With Michigan’s unemployment rate running from 14 to 15 percent, and the national unemployment rate running around 9 to 10 percent, people are clamoring for a fix.
I’m not going to talk about whether President Barack Obama’s claim that 600,000-plus jobs were saved or created due to the stimulus is true — I’ll let the Wall Street Journal and CNN slug that one out.
And in response to Hoffman’s column, CNN isn’t a “Hard News” channel. Watch five minutes of the tripe that Rick Sanchez spews and you’ll see why Fox News beats it in the ratings.
What I am going to talk about is that there should be two unemployment numbers: voluntary and involuntary.
What do I mean by voluntary and involuntary unemployment? After all, unemployment is unemployment, right?
Well, not quite.
Just like strike prices exist in the realm of commodities trading or even deciding whether that quart of ice cream is cheap enough, such a concept also applies to the labor market.
Both the employer and the potential employee have their strike prices. It also may be called reservation wage for the employee.
If the employer’s strike price is lower than what the potential employee’s strike price is, you will have a condition of voluntary unemployment. An example of this is that John will only work for $10 an hour, but Company X is only willing to pay $8 an hour.
On the other hand, if John is willing to work for $5 an hour and the company is willing to hire him at that price, but is prohibited from doing so, we have involuntary unemployment.
The astute reader will have quickly pieced together this puzzle rated for ages 4 and up – minimum wage laws, in this case, have led to an increase in involuntary unemployment due to an artificial price floor.
This is why I consider it crucial to differentiate between voluntary and involuntary unemployment when the Bureau of Labor Statistics reports unemployment rates.
Even better, there should be reports on how many people and businesses would be willing to transact below this artificial price floor. That way, minimum wage laws can be seen as the true job killer it is in rough economic times.
If you could get a job for $5 and it kept a roof over your head and food in your stomach, wouldn’t you take it?
In case you don’t believe this is verifiable empirically, feel free to take a look at it all laid down in a simple Econ
222 assignment (http://tinyurl.com/yj56afs).
But let’s just keep this little secret between you and me — we wouldn’t want President Barack Obama’s stimulus plan to look bad, now would we?
E-mail the author: 
Jason Gillman
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Jason, it sounds to me that you believe that many people are turning away job offers because they aren’t being offered a high enough wage. I know several people who are unemployed and would take the first job offered to them. Heck, even coffee shops aren’t hiring right now.
It’s much harder to find a job in today’s market than I think you believe. My job gets applications all the time, everyday all day people are turning them in. And out of what seems to be hundreds of apps we have only hired 2 people.
People are more desperate for jobs than your column suggests.
Nice attempt, but, uh…not quite. Instead of directing you to a partisan blog and an undergraduate economics assignment for “proof” of the necessity of the minimum wage (as you did to link the minimum wage to unemployment), I will instead direct you to the United States Department of Health and Human Services, as well as the Department of Labor. Now let’s see what we can do. According to the Department of Labor, Michigan has a minimum wage higher than that of the wage mandated by the federal government. Michigan, coincidentally, also has the highest rates of unemployment in the nation. Aha!, you say. There’s my proof! Um…no. If I can, I would like to direct you to the states of Louisiana, Tennessee, Mississippi, Alabama, Arkansas, South Carolina and Georgia…you know, the Deep South and the bastion of hands-off minimum wage laws in our great nation. All of these states have either no minimum wage, or a minimum wage below the federal level. Well, what are we doing in Michigan? Let’s move to Louisiana! Or Arkansas! Or Alabama! There must be employers begging to hire us there! Wrong again. These states also have (GASP!) alarming unemployment rates (as well as rates of illiteracy, teen pregnancy, etc…but that’s another story for another day). But why? I won’t pretend to have the answer. But, if states like Michigan and California have a minimum wage above the federal level, and states like Louisiana and South Carolina have no minimum wage or wages below that of the federal level, and all four states are elbowing each other out of the way to win the “who has more citizens without jobs” race, than I can’t help but feel that the minimum wage isn’t a major player in this particular debate.
Ok, now let’s move on to your “voluntary” versus “involuntary” unemployment argument. I guess my first response is, “Hunh?” So, basically, we should let employers hire us for whatever wage they see fit, and we should shut up and be happy about it- is that the message you intended to send? Let’s crunch some numbers. The federal poverty line, according to the Department of Health and Human Services, is $10,830 for a single person. There are problems with this number, first and foremost the fact that the standards for poverty were established in the 1960s and haven’t been changed since. So we’re assuming that the percentages of our wages that we spend on food, transportation, housing, etc. haven’t changed (Hint: they have. Our level of poverty should be considerably higher, since more of our money is going towards astronomical health care costs or sky-high rent than food, which was the biggest expense in the 1960s). So, we’ve established that this is an imperfect number, but hey, it’s all we have to work with, so we’ll go with $10,830. The minimum wage in Michigan is $7.40. An individual who works at minimum wage for 40 hours each week, for all 52 weeks in the year will make $15,392, a few thousand more than the poverty line. That seems about right. You can live somewhat comfortably on $15,392. Now throw in a broken leg. Uh-oh, no health coverage. How about car troubles? That can be pretty pricey. Now, let’s add a kid. Or two kids. Or three kids. Things are getting a lot less comfortable in here. So, let’s travel to an imaginary world in which employers can hire you for $5 an hour. Your $15,392 (before taxes, btw) just became $10,400. That’s BELOW our (imperfect) poverty line of $10,830. Good luck.
Waitresses, custodians, retail workers, physical laborers, etc. work hard. These jobs are physically and mentally challenging, and, typically come with little to no benefits to make up for the low compensation received for performing such tasks. People who work these jobs deserve respect and dignity. They deserve a chance. They deserve to survive. To suggest otherwise is classism, and smacks of privilege and snobbery. The working poor, and the quickly disappearing blue-collar middle class that used to define the state of Michigan, have already taken a beating. I cannot fathom what will happen if we were to abolish the minimum wage that was created to protect us.
Very good summary response by CMUwoman on a topic worthy of discussing. Every economist would agree that there is a trade-off between wages and employment rates at SOME point. Most would agree that $8/hour, much less $5, has little or no negative effect on employment rates. Of course, this also depends upon the local labor markets (try hiring someone (legally) at $5 an hour in NYC.
Republicans like Jason believe that the main problem with the economy is that people are making too much money. Ask yourself, are you making too much money? Would you support a policy agenda that results in a reduction in your income? Tax cuts for the rich and ridicullous bonuses to Wall Street executives are OK but when it comes to everyone else, work for less!
I would love Jason to approach any minimum wage worker and lay out what he just said.
You schmuck.
Oh and CMUwoman you just submit your write up so people outside of the internet can read your massive burn on Jason “INVISIBLE HAND OF THE FREE MARKET” Gillman.
Reality Check and CMUWoman:
The part you’re having a hard time grasping is that in this economy, yes, what Jason says in regards to people turning down jobs because they don’t pay enough is exactly true. People make more on unemployment, so they stay on it. Besides, who only works 40 hrs. / week any more? Not making enough, get 2 jobs … they are out there, you just have to find them.
As the market rebounds, and employment is more available, then the ‘prevailing wage’ for certain work will rise. Employers will give raises to retain employees or they will find higher paying work elsewhere.
Artificially setting the minimum wage too high hinders new business ventures and forces employers to hire fewer people and hope to make their business succeed while possibly being understaffed. Without the success of small business, there will be much less business growth (and job growth).
Politicians really need to reduce taxes and the size of government so the American Economy can spend that money to grow and prosper … instead of paying government to restrict our growth further.
Its called Economics and Ronald Regan worked this philosophy to perfection! Read some history and see how it works.
What you fail to realize is that the minimum wage actually has less earning poser than the minimum wage when Martin Luther King made his lovely speech.
People who earn the minimum wage put every single cent they have right back into the economy in a way that benefits small business, lenders, just about everyone. If I make 15,000 per year, I’m sure as hell not socking it away in a savings account or putting it in my 401(k). I’m spending it on necessities. Immediately. If I get a raise of a buck or two, I’m still going to spend every cent, not because I want to, but because I have no choice but to pay rent, buy food, and take my kids to the doctor. Maybe I give some money to the cable company or the Megaplex once a week, but there is almost no discretionary income for someone making 15,000 a year. Oh, and it only hits 15,000 if you work 40 hours per week, which many employers won’t allow.
Noah- I think our difference in opinion lies with whom we trust. You trust corporations/companies/employers to do right by minimum wage workers (although I am continually perplexed as to why people trust big business and not big government). I do not. There is a reason that we have things like the eight-hour workday, weekends, minimum wage, overtime, fair hiring practices, sick leave, OSHA, and many other policies intended to provide blue-collar workers with a safe, just and livable working situation. You can be sure that that reason is not employers. Blue-collar workers fought and died for those rights, which are now taken for granted by all of us.
I don’t think the solution to unemployment is to work harder or to get a second job. And I certainly don’t believe that a laissez-fair attitude to workers’ rights will solve anything. What we’re forgetting here is that unemployment is just part of the problem. Say we have 100% employment, with employers paying workers $5 an hour- a perfect world for Mr. Gilman. In fact, we have people working multiple jobs at $5 an hour- an ideal situation for Noah. None of that matters if we have people who cannot feed their families, pay their rent or afford health care. Sweatshop laborers are employed. Indentured servants are employed. Slaves are employed. Are these things positive for humanity? No. The things that separate blue-collar workers from slaves, indentured servants and sweatshop labor are the eight-hour workday, weekends, overtime, fair hiring practices, sick leave, OSHA and, yes, the minimum wage.
The American Dream of working hard and pulling yourself up by your bootstraps is just that- a dream. It is no longer reality. A stable, 40-hour per week, blue-collar job with benefits, dignity and respect (Read: the American Dream. Picket fences, modest home, food on the table, etc.) is absolutely not a possibility for the vast majority of people. I have noticed that the working man (and woman) is continually accused of being greedy. I am deeply offended by this notion, especially when it is extremely wealthy businesspeople and politicians making these accusations. Working people want to work. They want to be able to feed their families and pay their rent. They would really appreciate affordable health care. They’re not demanding astronomical pay increases to gas up their yachts. They would, however, like to gas up their cars to get to work.
I think many people assume that workers enjoy being on unemployment. Or food stamps. Or WIC. Or any other program designed to help citizens who find themselves out of work. I can assure you that most people do not. It takes an enormous amount of humility to accept help when you have worked hard your entire life, at one or multiple low-paying jobs, and are still unable to provide for your family.
“Its called Economics and Ronald Regan worked this philosophy to perfection!”
Reagan didn’t invent “Economics” you know. I concede the point that there are indirect effects associated with unemployment compensation benefit rates. One of these indirect effects is that some individuals may choose to stay unemployed rather than accept a new job. This is perfectly rational. However, might it be that wages are too low in this situation?? Afterall, immigration rates have fallen since there are no jobs for those in the labor force willing to work for such wages:
http://online.wsj.com/article/SB125356996157829123.html
Reaganomics had the net effect of slashing the savings rate, piling debt onto middle-class homeowners, and destroying the long-term ability of U.S. producers to manufacture products in the U.S. It cracked the unions (who are responsible for the list of things CMUWoman mentions, and I’ll add the weekend to that list). It deregulated banks and investment and turned our economy into one based on shuffling money from place to place. Every president since then has been beholden to the beneficiaries of those policies (I include Clinton, I include Obama). Ron the Sainted One ranks among the most destructive presidents of all time.
Hey look, it’s another finely crafted article by Central Michigan’s own master logician, Jason Gillman! He definitely deserves a Pulitzer for this journalistic masterpiece.
So CMUwoman I am confused.. do you think someone who piles up debt to go to school and further themselves, steps into the workforce and earns less than a blue collar worker is ok? You rely on Big Government but it perplexes me why you would considering at least the United States govt couldn’t reach the Superdome in 5 days after a hurricane. And don’t give me that “it was ALL Bush’s fault”.. it was the entire bureaucratic corrupt current system.
And if you look carefully and do a little research, CMUWoman’s rant is straight out of the Micheal Moore playbook.
CMU Woman:
The fact you put your trust in Big Government is laughable … they are the most wastefull institution in the world.
You base your argument on a premise that most american’s are forced into minimum wage jobs by some outside force. I would argue they had the same access to college that I did … and I paid for it myself … and am still paying for it. People forced to survive off minimum wage have made choices in their lives and are forced to live with them … some may be have been hit very hard by unfortunate circumstances, but still may have made very poor choices detrimental to their success.
This is where our argument fault line is…you are a staunch democrat who believes is socialistic values … I don’t. I grew up with little money and had a paper route at the age of 10 to buy the basketball shoes I wanted. I worked 2 jobs through college at CMU and have worked since the age of 10.
To your point about job regulation, Unions served their purpose, I agree with you, but at some point they are only now serving their cause, and not what’s healthy for business.
There are 2 types of workers in this country, protected and unprotected. Protected workers will always have employment because they are productive. Unprotected workers may struggle becuase they were not productive enough for their employers to keep them.
My advice to anyone who is unemployed: Be more productive than the pay you’re being given and you’ll be employed!
Good Luck!
Noah, the fact that you stereotype the unemployed and those who survive on minimum wage jobs is not only “laughable,” it is ignorant and despicable. Not everyone had the same access that you did, despite what you may think. Race, gender, social class, parental influence, access to health care, region, k-12 school, blind luck: these are all factors that play a major role in determining the future of any child, and to say that everyone is starting out on an even playing field is just uninformed. And what is a “protected” worker? Unions protect workers, but you said unions have served their purpose. Laziness, Noah, is not synonymous with unemployment. You say that my ideals, and the ideals of many working-class people, are “not what’s healthy for business.” Um, pardon me, but I think the multi-billion dollar business world can protect itself. I’m concerned with what is healthy for people, not big business.
Oh Boy! I assume that you are referring to “Capitalism: A Love Story”, yes? Although Michael Moore is a guilty pleasure of mine, I have yet to see the film. Contrary to popular belief, Michael Moore is not the anointed leader of blue-collar workers, although he does share many of their values. He also did not invent the ideas of social justice, respect, collective bargaining, unions, the minimum wage, etc.
So, do I, “think someone who piles up debt to go to school and further themselves, steps into the workforce and earns less than a blue collar worker is ok?” I’ll do you one better, Oh Boy: I don’t think you should have to have piles of debt in order to pursue higher education! Scandalous? In a society where we have been told that you can achieve anything if you just work hard, yes, that is an extremely scandalous idea. We’ve made college unaffordable and unattainable for the vast majority of people. Access to education is largely what separates the haves from the have-nots.
My question for you is, do you think having a college education makes you better than men and women who have worked for decades at blue-collar jobs? My degree doesn’t make me better than my family members and friends who don’t have a degree. It doesn’t make me more deserving of health care or a livable wage. It doesn’t make me more deserving of safe working conditions and public education. As much as we claim to be an egalitarian country, we are very quick to set up a strict hierarchy of the classes. And that is unfortunate and unnecessary.
My, um, rant was actually an opinion, supported by evidence. You’re welcome to disagree. Dialogue and discussion are the only way we will ever move forward to guarantee the civil, social and human rights of every individual.
CMU Woman:
First, Unions protect nobody but their own bottom line … laws protect people. Yes, the Unions helped create those laws, but Unions are now only causing issues for many companies and over-reaching their purpose.
Have you seen Pursuit of Happyness? Great Story of a man who did not use excuses, nor did he give up on his dream. If 1/2 of the American people took his Philosophy to Life, we would be much further ahead as a country.
To the point of jobs – I looked in the paper this weekend and saw a ton of job postings — there are jobs for professional truck drivers who make upwards of 50 – 60 thousand per year – a fair living wage, there are clerical jobs available with benefits, there are nursing jobs available, there are a TON of available jobs. The problem is, there are not many manufacturing jobs which pay $80,000/yr. for the uneducated anymore — that’s where your point gets blown away. You must be educated for the field you’re in … if you don’t go to college, you will lose out on those jobs.
Many American’s have been spoiled and have too strict of a search for their jobs. Truck drivers are at a premium, but people don’t want to do that — I call that their choice to be unemployed at that point.
Use the social status, race, sex, gender, whatever you want as an excuse … I’ll tell you this, many people have MORE ACCESS to grants and financial aid than I did.
Again, you think everyone has a right to FREE higher education, you are showing your socialistic tendancies again. MOVE TO CANADA or EUROPE. Maybe then you will have no more excuses.
If you want to live in a libertarian utopia, I hear Somalia is nice this time of year.
CMU Woman,
Contrary to what you may think, i am not a fan of the “blind hand of capitalism”. i think there is a big difference between capitalism and corporatism which is the real beef Moore should have had an argument over. Corporations that lobbied and corrupted our politicians setup a system where small business has to struggle, but that is not an issue with capitalism. Again, our government failing to accomplish something, see a pattern of the US govt. On your other question about being better than others the answer is absolutely not. I do believe that those that take temporary personal financial risk to advance their knowledge of a certain topic should have its rewards in the end. But the real question is what do you consider blue collar. Seems to me a farmer that provides for his own on his feet sweating all hours of the day for a certain amount of seasons and budgeting during difficult times are the people that some in america forget about when they rely on “the man” to pay them wages fits that hard-working category. If a blue-collar worker has an issue with the wages they are paid they should remember they are working for someone else to create their product. Their employer is the one who took a very large risk to bring a new product into the market.
I don’t understand why when I tell someone thats been griping in the auto industry to start their own business they give me a blank stare and say “huh”? BTW I think if the college community actually did some research into what our politicians that we drool over actually stood for and brought more awareness to the real representatives like Ron Paul(real leader) and Dennis Kucinich, then we would actually get something accomplished and start to unserstand how things SHOULD be working again. I think we agree the system is broken but I don’t think the answer is to do away with capitalism which is what Moore is about. We have to eliminate corporatism.
Hey Linus, hows the trolling lifestyle going for you? Theres always one on these newspaper sites but we never hear from them in real life. Just constant complaining, just like the Freep. Go away little boy
Telling an American citizen to leave the country because of their opinion is the mark of a truly enlightened individual.
Thats the shortest comment you have made. sometimes short and sweet works best
Nothing like getting in the last word, eh, Oh Boy
I appreciate dialogue and debate between people with differing opinions; that’s what makes life interesting, don’t you think? I do not appreciate being told to, “MOVE TO CANADA or EUROPE” (thanks, Noah) because I have an opinion that doesn’t align with yours. When individuals resort to that old stand-by, I tend to assume logical, reasonable and civil debate is over. Stifling free speech and the opposition is perhaps the least democratic thing any society (or individual) could do. Counterproductive and, ahem, unpatriotic, wouldn’t you agree?
Haha it’s one of those Ron Paul people.
CMUWoman:
I appreciate debate, but don’t apprecaite people trying to take away my freedoms and liberties because you want to change our country to a Socialist State — that’s why I tell you to go somewhere else. If you don’t like the foundation of this country, then you have the freedom to go somewhere else … that’s all.
Our K-12 school system, police departments, fire departments, Medicare, etc. are all socialist programs. If you would like the freedom to protect yourself from crime/fire, educate yourself and your children and provide your own healthcare as an elderly individual on a fixed income, by all means, do so. But do not throw around words like “socialism” and expect me to run screaming in terror.
If you can say our country is exactly the same as it was 200, 50 or even 20 years ago, you are sorely mistaken. We have grown and developed over the years. We’ve had dozens of amendments to the Constitution for a reason- it was a document developed largely by old, white, wealthy men in the eighteenth century. Of course we’ve made changes. Of course adaptation has been necessary. Women can now vote. Slavery is outlawed. Discrimination based on race is illegal. Those are things that were not in the, “foundation of this country,” as you call it. Those are, in fact, “freedoms and liberties” that were granted and guaranteed, not taken away, through change and massive social movements.
With all due respect, you do not, “appreciate debate.” You would be laughed out of any face-to-face debate if your response to an opponent’s point was, “go somewhere else.” As American citizens, we have the right to criticize our government (One of those pesky amendments. The first, in fact). Exercising that right doesn’t make me unpatriotic, nor does it imply I should (or want to) leave my country. Marching out tired rhetoric is beneath those who want, as I said in an earlier post, civil, reasonable and logical debate.
CMUWoman,
Your entire arguemnt has been based off opinion, not fact. You would be laughed at in a debate because of this. Here is my fact on your argument.
K-12 school programs (government run) are the worst of any Industrialized Nation. This is a fact. My parents sacraficed and sent me to private schools. Notice how Medicare and Medicaid are going bankrupt faster and faster each year? And Social Security? SS was not intended to be a social fund, but a retirement fund for only those who put money into it. The truth is, government is not as efficient as people like yourself would like to believe. I would agree that if the government was a non-profit organization and actually acted like one, it could reduce overall costs — problem is, they are not.
I agree with you that our country has evolved into a nation of freedom for more individuals and I love those freedoms.
My main argument with you is that you seem to believe in the redistribution of wealth as led by the government. That is Socialism. It does not work as well in other countries as our freedom state has here. My point being: If you have so many complaints about the freedoms we enjoy, you always have the freedom to go somewhere else.
I find it funny you say I would fail a debate … truth is debates are won on facts and I don’t thing history bodes well for the US government and how they run things!
Noah- I have cited information from the Department of Labor, the Department of Health and Human Services, and the U.S. Constitution. What have you cited? Oh, I’m sorry, you referenced the “Pursuit of Happyness.” It’s based on a true story, so that must be a legitimate academic source. I personally found it horrifying that in the wealthiest country on the planet, a child was left homeless. But, again, it’s a film, not an academic reference.
The minimum wage is not a redistribution of wealth; it is a check/balance to the power of business, just as our three branches of government act as checks/balances to each other. I find it very curious that you stated, “I would argue they (blue-collar workers) had the same access to college that I did,” and yet, in your latest post, you stated that you were sent to private schools. Case in point- not everyone has access to a private education, not everyone begins life as an adult on an even playing field. With that private education came privileges that some people did not have. It’s admirable that your parents made sacrifices to send you to private schools. Not every parent can make those sacrifices.
And perhaps when you, “tell someone thats been griping in the auto industry to start their own business they give me a blank stare and say ‘huh’?”, they are merely staring at you in disbelief over the sheer audacity of your suggestion. New businesses require money. Typically, large sums of money. Blue-collar auto workers (or custodians, waitresses, the unemployed, etc.) don’t have money. That’s the problem. They’ll have even less money if we let employers hire people for $5 an hour, as Mr. Gillman suggests. So they’re employed? I’ll cite one of my earlier posts: “None of that matters if we have people who cannot feed their families, pay their rent or afford health care. Sweatshop laborers are employed. Indentured servants are employed. Slaves are employed. Are these things positive for humanity? No.”
I’m also still curious as to what a “protected” worker is? And as for your comment on unions, you’re very right, unions are out to protect their membership, just as big business is out to protect itself. At least union members elect their leaders. Government is imperfect, but, again, at least we elect those leaders. Business leaders are unelected and largely unregulated. Putting my health, education and personal well-being into the hands of the free market makes me nervous.
I never said you would fail in a debate. I did, however, say that, “You would be laughed out of any face-to-face debate if your response to an opponent’s point was, ‘go somewhere else.’” And that is very true, you would be laughed out of that debate. The “if-you-don’t-like-it-you-can-leave” rhetoric is (yawn) boring and, quite frankly, pathetic. You are a citizen. You have the right to express your opinion, as do I, without fear of persecution. I think we can both agree that the beauty of our country lies with that fact. Please keep that in mind.
I’m sure you and I could go back and forth for weeks.
I apologize if I’ve somehow persecuted you. My point was to simply point out a freedom you have — moving somewhere that better suits your percieved lifestyle.
I agree, we all have our opinions, and you and I clearly don’t agree. You should look up “protected” workers — its an HR term that describes anyone but young white males.
You obviously don’t know enough about Unions to speak too much about their impact. I’ve done many studies to show the inefficies caused by the way unions work and tell you this — they single handedly took down the auto companies — not the CEO’s. Read about the teachers Unions in NY that have 700 teachers being paid for not working because of a Union contract that does not allow them to be fired for misconduct — they get paid for nothing!
As for my private education – yes, many others were afforded the opportunity through scholarships, so to say not everyone has access, that’s not true. You should also research some charter schools – private education funded by tax dollars. They are the reason Chicago Schools are in the tank. The consumer chooses where their tax dollars go by sending their kids to those schools. I also went to CMU and received the same student loans almost anyone could have received — especially if they made less than my family.
You are just more compassionate for those who struggle and make excuses for themselves. Which is why I cited a move (true story) about a man who simply REFUSED to do so. Yes, it was fact, not just a movie.
If I was in a fact to face debate, I would also pull actual data and use information from studies .. this is just a discussion forum and no points are being awarded here. I would also bring the classified add and show you how many jobs are available paying well more than the minimum wage — again, too many spoiled, uneducated auto workers don’t want to do anything else.
CMUWoman:
Here is your data:
Relatively few Americans earn the federal minimum wage.[1] In 2005, 1.9 million Americans reported earning $5.15 or less per hour.[2] This amounted to 2.5 percent of all workers earning hourly wages and 1.5 percent of all workers in the United States. But these numbers include workers who also earn tip income. Many of those earning less than the minimum wage work in restaurants and so make more than the minimum after taking their tips into account. Using another measure of earnings that includes tips, 1.3 million Americans earn the minimum wage or less per hour, or 1.1 percent of the total working population.[3]
The Young
Most workers who earn the minimum wage or less fall into two categories: young workers, usually in school, and older workers who have left school. The majority of minimum wage-earners fall into the first category: 53 percent of those earning $5.15 or less per hour are between the ages of 16 and 24. [4] The remainder are 25 years of age or older.
Table 1
Demographic Characteristics of Minimum Wage Workers
16-24 years old 25+ Total
Men 35.2% 33.6% 34.4%
Women 64.8% 66.4% 65.6%
White 83.6% 79.5% 81.7%
Black 11.1% 11.8% 11.4%
Asian 1.7% 5.4% 3.4%
Married 4.8% 42.5% 22.5%
Wage and Income Characteristics of Minimum Wage Earners
Part Time 67.0% 55.6% 61.7%
Full Time 33.0% 44.4% 38.3%
Avg. Family Income $64,273 $33,606 $49,885
At or Below the Poverty Line 16.9% 22.8% 19.5%
Family Income > 200% of Poverty Line 64.7% 44.8% 56.1%
Education Levels of Minimum Wage Workers
Less Than High School 36.3% 22.0% 29.8%
High School Graduate 20.9% 38.5% 29.1%
Some College 35.6% 20.5% 28.5%
Associates Degree 3.4% 8.5% 5.8%
Bachelors Degree or Higher 3.4% 10.6% 6.8%
Source: Heritage Foundation calculations based on the Bureau of Labor Statistics, 2005 Current Population Survey and merged outgoing rotation group files
Minimum wage workers under 25 are typically not their family’s sole breadwinner. Rather, they live in middle-class households that do not rely on their earnings. For the most part, they have not finished their schooling and are working part-time jobs. These workers represent the largest group that would directly benefit from a higher minimum wage.
Here are a few important characteristics of the teenagers and young adults who earn the minimum wage or less:
•Fully 67 percent work part-time jobs.
•Their average family income is $64,000 per year.
•Only 17 percent live at or below the poverty line, while 65 percent enjoy family incomes over twice the poverty line.[5]
•They have less education than the population as a whole. Fully 36 percent have not completed high school, and 21 percent have only a high school degree. Another 37 percent have taken college courses but do not yet have a bachelor’s degree; many of these are college students working part-time while in school.
•Fully 65 percent are women.
•Only 5 percent are married.
All from the Heritage.org sourced from the bureau of labor statistics. Explain to me why we need to raise this? For college students? Will it really make that great of an impact? — I’ll answer for you NO! Trust me, those working in restaurants DO NOT claim all their tips!
Regards,
Noah
I’m glad to see that you finally cited some sources (besides “The Pursuit of Happyness.” Sorry, but a movie based on a true story is not fact. “The Amityville Horror” also claims to be based on a true story. Hmm.), since you criticized me because my, “entire arguemnt (sic) has been based off opinion, not fact” when, in fact, I actually utilized multiple sources of information. And when I asked you to produce sources, you responded with, “If I was in a fact to face debate, I would also pull actual data and use information from studies.”
Ahh, yes. Unions. The evil union is responsible for the demise of the home, the family and traditional values. Also, “they single handedly took down the auto companies.” Wow. That is quite a feat. I mean, I thought the demise of the auto industry was largely because of the combined effects of globalization (decreasing dollar value, increased competition, etc.), as well as the fact that we put all our eggs in one basket, so to speak (you know, not diversifying our industry). The UAW, and all unions, is not infallible. It is imperfect, just like anything involving large groups of people. But you can thank them for the weekend. And I just can’t understand why the UAW would destroy the livelihood of its members by bringing down the US auto industry. Unions ensure that workers have a place at the table, so that they can have a say in legislation that impacts them.
I am aware of the definition of protected workers. I asked only because you seem confused. You say that, “There are 2 types of workers in this country, protected and unprotected. Protected workers will always have employment because they are productive. Unprotected workers may struggle becuase (sic) they were not productive enough for their employers to keep them.” And then you say that I, “should look up ‘protected’ workers — its an HR term that describes anyone but young white males.” So are you saying that young, white males aren’t productive, and that’s why they are unemployed? Are productive workers always protected? Can young, white males ever be protected? Can women/minorities be unproductive? Your definitions/claims don’t seem to line up.
So, on to your cited information. Let’s assume that the neo-conservative research group The Heritage Foundation’s findings are unbiased and accurate, and a very tiny percentage of American workers make the minimum wage. So tiny, in fact, that it’s insignificant, and makes no difference. Then why are you and Mr. Gillman making a fuss? Why is it such a problem for a tiny portion of Americans to be guaranteed the federal or state minimum wage? If we abolish the minimum wage to decrease unemployment, as Mr. Gillman suggests and you seem to support, “Will it really make that great of an impact?” as you asked in your latest post. Based on the information you presented me, reducing the pay of 1.1% of the poorest Americans just doesn’t seem like it would reduce unemployment.
You’re right, I do have compassion for those who struggle. The vast majority of people who struggle work hard; they aren’t lazy or stupid, despite claims by people like you who perpetuate that hateful stereotype. Many people who struggle haven’t had access to resources that other, more affluent, citizens have had. Not every child can go to a private school, despite your claims to the contrary, nor does every community have a charter school. We still have massive gender and racial inequity in our personal and professional lives. All of these factors contribute to a hierarchy of class and oppression. When people threaten to change this hierarchy (civil rights advocates, women’s rights activists, the labor movement, etc.) they are often told to “love it or leave it” by those who hope to instill fear. It didn’t work with social justice activists of the past (you know, folks like Dr. King, Rosa Parks, Susan B. Anthony), nor will it work with our current grassroots movement. And if you don’t like that, than you can leave…just kidding
I will always stand up for your rights as an American citizen, and I will never ask you to leave because we don’t agree.
On Unions, you likely don’t have the background and have done the studies I have, but put it this way … the most productive and profitable (I know … bad word) auto companies working in the US are Toyota and Honda … employees make very good wages (better than Union workers) and are non-unionized. Don’t have the facts in front of me, but have done the research — you should look it up.
I was not clear on my “protected worker” comment. Essentially, we employers are not allowed to discriminate when hiring (which I agree with), but HR groups FORCE them to discriminate when firing someone. I’ve been told I need to be extra careful because they are not being productive, but they are over 40, so we have to be “extra” careful — I should be able to hire and fire on ability and not have to worry about the rest. You cite these wonderful role models: “Dr. King, Rosa Parks, Susan B. Anthony”. I’m glad you did…one thing none of them did … complain because they were in tough situations! They did something about it without excuses!
The problem with minimum wage is that it really only affects small business, but can be a huge hit to them. Our point is this, most people making that wage are either a.) working in a restaraunt not claiming most their tips or b.) living off another dependant. Point being that it hurts small businesses from growing and expanding to a point where they can afford to pay people more. Call Heritage what you want, those are facts from the US Government.
As for compassion for struggling people, I would love to see your facts. As I’ve stated before, how many are just too lazy and don’t want to work? I’ll tell you this, I’ve heard panhandlers admit they do it for extra money while working 9-5 making 60K / year. I’ve given money to those who “look” like they’re in need. I donate to charity and donate my time to help kids in need.
The difference between you and I is that you want government to handle everything (which is why our public school systems SUCK)and I don’t trust them as far as I can throw them.
Finally, if I feel at some point that I don’t live in the greatest country in the world, I would move elsewhere.
CMUWoman:
http://www.aftermarketnews.com/Item/28594/uaw_losing_pay_edge_foreign_automakers_bonuses_boost_wages_in_us_plants_as_detroit_car_companies_struggle.aspx
Below is a non-bias article proving what I said above. Funny how the Union Leaders blame executives … I wonder how much of that salary is paid to the Unions for dues? Ever seen what kind of car the Union Executives Drive?
Point is this, you will lose the Union debate based on facts as shown here. Unions are now needless overhead…just ask the non-union autoworkers!
U spend way too much time posting on this website, get back to work!
RAISE MINIMUM WAGE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!