Friday, December 31, 2010

A Ray Of Hope For Working Arizonans: $0.10 Increase In The Minimum Wage

A marginally brighter New Year is still brighter...

From the Arizona Daily Star, written by Alex Dalenberg (dated December 13, 2010) -
Arizonans making minimum wage will see a small bump in their paychecks starting Jan. 1 when the state minimum increases 10 cents per hour to keep pace with the national cost of living.
The state minimum wage will increase from $7.25 to $7.35 per hour on New Year's Day and remain at that level throughout 2011. The new state minimum will also be 10 cents higher than the federal minimum wage, $7.25 per hour, which is required for the vast majority of Arizona businesses.

Tipped employees in Arizona will also get a 10-cent boost, from $4.25 to $4.35 per hour.
As Rebekah Friend, Executive Director of the Arizona AFL/CIO wrote (dated December 21, 2010) -
The minimum wage gives low-income working families some solution to these questions, and this New Year's Day it will automatically increase to keep up with a rising cost of living.
The minimum wage ensures that our society rewards hard work and that working families find economic security.
But until Arizona voters passed Proposition 202 in 2006 to raise the minimum wage and index it to inflation, its value had dropped to its lowest level in 51 years.
Now, yearly adjustments to keep up with the rising cost of living are helping to ensure that working families don't fall behind again.
On Jan. 1, the minimum wage in Arizona will increase by 10 cents to $7.35 an hour and to $4.35 an hour for tipped employees such as waiters.
A dime hardly seems like much, but the small boost gives low-paid workers more money to take care of their families - about $200 a year for a full-time minimum-wage employee.
These workers aren't simply high schoolers flipping burgers to pay for gas, as skeptics of the minimum wage sometimes portray them. Nationwide, adults make up more than 75 percent of those working for that rate.
Most significantly, when Arizonans voted to raise the minimum wage in 2006, they gave raises to the parents of an estimated 200,000 children.
Starting tomorrow, minimum wage earners in six other states - Colorado, Montana, Ohio, Oregon, Vermont and Washington - will also see small adjustments to their wages.



Thane Eichenauer said...

What you think of as a ray of hope is actually a rail gun of destruction. What of those people whose productivity doesn't match of exceed the new $7.35/hour mandate? They will simply not be hired.

Milton Friedman does a fine job explaining what the effects of a minimum wage law are

Eli Blake said...


The value of $7.35 this year is the same as the value of $7.25 was last year. That's what the meaning of 'indexed to inflation' means.

If someone is not doing work worth $7.35 this year then they were presumably not doing work worth $7.25 last year. So I guess I don't understand what your problem is with this.

Or perhaps you would prefer that there be no minimum wage at all? So that our workers are consigned to earn what they earn in Mexico (thanks to NAFTA, the economies are now interelocked,) which is to say about $1.50 an hour on average? Granted that would probably solve the immigration problem but it would mean the majority of Americans, like the majority of Mexicans, were living in poverty.

Eli Blake said...
This comment has been removed by the author.
Eli Blake said...

Incidentally, Washington has the highest minimum wage in the country (and it is going up there, to $8.67) but Washington is faring better than Arizona or most other states in this recession. If minimum wage is such a bad thing, what's up with that?

Thane Eichenauer said...

I would prefer no minimum wage law at all. There is no correct way to calculate a minimum wage. Why should the government of Arizona (or the US) mandate any wage rate? $6.00/hour, $7.00/hour, $14.00/hour? In the end the choice is political not scientific. 95% of the US workforce is paid more than the minimum wage due to competition by employers to retain skilled workers. Eliminating the minimum wage would not change wage rates for the vast majority of workers and would allow some workers to obtain jobs.

As for Washington state doing better, you may be right in aggregate but for an individual who wants to work at $8.00 (and is marginally skilled) but doesn't have enough job skills to meet Washington state's $8.67/hour mandate? That person remains unemployed due to government fiat.