Spokane7
49°
December 31, 2010 in Opinion
Editorial: Minimum wage should reflect good, bad times
In the spirit of a new year, let’s call a modest truce and concede that the economy stinks, and there is suffering enough to go around.
People earning minimum wage are struggling, though probably not as much as those who have lost their jobs. Businesses that rely heavily on minimum-wage workers are struggling, too, though probably not as much as those enterprises that have closed their doors for good.
And while there is a legitimate debate to be had over the level of Washington state’s highest-in-the-nation minimum wage, this isn’t the most promising time for it. Nevertheless, it is timely to give the law – affirmed by state voters in 1998 as Initiative 688 – a tune-up.
Like a thermostat that cranks the furnace up but never back down, Initiative 688 has been shown to have a significant flaw.
Effective today, the wage will increase by 12 cents an hour, a judge having rejected a business group’s attempt to cancel it.
The most defensible rationale for Initiative 688, which harnessed the state’s minimum wage to the federal consumer price index, was to let the buying power of a minimum-wage job keep up with the cost of living. Adjustments would occur regularly and gradually rather than go years between abrupt updates, based on emotional arguments and fluctuating political numbers.
In 1998, however, no one was thinking that the cost of living would go anywhere but up. The CPI rose only 1.6 percent that year, but that was the lowest annual rate in more than 30 years. The number hadn’t actually gone down since 1955, and the initiative language didn’t anticipate what would happen in 2009, when the CPI declined, and 2010, when it regained some but not all of the 2009 loss.
The state Department of Labor and Industries determined in October that only the past year matters, so the wage rate would rise accordingly. That might make sense if the minimum wage had been reduced in 2010, based on 2009, but it doesn’t work that way.
State Attorney General Rob McKenna thinks the department erred, but Kittitas County Superior Court Judge Scott Sparks refused to grant a summary judgment to halt the increase.
Thus, it appears, the wage can rise but never decline. Instead of keeping up with inflation, the minimum wage is allowed to creep ahead of it.
It may sound benevolent to ignore economic fundamentals – supply and demand, for example – in order to shore up low-income workers’ buying power, but it’s a deception that will backfire in the long run.
The biggest gift government could give to those at the lowest rungs of the income ladder is an economy that rewards investment and creates jobs and opportunity for all.
The lawsuit over the 2011 minimum wage isn’t over, but the Legislature, which will be in session in a few days, shouldn’t wait on an unknown outcome. If the wage level was expected to keep pace with inflation, that’s what it should do, in bad times as well as good. Lawmakers can and should provide that clarity.
To respond online, click on Opinion under the Topics menu at www.spokesman.com.
Editorial: Workers’ beer routine undermines public trust 
drywitt99 on December 31 at 7:23 a.m.
The S-R going rogue.
Becoming a mouthpiece for the Chamber of Commerce???
A 12 cent an hour increase seems…and IS….miniscule.
But if you are living off of a diet consisting primarily of macaroni & cheese…..an extra $4.80 a week is a significant increase in your purchasing power.
And $4.80 that I GUARANTEE will be spent. An immediate economic stimulus.
Explain to me….PLEASE…..how a 1.4% increase in the minimum wage does ANYTHING to negatively impact business.
Show me a business….ANY BUSINESS…..that slipped into bankruptcy as a result of a 1.4% increase labor costs.
The doomsayers proclaim that a 12 cent an hour increase in the minimum will result in lost jobs.
REALLY???
If it takes 24 hours or labor each a day for a business to remain open, will a 1.4% increase REALLY result in a layoff or termination??
No.
And even if it did…..if a fast food restaurant had to increase their prices by 1.4%……a hambuger going from $1.00 to $1.014…….is bankruptcy or lost jobs an inevitable result???
NO.
It is a FANTASY….a MYTH……and one which the S-R has apparently bought into.
misjustice on December 31 at 7:48 a.m.
The “official” federal consumer price index may, on paper, indicate that the cost of living has not increased. But rent, gasoline for the auto, groceries, the Avista bill, the City utilities bill, insurance rates/premiums/co-pays, and other basic neccessities of life sure have increased.
And drywitt, what else is to be expected from the SR? They must pander to their business interests. On a good note, the SR, in another editorial boasted that car ad revenues are up! So all is right in their lil’ corner of the world.
JBlim on December 31 at 9:16 a.m.
The Spokesman is raising their home delivery rates tomorrow. Shouldn’t their rates reflect bad times too? No, because they’re special, the working poor are not.
drywitt99 on December 31 at 9:25 a.m.
Speaking of irrational arguments regarding the minimum wage……..whatever happened to hawken??
Dead??
Institutionalized…..at long last??
Or vacationing with his good friend/pool boy Raoul in Cancun???
Just wondering???
Rand on December 31 at 9:31 a.m.
How is the argument this editorial is making irrational? The CPI is lower now than the last time we raised the min wage. The CPI is the number we tied the wage to. Their argument seems very logical.
Somehow this turns into an argument as to weather the wage should be higher independent of the CPI. This is an entirely different issue. The law as it is now has a flaw in my opinion.
misjustice on December 31 at 10:34 a.m.
@ dry; shhhhhhh!
; )
JBlim on December 31 at 10:42 a.m.
Speaking of irrational, the law have a flaw in da weather . . .
Rand on December 31 at 10:56 a.m.
Excuse me I meant whether. Sorry.
greenlibertarian on December 31 at 11:47 a.m.
“drywitt99 on December 31 at 9:25 a.m.
Speaking of irrational arguments regarding the minimum wage……..whatever happened to hawken??
Dead??
Institutionalized…..at long last??
Or vacationing with his good friend/pool boy Raoul in Cancun???”
I generally enjoy your posts, drywitt99, but please, lose the nastiness.
It is a blessing that Hawken has been absent, leave it at that.
berrybestfarm on December 31 at 12:05 p.m.
We can be pretty sure that the CPI decline was a once in a lifetime anomally and move on. What goes into the CPI calculation certainly needs to be revised but that is another issue.
We need folks like hawken to make us think. We don’t learn anything new listening to those who agree with us.
Alfredo on December 31 at 1:02 p.m.
As far as the federal minimum wage goes, it was needed to prevent companies from paying low wages during times where the labor pool was too plentiful, keeping employers from pushing labor down too far.
I think Washington has done a great job of being an example of demanding more from employers. Perhaps a hike wasn’t needed, let’s just make sure it isn’t reduced.
Elkay on December 31 at 1:52 p.m.
Rand, thanks for your opinion. While I’m all for giving employee raises, there is a flaw in this law as it pertains to CPI.
SS for those on fixed income isn’t going up (also tied to CPI), but as misjustice says, “The “official” federal consumer price index may, on paper, indicate that the cost of living has not increased. But rent, gasoline for the auto, groceries, the Avista bill, the City utilities bill, insurance rates/premiums/co-pays, and other basic neccessities of life sure have increased.”
Rand on December 31 at 2:29 p.m.
Alfredo,
I think we can agree to keep minimum wage where it is. How about keeping it as it is until the CPI rises to above where it was the last time there was a min. wage increase.
Elkay,
I have heard that we have changed how inflation is measured. Someone told me that if we measured inflation the same way we did 90 years ago inflation would be somewhere in the range of 10%. Maybe there is a problem with how we come to our CPI number.
Elkay on December 31 at 3:50 p.m.
Rand,
After looking at the products and services that are “measured” in CPI (done by the Bureau of Labor Statistics), it would seem a majority of them have indeed gone up, some significantly. That implies that there IS a problem with our measuring inflation.
Low-income earners obviously notice inflation far sooner than higher-wage earners. Yet, paying a “living wage” by small business owners can be an impossibility for them.
So an increase in our minimum wage may “help”, but still won’t cut it.
I wish the bashers who highlight just the “big, bad business owners” on these blogs would knock it off. They might look at other sources (i.e. UN-needed government bureaucrats, unsustainable public pensions and benefits, sin taxes, gasoline prices, etc.) that force higher fees and taxes on everyone, including the poor.
zelda on December 31 at 6:32 p.m.
The measure that’s used is typically something called “core inflation.” and that hasn’t gone up much. Other expenses tend to be cyclical commodities and those have gone up — esp. gasoline. A lot of investors are loading up on commodities because of quantitative easing.
Believe me, the oil producers know exactly what price the market is willing to bear and they cycle up and cycle down every 18 months or so. The higher it goes, the less people consume, so they lower the price for a while. I really got a chuckle out of the former CEO of Shell Oil saying the other day that gasoline would go over $5/gal. Trying to soften the beachhead, maybe?
Alfredo on December 31 at 6:54 p.m.
@Zelda, I totally agree. I’ve always said the oil companies do this intentionally, they jack up the price 50 cents a gallon, that way we are “happy” when they drop it by 25 cents (still 25 cents higher than it previously was).
Dazzeetrader11 on December 31 at 8:12 p.m.
The article above confirms a principle. It really doesn’t argue whether or not a pittance is due for the “next to unemployed”.
It really doesn’t argue a number or whther the current minimumwage types should get a “raise”. It’s the principle of how often evaluations should occur and how much a raise should be.
Remember, the minimum wage isn’t supposed to be a wage that’s long term. It’s a college or HS kids wage to help them to the next level. I wonder if it’s being treated like that when raises are demanded. It’s not enough for a family…not even enough for a single person. It might be an incentive for folks to get busy…..or stay at a sustenance level.
CPI’s there for a reason. It should be used as the index it is. It’s not perfect either. How about unemployment dropping. That might help everyone. In the end, school. training, etc will sove the minimum wage problem. It’s ingrained in the culture this “minimum wage”. And the culture iwe live in suggests that t raises should be an auto. Well…it isn’t an auto. It’s maintenence….that’s all. Not much better than unemployment insurance….financially…. but for those of the US who work it’s an important index of the will to get and hold a job. That alone should count for something. Give em love..in the form of a few pennies more. It’s not a ‘right” and the raises will be justifiably argued in the courts……but for many, it’s the best they can do for now.
Green lib…you’re garbage for saying that. Hawk might be gravely ill. I thought libs preached tolerance. guess not when it comes to your phoney liberalism…..
Arch_Druid on December 31 at 11:45 p.m.
@Daisy Minken, Green Libertarian doesn’t exactly strike me as a guy who is “liberal” let alone “phony” about it. There could be a very good reason why Hawken has not made another appearance, and that is, when he started crossing the line, those who run the comments sections started seeing flags and then banned the fellow from the blogs. He can’t post (possibly) because he got silly once too often.
As for some of the other posters here, it is quite often the the S-R HAS spoken for the corporate interests as well as the GOP. So their latest editorial that you feel a great need to grouse so much about is simply par for the course.
Here is my opinion about the minimum wage: If Avista suddenly wants to raise its rates which is going to factor in the cost of a great many goods and services, causing a minimum wage employee to sacrifice a percentage of his wages is certainly not going to help him. If Avista for one wishes to raise their utility rates to assist the corporate heads in having a higher share of bonuses, maybe these corporate heads should sacrifice their bonuses in economically bad times. The CPI should become as much of a factor as to whether they can even have their bonuses or not. But that would take gvt meddling, wouldn’t it?
For anyone not paying attention, Avista gets their utility rates approved through gvt meddling. So, that being the case, the gvt could certainly tell Avista that their rates can only increase on the basis of the CPI, and DROP their rates on the same basis. Labor shouldn’t be the only people who make this sort of sacrifice. They all should.
Dazzeetrader11 on January 01 at 12:40 a.m.
Fundamental difference is the issue of where the government fits Arch. I do see your point though. Meddling can be protective or not depending on whose ox is being gored.
Government is terrific if it allows you most everything you want. Awful if it’s cuts you back. CPI is only a tool…..it applies to those who make and wish it to apply. The biggest issue is that Avista ( using your example) is a big for profit company that fuels so much In Washington that it’s illogical to not give it something…right or wrong.
When it comes to minimum wage, those folks don’t generate mcuh…certainl nothing like Avista does.
So I think they’re valued differently. A few cents supplied by a small or big employer makes a difference to the small guy but not so much to the other. Aista doesn’t need minimum wage workers..it’s beyond that. It’s moot for them.
It’s close these days. The weak or temporarily weak needs some wupport or they’ll be going under. But the point of the article isn’t pro or can poor folks. It’s abou the priciple as to how miminum wage should be calculated or managed. If the economy is down, lower it? It’s the economy is on fire…raise it?
As it sits now, there’s no way to do either…it just goes up. I think that’s the point..how to manage it.
As for the other, Hawk’s a good guy…feisty to be sure but most of the time he has a refernce and doesn’t make things up. Surely he’s done nothing like Green did in his post above. That’s just beyond the pale…..and someone should call him on it. He doesn’t care. I do think though, that if a bunch of the left leaners complain enough, with or without justification, someone could be banned. …not for doing anything wrong but, instead , because his views becoming unpopular. Still Green’s a jerk in most things…this one was just another.
drywitt99 on January 01 at 9:22 a.m.
Greenie:
Me….nasty?????
I’m offended by that!
greenlibertarian on January 01 at 11:19 a.m.
Who needs a house out in Hackensack?
Seems like such a waste of time.
You oughta know by now.
;)