Wednesday, January 28, 2009
The six oclock news ran Bush and the locked door video for a week. Lests see if this even makes it to the daily show.
It looks like President Obama hasn't gotten acquainted to his White House surroundings. On the way back to the Oval Office Tuesday, the President approached a paned window, instead of the actual door -- located a few feet to his right.
Doors didn't open automatically for Obama’s predecessor either. While making a hasty exit from a 2005 press conference in Beijing, former President George W. Bush tugged on the handles of a door, only to find it locked.
Bush laughed off the blunder, but the pictures still live on as part of Bush's lame duck legacy. However, there was little note taken of Obama's rookie mistake.
Obama, who was returning from meeting with Congressional leaders, may have been distracted by Republicans' icy reception to his $825 billion stimulus package, which is poised to pass on Wednesday even without a groundswell of Republican support.
Saturday, November 22, 2008
The Friday Line: Ten Republicans To Watch
The great thing about elections is that as soon as the last one ends, the next one begins.
Everywhere the Fix goes these days -- and by everywhere we mean the office, Starbucks and the gym to play basketball -- people want to know: Who's next?
Who are the faces that will emerge to rebuild the Republican party following its decimation at the ballot box in 2006 and 2008? (The ugly totals: 54 seats lost in House, 13 seats -- at least -- in the Senate and a little thing called the White House.)
So, to slake the thirst of Fixistas across the country (heck, around the world) we are going to start ranking the 10 Republicans to keep an eye on over the coming months and years.
To be clear, this is not -- and should not be taken as -- a list of potential contenders to take on Barack Obama in 2012. Some of the people on this list will certainly be in the Republican field in four years time but others almost certainly won't.
The most notable omission is that of Alaska Gov. Sarah Palin. While we expect the former vice presidential nominee will be on this Line in the coming months, she doesn't make it this time around because it is not yet clear how she will find a way to remain in the national dialogue from her far-away outpost in the Last Frontier. Palin is also VERY lightly regarded by many of the opinion leaders and establishment types within the GOP, making it tougher for her to command a leading role.
Former Arkansas Gov. Mike Huckabee is also not on the Line -- not because we don't think he is considering a 2012 bid (he is) but because as of today it's not clear what his niche is within the party. His fresh-faced appeal and shtick (and don't get us wrong, we love shtick) may not wear so well a second time around.
The common thread for membership on this list, which was compiled based on a series of conversations with Republican operatives and the Fix's own analysis, is that each of these individuals will have a role to play in the conversation about where the party heads between now and 2010.
Agree or disagree with our picks? Feel free to offer suggestions of your own in the comments section below.
To the Line!
10. Steve Poizner: Poizner, the Insurance Commissioner of California, has an early head-start on being the Republican nominee for governor in 2010. And, if Sen. Dianne Feinstein (D) decides not to run, Poizner's ability to self-fund a campaign coupled with his relatively short time in elected office and his outsider message could make him viable in the general election. As California goes, so goes the country.
9. Haley Barbour: There are those who mention Barbour's name for the 2012 GOP nomination. We are decidedly skeptical about that -- will the country be ready for a man who had a hand in inventing modern-day lobbying in Washington? -- but Barbour is clearly someone to watch. Remember that before he became governor of Mississippi in 2003, Barbour was one of the leading political operatives in the country and has tentacles (and acolytes) all over the country. That makes him a force to be reckoned with.
8. Jon Huntsman Jr.: As The Fix was waiting to meet with Huntsman on Thursday, CNN's Wolf Blitzer was touting him as a rising star in Republican politics. Nice convergence. Huntsman won re-election earlier this month with 78 percent (granted it was in ruby red Utah) and has the looks and re&eaccute;sum&eaccute; -- fluent in Chinese, progressive on the environment -- that could make him appealing for a party looking desperately for a different profile. Huntsman is a Mormon, however, and, as Mitt Romney demonstrated earlier this year, that could be a major problem if he decides to run for president.
Cantor's rapid rise make him one to watch in the GOP. (AP Photo/Susan Walsh, File)
7. Eric Cantor: The Virginia Republican's unfettered rise through the ranks of House leadership continued earlier this week when he was elected Minority Whip -- the second ranking position within the GOP. Cantor was among those vetted in John McCain's vice presidential search and his personal background -- a Jewish Republican -- will be intriguing for many within the party looking for something new. Cantor's problem: Is the House too small a perch from which to become a national figure?
6. Mark Sanford: South Carolina's Sanford is the newly elected chair of the Republican Governors Association, a useful job through which to raise one's national profile. Since McCain's loss earlier this month, Sanford has been a leading voice for the party to return to the principles of former President Ronald Reagan; "Some on the left will say our electoral losses are a repudiation of our principles of lower taxes, smaller government and individual liberty," wrote Sanford in an op-ed piece for CNN.com. "But Tuesday was not in fact a rejection of those principles -- it was a rejection of Republicans' failure to live up to those principles." Sanford's reform credentials are impeccable but he has, throughout his career, rubbed the party establishment wrong, which could hurt him as he seeks a broader role.
5. Bob McDonnell: McDonnell, Virginia's attorney general, will be the Republican standard-bearer in the Commonwealth's gubernatorial race in 2009. Off-year statewide elections are always looked to by the two parties as litmus tests for how each side is doing, and the fact that this campaign will take place in the purple state of Virginia makes McDonnell all the more important. If he wins, it will be seen as a sign that the Republican party is alive and well and living in Virginia. If he loses, he'll join the Jerry Kilgore Hall of Fame.
4. Mitch Daniels: Even as Obama was pulling off a stunning win in the Hoosier State at the presidential level, Daniels was cruising to reelection by 18 points. At the end of the campaign, Daniels pledged in a television ad that he would never run for another office but even if he stays true to his word, his experience in 2008 makes him a valuable commodity for Republicans. While Daniels's ties to George W. Bush won't help him -- he served as the director of the Office of Management and Budget from 2001 to 2003 -- his electoral success in a critical Midwest battleground means Daniels has a seat at the table.
3. Mitt Romney: Discount the former Massachusetts governor and presidential candidate at your own peril. Romney has three big things going for him: he is, by almost anyone's account, an expert on the American economy; he is incredibly ambitious and will work harder than almost anyone to make sure his voice is heard; and he has immense personal wealth and a willingness to spend it. Do his flip-flops on social issues (and his Mormonism) still make social conservatives queasy? You bet. But Romney is in the mix and will aim to stay there.
John Thune could be the face and voice of the GOP opposition. (AP Photo/Doug Dreyer)
2. John Thune: The South Dakota Senator is incredibly well positioned to emerge as the telegenic voice of the Obama opposition. Thune is part of a group of young and aggressive Republican senators who will look to take the fight to Obama and Senate Democrats over the next two years. It doesn't hurt Thune that he is already a revered figure among conservatives after ousting former Senate Majority Leader Tom Daschle in 2004. Thune's problem is that conventional wisdom within the party already seems to be settling on the idea that the GOP governors need to lead Republicans out of the wilderness in which they currently find themselves.
1. Bobby Jindal: There is NO hotter commodity in the Republican party these days than Jindal. Jindal is the rare candidate who both reformers and establishment types find appealing, and as a 37-year-old Indian American he is -- literally and figuratively -- the sort of new face the party is pining for. While Jindal is hot right now, it's important to remember that he is the governor of a state with a complex political scene -- meaning there will be myriad opportunities for Jindal to falter over the next few months and years
Friday, November 7, 2008
Election Analysis: America Can Take Pride In This Historic, Inspirational Disaster
Although I have not always been the most outspoken advocate of President-Elect Barack Obama, today I would like to congratulate him and add my voice to the millions of fellow citizens who are celebrating his historic and frightening election victory. I don't care whether you are a conservative or a liberal -- when you saw this inspiring young African-American rise to our nation's highest office I hope you felt the same sense of patriotic pride that I experienced, no matter how hard you were hyperventilating with deep existential dread.
Yes, I know there are probably other African-Americans much better qualified and prepared for the presidency. Much, much better qualified. Hundreds, easily, if not thousands, and without any troubling ties to radical lunatics and Chicago mobsters. Gary Coleman comes to mind. But let's not let that distract us from the fact that Mr. Obama's election represents a profound, positive milestone in our country's struggle to overcome its long legacy of racial divisions and bigotry. It reminds us of how far we've come, and it's something everyone in our nation should celebrate in whatever little time we now have left.
Less than fifty years ago, African-Americans were barred from public universities, restaurants, and even drinking fountains in many parts of the country. On Tuesday we came together and transcended that shameful legacy, electing an African-American to the country's top job -- which, in fact, appears to be his first actual job. Certainly, it doesn't mean that racism has disappeared in America, but it is an undeniable mark of progress that a majority of voters no longer consider skin color nor a dangerously gullible naivete as a barrier to the presidency.
It's also heartening to realize that as president Mr. Obama will soon be working hand-in-hand with a former Ku Klux Klan Grand Wizard like Senator Robert Byrd to craft the incoherent and destructive programs that will plunge the American economy into a nightmare of full-blown sustained depression. As Vice President-Elect Joe Biden has repeatedly warned, there will be difficult times ahead and the programs will not always be popular, or even sane. But as we look out over the wreckage of bankrupt coal companies, nationalized banks, and hyperinflation, we can always look back with sustained pride on the great National Reconciliation of 2008. Call me an optimist, but I like to think when America's breadlines erupt into riots it will be because of our shared starvation, not the differences in our color.
It's obvious that this newfound pride is not confined to Americans alone. All across the world, Mr. Obama's election has helped mend America's tattered image as a racist, violent cowboy, willing to retaliate with bombs at the slightest provocation. The huge outpouring of international support following the election shows that America can still win new friendships while rebuilding its old ones, and provides Mr. Obama with unprecedented diplomatic leverage over our remaining enemies. When Russian tanks start pouring into eastern Europe and Iranian missiles begin raining down on Jerusalem, their leaders will know they will be facing a man who not only conquered America's racial divide but the hearts of the entire Cannes film community. And those Al Qaeda terrorists plotting a dirty nuke or chemical attack on San Francisco face a stark new reality: while they may no longer need to worry about US Marines, they are looking down the barrel of a strongly worded diplomatic condemnation by a Europe fully united in their deep sympathy for surviving Americans.
So for now, let's put politics aside and celebrate this historic milestone. In his famous speech at the Lincoln Memorial 45 years ago, Dr. King said "I have a dream that one day my children will live in a nation where they will not be judged by the color of their skin, but by the content of their character." Let us now take pride that Tuesday we Americans proved that neither thing matters anymore.
Monday, October 27, 2008
Wednesday, October 22, 2008
Would the Last Honest Reporter Please Turn On the Lights? By Orson Scott Card
Editor's note: Orson Scott Card is a Democrat and a newspaper columnist, and in this opinion piece he takes on both while lamenting the current state of journalism.
An open letter to the local daily paper — almost every local daily paper in America:
I remember reading All the President's Men and thinking: That's journalism. You do what it
takes to get the truth and you lay it before the public, because the public has a right to know.
This housing crisis didn't come out of nowhere. It was not a vague emanation of the evil Bush
It was a direct result of the political decision, back in the late 1990s, to loosen the rules of lending
so that home loans would be more accessible to poor people. Fannie Mae and Freddie Mac were
authorized to approve risky loans.
What is a risky loan? It's a loan that the recipient is likely not to be able to repay.
The goal of this rule change was to help the poor — which especially would help members of
minority groups. But how does it help these people to give them a loan that they can't repay?
They get into a house, yes, but when they can't make the payments, they lose the house — along
with their credit rating.
They end up worse off than before.
This was completely foreseeable and in fact many people did foresee it. One political party, in
Congress and in the executive branch, tried repeatedly to tighten up the rules. The other party
blocked every such attempt and tried to loosen them.
Furthermore, Freddie Mac and Fannie Mae were making political contributions to the very
members of Congress who were allowing them to make irresponsible loans. (Though why quasi-
federal agencies were allowed to do so baffles me. It's as if the Pentagon were allowed to
contribute to the political campaigns of Congressmen who support increasing their budget.)
Isn't there a story here? Doesn't journalism require that you who produce our daily paper tell
the truth about who brought us to a position where the only way to keep confidence in our
economy was a $700 billion bailout? Aren't you supposed to follow the money and see which
politicians were benefiting personally from the deregulation of mortgage lending?
I have no doubt that if these facts had pointed to the Republican Party or to John McCain as the
guilty parties, you would be treating it as a vast scandal. "Housing-gate," no doubt. Or "Fannie-
Instead, it was Senator Christopher Dodd and Congressman Barney Frank, both Democrats, who
denied that there were any problems, who refused Bush administration requests to set up a
regulatory agency to watch over Fannie Mae and Freddie Mac, and who were still pushing for
these agencies to go even further in promoting sub-prime mortgage loans almost up to the
minute they failed.
As Thomas Sowell points out in a TownHall.com essay entitled "Do Facts
Matter?" ( http://snipurl.com/457townhall_com] ): "Alan Greenspan warned them four years
ago. So did the Chairman of the Council of Economic Advisers to the President. So did Bush's
Secretary of the Treasury."
These are facts. This financial crisis was completely preventable. The party that blocked any
attempt to prevent it was ... the Democratic Party. The party that tried to prevent it was ... the
Yet when Nancy Pelosi accused the Bush administration and Republican deregulation of causing
the crisis, you in the press did not hold her to account for her lie. Instead, you criticized
Republicans who took offense at this lie and refused to vote for the bailout!
What? It's not the liar, but the victims of the lie who are to blame?
Now let's follow the money ... right to the presidential candidate who is the number-two recipient
of campaign contributions from Fannie Mae.
And after Freddie Raines, the CEO of Fannie Mae who made $90 million while running it into the
ground, was fired for his incompetence, one presidential candidate's campaign actually consulted
him for advice on housing.
If that presidential candidate had been John McCain, you would have called it a major scandal
and we would be getting stories in your paper every day about how incompetent and corrupt he
But instead, that candidate was Barack Obama, and so you have buried this story, and when the
McCain campaign dared to call Raines an "adviser" to the Obama campaign — because that
campaign had sought his advice — you actually let Obama's people get away with accusing
McCain of lying, merely because Raines wasn't listed as an official adviser to the Obama
You would never tolerate such weasely nit-picking from a Republican.
If you who produce our local daily paper actually had any principles, you would be pounding this
story, because the prosperity of all Americans was put at risk by the foolish, short-sighted,
politically selfish, and possibly corrupt actions of leading Democrats, including Obama.
If you who produce our local daily paper had any personal honor, you would find it unbearable to
let the American people believe that somehow Republicans were to blame for this crisis.
There are precedents. Even though President Bush and his administration never said that Iraq
sponsored or was linked to 9/11, you could not stand the fact that Americans had that
misapprehension — so you pounded us with the fact that there was no such link. (Along the way,
you created the false impression that Bush had lied to them and said that there was a
If you had any principles, then surely right now, when the American people are set to blame
President Bush and John McCain for a crisis they tried to prevent, and are actually shifting to
approve of Barack Obama because of a crisis he helped cause, you would be laboring at least as
hard to correct that false impression.
Your job, as journalists, is to tell the truth. That's what you claim you do, when you accept
people's money to buy or subscribe to your paper.
But right now, you are consenting to or actively promoting a big fat lie — that the housing crisis
should somehow be blamed on Bush, McCain, and the Republicans. You have trained the
American people to blame everything bad — even bad weather — on Bush, and they are
responding as you have taught them to.
If you had any personal honor, each reporter and editor would be insisting on telling the truth —
even if it hurts the election chances of your favorite candidate.
Because that's what honorable people do. Honest people tell the truth even when they don't like
the probable consequences. That's what honesty means . That's how trust is earned.
Barack Obama is just another politician, and not a very wise one. He has revealed his ignorance
and naivete time after time — and you have swept it under the rug, treated it as nothing.
Meanwhile, you have participated in the borking of Sarah Palin, reporting savage attacks on her
for the pregnancy of her unmarried daughter — while you ignored the story of John Edwards's
own adultery for many months.
So I ask you now: Do you have any standards at all? Do you even know what honesty means?
Is getting people to vote for Barack Obama so important that you will throw away everything
that journalism is supposed to stand for?
You might want to remember the way the National Organization of Women threw away their
integrity by supporting Bill Clinton despite his well-known pattern of sexual exploitation of
powerless women. Who listens to NOW anymore? We know they stand for nothing; they have
That's where you are right now.
It's not too late. You know that if the situation were reversed, and the truth would damage
McCain and help Obama, you would be moving heaven and earth to get the true story out there.
If you want to redeem your honor, you will swallow hard and make a list of all the stories you
would print if it were McCain who had been getting money from Fannie Mae, McCain whose
campaign had consulted with its discredited former CEO, McCain who had voted against
tightening its lending practices.
Then you will print them, even though every one of those true stories will point the finger of
blame at the reckless Democratic Party, which put our nation's prosperity at risk so they could
feel good about helping the poor, and lay a fair share of the blame at Obama's door.
You will also tell the truth about John McCain: that he tried, as a Senator, to do what it took to
prevent this crisis. You will tell the truth about President Bush: that his administration tried
more than once to get Congress to regulate lending in a responsible way.
This was a Congress-caused crisis, beginning during the Clinton administration, with Democrats
leading the way into the crisis and blocking every effort to get out of it in a timely fashion.
If you at our local daily newspaper continue to let Americans believe — and vote as if —
President Bush and the Republicans caused the crisis, then you are joining in that lie.
If you do not tell the truth about the Democrats — including Barack Obama — and do so with the
same energy you would use if the miscreants were Republicans — then you are not journalists by
You're just the public relations machine of the Democratic Party, and it's time you were all fired
and real journalists brought in, so that we can actually have a news paper in our city.
Sunday, October 12, 2008
Once Bush won, and it became clear that the Florida democrats were trying to steal the election, I became something of a Bush loyalist. Throughout his first term, I took note of all the really horrible things that were said about him, saw that a large portion of the left would rather see Bush fail than see America succeed, and was alarmed by the complicity (and often, participation) of the MSM and mainstream Hollywood. It wasn't far into his second term that I succumbed to Bush Fatigue, due to his inability to make the case for his foreign policy to the American people, and his inability to find the veto pen. He has truly been a terrible steward of the Republican brand, and because of this, the Conservative and libertarian causes are suffering.
I'm no fan of McCain , but as I dislike Obama, I'll be pulling the lever for McCain in November.
This is surely small of me, but if Obama wins, I plan on giving him as much of a chance as the Democrats gave George Bush. I will gleefully forward every paranoid anti-Obama rumor that I see, along with YouTube footage of his verbal missteps. I will laugh and email heinous anti-Obama photoshop jobs, and maybe even learn photoshop myself to create some. I'll buy anti-Obama books, and maybe even a "Not My President" t-shirt. I'm sure that the mainstream bookstores won't carry them, but I'll be on the lookout for anti-Obama calendars and stuff like that. I will not wish America harm, and if the country is hurt (economically, militarily, or diplomatically) I will truly mourn. But i will also take some solace that it occurred under Obama's watch, and will find every reason to blame him personally and fan the flames.
Obama's thuggish behavior thus far in this election cycle - squashing free speech, declaring any criticism of his policies to be "racist" (a word that happily carries little weight with sensible people these days), associating with the likes of Ayers, Wright, and ACORN - suggests that I won't have to scrape for reasons to really viscerally dislike Obama and his administration. And even if he wins, his campaign's "get out the vote fraud" activities are enough to provide people like me with a large degree of "plausible deniability" as to whether he is actually legitimately the president.
I've seen a President that I am generally-inclined to like get crapped on for eight years, and I've seen McCain and Palin (honorable people both, despite policy differences I may have with them) get crapped on through this election season. If the Democrats think that a President Obama is going to get some sort of honeymoon from the folks who didn't vote for him, as a wise man once said: heh.
Sunday, September 28, 2008
I thought maybe I should cut and paste the whole article. Not like I am paying per word.
June 28, 2001
Who is Paid the Minimum Wage and Who Would be Affected by a $1.50 per Hour Increase
by D. Mark Wilson
Who Works the Minimum Wage?
The 1.6 million paid-hourly workers who earn minimum wages can be broken down into two broad groups.1
Over half (53 percent) are teenagers or young adults under the age of 23. More than half (54 percent) of these young workers live in families with incomes two or more times the official poverty level for their family size and 18 percent live in poor families. The average family income of these young workers is almost $50,500 per year. The average income for single young workers is $11,200. Over 63 percent are enrolled in either high school or college.
The other half (47 percent) are workers ages 23 and up. More of these workers live in poor families (29 percent). Yet, even within this half of the minimum wage population, the average family income is over $38,100 per year. The average income for single workers is $19,300. Over 30 percent of these older workers did not graduate from high school and another 36 percent had only a high school diploma.
Almost 43 percent of all minimum wage workers are children, 26 percent are married family heads or spouses, 11 percent are single family heads, and 17 percent are single people (another 3 percent are other relatives).
Less than 21 percent of minimum wage workers are the sole breadwinners of their families and less than 5 percent are sole breadwinners that work full-time year-round. Less than 5 percent of minimum wage workers are poor single mothers over 18 years old.
Over 57 percent of all minimum wage workers work part-time voluntarily. Only 25 percent work full-time year-round while over 28 percent work part-time part of the year.
The average family income for all minimum wage workers is $45,200 and their wages account for 35 percent of their total family income. The average income of single-nonfamily minimum wage workers is $16,800.
Very Few Workers Remain at Entry-Level Wages for Long
Nearly two-thirds of minimum wage workers move above the minimum wage within one year, and the median raise for those workers is over 10 percent.2 For full-time minimum wage workers, the median first-year raise is almost 14 percent. Entry-level jobs are not lifelong dead-end jobs. These jobs allow Americans to establish a track record of work that creates opportunities for better paying jobs.
Who would be affected by a $1.50 Increase in the Minimum Wage
There are 7.1 million paid-hourly workers who would be affected by an increase in the minimum wage to $6.65 per hour _ 1.6 million are currently paid minimum wages and 5.5 million are paid between $5.15 and $6.65 per hour.3 These workers can also be broken down into two broad groups.
One half (50 percent) are teenagers or young adults under the age of 23. Two-thirds (66 percent) of these young workers live in families with incomes two or more times the official poverty level for their family size. Just 14 percent live in poor families. Almost 74 percent are enrolled in either high school or college. Just 5 percent are married. Over 88 percent live in families with an average income of almost $63,600 per year. The average income for single young workers is $10,000, but their average household income is $47,100 because 81 percent live with two or more people.
The other half are workers ages 23 and up. Over half (51 percent) of these older workers live in families with incomes two or more times the official poverty level for their family size and 22 percent live in poor families. Over half (56 percent) do not have any children of their own to support. The average family income of these older workers is almost $38,300 per year. The average income for single workers is $18,000. Over 27 percent of these older workers did not graduate from high school and another 40 percent had only a high school diploma.
Over 42 percent of the workers who would be affected by an increase in the minimum wage are children, 26 percent are married family heads or spouses, 12 percent are single family heads, and 16 percent are single people (another 4 percent are other relatives).
Less than 17 percent are the sole breadwinners of their families and less than 7 percent are sole breadwinners that work full-time year-round. Less than 6 percent are poor single mothers over 18 years old.
Almost 54 percent of all workers who would be affected by an increase in the minimum wage work part-time voluntarily. Only 31 percent work full-time year-round while over 26 percent work just part-time part of the year. Almost 6 percent are union members.
The average household income of all paid-hourly workers affected by the minimum wage increase is $51,200 and their wages account for just 29 percent of their total household income.
Almost half (48 percent) live in the South and 27 percent live in the Midwest.
Increasing the Minimum Wage Would Not Help the Poor
Just 1.9 percent, or 404,000, of the 20.8 million poor Americans over the age of 15 would be affected by an increase in the minimum wage to $6.65 per hour.
Studies show that raising the minimum wage does not significantly reduce poverty. In fact, for some subgroups, minimum wage increases appeared to raise the level of poverty.4
Senator Edward M. Kennedy (D-MA) is proposing an unparalleled increase in the minimum wage. His bill (S. 964) would increase the hourly minimum wage by $1.50 over the next 18 months to $5.74 thirty days after enactment; $6.25 on January 1, 2002; and $6.65 on January 1, 2003. It would amount to a 29.1 percent increase in the minimum wage—over five times the rate of inflation that is forecast by the Congressional Budget Office over the next two years. Never before has Congress raised the minimum wage by more than $.90 per hour over a two-year period.
Large Unfunded Mandate on State and Local Governments
The Congressional Budget Office estimates that increasing the minimum wage to $6.65 would impose a $2.1 billion unfunded mandate on state and local governments from fiscal year (FY) 2002 to FY 2006. This exceeds the statutory threshold in the Unfunded Mandates Reform Act and may require a point-of-order vote in Congress to waive the Act. Much of the higher cost for local governments will be borne by taxpayers in small towns and rural communities.
The Congressional Budget Office also estimates that increasing the minimum wage to $6.65 would impose an additional $1.5 billion cost to federal taxpayers in the form of in higher federal spending for welfare-to-work programs from FY 2002 to FY 2006.
Large Private Sector Cost
The Congressional Budget Office estimates that increasing the minimum wage to $6.65 would cost private sector employers $30.2 billion from FY 2002 to FY 2006. Someone would have to pay for this cost. Economic research indicates that those who pay the most are unskilled youth through fewer job opportunities and consumers through higher prices.
The last time the minimum wage was increased, restaurant menu prices increased 2.6 percent in 1997 compared with a 1.7 percent increase in the consumer price index. Inflation in the service sector, in which most minimum wage workers are employed, rose 2.8 percent in 1997—1.1 percent higher than the overall inflation rate.
Reduces Job Opportunities for Unskilled Americans
Proponents often point to the increase in employment after the 1996_97 hikes in the minimum wage as proof that mandating an increase does not destroy jobs. This argument, however, is misleading and deceptive. Focusing only on total employment hides significant negative effects for groups like teenagers (see chart). Although the last increase in the minimum wage did not reduce total employment, it did reduce employment rates, particularly for unskilled teenagers. Only the red-hot economy in 1998 and 1999 was able to mitigate the impact of the last minimum wage increase on teenagers.
A 1999 survey of small businesses by the Jerome Levy Economics Institute shows that raising the minimum wage to $6.00 per hour would cause more than 20 percent of small-business owners to reconsider their employment decisions.
The Congressional Budget Office estimates the potential job losses associated with an increase in the minimum wage to $6.65 at roughly 200,000 to 600,000 jobs.
In addition to reducing the size of their workforce or not hiring as many additional workers, employers could also reduce the number of hours worked by some of their employees. Because many minimum wage workers are on part-time schedules, reducing hours may be easier to do than if all workers were employed on fixed eight-hour schedules.
Employers may also respond to an increase in the minimum wage in ways that do not involve adjusting employment levels or hours. For example, some employers might reduce fringe benefits or may not add new benefits to attract and retain workers.
Would Make Welfare Reform More Difficult for States
The states face an enormous challenge of moving families from welfare to work—particularly as federal work requirements increase and the welfare caseload shrinks to Americans with the least job-related skills and greatest barriers to work. To move forward with welfare reform, state officials should have the flexibility to determine the appropriate entry-level wage rate for their states without a burdensome federal mandate that restricts their ability to help the poor.
· Higher mandated wages reduce employment opportunities for the least skilled and cause shifts in the profile of those who get hired as employers favor more highly skilled applicants. And as entry-level unskilled job opportunities disappear, welfare recipients have a more difficult time finding work.
Economic uncertainty Suggests Caution
Economic growth has slowed dramatically. Consumer spending is sluggish and investment spending has collapsed. Employment growth is weak and unemployment has increased. Inflation is up, energy prices remain relatively high, and profit margins are being squeezed. Now is not the time to rapidly increase the minimum wage.
D. Mark Wilson is a Research Fellow in the Thomas A. Roe Institute for Economic Policy Studies, at The Heritage Foundation.
1 Heritage Foundation calculations based on the March 2000 Current Population Survey conducted by the Census Bureau. This estimate includes paid-hourly workers earning the federal minimum wage and paid-hourly workers earning state minimum wages that are higher than the federal. Over 1.1 million earn the federal minimum wage and 500,000 earn higher state minimum wages.
2 William Even and David Macpherson, "Rising Above the Minimum Wage," Employment Policies Institute, January 2000.
3 Heritage Foundation calculations based on the March 2000 Current Population Survey conducted by the Census Bureau. This estimate does not include workers in states whose state minimum wage is higher than the federal minimum wage. For example, no workers in California will be affected because the state minimum wage rises to $6.75 on January 1, 2002.
4 Richard Vedder and Lowell Gallaway, "Does the Minimum Wage Reduce Poverty?" Employment Policies Institute, June 2001; Jill Jenkins, "Minimum Wages: The Poor Are Not Winners," Employment Policy Foundation, January 12, 2000; and Ronald B. Mincy, "Raising the Minimum Wage: Effects on Family Poverty," Monthly Labor Review, July 1990.