Thursday, February 14, 2013

Minimum Wage, Minimum Raise

According to a study by CEPR highlighted in Huffpo, if the minimum wage had kept pace with productivity since the 1960s, it would be $21.72 an hour by now.  If you "only" go by inflation it should be $10.52; it currently stands at $7.25. The tipped minimum wage is $2.13 (although employers are supposed to make up the gap to meet $7.25). 

In the State of the Union speech on Wednesday, Obama proposed that the minimum wage be raised to $9.00 an hour. This proposal is typical Obama, and typically centrist: propose something too weak to begin with, so it can be negotiated down to almost nothing by the mule-headed Republican party. We'll be lucky to see an increase that breaks the $8.00 barrier.

Obama's strategy should go like this: "Since productivity indicates $21.72, that would be the just minimum wage, and therefore that's our baseline standard. My starting position will be a $30 minimum wage, because we know that Congress has a history of not raising it properly, so we must pad it now because working people can't expect another increase for years. That's only fair.  And we also have to make up for decades of lost minimum wage increases.  That's only fair too.  Alternatively, we start at $27 and tie the minimum wage to automatic increases based on productivity and inflation, so we don't have to rely on a procrastinating Congress to increase it." Once you’ve made a strong starting proposal, you then negotiate from there, and privately send out signals that your do-not-cross red line is $25. When Congress fails to act, you use that fantastic Obama campaign machine to mobilize lengthy workers' protests, you have a full PR blitz of speeches and commercials, you whip out the veto pen and use it as a weapon (Obama has only two vetoes, whereas Bush, Jr. had a dozen, Clinton 36, and Bush Sr. 44). You might even call Congress into emergency session until they pass a $25 minimum wage so working people can feed their families in tough economic times.  

That way, you have at least a chance of a real reform that will help people and make things a little fairer.  And a more directly confrontational approach will clarify conservative opposition to the public interest in people’s minds, too.

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