[Washington Post] Life at $7.25 an Hour

YOU TELL 'EM TED!!! CALL 'EM OUT!!!

Man . .that does a heart Good to see that every now and again.

Rocket River

 

wouldnt it be smart to go to a trade school or community college and start makin at least 10 bucks an hour. than workin a mcdonalds fulltime

 

Beware the necromancer

 

http://www.azcentral.com/news/articles/0210biz-teenwork0210.html

New wage boost puts squeeze on teenage workers across Arizona
Employers are cutting back hours, laying off young staffers

Chad Graham
The Arizona Republic
Feb. 10, 2007 12:00 AM
Oh, for the days when Arizona's high school students could roll pizza dough, sweep up sticky floors in theaters or scoop ice cream without worrying about ballot initiatives affecting their earning power.

That's certainly not the case under the state's new minimum-wage law that went into effect last month.

Some Valley employers, especially those in the food industry, say payroll budgets have risen so much that they're cutting hours, instituting hiring freezes and laying off employees.

And teens are among the first workers to go.

Companies maintain the new wage was raised to $6.75 per hour from $5.15 per hour to help the breadwinners in working-poor families. Teens typically have other means of support.

Mark Messner, owner of Pepi's Pizza in south Phoenix, estimates he has employed more than 2,000 high school students since 1990. But he plans to lay off three teenage workers and decrease hours worked by others. Of his 25-person workforce, roughly 75 percent are in high school.

"I've had to go to some of my kids and say, 'Look, my payroll just increased 13 percent,' " he said. " 'Sorry, I don't have any hours for you.' "

Messner's monthly cost to train an employee has jumped from $440 to $580 as the turnover rate remains high.

"We go to great lengths to hang on to our high school workers, but there are a lot of kids who come in and get one check in their pocket and feel like they're living large and out the door they go," he said. "We never get our return on investment when that happens."

For years, economists have debated how minimum-wage increases impact the teenage workforce.

The Employment Policies Institute in Washington, which opposed the recent increases, cited 2003 data by Federal Reserve economists showing a 10 percent increase caused a 2 percent to 3 percent decrease in employment.

It also cited comments by notedeconomist Milton Friedman, who maintained that high teen unemployment rates were largely the result of minimum-wage laws.

"After a wage hike, employers seek to take fewer chances on individuals with little education or experience," one institute researcher told lawmakers in 2004.

Tom Kelly, owner of Mary Coyle Ol' Fashion Ice Cream Parlor in Phoenix, voted for the minimum-wage increase. But he said, "The new law has impacted us quite a bit."

It added about $2,000 per month in expenses. The store, which employs mostly teen workers, has cut back on hours and has not replaced a couple of workers who quit.

Kelly raised the wages of workers who already made above minimum wage to ensure pay scales stayed even. As a result, "we have to be a lot more efficient" and must increase menu prices, he said.

While most of the state's 124,067 workers between the ages of 16 and 19 made well above $5.15 per hour before the change, the new law has created real-life economic opportunities.

Liliana Hernandez brings home noticeably more under the new law. The 18-year-old, who attends Metro Tech High School in Phoenix and works part time at Central High School, is saving the extra money, maybe to put towards buying a used car.

Hernandez said she deserves the raise just like any other Arizona worker even if she still lives with her parents.

"I'm doing the best I can and working hard like everyone else," she said.

In the months leading up to last November's vote, advocates of the new law maintained that it would help Arizona create a "living wage" for some of the poorest workers.

The Economic Policy Institute estimated that 145,000 Arizonans would receive a pay raise. That was how many made $5.15 to $6.74 per hour.

At one press conference, a mother described how she was unable to afford basic school supplies for her son.

Opponents, however, said there was little talk about teenage workers. "Everyone wanted to focus on the other aspects of the minimum-wage campaign," said Michelle Bolton, Arizona state director of the National Federation of Independent Business.

An Employment Policies Institute study determined that 30.1 percent of affected workers in Arizona fell between the ages of 16 and 19.

"Workers affected by the minimum-wage increase are less likely to be supporting a family than the typical Arizona worker," it stated. "For example, 30.4 percent of the workers are living with their parent or parents, while only 7.6 percent of all Arizona workers are in this category."

John Weischedel, a senior at the East Valley Institute of Technology in Mesa, knows he is lucky to be making $8 per hour at an auto dealership and learning technical skills. So are most of his friends who make $9 or more per hour while still attending high school.

After the minimum-wage law went into effect, "a couple of my friends got laid off - they worked in fast food," he said. "They're going to wait until they're out of high school to find other jobs."

Matt Dempsey contributed to this article.

 

The Arizona article is interesting but is short sighted.

It hasn't looked at what the impact has been in other cities or states, a year later. Initially, the teen workforce will shrink due to costs. Every store holding out on increasing their prices will eventually raise them in a couple of months. Once business picks up again, the ice cream shop will have to hire more employees again and their prices can be raised higher with the other stores. If they do not hire more employees, they will lose customers to the other stores, which can sell more ice cream and handle more customers.

The workforce that is not living with their parents will be affected by their wages creeping higher also. Minimum wage hikes have shown to increase the salary of other low income people who make more than the minimum wage.

The middle class will have higher expenses with no significant difference with salary. They will get less goods for their money, but the lower class will benefit the most. I am glad that Arizona increased it so quickly.

 

Fulfilling their promise, Democrats in the House have voted to raise the minimum wagefrom its current $5.15 an hour to $7.25 by 2009. But before you count the big gains for low-income families, consider this fact: among the poorest fifth of U.S. households (their 2005 incomes: less than $19,178), only one in seven actually has a full-time, year-round worker. About 60 percent have no worker at all, says the Census Bureau. The rest have part-time or part-year workers. A higher minimum wage won't help most of these households, which consist heavily of single parents and the elderly.

Among social scientists, it's no secret that the minimum wage is a weak weapon against poverty. Modest numbers of workers are affected; a lot are teenagers, often from middle-class homes; and many of the poor don't work. And a higher minimum may destroy some jobs. No matter. Democrats plunged ahead because raising the minimum wage is symbolically powerful. It says that you care about "economic justice."

This is, I think, a metaphor for what ails our politics: it's mostly about gestures and giveaways; it's not about hard choices.

Let me engage in a fantasy. Let me assume that Democrats and Republicans actually intended to address two serious national problems: first, our huge dependence on insecure foreign oil; and second, the persistent mismatch between public resources (taxes) and public obligations (spending). What might they do? Herewith, a package of proposals:

* Enact an energy tax equivalent to $2 a gallon on gasoline—introduced over six years, or about 33 cents annually. The purpose: to increase tax revenues and induce Americans to buy more fuel-efficient vehicles.

* Raise federal fuel-efficiency standards for cars from the present 27.5 miles per gallon to 40mpg by 2020 and make similar increases for light trucks and SUVs. If fuel-efficient vehicles are to be favored, they must be available.

* Open the Arctic National Wildlife Refuge to oil production. This would help offset declining U.S. output elsewhere.

* Increase the top tax rate on dividends and capital gains (profits on stocks and other assets) from today's 15 percent to at least 25 percent.

* Require Congress to cut $1 of spending for each dollar of tax increase until the budget balances. After that, tax and spending changes would have to offset each other. Higher spending would require higher taxes—and vice versa, with exceptions for recessions.

* Require the Congressional Budget Office to confirm spending cuts—and if they're not made, mandate automatic cuts to all non-defense programs, including Social Securi-ty and Medicare (Social Security checks would fall, Medicare premiums would rise).

* Raise the eligibility ages for Social Security and Medicare gradually to 70 by 2029. At 65, people would have to buy into Medi-care (that is, pay for coverage) until they reached eligibility for subsidized benefits.

A package like this would eliminate the budget deficit, probably within two or three years. It would temper our dependence on foreign oil (gasoline accounts for almost half of U.S. oil use) and let us begin to adapt to an older, healthier society (since 1970, life expectancy has increased seven years). Although it would be controversial, the package would be balanced. Budget measures would be split between tax increases and spending cuts; energy measures would be split between more production and more conservation. Finally, this approach would compel legislators to debate openly the value of higher spending versus higher taxes.

The fact that something like this won't soon be proposed—let alone passed—speaks volumes about our politics. Both parties have marketed government as a source of aid and comfort. Benefits are to be pursued, burdens shifted and choices avoided. Problems are to be blamed on scapegoats ("the liberals," "the rich"). There is little sense of common interests and shared obligations. Politicians resort to symbolic acts that seem more meaningful than they actually are: the minimum wage, for instance.

Robert J. Samuelson
http://inside.msnbc.com/id/16608335/site/newsweek/