Should the minimum wage law be repealed?

GOP candidates for governor
“The four Republicans running for governor in next week’s primary do not like Minnesota’s new minimum wage law. One of them is proposing to freeze the hourly rate at the current $8,” reports Tim Pugmire for MPR News.

Businessman and first-time candidate Scott Honour called for an end to automatic minimum wage increases Monday as part of his broader plan for boosting the state economy.

The $8 hourly minimum wage, up from $6.15, kicked in on Friday. It was the first increase since 2005 and the first of a series of hikes DFL Gov. Mark Dayton signed into law last spring.

The minimum wage is set to rise to $9 next year and to $9.50 the year after. The increases will likely resume in 2018 when automatic annual inflation adjustments take hold.

Economists have an ongoing debate about whether hiking the minimum wage leads to job loss, and if so, by how much.

Today’s Question: Should the minimum wage law be repealed?

  • Bob MacNeal

    While I applaud the legislature for this modest progress, an $8 minimum wage is absurdly low. Seattle’s $15 minimum puts MN to shame.

  • Narred

    Back?!? We are still 20 years behind.

    • Try 45 years behind.

      Minimum wage has not kept pace with inflation and was at its peak in 1968 @ $1.60/hr (which is $10.69/hr adjusted to 2013 dollars).

  • Ralphy

    When I started working, in 1964, the minimum wage was $1.15.
    $8 in 2014 is equal to $1.06 in 1964.
    Minimum wage earners make less in Minnesota today than minimum wage earners did in 1964.
    It is unrealistic for anyone to live on $8 per hour. By allowing businesses to pay less than a living wage, these under paid workers basic living expenses are being supplemented by tax-payers. In effect, tax-payers are subsidizing the employer, commonly referred to as “The Walmart Effect”, as they don’t need to pay a livable wage as a bare minimum.

    • reggie

      Ralphy, you’ve hit the issue exactly. The “minimum wage” should be set at whatever amount it takes to allow a worker to live without public subsidy for basic living expenses. To pay any less allows employers to shift the real cost of doing business — which includes a healthy employee — to the public. Lately, such cost-shifting seems to be the new American way, but it is neither good for society nor sustainable.

    • Jim G

      Exactly… I started working at Target in 1968 for the minimum wage $1.60/hour. The 2014 equivalent wage would be $10.96/hour. My answer to today’s question is an emphatic… no. Instead, this law’s tentative stepped increase in the minimum wage puts workers in jeopardy of falling further and further behind a living wage.
      Inflation calculator.
      http://www.bls.gov/data/inflation_calculator.htm

  • kevins

    No! These fellows are businessmen. They know that it is in the interest of business to keep labor costs as low as possible. They have benefited for decades from the government setting a minimum wage that has not kept up with inflation, one of the most ready-made excuses to keep pay low that I have ever seen. They are happy to cry about government regulations, except of course, that one.

  • John O.

    The federal minimum wage law itself dates back to 1938. “Should the minimum wage law be repealed?” is not the same as asking something like “Should Minnesota repeal the recent minimum wage increase?” One requires federal action, the other at the state level. Even if Minnesota repealed its minimum wage law, the federal law governs.

  • whitedoggie44

    I do not know the correct wage floor compensation for low skill workers but believe that the left can never appreciate the law of unintended consequences when asking business to provide a “living wage” to low skill workers. When these additional labor cost are added to the cost of products, it will be interesting to see how consumers react to the $50.00 small pizza price. Technology will eventually make low skill workers obsolete.

    • reggie

      Technology will continue to displace workers, no matter what the wage rate. The issue is that eventually we will have to pay the true cost of the products we buy. If that’s 50 bucks for a pizza, with no public subsidy to Papa John, that’s what it should be. Under the current system, the McDonalds, Walmarts, and pizza purveyors who pay only the current minimum wage receive BILLIONS of dollars in taxpayer support. If you want lower taxes, cut those subsidies by raising wages.

      Bloomberg News (not generally considered a left-wing mouthpiece) summed it up simply enough: Walmart and McDonalds are Welfare Queens. The article was posted Nov 13 last year, if you’re interested in the numbers.

      • Jamie

        But the majority owner of Bloomberg, L.P. is a very small man who thinks he knows what’s best for everybody else, and tries to use his accumulated money and power to force people to please his dictatorial tendencies.

      • whitedoggie44

        Perhaps you will pay for that $50 pizza but I will wager most americans will not so the unskilled workers will be unemployed. Your analysis above is contrary to every analysis ever completed on the impact of wages and pricing and impact on consumption. Interesting to note, when polled in Walmart parking lot if minimum wage should be increased a majority said “yes”. When polled in Walmart parking lot if they would be willing to pay for that $50 pizza in higher prices the majority said “no”.

    • Punch Pizza pays their employees a minimum of $10 per hour. It’s been a while since I’ve visited one, but I’m pretty sure their pizzas do not cost $50. Costco pays living wages to their employees and their prices are often better than competitors who pay their employees less. What do these business owners know that you don’t?

      • whitedoggie44

        Several months ago, obama paid a visit to a local deli in Ann Arbor Michigan specifically due to the fact the owner pays his employee $15.00 per hour. Obama paid $16.50 for his corn beef sandwitch. Some enterprising journalist hung around after he left and asked a direct question: How many students at the University of Michigan patronize this Deli? The answer, very few as they can’t afford a $16.00 sandwitch. Whether this place stays in busines I have no idea, but understand there are always unintended consequences when creating artifical wage floors.

        • Perhaps the deli owner created a business plan that doesn’t rely on students to patronize it? If there are enough other customers coming in, who cares? There’s a fairly high-end restaurant in the Dinkytown neighborhood near the University of Minnesota campus that doesn’t see much student business either, but they’ve stayed open for 13 years now because they draw faculty, staff and residents from the surrounding neighborhood.

          There may well be “unintended consequences” to “artificial wage floors” but the intended consequences of having a respectable minimum wage will still outweigh them.

          • whitedoggie44

            Must disagree with you on this one as there will be alternatives then paying artificial wage with no skills. Why not $30 per hour or higher because it is not the responsibility of business to pay the social cost of unskilled labor. The poor will become even more destitute.

          • Right now, the alternative seems to be subsidize business that pay poverty wages through programs intended to help the poor.

            Given the choice between paying more for the goods and services I consume or paying more taxes to fund programs like food stamps and other public assistance so McDonalds and Walmart can continue to enjoy cheap labor, I’ll take the minimum wage increase, thanks.

            It’s been widely established that raising the minimum wage raises demand for goods and services since people can actually afford them, which is good for all of us.

            The fact that you have to make up ridiculous notions like a “$30 per hour minimum wage” that nobody is realistically suggesting only serves to confirm that there is no valid argument against requiring employers to pay a reasonable minimum wage.

  • Gary F

    All the big retail chains and restaurants already have plans for more automation. Fewer jobs for younger people and for people entering the workforce.

    This also forces higher wages for employers who pay more than the minimum because they want better than minimum wage quality workers. So businesses raise there price forcing everyone, including those with “raises”, to pay more for basic items, thus not getting a raise. That is , if they still have their job.

    Why not force employers to pay $25 per hour?

    • KTN

      Why not force employers to pay $25 per hour?
      I think you might want to take another (or first) econ class and then rethink that statement.
      But, since you hate the poor, what wage should they get for their work?

      • Gary F

        The poor wont benefit from this in the long run if you actually payed attention in your econ classes.

  • TCguns_carry

    The law of unintended consequences of the Left’s poor, emotion-driven actions. But hey, the result of this one will be more of the people they tried to ‘help’ turning into Conservative voters once the impact hits them. So, thanks MNDFL!

    • LOLWUT?

    • Jon

      I like the guy who was struck by the “law of unintended consequences” when he went to get coffee brandishing a gun at Sky Harbor and was arrested, what a loonie leftie lefting it up with unintended consequences

  • Sue de Nim

    I would support abolishing the minimum wage and replacing it with something even better. The trouble is that automation is eventually going to create a situation where there are simply not enough living wage jobs to go around, and what does justice demand when that is the case? I advocate a program modeled on the WPA that makes government the employer of last resort. Anyone willing and able to work can get a job working on public works projects, maintaining parks, cleaning government buildings, beautifying public property, eradicating invasive species, or whatever. If someone is willing to work for an employer who pays less than the wage the government offers, they’re free to do so, but no one would be forced to accept starvation wages. Other than that, the government wage would become the de facto minimum. This program would also stabilize the economy by providing counter-cyclical feedback. It would automatically expand and provide stimulus when there’s a recession, and shrink when the economy is booming and stimulus is not needed. The program would also provide work experience and could include training in work habits, which would make alums of the program more employable by the private sector, which would further benefit the economy.

    • Jamie

      That’s not the worst idea I’ve heard, and you know I don’t always agree with you. It’d be interesting to follow that thought process through reality in one of the 50 states to see how it would work. What if you’re able to work, but not willing?

      • Yanotha Twangai

        A person who is able but not willing to work would opt out of the program, don’t you think? One outcome of this kind of true “right to work” (as opposed to the Orwellianly named union-busting law adopted in some states) is that it would make the prejudice held by many conservatives true, in that if you’re poor it would probably be your own fault.

    • Happy hiker

      That’s a pretty good idea. It reminds me of when I went out to Redmond, Washington for some work training. The software company that I was at had huge incentives for their employees. Massage Chairs, Free Juice Bar, Pool Tables and quarterly keg parties…just to name a few Why? Because they were competing with the Microsoft Campus right down the road. People are going to be more attracted to the best incentives.. be it wages too.

      • Jamie

        Yeah, that’s called competition. It’s a key component of capitalism. The company didn’t need an outside party to set a minimum wage to provide these incentives for their employees. They were trying to attract the best talent and paid them what they were worth. Minimum wage employers will try to attract the best talent they can within the group of people willing to work for minimum wage.

  • Aodhan McCullah

    A businessman, especially big business, is going to do what’s best for his pocketbook, not worrying about whether the people who work for him can pay their bills and put food on the table. It’s a rare executive that cares what the guy in the trenches is getting paid as long as profits are good.
    All of you who think the minimum wage should stay below a living wage, get down off of your soapbox and try paying rent, insurance, bills, groceries, et cetera on $8.00/hour or less.

  • Rich in Duluth

    No.

    The truth is that many of these low pay jobs will eventually go away due to technology. But, as noted by others, here, paying wages that requires an employee to receive government support simply shifts the cost of that employee from the employer to the taxpayer. In addition, it distorts the actual cost of whatever goods or services that low wage earner provides.

    This country does not need more low wage earners. It needs engineers, scientists, medical providers, construction workers, designers, and other highly skilled workers. This requires affordable, high quality education and a public that values higher education enough to provide it.

  • PaulJ

    It could be repealed if the higher ups wouldn’t take advantage (ROFL).
    Maybe it could be repealed just to foment unrest, we haven’t had peasants bashing down barriers since the 1930’s.

  • Matt Kennedy

    If we scrap minimum wage, it should be replaced with a 95% top marginal tax rate on income over 100k, this would be a good motivator for executives to invest in their work force instead of pocketing more and more for themselves at the cost of worker livelihood.
    There is no free lunch. Lower worker wages will require more services from the safety net, requiring more taxes to pay for those safety nets. If the goal is fairness, lets find the best way to do that, instead of playing games with wages and taxes.

    • Gary F

      I’d stop working once I get to $99K.
      Lots of people will. It’s called the Laffer Curve, or asking who John Galt is.

      • Matt Kennedy

        Like they did back in the 50s?
        Anyway, that’s not the way employment works in the real world. I’m pulling the 95%/100k number out of my butt at the moment (currently top marginal rates at 35%, but some economists think it could be doubled to 70% before the theoretical “Laffer Curve” would kick in) but the general idea is that the marginal tax rates of incomes above the six figures has an impact on the wages of the working class. If an executive wants to make more, they certainly can, but the motivation for exorbitant executive compensation can be tempered by those higher marginal taxes, and the income from the business could instead be reinvested in the workers, where less income is lost to taxes, which in the long term can produce even more good and profit for the company (I’ve worked in small business for decades, I’ve seen first hand that over the long term, a better paid workforce even for entry level and menial jobs can be an asset, not a liability). Plus, the better compensated the working class is, the less the safety net is strained, the less the overall tax burden is placed on the economy.

  • Jamie

    Basic economic study shows that the higher the price of an item, the
    less demand there is for that item. To take that theory and apply it to
    a rising minimum wage makes it clear that by raising the minimum wage,
    less people will be hired to perform minimum wage jobs – thereby
    creating more unemployment.

    In any employment situation, there’s a balance that needs to be struck between the employer and the employee. The employer needs to feel that the value created by having the employee is at least as much as he’s paying the employee. The employee needs to feel that they are being paid fairly for their work. Where these two needs overlap is the appropriate wage range for the job, regardless of what any outside party says.

    • Happy hiker

      When I am in a money crunch due to unforeseen expenses.. I get rid of the unneeded expenses. I think that the last thing companies should do is raise the price on their products. I think they will be forced to cut the fat off their expenses. If they were smart anyways.

  • Peter Doblinger

    Minimum wage increases mandated by the legislature is just another shiny bauble hung out there to distract people from real issues like building an unneeded $77 million office building or an unwanted $1.8 billion railroad or a $500 million stadium instead of fixing our roads or funding existing programs.

    I (we) will pay either way – increased cost for social network without a wage increase or increased cost for goods and services with a minimum wage increase. People that think this is a means to extract money out of the 1% are dreaming.

    The minimum wage deal is just another way for politicians buy votes from under informed voters so they can continue to line their pockets with our money.

  • Presley Martin

    Sure get rid of it, and the jobs and just pay citizens a base salary of 20K a year like Switzerland.

  • bob hicks

    I think where the media really misses the boat, including MPR, is in not challenging the republican governor candidates to try to live on less than $10/hr for a month. If any of the candidates accepted the challenge, their efforts to live at that threshold would be tracked and reported by the media.

    None of them would have the courage to try it, because they know it can’t be done, so I guess it would be an empty challenge…

    It’s not 1938; we need a wage construct that fits our modern society. That construct is: a living wage.

    I’ll be happy to pay more for my pizza or any other consumer good when I know that the people making it are earning enough to participate more fully in our economy. Heck, with a living wage requirement, we might just sell more durable goods and build more stuff — and then employ even more people at living wages to build more stuff!!

    • Jamie

      I think where you’re missing the boat is that none of the candidates for any offices are at the point in their lives where they would be required to live on a the income provided by a minimum wage job. The minimum wage is not supposed to be a maximum wage, and in 99% of cases it is not a maximum wage. In those cases where it is a maximum, either the employee isn’t moving up in skills or responsibility, or they need to move on to another employer.

    • Happy Hiker
  • Kris Jacobs

    I notice the other candidates are not chiming in with Mr. Honour. Perhaps they remember the Emmer debacle.

  • Happy hiker

    Absolutely not. It’s about time employers start paying people what they are worth. It is very hard to even make a living off $9.50 an hour. Why are the republicans trying to keep the income gap so large. It’s obvious that they are trying to suppress the lower class to stay that way and are in favor of big business. This is not surprising information at all, it is however very sad.

  • JQP

    news to GOP candidates.
    The US economy is consumer driven. Basically if 240 million people don’t have disposable income.. no amount of price slashing for your products will save your business.

  • Nicholas Kiesling

    washingtons minimum wage is 15, i dont see what the big deal is.

  • omaeel

    No way. Look at the statistics. Every time minimum wage has gone up, the economy improves.

  • Jeff

    I don’t have that big of a problem with the new minimum wage (although it will cause price increases and by definition job losses) I hope more businesses add a minimum wage fee onto their bills to customers like that cafe in Stillwater, that way we can all see the true costs to our daily lives of the wage increase.

    • Jon

      I want all receipts to be broken down into the true costs to their component parts, to every last chicken bone on my plate at Applebee’s! Label the chicken bone “innocent chicken blood” to show the true wages paid by such an economic atrocity! Corporate CEO benefit package costs should be listed too, the more time wasted on labeling the better. And gluten, we can’t forget about the bloating costs of gluten. That’ll show those wheat-peddling fatcats who’s boss!

      • Jeff

        Just like that fuel fee charge you get on your food deliveries right? It’s still there on every food order from a restaurant, it’s a bit of a statement for businesses to be making to put it on there.

        • Jon

          That’s right, waste of time. What gets me is when they introduce new rules for things like airlines itemizing certain fees “just so you know”… they should add an itemized fee for “fee itemization fee” and “fee itemization fee fee” ad infinitum.

  • Barbara

    No, let’s index it with executive salaries