The Blue State

First wave of minimum wage increases took effect

This week we saw the first direct impact that the Democratic Congress has had on working class pocketbooks.  In the first of three increases that take place throughout the next few years, the national minimum wage increased by 70 cents to $5.85 an hour.  When it eventually reaches $7.25 an hour, it will have a huge effect on many some American families:

A person working 40 hours per week at the current minimum wage of $5.15makes about $10,700 a year. A raise to $5.85 an hour would increasethat to $12,168 a year before taxes. An increase to $7.25 would boostthat to just over $15,000 a year.

The federal poverty level for singles is $10,210, couples is $13,690 and $17,170 for families of three.

The minimum wage has remained at $5.15 an hour for roughly a decade -- the longest period without an increase since 1938.

Keep in mind though, as Holly Fechner points out, that even with the wage increase the poor's purchasing power will remain low:

Over the past decade, the purchasing power of the minimum wage fellevery single day, even as costs continued to rise. The bill Congressjust passed merely restores the minimum wage to the same value it hadafter the last increase in 1997.

Of course, the wage hike will not include all workers.

29 states have a higher minimum wage than the federal government.

Minimum wage bill FINALLY appears to be set

On Monday evening, the House Ways and Means Committee approved the Senate's version of a bill that would raise the minimum wage from $5.15 to $7.25 an hour, and also give tax cuts to businesses.  The tax cut portion of the bill had created a disagreement between the two parties.  Once it became clear that the only way a minimum wage increase could get passed was if tax cuts for businesses were also included, then Senate Democrats caved in and ultimately agreed to the compromise, and it was passed by an overwhelming majority in the Senate.

Now that the House panel has cleared it, the bill will head to the House floor for a formal debate, followed by a vote.  It is expected to pass by an overwhelming margin.  The White House will not veto the minimum wage bill because it includes tax cuts for the more larger corporations.

According to the AP, the tax cuts in the bill will cost the U.S. Treasury roughly $1.3 billion over the next ten years.  That might be problem.  Back in January, Pelosi's Democrats passed a rule that institutes a pay-as-you-go system.  In other words, no new deficit spending.  Though, it is rumored that the Democrats could find extra revenue by passing legislation that cracks down on unpaid taxes for big businesses.  The Senate Budget Committee was told earlier this month by a government official that a renewed effort to seek unpaid taxes could result in billions of dollars worth of new revenue.

We need a quality of life index

We have our gross domestic product, which measures total domestic production.  We have stock prices, which measure the value of large firms.  We have earnings reports, the unemployment rate, consumer confidence, interest rates and a whole list of other economic indicators.  What we don't have is an indicator that measures quality of life for the middle class.

In terms of production, unemployment and consumer confidence, the economy is doing quite well.  So it came as no surprise that President Bush spent time this week touting those impressive statistics.

But that is only one part of the equation.  Here is the other half that you might not hear the mainstream media bring up:

• The Commerce Department reported this week that personal savings are at the lowest level since the Great Depression.  The personal savings rate is negative 1%.
• People making minimum wage have the lowest purchasing power of any other time since 1955.
• Personal debt is 21.5% higher than personal income.  Although it is down slightly from 2005, the number is still very high by historical comparison.
• This is the first economic expansion since in more than sixty years that has not featured a prolonged increase in real wages (the term "real wages" means wages adjusted for inflation).  Also, the median hourly wage has fallen by 2% since 2003, when factoring in inflation.

Plus, we have rising education costs, already high energy costs and out of control health care expenses.

This is not a doom and gloom scenario.  The economy is growing.  We are in the middle of an economic expansion on Wall Street.  But when it comes to the overall cost of living on main street, many Americans are in quite a long-term predicament.  As a society, we are saving less and borrowing more.  This will help certain industries.  It will probably not help most Americans, especially the younger generation.  You'd think this would be of at least some concern to those who talk a lot about moral values.

Minimum wage battle takes a new turn

The Republicans have successfully stalled a bill that would have implemented the first minimum wage increase in ten years.  Now the Democrats have a response of their own.  Until the minimum wage bill is passed, Pelosi's House Democrats will block a cost-of-living (pay) increase for lawmakers.  Wa Post:

Lawmakers' pay will be frozen at $165,200 for this year in the dispute..

The Republicans are crying foul -- claiming that if Democrats allowed an amendment that cuts taxes for businesses, then they would let the minimum wage bill slide on through.

But Democrats say CEO pay has gone up exponentially in the last decade while bottom salaries have stayed put, even without factoring in inflation.  Minimum wage should be dealt with first.

We will have to watch how this plays out.  It is likely, according to some reports, that the Senate will pass a version of the minimum wage bill with tax cuts for businesses.  However, that is different than the House version.  So the House will have to decide whether to consider the Senate's bill, or ask the Senate to try one more time to pass their version that does not include tax cuts for businesses.

In related news, the CEO of Costco has added his name to the long list of CEO's that want Congress to raise the minimum wage.  They favor the proposal because raising wages for the lowest-paid workers usually reduces employee turnover.

Dem's minimum wage bill will help end slave labor in Saipan

Thanks to the second bill in the Democrats' 100-hour agenda, the days of sweatshops on the Marianas Islands are numbered.

Tom DeLay was famous for helping found the "K-Street Project."  But most progressive activists will remember him as the key protector of a policy that allowed sweatshop conditions to continue on a number of American colonies in the pacific.  But this week, historic language was put into the House version of the minimum wage bill that forces American companies in American colonies increase pay.

Back in 1996, Tom DeLay helped defeat the drive to end sweatshop conditions in the Northern Marianas Islands -- conditions that protected the Saipan government's selling of Mongolian women into the life of slave prostitution and forced abortions.  So who was the lobbyist that influenced Mr. DeLay to prevent such human rights laws from being enacted?  Why, none other than lobbyist Jack Abramoff, who was hired by the Saipan government to prevent the U.S. Congress from changing labor laws.

During one visit to Saipan in an effort to downplay the human rights abuses, DeLay praised their government:

"You represent everything that is good aboutwhat we are trying to do in America," DeLay said at the time to hisaudience, which included Saipan officials and factory owners.

Thankfully, this era will come to an end once the minimum wage bill passes the Senate, and is signed into law by President Bush.  Rep. George Miller (D-CA) has been fighting DeLay on this issue for the past decade, and is overjoyed by the end result:

"I first tried to increase the minimum wage in the Northern Marianasbeginning in 1997 and practically every year since then. But at everyturn, the needs and rights of workers in foreign-owned sweatshops inthe CNMI were trampled by the lobbyist Jack Abramoff and his Republicanallies in Congress, including now former Majority Leader Tom DeLay,"Rep. Miller said.

As far as DeLay is concerned, he now has a D.C. job that will help him lobby on behalf of other conservative causes.

Minimum wage bill will make a difference

A lot of people these days are upset with the large wage disparity in this country -- and it was only fueled by the big pay-offs for a few CEO's this holiday season.  Wage disparity is a huge issue, especially when considering the following facts:

• In 1982, the average CEO made 42-times more than the average non-management worker.
• In 1990, the average CEO made 107-times more than the average non-management worker.
• In 2003, the average CEO made 301-times more than the average non-management worker.
• In 2004, the average CEO made 401-times more than the average non-management worker.

You get the idea.  For people making the bare minimum, it is nearly impossible to scrape by.  For someone with a family of four making the $5.15 an hour minimum -- after payroll taxes, the refundable child credit and food stamps -- their total income in the year 2009 would be $19,608.  But if the minimum wage were raised to $7.25 an hour, their total income that year would be $23,115.  That is a huge difference.

We can complain all wage disparity until we are blue in the face.  But the fact is that raising the minimum wage would at least do some to relieve the burden on the working class.  That $3,507 could mean the world to these families.

House Democrats are scheduled to debate and vote on a minimum wage bill this week.

Public excited for new Democratic Congress

The polls back it up.

According to a new Washington Post/ABC News poll, Americans are more optimistic this year about the Democratic-controlled Congress than they are of the Bush presidency:

A new Associated Press poll goes even further.  A majority of Americans favor the items that are on the Democrats' agenda in the first 100 hours:

Minimum Wage
Favor - 80%
Oppose - 18%

Embryonic Stem Cell Funding
Yes - 56%
No - 41%

Allowing people to buy prescription medication from other countries
Favor - 69%
Oppose - 28%

The Republicans will have to wait until a more controversial topic arises, such as gun control, before they can attack without appearing so far outside the mainstream.

Bush protects Congressional salary increases

Earlier this month as Congress was getting set to adjourn, the Republicans failed to pass more than a half-dozen spending bills.  However, they did find time to try and sneak through legislation that would have increased their own salaries and the salary of the Vice President.  The Democrats stepped in and blocked the bill, citing the need to raise the national minimum wage before even thinking about their own wages -- especially since Congress only worked for 102 days out of the year, the least in recent legislative history.

That should have been the end of it.

However, late this week, President Bush signed an Executive Order to ensure the pay raise of Dick Cheney and Congress.  He attached it to an overall raise for all federal workers in order to minimize the political outrage that it would cause.

The Democrats are furious about the stunt, and vow not to accept a pay raise of their own until February, after which a minimum wage bill will be passed.

More children and young families going hungry

A report released by the U.S. Conference of Mayors shows a spike in the number of families who requested food aid -- and many of those families include parents that are employed:

The survey of 23 cities found civic and government groups received, onaverage, 7 percent more requests for food aid in 2006 than in 2005,following a 12 percent jump in 2005.

Requests for shelter roseby an average of 9 percent in 2006, with requests from families withchildren rising by 5 percent. More than half the cities said familymembers often had to split up to stay in different shelters.

Asthe numbers who could not buy their own food grew, more than half thecities, including Los Angeles and Boston, said groups spread resourcesfarther by giving less food to individuals or cutting the number oftimes people could receive help. The group estimated 23 percent ofrequests for emergency food assistance simply went unmet.

Franklin Cownie, the mayor of Des Moines, Iowa, who worked on thestudy, said he was troubled that more than a third of the adults askingfor food aid were employed.

"If you look at the data, you'll find folks that have jobs that don't have enough money to feed themselves," he told reporters.

Now you know why the minimum wage was such a huge issue in November.  Yes, voters were mostly concerned about the war in Iraq.  But in states such as Missouri, many Republican voters switched allegiances because of the minimum wage initiative.  Worrying about political conflict abroad is something many of us do.  But when it comes to having enough food on the table to feed your family, at the same time as working a 40-hour-per-week job, that is more important than anything else.

Cartoon: Minimum Wage

This cartoon refers to the trick Senate Republicans tried to pull this week.  After the GOP suddenly reversed its stance on the minimum wage issue, Senate Dems knew there was a catch.  Attached to the Republican minimum wage hike bill was a tax cut that will only help the richest two percent of all American households.  When it came time to vote, the Democrats told the Republicans to bite themselves.

(By Mike Keefe, The Denver Post, Cagle Cartoons)

Oh, and by the way: had the Democrats buckled and supported this GOP bill, it would have added roughly $2 trillion to the National Debt between 2012 and 2021.  So if you were wondering which party is more fiscally responsible, now you got your answer!
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Other sites blogging about this issue: Center for American Progress, Mauledagain, The Ward Report, Flashpoint, Pleasing to Remember, Wash Park Prophet, Say Anything, The Christian Left, Birmingham Blues, The Liberal Journal, OH-12, Voice of Dakota, Political Dogs, Internal Colonization.