Local Discussion. Read by thousands every month! Idaho Falls, Ammon, and East Idaho
This week, Congress passed a bill raising minimum wage. This new bill raises the Federal Minimum Wage, from $5.15 to $7.25 over a 26 month period. So what does this mean for me? What does this mean for the small business that I work for?  I might get a pay raise, but my hours might also be cut. So what does Idaho Falls think?
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Gato got runned over by Marcus many moons ago. Be ye daft, 2486? 
be keepin yer lucky charms to yerself laddie! 8o 
Let's have a new poll, alright, Joe?
It WAS all he had to say about it! 
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{ 30 comments… read them below or add one }
About 15(?) years ago, I was a manager at a local fast food restaraunt when the min wage went up from 3.65 to 5.15. While this increase was smaller than the one recently approved by congress, the business owners handled it in the following manner: 1- raised prices across the board, and 2- reduced the rate of new hires. Note that the owners (we were a franchise, locally owned with 5 stores) did NOT cut anyone’s hours, but I’m sure that this would be pretty much on a case by case basis, based on each business and each owner.
For me personally, the bigger concern is one of salary compression, not the wage increase itself. Let’s say that someone just got a raise to $8/hr after 3 years at a small business, then 6 months later, a new hire is making nearly as much as they are after 3 years with the same company…
I think it should be forever pegged to our congressional and presidential salaries, and all should be pegged to a common growth index (like inflation or consumer cost of goods).
One argument against it is that it only affects the people making below the new minimum amount.
Let’s think about it. If you make $7.25 at a job, and they raise the minimum to that amount, aren’t those people going to get raises also?
A boss knows they have to raise all their wages because workers can go do anything for the same amount if they don’t.
Before I (or anyone) can determine whether raising the minimum wage is a good thing, I need to know why a minimum wage set is the first place. What purpose does a minimum wage serve?
I was working at a local daycare when the minimum raise went up the last time. I had received a raise of about $1.00 putting me somewhere at about $4.50 an hour about 6 months before the minimum raise increase. When the mimimum wage increase went into effect my new payrate was $5.15 so I was right back at minimum wage. I was told that in effect I had received an additional raise which isn’t the case considering I was back at minimum wage after making more then that before. One of the ladys at the center had been there for 7-10 years (its been to long, I can’t remember exactly). Before the increase she was making around $8.00 an hour, considerably higher then minimum wage but after the increase she wasn’t making much above.
I believe that the current minimum wage is not enough to support even a single person on with the living expenses but it is also a tough situation for employers and employees that have some seniority with the company and were making minimum wage to see end up back at the bottom of the ladder again.
Good question, 8B. I don’t know either, so I looked on wikipedia. http://en.wikipedia.org/wiki/Minimum_wage
I didn’t know that 90% of all countries have a minimum wage, ours was started in 1938 under FDR as part of the whole slew of things to help get us out from the Depression. The idea was borrowed from Australia’s 1907 living wage.
The reasons in favor of a minimum wage at all are to hedge against worker exploitation (I always think to that Tom Cruise movie Far and Away).
That page is interesting to read about the minimum wage’s relationship to purchasing power, which is why I think it (and congressional pay) needs to be tied to a consumer purchasing power index.
The section titled “Debate over consequences of minimum wage laws” The issue is hotly debated, with the ill-effects rooted in theory. Any adverse effects can also be attributed to other things, so it’s too difficult to tell.
I did not realize an increased earned income tax credit (EITC) is viewed to be more helpful to poorer people. It’s too bad that only comes once a year, though, which is probably why so many low-wage earners would rather “see the money” from each paycheck.
I don’t think the “worker exploitation” argument holds water. Take a look at the PR story on December 28, 2006. The fast-food places were offering $7 per hour to start because of the tight labor market. Some were even offering bonuses. I’d bet that their existing experienced staff were getting commensurate wage increases just to keep them on board.
Seems that the minimum wage tends to exploit the employer when labor is plentiful – they are being forced to pay above market value.
Another question: Whose responsibility is it to see that I have a minimum wage (or living wage), mine or the government’s or somebody else’s?
Did this bill pass through all of Congress or just the House?
I’m undecided about this. First, I am against worker exploitation like a sonofabitch. But then, like 8B mentions, whose responsibility is it? Perhaps we should not rely on our government, which has a ratty reputation when it comes to civic issues and civil rights, and instead rely on ourselves and our communities to react to this issue.
For example, I was treated poorly as an employee at a local sandwich place, so I will not eat there anymore, nor will anyone in my family. I will not eat at Fiesta Ole’ because of the way some friends were treated. If I hear of some company abusing its workers or paying them too little, I will boycott it (for instance, Wal-Mart … and in the interest of full disclosure, I shop there from time to time, but only when it’s absolutely necessary).
My point is this: should we allow the government to act as the “Papa Bear” and take care of us (medicare and disaster relief come to mind) or should we rely on the concept of self-governance?
I recently wrote a blog about this on my MySpace page (my name links to it) if you want to further discuss it.
My answer is “Yes.” Let’s assume that you work a 40 hour work week and have 2 weeks of vacation a year. For the sake of easy math, that’s 2000 hours a year. $5.15×2000=$10,300. It’s crazy to think that someone could live off that kind of wage. Sadly, Idaho Falls is full of small-town employers. With the exception of the INL, Wal-Mart, city/county employees, and maybe Qwest, there aren’t any large employeers. I know of a few cases where the owner/operator of local small businesses make bank, but the employees get nothing. With minimum wage at 5.15, employers can justify paying people $6.50 per hour and think that it’s a great wage. But in no way livable. What would really be great is not only increasing the minimum wage, but giving those folks already making $7.00 per hour a similar increase. That way, you’d still be taking care of the loyal, long-term employees that have worked their way up too. The question is, how much of a pay cut will the owners be willing to take?
**cough** Melaleuca ** cough cough**
When we returned to the IF area, my wife checked into doing her old job at Melalcua, but it was paying the exact same amount that it had when she had left about 6 years before. The pay was considered too low even 6 years before.
I can understand the point about paying market forces. With no minimum wage, in theory you could pay your lower workers $3 per hour and your best employees $12 per hour, right?
Somehow I don’t see that happening. I have seen too many workplaces where the boss sets wages in relation to all others.
I see a boss telling the better employees, “Look, these others are only getting $3 per hour, I cannot really pay you more than $6 per hour then.
That’s why I believe in the theory of abolishing the minimum wage, but not the practice. Hey, kinda like communism!
As an small-business employer (not like Melaleuca), I find positives and negatives in what is proposed.
I wish there was some way to have a minimum wage for high-school aged workers who IMO truly do not have the life experience or skills to be compared to older employees. I don’t discriminate based on age. However, I honestly believe a 17 year old has experienced far less situations that required decision making skills, than a 25-30+ year old has.
I feel it is part of my civic duty to hire at least 1-2 high school students annually, as a way to introducing them to a specialized work environment, as they make career choices. As unskilled workers in my office, they start at minimum wage. I do offer them the chance for advancement, bonuses and retention if their work is satisfactory.
But I don’t think it is right to offer a 25-30+ year old (or anyone who has experienced life away from home and had to make priority choices in their life) the same entry pay as a H.S. student.
I guess where I really stuggle with this increase is when it comes to the H.S. students. My older, more seaoned employees deserve more $. Yet, how can I justify what may be $1.50 raise for a H.S. worker with no experience and compensate my other workers fairly when budgets have been fixed?
Do I lay someone off? Not fair in my book. It’s also not fair to my more sr. workers to see the percenage increase H.S. students would now receive.
I wish there was a minimium wage for unskilled “beginners” not yet out of H.S. Then a different living wage scale for more experienced employees who may have real life training compared to a college education (or both).
Contrary to what I read somewhere, not all businesses can pass increased employee costs on to consumers. Some of us are capped in what we can charge.
I wish there was a minimium wage for unskilled “beginners†not yet out of H.S.
There is, depending on your type of business.
Full-time students working in retail/service stores and agriculture need only be offered $4.38 per hour.
In addition, you can offer a training wage of $4.25 per hour to anyone under 20 for their first 90 calendar days of employment.
There are other exceptions and limitations you can find at the US Department of Labor website.
Don’t know how many HS students would work for those wages, of course.
I certainly commend OK4Now on hiring and training HS students as a community service.
Thank you, John, for the link. I’ll check into it.
I like teens and I think I can help some kids create better lives for themselves. Nonetheless, I appreciate your very kind and unexpected remark.
That is really interesting information, John, I have never heard of that. It would seem to be a great way for local businesses to take a chance with more student employees and not lose too much money if those kids don’t work out.
Was I the only one who didn’t know that, or why do more businesses not know about it?
Yes, my bad. I forgot about Melaleuca. But, as you mentioned, Frank continues to get rich, while his wages haven’t changed in six years.
I wonder what people think about two other issues related to minimum wage.
One is congressional wages. Why is the free market supposed to be great for ordinary American wages, but our congress set themselves up with automatic pay raises (essentially their own minimum wage)?
Why does congress believe they are better than us? Isn’t what’s good for the goose also good for the gander?
The second issue I wonder about is the low wage industry of illegal immigrants, and the businesses that thrive from that.
What dynamics does that play on the minimum wage, and what effects might there be if illegal immigration can be cracked down on?
Just heard that the senate failed to advance this bill Wednesday, the same one which the house passed. This means no minumum wage increase for now
I wish there could be a task force at least follow this. Perhaps a first step would be to split the propsed increase with where the min. is now, and do a 50% increase?
I can see so many different sides to this issue. Adults/families can’t live on M.W. pay. Small businesses will fold if it is increased too much at one time.
Truly unexperienced workers, like the H.S. students I mentioned above, I don’t believe deserve as much compensation, as an adult who has had to do some critical thinking and make decisions. M.W. is an entry level, no-skills position, at least the way I think about job classification and pay.
Please note I said “unexperienced” not “unskilled” as I believe most adults have skills.
I think it would be interested to hear from various small business owners (<25 employees) to hear your views. Mid size employers (26-100) should have interesting thoughts as well.
I don’t like being told what I have to do, as I’ve tried to compensate my employees fairly. One thing I always do is talk to the employee about options.
For example, I had an employee want not to “advance” on the pay scale because overall he was much further ahead having my corporation pay for his college tuition for that semester, instead of his salary increasing. If his salary increased, he had to pay more taxes and then pay his own tuition and he would ultimately have less disposable income.
Not all coporations can do what mine can with education. Coporations have laws governing what they can and can’t do for employees, depending on many factors. So I’m just interested to know what other corporations or employees have experienced that seemed like a win-win situation to them.
Back when the minimum wage was $3.80 an hour, I was working for a local rental shop. The minimum wage increased to $4.25, and the owner refused to increase my pay!
Maybe he felt that way because I was only 15 and that he was doing me the big favor anyways. He was a well-known cheap in town, also infamous for his horrible treatment of employees.
I told him “never mind”, and got a new job in a week that started at $6 per hour and worked up to $9 a year later.
The rental shop owner? Bankrupt and business completely dissolved within the next five years.
Thanks for sharing your first work experiences, Joe. Wow, $.45/hr and you didn’t get the adjustment. Good for your for looking elsewhere.
If you can answer these, which I understand you may not be able to given that these were/are real businesses an bosses, I’m interested to know a little bit more especially about your second employer.
1. Do you have any idea the approximate workforce of each business?
2. The rental company was a service-sector, which will always pay lower; nonetheless, you still should have been paid the new M.W.
Was the second business also in the service sector? Or was it more of a business that worked on supply and demand?
How would you categorize it as a business – expanding to new locations, growing at one location, very established, high tech etc? I’m wondering what would give the second employer enough cash flow to increase your pay $3.00 in one year.
Please don’t be offended with what I wrote, it was great for you and I’m happy that you founded a company who valued your skills/abilities.
I’m just thinking for FTE, the equivalent of a $3.00/hr raise you received in one year, if given to all employees, would be about $6,000.00 for an FTE. While you probably didn’t get benefits, which can be 25-40%, I don’t know how many businesses could afford to raise employees that much in one year. Maybe you were the only one who got a $3.00 raise, given your work.
You must have been disappointed at what amount the Houst proposed as the M.W. this year, given what you made back in H.S. which was more.
Thanks again for sharing this info. As always, it’s another piece of information for me (and hopefully others) to consider.
I read somewhere that larry craig and mike crapo signed onto a bill to completely abolish the federal minimum wage requirement.
I could support that if they attached to it a complete abolishment of congressional pay.
If market forces are to be trusted, then Idahoans can vote annually how much to pay our congressmen and senators, based on the job we think they did the past year.
What’s good for the goose is good for the gander, right?
As for Congressional pay, two things really irritate me:
1. Their “work week” and lack of consequences if they aren’t there to vote. Many who are running for Pres. aren’t spending their time voting. And their work week is something like T-TH. Wow – wouldn’t that be nice?
2. I might be wrong about this (I HOPE I’m WRONG about this), but I was told that basically once is a Senator then that person is paid a Senator’s pay even after they retire. Not sure if the same if true for the House.
Would someone please either confirm what I wrote, or hopefully, correct me? What about those who run for state offices, such as Gov.? Are we to believe they are still paid as former Senators/House Members and then possibly paid as Gov. etc. by resident taxes? UGH.
On the minimum wage, lots of posturing. Not sure why Craig and Crapo said what they did, but Harry Reid said NO WAY would the Dems in the Senate give the tax breaks to small businesses. Wonder if the two are connected?
That’s exactly why we should abolish mandatory minimum payments for our congressmen and senators, and set their pay annually by popular vote (i.e. “market forces”) To continue the current system is to keep them on a welfare-based system.
I see a ballot asking voters “How much do you think Senator X should be paid for the next year?”
* – $20,000
* – $30,000
* – $40,000
* – $50,000
* – $60,000
* – $70,000
* – $80,000
* – $90,000
* – $100,000
* – $110,000
* – $120,000
* – $130,000
* – $140,000
* – $150,000
And the amount that gets the most votes is the pay they get for the next year. Or we could average the pay votes from all ballots and pay that average.
This idea dovetails perfectly with all the rhetoric our political leaders have been spouting to us, so please contact them today and ask if they will support this.
Why wouldn’t they?
I might be wrong about this (I HOPE I’m WRONG about this), but I was told that basically once is a Senator then that person is paid a Senator’s pay even after they retire. Not sure if the same if true for the House.
Of course that’s wrong. Congress pays into the Federal Employee Retirement System, and in general, while the retirement pay is not bad, it averages about $47K per year, and is MUCH less for those that serve only one or two terms. That’s not chicken feed, but it’s rather paltry compared to similar longevity on many corporate Boards of Directors.
Even the longest serving Senator is capped at 80% of final salary, which is not at all out of line with what a worker contributing, say, 4% to a matched 401K for 30 years can expect.
You can find more info from the Congressional Research Service here.
That’s exactly why we should abolish mandatory minimum payments for our congressmen and senators, and set their pay annually by popular vote (i.e. “market forcesâ€) To continue the current system is to keep them on a welfare-based system.
Have to disagree, Joe. We already have a market based system – only those who want to work for what is being paid apply by putting their names on the ballot. While it doesn’t happen as frequently in Idaho as some other states, perhaps, every cycle a large number of well-qualified individuals decide not to run because they can’t afford the pay cut (especially given their having to establish an additional residence in DC).
The current $165K is a bit less than Congress was paid 50 years ago, and only 85% of what they were paid 40 years ago, when adjusted for inflation.
I’d have to believe that a popular vote would very likely lead to a further reduction in the pool of potential well-qualified candidates. Salary is obviously only one factor, but even in Idaho, $165K is not out of line for the type of experienced individuals that we should be electing to make critical decisions on our behalf.
And of course, it’s interesting to remember that over 20% of Idaho’s Congressional salaries are being subsidized by non-Idahoans.
Thanks for the info John. I knew the “exs” from Congress still got some $, but wasn’t postive of the amount.
I have to agree with John’s comment that compensation for Congrss members at $165K, is not an excessive salary for that area. Living in D.C., Arlington, MD bedroom communities etc. is very expensive.
When a can of Coke is $1.50-2.00+ and a hamburge is $12-$15.00+ for the basic burger (plus a tip), it’s even understandable to me why so many from Congress give speeches for the extra cash.
That doesn’t mean I like the process of how Congress approves their own salary increases.
Back to what John said about some qualified individuals not being able to take the pay cut to serve in Congress, I have to second that opinion.
Additionally, while most have the financial means, either directly or promises of donations to run their campaigns, there is NO guarantee someone won’t run for Congress and owe millions for campaign costs. Look at Dirk’s unpaid bills last year while he was still Gov.
I only add the cost of running for election, because I think the cost is another factor prohibiting some citizens, who want to serve their country, away from political careers.
I admit I was being facetious about abolishing the congressional pay.
John made great points in regards to why it would be a bad idea to abolish their pay and let us voters (the “market forces”) decide their pay.
Those same great points apply against abolishing the minimum wage, I believe.
So why did our Senators Larry Craig and Mike Crapo vote in favor of that bill?
Here’s some pretty interesting reading on current wages in Idaho.
http://www.idahostatesman.com/103/story/70306.html
You can get the Idaho wage gap study directly from here.
I don’t think raising the minimum wage is a good idea. I do agree that paying employees fairly is extremely important, but to place the burden of reducing the wage gap on business owners is never going to fix the true problem. It is like trying to cure cancer with Vicks Vapo Rub. It will make you feel good, but it doesn’t fix anything.
Which brings up a good point. What is the problem? Why do we have wage gaps? Why does the cost of living increase? Who ultimatly bears the burden of a wage increase? Who ultimatly benefits?
This is the reality, if the wages increase, I will have to increase the wages I pay to my employees. That increase will be passed along to our customers. Our customers will theoretically have had their wages raised so the price change is compensated for. The services and products as well as the labor time won’t change. What will change is the amount of money being transfered between our customer and our business and our business and our employees.
So … who benefits from that? Think about it.