A visit to Philadelphia and a N.J. Assembly vote sharpen minimum-wage focus

Solar panels being installed on a home in Glendale, Calif.
Solar panels being installed on a home in Glendale, Calif. (REED SAXON / AP)
Posted: February 15, 2013

Making the sell for his State of the Union proposal to raise the minimum wage to $9 an hour, President Obama is dispatching his acting Labor Secretary to Philadelphia on Thursday.

Seth D. Harris, who took over for outgoing Labor Secretary Hilda Solis, will visit the offices of the AFL-CIO in Philadelphia to hear from area labor leaders and minimum-wage workers.

Harris' visit comes on the same day that the New Jersey Assembly considers whether to put a minimum-wage question on the ballot in November.

The federal minimum hourly wage, which Obama would like to see increased by 24 percent to $9, is now $7.25, the same rate as it is in Pennsylvania, New Jersey and Delaware.

"Tonight, let's declare that in the wealthiest nation on Earth, no one who works full time should have to live in poverty," Obama said in his address, adding, "so here's an idea that Gov. Romney and I actually agreed on last year: Let's tie the minimum wage to the cost of living, so that it finally becomes a wage you can live on."

Sounds good to Jessica Nunez, 37, of Philadelphia, who supports the minimum-wage increase and may be among those to speak with Harris on Thursday. She works two minimum-wage jobs - as a housekeeper and as a warehouse worker.

"It would make things stable," said Nunez, a mother of three. "I wouldn't be wondering which is more of a priority, somewhere to live or my children's stomach.

"I think [an increase] is wonderful," she said, "because it will help the economy and help the people."

Whether it will help the economy and help the people has been the subject of persistent debate among economists, rising afresh with new attempt to raise the minimum wage.

Dueling analysts, each from similarly named think tanks in Washington, make the standard counterarguments.

Arguing against an increase in the minimum wage, and also making increases automatic, is Michael Saltsman, research director at the Employment Policies Institute.

Saltsman argues that the majority of people living in poverty aren't working, so raising the wage won't lift them out of poverty.

Employers, he said, will respond to increased wage requirements by cutting hours or cutting employees.

And, ultimately, he said, "minimum-wage battles won't be battles between workers and management, but a battle with technology, and that's a battle workers cannot win." Employers will invest in technology, such as electronic cashier systems, to replace workers, if labor costs go up.

Arguing for the minimum-wage increase, and also for making increases automatic, is David Cooper, an economic analyst at the Economic Policy Institute.

Cooper said that the value of the minimum wage has actually gone down over the years. "Every year inflation wage is eating away at the minimum wage," he said, adding that the minimum wage in 1968, $1.60 an hour, would actually be worth close to $10, adjusting for inflation.

Minimum-wage increases "have no measurable effect on employment," he said. Labor costs aren't the main challenge facing businesses. "The main problem is simply a lack of customers."

Putting more money into the hands of minimum-wage workers would cause them to spend more, stimulating the economy, he said.

The White House estimates that 15 million workers would benefit directly from the increase.

In January, Gov. Christie vetoed a bill to raise the minimum wage. The bill would have raised New Jersey's minimum wage to $8.50.

Given that both houses passed a minimum-wage increase, Thursday's resolution before the New Jersey Assembly is likely to succeed. The resolution proposes a constitutional amendment, to be placed on the ballot in November, that would raise the hourly wage to $8.25 and link future increases to the Consumer Price Index.

The Senate passed the resolution Feb. 7.


Contact Jane M. Von Bergen at jvonbergen@phillynews.com, @JaneVonBergen on Twitter, or at 215-854-2769. Read her workplace blog at www.philly.com/jobbing.

 

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