

16 comments
PortDriverUnion
PortDriverUnion

"On the importance of organizing": Port truck drivers, who transport the goods Americans need, are in a national struggle to improve working conditions and earn a fair day’s pay for a hard day’s work.Drivers have had to file millions of dollars of wage claims to get back their own stolen wages. Most port drivers are unlawfully misclassified as "independent contractors" so companies can illegally deduct from their paychecks and deny pay for time worked. Despite requiring skill and professionalism, port drivers struggle to make ends meet. Port drivers, along with working people across the country, will continue to organize to create a better future for our children. Follow @PortDriverUnion

reallife
reallife

If this is so good then why stop at $10, let's make it $30, that way people will have even more money to spend.

Heck make it $50. That should straighten the economy up.



AlphaJuliette
AlphaJuliette

If the Federal Government wants to raise the wages it pays its workers then that's fine.  But it's not fine to compel private business to do the same with a law.  I view this as artificially setting compensation other than what the market will bear and demands.

To be clear, minimum wage law is artificial in nature and won't help the lowest paid people in our workforce in the long run.

The real discussion here should surround wealth inequality and upward mobility.  Both scenarios are out of balance and unfair in our current economic situation.  Wealth inequality is eroding the middle class.  Opportunities for upward mobility are becoming scarcer and certainly much more difficult.

Private enterprise will pay a person what they are worth, what they can contribute to the work effort, how valuable they are to an organization. In other words, what the market will bear.  That should be the standard by which compensation should be set.  Upward mobility provides opportunity for workers to educate themselves academically and/or practically (on the job) to make themselves more valuable.  It also encompasses an entrepreneurial aspect that allows people to start their own business and grow it.  Raising the wage of workers at McDonalds to $15/hr. as demanded by employees protesting their low wages does not meet any of these criteria and would too set an artificial wage for essentially unskilled labor.

Imagine how an experienced CNC machinist would feel if the burgers he was served were prepared by workers making $15/hr.  He, after all, put himself through school to learn highly technical concepts then put in the time on the job (often years) to master them.  His contribution to his company's efforts to manufacture a commodity that sell for a market price adds to the value of his company.  This not only makes him valuable to his current company but makes him marketable to others. 

The McDonalds employee, on the other hand, would have earned his unskilled hourly wage by protest. 

Living wages and wealth distribution should rightly be relegated to the private sector and not imposed by federal law.  But, a component part of this should be the opportunity provided by either private enterprise or the federal government for upward mobility.   

tom.litton
tom.litton

@AlphaJuliette  

"To be clear, minimum wage law is artificial in nature and won't help the lowest paid people in our workforce in the long run."

Why?

"Private enterprise will pay a person what they are worth"  No private enterprises will pay people what they have to, regardless of what they (or, i'm assuming you mean their work) is worth.  If they can find enough people to fill their positions at $2 an hour, then they will do so, regardless if their work produces $10 of profit or $100,000,000 of profit. 


I think some more highly skilled people do and will complain about the fast food workings making the same pay, but they are being stupid.  If they have the option of going to work at a fast food or department store for similar pay, not only does that allow them to demand a higher salary, but it allows them to survive if they can't find a job in their chosen profession.

Here is the problem with the upward mobility argument.  It only helps those that are capable of taking advantage of it.  What are you going to do with the others?  Let them (and their children) die of starvation?  Let them be a drain on society their entire lives?  

Don't get me wrong.  The government should do everything possible to make upward mobility easy.  I believe education should be top notch, and college should be attainable by anyone who wishes to go.  But if you think it will raise everyone to be in the top 80% of wage earners, then you don't understand percentages. 

MrObvious
MrObvious

@AlphaJuliette 

And why is it not fine to compel a company to pay their employees a living wage? Especially since the country have ti pick up the tab if the employee can't pay their bills.

I am NOT fine with paying for companies labor. I don't mind paying for their products but I should not have to pay for their labor as well. My product purchase should pay for companies bills (including labor). 

I'm sorry, but this is not a question about skilled or unskilled labor. This is a question about if we as a society should also have to accept that companies socialize their costs while pocket all their profits.

mantisdragon91
mantisdragon91

@AlphaJulietteOne thing to consider in your argument is the simple fact that the CNC machinist you alluded to would also now be making more since his skills would be more valuable than those of a minimum wage employee and thus his payscale would be adjusted up accordingly. Unfortunately if left to their own devices private industry would pay the least they could get away with and in a weak economy that means that if the current minimum wage wasn't in place they would be paying people $5 or $6 an hour and the Government would be stuck providing health care and supplemental nutritional assistance to their workers, just as we currently do for full time fast food and Walmart employees. In other words the tax payers support their ability to make record profits by allowing them to pay their employees less than a livable wage.

AlphaJuliette
AlphaJuliette

@MrObvious

Must disagree MrObvious as the comparison between skilled and unskilled labor and what is marketable and more valuable definitely comes to bear here. 

For most of us the job at McDonalds is a beginner job, one that many of us took on when we were in high school.  Ultimately this starter position wasn't meant to equate to a life long career unless, of course, said employee moved to a branch manager position and beyond.  Working at McDonalds or Walmart pays a certain amount based on the value of what the employee can contribute in a certain position.  Move up the ladder and improve your marketability (what you offer and can provide) and your compensation is improved. 

A living wage is based more on free market influences and what an employer is willing to pay than it is on a law compelling employers to pay something that is ultimately artificial.

AlphaJuliette
AlphaJuliette

@mantisdragon91

Raising the minimum wage will not also mean a pay raise for the machinist.  If the minimum wage increases by 28%, as is illustrated in the article, the machinist won't also experience such an increase in his/her compensation.

With that said I fully acknowledge that the private sector is taking full advantage of the current job market.  It's an employers market to be sure.  There are many applicants for any one job.  So, private sector employers can, and do, reduce the compensation and benefits that they are offering.  This is part of free market influences.  But for many it still equates to a living wage.  Just not as good as it once was.  When the situation reverses and the economy is booming again employers will have to increase the compensation and benefits in order to attract and retain productive people.

Ultimately (this may be a bit polly-anna) employers should take care of the people that take care of them.  I see this as being a far better long term solution to living wages, reducing the wealth inequality, re-establishing upward mobility and strengthening the middle class than anything the government can come up with.  

AlphaJuliette
AlphaJuliette

@MrObvious

I understand your position and largely agree with it.  But for me the minimum wage is artificial in nature and doesn't work with a free market system. 

You are absolutely correct about "this economy."  The Great Recession changed our economy on a fundamental level, in my opinion.  We are still trying to react to that change and recover.  I don't believe raising the minimum wage helps with that process.  Now, if employees want to organize then that is a different matter entirely. 

MrObvious
MrObvious

@AlphaJuliette @MrObvious  

For most of us the job at McDonalds is a beginner job

Not in this type of economy. Again - I don't want to pay twice - first for the product and then for the employee. It's not a very radical position. Plus wages has not increased with inflation for over a decade. 

AlphaJuliette
AlphaJuliette

@mantisdragon91

What compels companies for automatically raising wages across the board if the Feds increase the minimum wage? 

As for corporations, I agree.  People are just numbers and numbers affect the bottom line.  For some, not all, some, corporations people are a necessary cost of business expense they would rather do without.  And they tend to treat their people thusly.

mantisdragon91
mantisdragon91

@AlphaJuliette@mantisdragon91What are you basing the assumption that the machinist will see no increase on? If you look at past increases in minimum wage the pay scales for higher skilled positions have followed in lockstep.


And hoping that Corporate will do the right thing when it comes to employees, ignores the mercenary, shortsighted nature of today's CEOs who rarely look at anything beyond maximizing the stock valuation for the next quarter which typically features squeezing employee costs as much as possible.