By James Fallows
The Atlantic, Nov 23, 2012
... Just before Thanksgiving, following the observations of a Boston bartender, I published messages from several readers on the importance of raising the minimum wage. In real terms, the minimum wage has gone steadily down; these readers argued that keeping it even with inflation, or better yet moving it substantially ahead, would help lower-income Americans while not hurting the economy as a whole.
Now some responses. ...
2) The words of Ron Unz. A very large number of readers pointed me to an essay in the American Conservative, by Ron Unz. It supports increasing the minimum wage, and here is a sample of its reasoning:
So how might we possibly raise the wages of American workers who fill [the] huge roster of underpaid and lesser-skilled positions, holding jobs which are almost entirely concentrated in the private service sector?
Perhaps the most effective means of raising their wages is simply to raise their wages.
Consider the impact of a large increase in the federal minimum wage, perhaps to $10 or more likely $12 per hour....
A minimum wage in this range is hardly absurd or extreme. In 2012 dollars, the American minimum wage was over $10 in 1968 during our peak of postwar prosperity and full employment. The average minimum wage in Canadian provinces is currently well over $10 per hour, the national figure for France is more than $12, and Australia has the remarkable combination of a minimum wage of nearly $16.50 together with 5 percent unemployment.
For those who don't know, Unz is no one's idea of a leftie or union activist. Worth reading. ...
4) On the other hand. From another small-business owner, this one in Maryland [John Shepley, co-owner, Emory Knoll Farms, and member, Business for a Fair Minimum Wage]:
When I wear my small business / local economy advocacy hat, the increase in minimum wage issue is core to me. I testified @ the MD House of Delegates and State Senate finance committees for a minimum wage increase bill they were considering in the 2011 legislative session (it failed). The interesting points were that those testifying against increasing the minimum wage were making exactly the same points as me - to different conclusions. What your correspondents in today's post missed is the hard-to-quantify benefits to a business for paying a higher minimum wage than the legal minimums:
• Dramatic decrease in employee turnover, which results in:
• Increased employee productivity / competency
• Decreased training costs & other associated costs to replace employees
• A beneficial company culture which is easier to maintain and reinforce
• Increased 'buy-in' or sense of ownership by the employees - they will stay that extra half hour when it's really needed - without being asked' because they already understand the urgency of the situation
([One company] starts permanent employees at $10 / hour for 'minimum wage' types of jobs. We also pay an annual bonus based on company financial performance which in recent years has run to 25-30% which bumps those employees to nearly $13 / hour. And we pay 75% of health insurance costs for all employees after 3 months, have a 401k that we contribute 3% / year to as well.
... In the past five years we have not lost an employee because they've gone and found a better job.)
...
Read Full Story:
http://www.theatlantic.com/politics/archive/2012/11/black-friday-special-festival-of-minimum-wage-ideas/265550/
Copyright 2012 The Atlantic