Bare Minimum Wage
Increase cold comfort for struggling workers.
The rate will increase from its current $5.85 to $6.55 per hour and is the second of 3 increases mandated by a 2007 law. But according to the Labor Department, the new wage is actually less than the 1997 rate - adjusted for inflation. With food prices up 5% and energy costs up 25%, the increase is cold comfort for millions of U.S. workers.
A full-time worker making the new minimum wage would earn approximately $13,624 a year, well below the poverty line for a family of 3. Although 23 states insist on a minimum wage higher than the federal government, 40% of Americans live in places where the latter is the going rate.
Also unsatisfied with the wage increase: Companies now forced to spend more on labor.
The new minimum wage will increase the weekly haul of 2 million employees by $23, forcing the business community to pay out an additional $46 million every week. Some economists believe the ripple effect will, in the long run, hurts workers.
But the plight of a company's bottom line means little for workers struggling to make ends meet. In some places minimum wage is so low people can actually make more money panhandling. Like Coos Bay, Oregon, for example, where police reported that beggars outside Wal-Mart (WMT) could make up to $300 a day (it would take workers inside the store a week to make that much). In Manhattan, according to an article in the New York Times, some vagrants can earn up to a dollar per minute for an astounding $125,000 a year.
Sure beats working for $6.55 an hour.
For more on the minimum wage and the business of panhandling, check out Hoofy and Boo's always astute report.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter