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Blog: Sound Off: Is the new minimum wage high enough?

07/24/2008
Journal Star (Lincoln, NE)

Is the new minimum wage high enough?

The federal minimum wage rises today from $5.85 to $6.55 per hour, the second of three annual steps up to $7.25.

The grumbling among some business interests and economists has resumed as advocates for the poor ask for more.

In Nebraska, the change will apply to a few thousand people, about 0.5 percent of hourly wage earners, who are paid the minimum.

The Let Justice Roll Living Wage Campaign is calling for a minimum wage of $10 in 2010 as “the least we can do to make up lost ground and bring the minimum wage closer to an adequate living standard.”

But some continue to argue the minimum wage is counterproductive, that employers are likely to cut the number of people they employ as they are forced to pay higher wages.

A new study to be published this fall by Joseph Sabia at the University of Georgia and Richard Burkhauser of Cornell University analyzed the effects of the 2005-06 increase in New York state’s minimum wage and found that the employment decline among vulnerable groups, such as teenagers and adults without a high school diploma, was substantial.

Philip Baker, administrator of labor market information at Nebraska Workforce Development, hadn’t seen that study.

“I can say that July 24, 2007, when the minimum wage went to $5.85, we did not see the unemployment rate rise,” Baker said in an e-mail. “It will take awhile to see if there is an effect and by a while I mean at least a year.

The state’s Occupational Employment Survey shows the average statewide entry wage for all industries is $8.50. For metropolitan areas, it is $8.70, and the non-metropolitan area is $7.65 per hour, Baker said.

Federally gathered labor statistics show that of 553,000 Nebraskans getting paid by the hour in 2007, 3,000 were at minimum wage, and 14,000 were below that, under a variety of exemptions, including agriculture, babysitters, apprentices, people in vocational rehabilitation programs and people employed by their family.

That number of Nebraskans working at the minimum wage is virtually unchanged from 2005, when there were 3,000 among 549,000 total hourly-paid workers, according to the Bureau of Labor Statistics.

Is the new minimum wage high enough?

 

 

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