Critics, Proponents Spar Over Minimum Wage
ROBERT SIEGEL, host:
$7.25 cents an hour, that'll be the federal minimum wage for American workers starting tomorrow. It's the latest milepost in a long debate over whether there should even be a minimum wage, and if so, where it should be set. Presidents have been weighing in for decades, starting with Franklin Delano Roosevelt.
President FRANKLIN ROOSEVELT: Minimum wages should not be reduced.
President HARRY TRUMAN: The minimum wage fixed by law should be raised to at least 75 cents an hour.
(Soundbite of applause)
President JOHN KENNEDY: Yesterday, the Senate passed the $1.25 minimum wage. It was actually…
President BILL CLINTON: $4.25 an hour is no longer a minimum wage, but millions of Americans and their children are trying to live on it.
President GEORGE W. BUSH: Another area where we can work together is the minimum wage. I support the proposed $2.10 increase in the minimum wage over a two-year period.
SIEGEL: Presidents Roosevelt, Truman, Kennedy, Clinton and George W. Bush, who signed the 2007 bill that requires the minimum wage to move from 6.55 an hour to 7.25 an hour tomorrow.
NPR's David Greene joins us now to talk about this. And David, presidents have often been at the heart of these debates. They're always controversial. Why has this never been settled?
DAVID GREENE: Always very controversial, Robert. And you know that there's this powerful moral argument, you know, who doesn't want to help disadvantaged workers make more money? And we should say that two-thirds of minimum wage workers are women. And so there really is a matter of gender equity, as well. But, you know, after endless studies and statistics and research projects, there's just no firm consensus among economists that raising the minimum wage actually helps the poor.
And so you might say, how is that possible when you're actually giving people more money? And it's because on the other hand, some economists say that what happens when you raise the minimum wage is you can lose jobs in the economy. Jobs can be cut, and so fewer people are actually getting a paycheck. But there hasn't been a clear consensus around that idea either. And so you've got a lot of numbers, a lot of research pointing in different directions and this debate just keeps on going.
SIEGEL: Let's talk about this number, $7.25, what the minimum wage becomes tomorrow. How many people are affected because they actually make less than that?
GREENE: Yeah, it's a good question, Robert. The Labor Department says there are about 5 million people in the U.S. who make less than 7.25 right now. So they'll get a raise tomorrow. And one of them is a woman in Texas I spoke with Marisa Purvis. She's 20 and actually works two minimum wage jobs, one of them at a Sonic burger, the fast food joint. She runs hot dogs and hamburgers out to cars. She says after paying her college tuition and rent, there's just nothing left over. She's looking for any little bit that comes in. Let's listen to her.
Ms. MARISA PURVIS: I mean, any little bit helps. And my goal is to always make sure that I'm very friendly with my customers because the friendlier you tend to be with them and getting their order right, the more likely they are to give you a little tip.
GREENE: So that's Marisa Purvis. But Robert, it's not just her. She makes 6.55 an hour. If we look at Americans making, say, less than $9 an hour, we're talking about roughly 15 million workers. They might see a change starting tomorrow if businesses that pay a bit more than a minimum wage also increase their wages just, you know, to keep pace.
SIEGEL: But we're in a recession and it's rough on business as it is.
GREENE: And that's really the question of the moment. We don't know what's going to happen when we raise the minimum wage in the middle of this recession. We're talking about, you know, 9.5 percent unemployment. One fear is that you're not going to see that ratchet effect. Business that pay, you know, 8.50 an hour will say, well, I don't have to change anything I do. And they'll just keep going as is.
And, also, there's a concern that this is going to hit businesses at their most vulnerable. You know, they just have no extra money hanging around right now and so if they're forced to pay out more in wages, they'll just cut hours or maybe even cut some of those low wage jobs.
SIEGEL: And this is the argument that opponents of increasing the minimum wage make that you raise the minimum wage. They say you actually end up hurting the people whom you're trying to help.
GREENE: That's exactly right. And that's the argument they're making right now. But there's an entirely different view from some other economists. Let's go back to Marisa Purvis, the woman you heard from. You know, she told me she can't afford to buy a new CD right now, when it comes out. Well, she's got an extra 10, 20 bucks a week and can buy a CD or grab dinner on the weekend with her friends from college.
If a few million people like her can spend a little more out there, that might be a good thing for the economy - an economy that needs a kick start. So, some economists say this is the perfect time.
SIEGEL: An extension of the stimulus, they would say.
GREENE: Exactly. And we should say one of the big proponents of stimulus, President Obama, actually supports raising the minimum wage even more than this. At least he did as a candidate. He said he wants much higher than 7.25 and hour. But we'll see where this goes, you know, whether Mr. Obama brings higher minimum wages on the agenda in a tough economy is an open question. And, you know, Senator Ted Kennedy of Massachusetts has always been the standard bearer of this issue. He's in very poor health and it's hard to see someone sort of taking over with the same passion that he's had.
SIEGEL: Thank you, David.
GREENE: Thank you, Robert.
SIEGEL: That's NPR's David Greene speaking with us from New York.