Atlanta Journal-Constitution: Different views on minimum wage; Is it good business to pay workers $7.25 an hour?

Atlanta Journal Constitution, July 19, 2009

Pro

Cindia Cameron, Organizing Director, 9to5 National Association of Working Women Co-chair, Georgia Minimum Wage Coalition

In 1938, with an unemployment rate of 19 percent, President Franklin Roosevelt said of the new minimum wage law, "The increase of national purchasing power [is] an underlying necessity of the day."

In 2009, a minimum wage increase is a well-timed economic stimulus strategy. The $24 per week increase that a full-time minimum wage worker will soon receive will be spent on milk, shoes and diapers. It will benefit local businesses and the tax base of struggling cities. Recent studies show that states that raised minimum wages showed better employment and small business trends than states that did not.

CEO Margot Dorfman of the U.S. Women's Chamber of Commerce is also a fan. "When businesses don't pay a living wage, all society pays . . . through poverty and needless disease. We pay as businesses and communities suffer economic decline."

Food bank directors, congregational leaders and minimum wage workers agree: Raising the minimum wage strengthens families, businesses and communities.

Con

William Dunkelberg, Professor of Economics and former Dean, School of Business, Temple University and Chief Economist, National Federation of Independent Business.

If a car dealer has too many cars, the logical thing to do is reduce the price to get the cars sold and in use. Now, the economy has too many unemployed workers. The unemployment rate is 9.5 percent, 24 percent for teenagers and 38 percent for black teens. Is it logical to raise the price of labor to get them hired? Absolutely not.

Raising the minimum wage permanently reduces opportunities for unskilled workers to join the work force. And, about half of all minimum wage workers come from above-median income families. They don't need charity. Raising the minimum wage destroys jobs. Those that keep their jobs have more money to spend but, dollar for dollar, that money comes out of the pockets of consumers who pay higher prices to cover the labor costs. Economists estimate a loss of 300,000 jobs for kids under 24 will result from the 70-cent hike in the minimum.

Government price setting has never been good for the economy and is the wrong way to help low wage workers. If you can't get a job, the wage is irrelevant. You're on welfare and on a street corner.

Compiled by Tom Sabulis, tsabulis@ajc.com