Corporate Front Groups Battle State Minimum Wage Hikes
This is a cross- from Steve Cooper at the We Party Patriots blog.
As states like Connecticut, Iowa, New Jersey, and New York are looking to raise the minimum wage, they are meeting opposition from well-funded political groups who seek to increase corporate profit. Despite the swath of misinformation painting the minimum wage is a “job killer,” John Stoher of The American Prospect points out that the minimum wage is not even growing at the speed of inflation:
The federal minimum for an hourly wage was $3.35 in 1982 and now it’s $7.25, up 120 percent. Inflation, meanwhile, has climbed during that period by 135 percent.
Surveys find that nearly two-thirds of Americans want the minimum wage to be at least 10 dollars. Historically, raises in the minimum wage never lead to unemployment and small businesses are not affected. So where does such fierce opposition to it come from? Enter the Employment Policies Institute, a corporate-backed spreader of misinformation and propaganda that rakes in the money every time the minimum wage issue enters the political debate (this is not to be confused with the Economic Policy Institute (EPI), a think tank we often cite as legitimate).
John Stoher looked at the corporate spin machine that is the Economic Policies Institute in his article:
One of the most active in the propaganda industry has been the Employment Policies Institute, a so-called think-tank in Washington that serves as a front for Richard Berman & Co., a lobbying firm for major corporations in the fast-food, alcohol, and tobacco industries. The Employment Policies Institute studies essentially say: Raising the minimum wage hurts minimum-wage earners. We know, we know. That sounds counter-intuitive, but trust us. We’re the experts.
Recently, New York City Mayor Michael Bloomberg and State Assembly Speaker Sheldon Silver co-authored an op-ed in the New York Daily News making the demand-side case that New York City is expensive to live in and that minimum wage has not kept pace with inflation.
Fortunately for Berman, he has allies among politicians, reporters, and lobbyists to counter arguments favoring an increase in the minimum wage. In New York, State Senate Majority Leader Dean Skelos warned the bill could be a “job killer rather than a job promoter.” In Connecticut, the National Federation of Independent Business reacted to news that the state’s General Assembly looked to raise the wage from $8.50 to $9.75 over two years, then index it to the rate of inflation. Local Director Andrew Markowski said a wage hike would hurt “the working poor—the people whom the advocates want to help.” The editors of the New York Post allowed a recent report to cite a study by the Employment Policies Institute showing the minimum wage “razes jobs” without revealing the Institutes’s corporate ties. The report’s lone qualification came in the form of an opposing claim that the Institute “is a front group for the restaurant and hospitality industry.” Even so, it stated unequivocally later on that studies supporting a wage hike were “union-backed.”
To John or Jane Q. Public, the obvious solution would be for these corporations to stop paying millions of dollars to suppress wages and instead use that saved money to shell out the extra few cents for their workers every week. But that goes against the inherent nature of the war on workers. It is not enough to simply impede progress, you must push your workers into poverty if you want total control of them.
Berman’s propaganda doesn’t stop at anti-worker and anti-union speak, as Stoher points out:
Berman takes millions from his clients and funnels the money through 15 “nonprofits,” according to CREW. They in turn generate reams of misinformation to distract the public from issues like drunk driving, childhood obesity, second-hand smoke and animal rights. The Center for Media and Democracy’s PR Watch says Berman works “in the shadows for decades while pocketing millions from unpopular industries for his work thwarting public interest legislation.” If the Employment Policies Institute were truly a think-tank, truth would matter.
The truth does not matter, not in modern politics. Politicians have to shorten their messaging to fit the news cycle and by the time it is edited, the truth is lying on the cutting room floor. Still, there are a select few politicians able to see through the illegitimate think tankers who are currently fighting for what’s right by workers. They are battling for wage standards in their states. Here is an overview of the minimum wage fight across the fruited plains.
In New Jersey, lawmakers are looking to raise the minimum wage to $8.50. They are looking out for more than restaurant employees as they shed light on other industries that get paid the minimum wage as well:
Many minimum-wage workers are in jobs we may not assume to be minimum-wage occupations, such as contracted workers at airports who handle our luggage, process tickets and clean airplanes. Or home health aides and office workers.
Most are not that young. Of the 40,000 in New Jersey who earn minimum wage, more than half are 25 or older. More than a third are at least 45.
New Jersey lawmakers are also factoring into the equation the increased tax revenue and economic stimulus that would come from a raise in the wage floor:
When we raise the wage floor, pay also tends to increase a little for other low-wage workers. Some of the thousands of New Jerseyans now paid 25 cents or 50 cents more than the proposed new minimum of $8.50 an hour also may see an increase if the minimum wage is raised.
Second, increasing the minimum wage may lead to fewer people needing government assistance for housing, food and health care. That would benefit taxpayers.
The third and broadest benefit would go to our economy. Low-wage workers — unlike high-paid executives — have to spend every dollar they get to cover their families’ essential expenses. The current rate of $7.25 comes to $15,080 a year. That is below poverty level for a family of three, and is not nearly enough in our expensive state to meet basic needs for food, housing, clothing and transportation.
In Iowa, a Senate sub-committee is exploring the benefits of raising the minimum wage to $10 an hour. However, the leader of the the sub-committee has admitted the bill is unlikely to be passed this year because of a lack of support among Republicans who are sticking to the anti-worker agenda their campaign contributors are demanding. Using the same arguments as others, many are poopooing the idea despite the obvious help it could provide lower and middle class workers:
Sen. Tom Courtney, D-Burlington, the bill’s sponsor, said anyone currently earning the hourly minimum is making a little more than $14,000 a year, which is not enough to live on.
However, business representatives and Sen. Mark Chelgren, R-Ottumwa, argued that a state-mandated increase would be detrimental to Iowa’s economic recovery, and would hit young people particularly hard.
“I don’t think there’s any proof that the minimum wage makes businesses go under,” Courtney said.
The argument that raising the minimum wage would hurt younger Americans has been proven to be faulty at best, while many lawmakers argue it would actually help them:
Courtney and Charlie Wishman of the Iowa Federation of Labor, AFL-CIO, refuted that claim, saying most minimum-wage earners are aged 20 years or older and often are single parents, minorities or college students.
“Every year we raise college tuition. To me this is the greatest thing we could do for young people so they can afford college,” said Sen. Dick Dearden, D-Des Moines, who joined Courtney in supporting the bill. “This is not going to put anybody out of business and I think it’s the right thing to do.”
In Connecticut, House Speaker Chris Donovan, who is running for Congress, wants to raise the state’s minimum wage of $8.25/hour to $9 this year, $9.75 next year and then tie it to the Consumer Price Index from there on out. Despite predictable Republican opposition, many in the state are rallying around the claim that such a move would help low-income families struggling to make ends meet:
Proponents for the minimum wage increase argue it is currently too low to serve as a livable wage while critics claim raising it hurts employers and stifles economic growth. According to Minimum Wage.org, the average full-time minimum wage earner in Connecticut working 40 hours a week, 52 weeks a year, earns $66 per day, $330 per week, and $17,160 a year, which after taxes is roughly $15,380 or very close to the national poverty line of $14,570 per year. This is insufficient to support one person in Connecticut, let alone a family whose sole breadwinner is a minimum wage worker.
Academic research debunks the notion that increasing Connecticut’s minimum wage to $9.75 will impede economic growth. In fact, two key studies over the past two years provide definitive and compelling evidence about the effect of raising the minimum wage.
The first study published in November 2010 in the Review of Economics and Statistics by economists Arindrajit Dube, T. William Lester, and Michael Reich reveals that increasing the minimum wage during a recession or periods of high unemployment has no adverse effect on employment or economic growth.
In the second study, published in April 2011 in the journal Industrial Relations, Syliva Allegretto, Arindrajit Dube and T. William Lester found minimum wage increases had no negative affect on teen employment levels or hours worked. These findings support earlier economic studies showing that employment slightly increases rather than declines when the minimum wage is raised.
In the Empire State, United Food and Commercial Workers (UFCW) Local 1500 is fighting for the state to raise its minimum wage. The union covers employees that would be most affected by the raise as many are adults who have families to support. From the Long Island Press:
Bruce W. Both, President of UFCW Local 1500 stated: “Neither a strong economy nor the American dream can be built on a wage of $7.25 an hour. We must realize New York State cannot overcome its economic challenges in a sustainable way if at the very foundation of its economy are workers living below the poverty line. We must support common sense economic principles and a strong minimum wage is at the top of that list. It is unfortunate that it has taken Albany so long to address this vital issue but our Union looks forward to working with Governor Cuomo, Speaker Silver and members of the New York State Senate to get over one million New Yorkers the raise they so desperately need.”
Anthony Speelman, UFCW Local 1500 Secretary-Treasurer, added that he is amazed at the money spent fighting against minimum wage adjustments:
It is amazing how much money corporations will spend from their own pockets to make sure no additional money goes into their workers pockets. It is appalling that the voice opposing the minimum wage increase will come from those making ten, twenty even fifty times what those on minimum wage make in a year. Any business that can only survive and profit by paying their workers poverty wages should either rethink their business model or consider another line if work. Regardless, their voices of greed will be drowned out by the voices of need.
To begin 2012, eight states raised the minimum wage, indicating that Speelman’s enthusiasm about the power of “the voices of need” may be spot on. Regardless, he and his counterparts will have to fight on, as long as there are Economic Policies Institutes out there to try to beat them back.