Sunday, Aug. 13, 2006 | 7:31 a.m.
Here are some pros and cons of raising the minimum wage that have been raised in the debates on the issue:
JOBS:
Pro: Forces employers to pay a wage that is deemed worthy of even the most inexperienced employee.
Con: Eliminates some low-paying jobs so employers can meet the increase in wages, thus increasing unemployment while leaving some high-volume businesses with smaller staffs.
ECONOMIC GROWTH:
Pro: Gives poor people more money to spend on goods and services .
Con: Stagnates economic growth by decreasing the affordable labor pool.
INDEPENDENCE:
Pro: Workers can more easily meet the responsibility of paying their bills, and encourages a somewhat better and more independent lifestyle.
Con: Increases the cost of government social programs and decreases independence as more assistance programs would be needed to help the increase in laid-off workers.
JOB TRAINING:
Pro: Encourages more investment in training employees who would improve their skills and eventually receive raises - money that can be used to further stimulate the economy.
Con: Decreases training opportunities as employers cut additional job training programs as they struggle to meet higher salaries for lower-skilled workers.
EDUCATION:
Pro: Encourages young working people to stay in school - or return to school - to get more education and thus improve their skills so they can later move up to higher-paying jobs.
Con: Encourages teenagers with jobs to drop out of high school because they are making more money.
ILLEGAL IMMIGRATION:
Pro: Discourages illegal immigration by making lower-skilled jobs more attractive to legal citizens, who would be more apt to consider filling those positions.
Con: Encourages illegal immigrants from poorer nations to cross the U.S. border because a minimum wage hike would further increase the difference between what is paid in the United States and in their homelands for similar jobs.
When the first minimum wage law was established in the United States in 1933, a worker could get some good value for that 25-cent-an-hour mandated wage.
Those who lived through the Great Depression recall how two bits could buy a haircut at the local barbershop or tickets for two, including two bags of popcorn, for a first-run movie at the local bijou.
With $5.15 in your pocket today - the current federal minimum wage - just try to get even a trim at a hair salon. And a movie at a multiplex? You'll have to sneak in - alone - just to pay five bucks for bad popcorn.
Proponents of Nevada's $1-an-hour minimum wage hike referendum, on the ballot in November, say it is the public's desire to provide the poorest workers with just a little more that will put the increase into the state's Constitution.
"There has not been an increase in nine years. Meanwhile, the cost of living has gone through the roof," says D. Taylor, secretary-treasurer of Culinary Local 226, a major backer of the referendum along with the Nevada State AFL-CIO.
"You want a good reason to increase it? Gasoline is $3 a gallon. If this (measure) is approved it will not solve the problem, but it will give many people a little more money to buy things they want and need."
Proponents estimate than more than 101,000 Nevadans earn less than $6.15 an hour, about half of whom are paid the minimum wage. The hike would give $2 million more a week to minimum-wage earners and provide $1 million or more a week for the other half.
The Nevada Restaurant Association, a leading opponent of the proposition, says those figures include mostly people who earn the minimum wage plus tips. The restaurateurs contend that only 5,800 Nevadans earn just the minimum wage.
Nevada and six other states, including California, do not apply tip credit toward their minimum wage. Many states allow employers to pay tip earners as little as $2.15 per hour, figuring employees will earn at least $24 in tips during an eight-hour shift to bring their hourly wage up to $5.15.
Taylor, and other referendum proponents, say the recent decision by Congress to shelve a national minimum wage hike will not deter Nevada voters. If anything, they say, it will encourage voters to do the job state and federal lawmakers have failed to do. The Nevada Legislature considered minimum wage hike bills in 2003 and 2005 but did not pass them.
In 2004 the Nevada minimum wage hike referendum garnered 68 percent of the vote. It needs to pass again on Nov. 7 to amend the state Constitution and go into effect.
"If you look at who voted for it the first time, you see people from all economic levels," Taylor says. "Even those making $100,000 a year and people living in rural areas voted overwhelming for it."
The referendum would give employers the choice of either raising salaries to $6.15 an hour or keep them at $5.15 if they provide health insurance. The amendment also would provide for increases of up to 3 percent yearly, based on the consumer price index.
The federal minimum wage has remained at $5.15 since 1997. But 18 states and the District of Columbia raised it in their jurisdictions after President Clinton gave states the go-ahead during his presidency. Washington state leads the pack at $7.63 an hour.
UNLV economist Keith Schwer says that the public's perception during tough economic times could be that the have-nots really need help.
"The support (for the referendum) comes from those who look at $5.15 an hour - $10,712 a year - as not being much money for people to survive on," he says.
"People see skyrocketing housing and utility costs and how difficult things are, particularly for low-income people. Thus there probably will be support" to pass the referendum.
Still, Schwer cautions that there are potential pitfalls: "Small businesses depend on low-wage workers, especially in restaurants. A sharp increase in wages could have a detrimental impact on such businesses."
Amid such concerns, referendum opponents including the Nevada Restaurant Association and the Las Vegas Chamber of Commerce have not given up trying to convince voters to dump the proposed hike.
"This is a deceptive and ugly proposition that does not belong in our state Constitution," says Brad Brennan, vice chairman of the Nevada Restaurant Association. "People (in 2004) did not realize what they were voting for.
"The cost of living increase can get out of hand and health care can be played with. Under this proposition, an employer could drop his employee's health insurance and pay the extra dollar per hour."
Noting that some waitresses and waiters already earn $50,000 a year or more in tips plus minimum wage, Brennan says his industry also will have to "ratchet up" the wages of cooks, dishwashers and others - costs that could be shouldered by consumers.
"There already is a perception that we are as expensive as New York - that we are not affordable," he says. "The question is how much are you willing to pay for a hamburger because restaurants will either have to work leaner or pass the cost onto the menu."
Christina Dugan, a vice president of the Las Vegas Chamber, says the potential of future 20- to 25-cent-per-hour annual increases, "irrespective of businesses' profits or productivity," should concern voters who should take a cue from Congress and spike the referendum.
"We are certainly pleased they (Congress) did not pass the (national) increase, as we are opposed to government on all fronts - federal, state or local - mandating higher wages," Dugan says.
If Nevada businesses are forced to pay a higher minimum wage than surrounding states, she says, it could create a "competitive disadvantage" for them.
"Nevada creates jobs four times faster than the national average," she says. "We do not want to see that curtailed."
Nevada lawmakers who support a minimum-wage increase say the referendum does take local businesses into consideration.
"The reason it is only a dollar increase is because we felt it was a threshold to not harming small businesses," said Assemblywoman Chris Giunchigliani, D-Las Vegas.
Senate Minority Leader Dina Titus, D-Las Vegas, who is running for governor, says that since there will be no increase in the national minimum wage, the referendum is "all the more important."
She doesn't think Congress' inaction will influence Nevada voters.
New Zealand passed the first minimum wage law in 1894, and 39 years later, the United States made its first attempt at establishing a minimum wage at 25 cents an hour under the National Industrial Recovery Act. Two years later, however, in 1935, the U.S. Supreme Court struck down the measure as unconstitutional.
In 1938 the 25-cent minimum wage was re-established under the Fair Labor Standards Act. Since then, there have been 26 changes to the minimum wage law, the latest on Sept. 1, 1997, raising it from $4.75 to $5.15.
Nevada passed its first minimum wage act in 1965. Three years later, the minimum wage - then $1.60 an hour - had its highest purchasing value, translating into slightly more than $9 in present-day money.
"The minimum wage today is the lowest in 56 years based on cost of living," Culinary official Taylor says. "It's a travesty - an indictment of what has gone wrong with the system.
"I tell anyone who opposes raising the minimum wage to go and try to live on the minimum wage for a while, then tell me you still oppose it."
archive
