Welcome to DU!
The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards.
Join the community:
Create a free account
Support DU (and get rid of ads!):
Become a Star Member
Latest Breaking News
General Discussion
The DU Lounge
All Forums
Issue Forums
Culture Forums
Alliance Forums
Region Forums
Support Forums
Help & Search
Economy
In reply to the discussion: Weekend Economists Repent! The End Is Here! July 20-22, 2012 [View all]Demeter
(85,373 posts)9. Want A Real Recovery? Raise the Minimum Wage. By Terrance Heath
http://www.nationofchange.org/want-real-recovery-raise-minimum-wage-1342791951
Scratch the surface of just about any economic debate this election year, and you'll find one issue that goes all the way to the core: the yawning gap between the 1% and the rest of us, as skyrocketing income inequality. A new report from the National Employment Law Project (NELP), "Big Business, Corporate Profits, and the Minimum Wage," shows the extremes of that divide, and makes the case for raising the federal minimum wage as a means of closing that gap, and putting the national economy on the road to a real recovery. The report explores the connection between stagnant and falling wages, and its central finding explodes the argument that raising the minimum wage will cause employers to stop hiring, and the hurt small businesses that opponents of a minimum wage increase (and of the idea of a minimum wage itself) claim are the primary employers of low-wage workers.
The central finding of this report is that the majority of Americas lowest‐paid workers are employed by large corporations, not small businesses, and that most of the largest low‐wage employers have recovered from the recession and are in a strong financial position.
The data in the report only strengthens the case:
The majority (66 percent) of low‐wage workers are not employed by small businesses, but rather by large corporations with over 100 employees;
The 50 largest employers of low‐wage workers have largely recovered from the recession and most are in strong financial positions: 92 percent were profitable last year; 78 percent have been profitable for the last three years; 75 percent have higher revenues now than before the recession; 73 percent have higher cash holdings; and 63 percent have higher operating margins (a measure of profitability).
Top executive compensation averaged $9.4 million last year at these firms, and they have returned $174.8 billion to shareholders in dividends or share buybacks over the past five years.
Got that? In "recovery" in which most of the new jobs being created are low-wage jobs, the biggest corporations and biggest employers of low-wage workers are enjoying record profits upwards of $1.97 trillion in the third quarter of 2011, according to the report. Most of them have recovered. Most have been profitable for the last three years, and nearly all were profitable in the past year. Most of them have more money to spend on operations. Executive pay at these companies averaged nearly $10 million last year, and shareholders enjoyed returns of nearly $175 million.
(I'd love to know how many of these same corporations have nothing or next-to-nothing in taxes. But I'll have to find that in another report, or do the research myself. Still, I'm willing to bet that most of these companies aren't any better at paying taxes than they are at paying their employees.)
The losers in all this are the workers, the very people who are creating value for these companies. If they're getting paid the federal minimum wage, they're getting paid about $7.25 an hour hasn't been adjusted for inflation in 40 years. If it had, those workers would be earning about $10.55 per hour. (It's even worse for workers like the waiters and waitresses with whom Mitt Romney recently said he sympathizes. The federal minimum wage for tipped employees like them is $2.13., and in states like Florida where tipped employees make just over twice the federal minimum wage for their jobs the restaurant lobby fought to lower the minimum wage.) They're working for a wage that put the basic necessities our of their reach. Health care and education are priced far out of their reach not to mention things like milk and gas, as prices rise but paychecks don't. Most can't afford a two-bedroom apartment, even working 40 hours per week....
Scratch the surface of just about any economic debate this election year, and you'll find one issue that goes all the way to the core: the yawning gap between the 1% and the rest of us, as skyrocketing income inequality. A new report from the National Employment Law Project (NELP), "Big Business, Corporate Profits, and the Minimum Wage," shows the extremes of that divide, and makes the case for raising the federal minimum wage as a means of closing that gap, and putting the national economy on the road to a real recovery. The report explores the connection between stagnant and falling wages, and its central finding explodes the argument that raising the minimum wage will cause employers to stop hiring, and the hurt small businesses that opponents of a minimum wage increase (and of the idea of a minimum wage itself) claim are the primary employers of low-wage workers.
The central finding of this report is that the majority of Americas lowest‐paid workers are employed by large corporations, not small businesses, and that most of the largest low‐wage employers have recovered from the recession and are in a strong financial position.
The data in the report only strengthens the case:
Got that? In "recovery" in which most of the new jobs being created are low-wage jobs, the biggest corporations and biggest employers of low-wage workers are enjoying record profits upwards of $1.97 trillion in the third quarter of 2011, according to the report. Most of them have recovered. Most have been profitable for the last three years, and nearly all were profitable in the past year. Most of them have more money to spend on operations. Executive pay at these companies averaged nearly $10 million last year, and shareholders enjoyed returns of nearly $175 million.
(I'd love to know how many of these same corporations have nothing or next-to-nothing in taxes. But I'll have to find that in another report, or do the research myself. Still, I'm willing to bet that most of these companies aren't any better at paying taxes than they are at paying their employees.)
The losers in all this are the workers, the very people who are creating value for these companies. If they're getting paid the federal minimum wage, they're getting paid about $7.25 an hour hasn't been adjusted for inflation in 40 years. If it had, those workers would be earning about $10.55 per hour. (It's even worse for workers like the waiters and waitresses with whom Mitt Romney recently said he sympathizes. The federal minimum wage for tipped employees like them is $2.13., and in states like Florida where tipped employees make just over twice the federal minimum wage for their jobs the restaurant lobby fought to lower the minimum wage.) They're working for a wage that put the basic necessities our of their reach. Health care and education are priced far out of their reach not to mention things like milk and gas, as prices rise but paychecks don't. Most can't afford a two-bedroom apartment, even working 40 hours per week....
Edit history
Please sign in to view edit histories.
81 replies
= new reply since forum marked as read
Highlight:
NoneDon't highlight anything
5 newestHighlight 5 most recent replies
RecommendedHighlight replies with 5 or more recommendations
The Biggest Banking Scandal this Summer (Hint: It’s not LIBOR) By Christopher Petrella
Demeter
Jul 2012
#6
Slick “No Labels” Plan to Duck Debate, Cut Social Security & Coddle 1% By Richard (RJ) Eskow
Demeter
Jul 2012
#19
Six Ways the Federal Reserve Could Boost the Economy By Adam S. Hersh and Cameron DeHart
Demeter
Jul 2012
#21
Libor fraud exposes Wall Street’s rotten core By Elizabeth Warren YES, THAT ELIZABETH WARREN
Demeter
Jul 2012
#28
Titanic Banks Hit LIBOR Iceberg: Will Lawsuits Sink the Ship? By Ellen Brown IF YOU ONLY READ 1
Demeter
Jul 2012
#30
Krugmenistan vs. Estonia THE DISH ON KRUGMAN, MAKING FRIENDS AND INFLUENCING PEOPLE
Demeter
Jul 2012
#41
This could be a great opportunity for a retirement community...for the prematurely unemployed
Demeter
Jul 2012
#63
Bill Moyers and Chris Hedges: How Whole Regions of America Have Been Destroyed in the Name of profit
xchrom
Jul 2012
#60
(Mid- 70's) "would be the closest America ever came to Utopia for many a generation"
bread_and_roses
Jul 2012
#71