Nobel Economists: Republicans Wrong on Minimum Wage

With the buying power of the Federal minimum wage at its lowest point in 55 years, five Nobel Prize-winning economists have been joined by 650 of their peers, in calling on the Republican-led Congress to increase the minimum wage. Describing the last increase almost 10 years ago as now "fully eroded," the economists said that they agree with a report written in 1999 by the Council of Economic Advisors declaring that "modest increases in the minimum wage have had very little or no effect on employment."

"We believe that a modest increase in the minimum wage would improve the well-being of low-wage workers and would not have the adverse effects that critics have claimed," the economists wrote in a paper delivered this week on a conference call hosted by the Economic Policy Institute, an economic research group based in Washington, D.C.

In addition to asserting that the real value of the minimum wage is at its lowest point since 1951, the economists also noted that the ratio of what a minimum-wage earner makes and the average pay rates of other hourly workers is at a significant low.

"The ratio of the minimum wage to the average hourly wage of non-supervisory workers is 31%, its lowest level since World War II," they said. " This decline is causing hardship for low-wage workers and their families."

The Federal minimum wage has been at $5.15 an hour since 1997, which puts a working American earning that wage, even laboring 50 hours a week, at below the national poverty line.

Senator Ted Kennedy (D-MA) has been ferociously pursuing the issue for years and with particular fervor in the current Congress, which ends this year.

“These esteemed economists understand what everyone except the Republican leadership and the White House understand: an increase in the minimum wage is long overdue and would strengthen our economy," said Kennedy, in a statement Thursday. "Millions of American families are living in poverty while working hard for the American dream, while the Republicans block every effort to give them the raise they deserve --- despite skyrocketing increases in health care, gas prices, and education."

Nobel Prize winners calling on Republicans to raise the minimum wage are Kenneth Arrow of Stanford University, Lawrence Klein of the University of Pennsylvania, Robert Solow of the Massachusetts Institute of Technology, Joseph Stiglitz at Columbia University and Clive Granger of the University of California, San Diego.

The Republican leadership and the Bush administration have stubbornly held to the view that a higher minimum wage would lead to fewer jobs and more employers moving jobs offshore -- the latter, a ludicrous assumption, given that most minimum wage jobs are local, service-oriented positions that cannot be moved to another country.

The group of 650 economists shot down that notion, saying in their report that a Democratic plan to phase in a minimum wage increase to $7.25 "falls well within the range of options where the benefits to the labor market, workers, and the overall economy would be positive."

They also contradicted Republican claims that most people earning minimum wage are teenagers who don’t use the money for living essentials and bare subsistence.

"While controversy about the precise employment effects of the minimum wage continues, research has shown that most of the beneficiaries are adults, most are female, and the vast majority are members of low-income working families," the report says.

Republicans put forth a bogus plan to raise the minimum wage over the summer, when they attached it to a whopping Estate Tax cut for America's super rich, knowing that the legislation would fail, but providing them with a cynical way to tell voters that they had voted to improve the lot of working families.

Meanwhile, the GOP Congress has killed three attempts by Kennedy to raise the minimum wage in just the last two years on almost straight party-line votes and will undoubtedly keep doing that if allowed to remain in power after November 7.

Said Kennedy: "It is clear as day that despite what the economists advise, the only way these hard working people will get a new raise is if this Congress gets new management in November."

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Here in Oregon.....

.....the economic problems stem from a Bushwhacked economy and are no worse than elsewhere in the US. Our $7.25 minumum wage is too low. On January 1, it goes up to $7.50.

- Surviving Bush one day at a time.
http://tomcatsbox.spaces.live.com

Who edited this piece today?

Will the person who edited my piece without asking me please e-mail me and tell me why the hell they're doing that?

Nobel Economists and Scientists: Republicans WRONG on Economics

Dumb Ass Republicans get EVERYTHING wrong........AGAIN!

From Scientific American:

The Social Welfare State, beyond Ideology
Are higher taxes and strong social "safety nets" antagonistic to a prosperous market economy? The evidence is now in
By Jeffrey D. Sachs

One of the great challenges of sustainable development is to combine society's desires for economic prosperity and social security. For decades economists and politicians have debated how to reconcile the undoubted power of markets with the reassuring protections of social insurance. America's supply-siders claim that the best way to achieve well-being for America's poor is by spurring rapid economic growth and that the higher taxes needed to fund high levels of social insurance would cripple prosperity. Austrian-born free-market economist Friedrich August von Hayek suggested in the 1940s that high taxation would be a "road to serfdom," a threat to freedom itself.

Most of the debate in the U.S. is clouded by vested interests and by ideology. Yet there is by now a rich empirical rec-ord to judge these issues scientifically. The evidence may be found by comparing a group of relatively free-market economies that have low to moderate rates of taxation and social outlays with a group of social-welfare states that have high rates of taxation and social outlays.

Not coincidentally, the low-tax, high-income countries are mostly English-speaking ones that share a direct historical lineage with 19th-century Britain and its theories of economic laissez-faire. These countries include Australia, Canada, Ireland, New Zealand, the U.K. and the U.S. The high-tax, high-income states are the Nordic social democracies, notably Denmark, Finland, Norway and Sweden, which have been governed by left-of-center social democratic parties for much or all of the post–World War II era. They combine a healthy respect for market forces with a strong commitment to antipoverty programs. Budgetary outlays for social purposes average around 27 percent of gross domestic product (GDP) in the Nordic countries and just 17 percent of GDP in the English-speaking countries.

On average, the Nordic countries outperform the Anglo-Saxon ones on most measures of economic performance. Poverty rates are much lower there, and national income per working-age population is on average higher. Unemployment rates are roughly the same in both groups, just slightly higher in the Nordic countries. The budget situation is stronger in the Nordic group, with larger surpluses as a share of GDP.
The Nordic countries maintain their dynamism despite high taxation in several ways. Most important, they spend lavishly on research and development and higher education. All of them, but especially Sweden and Finland, have taken to the sweeping revolution in information and communications technology and leveraged it to gain global competitiveness. Sweden now spends nearly 4 percent of GDP on R&D, the highest ratio in the world today. On average, the Nordic nations spend 3 percent of GDP on R&D, compared with around 2 percent in the English-speaking nations.

The Nordic states have also worked to keep social expenditures compatible with an open, competitive, market-based economic system. Tax rates on capital are relatively low. Labor market policies pay low-skilled and otherwise difficult-to-employ individuals to work in the service sector, in key quality-of-life areas such as child care, health, and support for the elderly and disabled.

The results for the households at the bottom of the income distribution are astoundingly good, especially in contrast to the mean-spirited neglect that now passes for American social policy. The U.S. spends less than almost all rich countries on social services for the poor and disabled, and it gets what it pays for: the highest poverty rate among the rich countries and an exploding prison population. Actually, by shunning public spending on health, the U.S. gets much less than it pays for, because its dependence on private health care has led to a ramshackle system that yields mediocre results at very high costs.

Von Hayek was wrong. In strong and vibrant democracies, a generous social-welfare state is not a road to serfdom but rather to fairness, economic equality and international competitiveness

http://www.sciam.com/article.cfm?chanID=sa006&colID=31&articleID=000AF3D...

If you're superstitious, or too weak to stand up for yourself, then join the Republican Party.

Otherwise, its Science over Superstition, in the Democratic Party! Where the vast majority of professions CAN see massively increased incomes via education, health care, modernization, etc.

This will not come from Republicans or DLC Democrats. It will only come from conservative and liberal folks who stop bickering about what we never will agree upon and start Modernizing America to compete.

Jim, I thank you for posting this article.

As a child of Swedish immigrant parents,I have listened to the
argument that "Sweden is going to hell", in regards to its
social welfare system.

I haven't seen this happen. True, my last visit was back in 1997,
but I have lived, worked and attended school in Sweden off and on
since 1958. Their technology is second to none. Everyone is ensured
good medical and dental healthcare. Elderly people are taken care of
for the duration of their days on earth. All children are guaranteed a
good education and job training is available for all students.

Yes, the taxes are high in Sweden, but everyone, not just those with children or in need
of medical care benefit from the programs the taxes help fund.
To the best of my knowledge, there are no homeless people in Sweden.
Those with mental afflictions are cared for, not tossed out to live on the streets.

Oh yeah, I almost forgot, the Swedes have a very cool submarine, one that
has made a lots of waves recently.( sorry for the pun, I couldn't resist)

http://www.nbc4.tv/news/10116514/detail.html

According to the Navy, it's a threat to security.

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