Precisely the point I made in a previous comment about the minimum wage: it's a stalking horse for "rallying the troops," be they employees or businesses.

All the posturing could be put to rest by indexing for inflation, with the minimum wage adjusted annually.

Of course, this would be hard to accomplish, since liberals would insist on raising the minimum wage to it's "appropriate level" FIRST, then indexing. The other side (business) would no doubt hold out for indexing to begin NEXT YEAR, basing it on the current figure.

That pessimistic analysis (which is my own) seems to suggest indexing will never happen, but you never know.

Michael-- If you look through the campaign literature of a number of the candidates, they are supporting indexing. I forgot to mention that in the post, but I was happy to see that.

And by the way, every advocate pushing minimum wage is pushing indexing. In New York State, it's the Republicans who oppose indexing-- they will grudgingly support an increase in some cases, but want credit for the times they vote for it. It is liberal Dems who push indexing.

Has any of the candidates emphasized a similar issue, the "Bush economy" effect on profits vs. wages? That is, profits are finally edging up, but no one is getting a raise. Seems to me that, "Where's your raise?," could be the "It's the economy, stupid," of the next year. That is, if continuing dragging employment isn't.

Thank heavens someone is serious about indexing. I support it because it would have the same effect as indexing has had for Social Security. It's removed the partisan wrangling from the process of keeping the benefits up with increases in the cost of living.

I can understand why business tends not to like it. They hate having expense increases mandated. However, I think it's good that the size and timing of those increases would become predictable, so businesses could prepare. How much more economically shocking, in my view, is a process which produces no change for 4 or 5 or 6 years, then foists a 30 or 40 percent increase in the minimum wage on them in a couple of years.

I think it's one of those issues where you have to drag them kicking and screaming to the table, then they find out they like what's for dinner.

Somebody has noticed the wage aspect of the current political economy. See Krugman's piece in the NYTimes dated today.

David in NY writes "Somebody has noticed the wage aspect of the current political economy. See Krugman's piece in the NYTimes dated today."

If it's attracted Krugman's attention, you can be sure there's damn little substance to it. Here's what he says at one point: "how weak is the labor market? The measured unemployment rate of 5.9 percent isn't that high by historical standards, but there's something funny about that number. An unusually large number of people have given up looking for work, so they are no longer counted as unemployed, and many of those who say they have jobs seem to be only marginally employed. Such measures as the length of time it takes laid-off workers to get new jobs continue to indicate the worst job market in 20 years."

Anybody want to bet whether that was his analysis 20 years ago when Reagan was dealing with the double digit inflation, double digit unemployment and double digit interest rates he'd inherited from the Carter years? Boy, with 11 or 12 percent unemployment, just think of all the people who had given up looking for work then! The real Carter unemployment figure must have been 16 or 17 percent!

But Krugman goes on. He writes "So if jobs are scarce and wages are flat, who's benefiting from the economy's expansion? The direct gains are going largely to corporate profits, which rose at an annual rate of more than 40 percent in the third quarter."

Very clever! He makes a small number look big by expressing it in percentages. I made a buck last year, and I made a buck forty this year. Wow! I've reaped "obscene profits" of forty percent!

That's the real Krugman at work. He's wonderful at manipulating data to serve his political ideology. Krugman has been at war with the Bush Administration since day 1. And we all know what the first casualty in wartime is.

I don't trust his writing at all.

I think you don't have Kucinich's true position on the minmum wage. His position on the minimum wage is as follows
"• Make the minimum wage a living wage."
from http://www.kucinich.us/passiton.pdf
Also
"Since the purchasing power of the minimum wage has dropped 21% in two decades, it’s time for living wages, not minimum wages."
from http://www.kucinich.us/materials/TenPoints.pdf

Also from http://www.kucinich.us/supporter_resources/otherpdfs/Dennis%20Comedy.pdf
10. What’s his stand on the minimum wage?
He is promoting a 'Living Wage' because the purchasing power of the minimum wage has dropped 21% in the last 20 years. He wants to repeal the tax cuts for the rich and invest in our nations deteriorating infrastructure. There would be no unexpected black outs if he had his way.

Also from http://www.kucinich.us/issues/sweat_shops.php
The notion of a minimum wage must be replaced by the right to a living wage -- everywhere.

If anyone who doesn't break out in hives at the mention of Krugman's name wants to check out the proposition that wage earners are not benefitting from any "improvement" in the economic situation, they can refer to this non-Krugman source. See this.

In re "the proposition that wage earners are not benefitting from any "improvement" in the economic situation," I guess that explains the massive shift in wageearner sentiment to the Democrats.

Since that was a joke and there's no such shift, you're left with several choices as explanation:

1) Wageearners are stupid and don't know what's good for them. You're free to make that point as often as you want during the campaign.

2) Most people are part of "the rich." I know I am. That's because I got a tax cut, and the tax cuts went to the rich.

3) Real wages aren't growing, but they're not declining either. There's virtually unanimous agreement that the recession was as short and mild as it was because consumer spending remained relatively robust. So peoples' real wages, although temporarily in neutral, are still nevertheless adequate for the vast majority to continue to support themselves in the style to which they have become accustomed.

First Bush was gonna get hammered because the economy was in recession. Now he's gonna get hammered because, while there's good economic growth, real wages are static. When real wages begin to rise, as they soon will, what's the fallback position then? I have a suggestion: Bush will get hammered because the rise in real wages is chiefly benefitting white males at the expense of women and minorities.

Sounds pretty good.

re David's link to the Krugman article, I'm not sure how increasing the min wage would help folks at the bottom. In the current climate that Krugman describes so well, low wage labor is drying up, and increasing the min wage is going to lead to massive layoffs at the bottom. Instead, shouldn't we be looking at cuts in the payroll tax on the bottom and EITC increases? These ideas have their own problems, most notably that they would come out of the federal budget instead of corporate pockets. But changing the min wage now would seriously disrupt the economic growth we've just started seeing.

Does anybody know whether the EITC increases with cost of living?

RE: "massive layoffs"

This argument is pulled out every time raising the minimum wage is discussed, yet historical data says that it simply isn't true.

But if prices go up, argues the Right, consumption must fall, correct? Well, yes and no. Yes if the item being consumed is discretionary. If it is not, the consumer must bear the price increase.

But people will stop going to McBurger, argues the Right, and McBurger workers will be laid off, correct? This would be true if only the prices of McBurger went up. If farm wages also went up, the consumer would still be faced with the exact same choices.

The "massive layoff" argument thus depends solely upon the assumption that the labor provided by minimum wage workers is not essential labor, an assumption that simply has no basis in fact.

Just want to back up what clonal antibody wrote. Replacement of the minimum wage with a living wage is the actual position of the Kucinich campaign, and is included in his Ten Key Issues. That's a lot more than just "general support" for an increase in the minimum wage. Given that Nathan himself has posted about living wage laws and says that he worked on the study that shows their benefits, it's disappointing that he has not chosen to mention this part of Kucinich's platform.

Also, as clonal antibody quoted from Kucinich's issues page on sweatshops, Kucinich supports a living wage for all workers not just American workers. This appears to be the same as Gephardt's "international minimum wage" that Nathan trumpets as beating the rest of the field.

Here's hoping that in the future Nathan will give Kucinich a fairer shake. Kucinich has a strong pro-labor record and a strong pro-labor platform that deserve highlighting. We need more voices speaking up on these issues instead of passing over the ones who already are.

Benedict - what item isn't discretionary in today's economy?

The situation you're describing - where farm wages go up so that consumers are faced with exactly the same choices - is simply inflation by the amount of the increase in the minimum wage, which won't help anybody.

The right brings up the argument about layoffs at the bottom so often because it's economics 101. That doesn't mean we shouldn't increase the minimum wage, it just means we should be aware of the consequences of doing so. In the current economic enviornment, I'm arguing that other policies to help low wage workers are preferable. Increasing EITC payments will be just as effective, and it won't pass the costs off onto small businesses or consumers.

Raises in the minimum wage do not cause corresponding layoffs, because the demand for minimum wage labor is inelastic.

For employers, the actual wage paid to minimum wage workers is much less than 100% of the cost of employing them. Low-wage workers require a whole lot of training and supervision per worker, not to mention the costs associated with rapid turnover of employees. An increase in the minimum wage itself has little impact on the other costs.

A 10% increase in the minwage does not translate to a 10% increase in costs or prices.

Larry - demand for minimum wage labor is not completely inelastic... it may be lesss elastic than demand for labor higher up, but businesses will still find ways to substitute for minwage labor as it gets more expensive.