Thursday, August 14, 2014

Congressman complains he hasn't had a raise, votes against minimum wage

Nebraska Republican Lee Terry, a U.S. congressman taking home $174,500 in base salary, is upset because he hasn't had a raise in six years.
Rep. Lee Terry.

In 2013, he voted against raising the minimum wage from $7.25, where it has remained stuck for the past five years.

According to the Huffington Post, Terry's opponent wants to cut the salaries of members of Congress by 10 percent. Terry says he can't afford that. He also refused to give up his salary during last year's federal government shutdown.
"God bless them," he said of his colleagues. "But you know what? I've got a nice house and a kid in college, and I'll tell you we cannot handle it. Giving our paycheck away when you still worked and earned it? That's just not going to fly." 
David Cay Johnston argues that raising the minimum wage benefits the next tier of workers above minimum wage earners. He notes that minimum wage earners actually got raises in 2007, 2008 and 2009. (And it was President George W. Bush who signed those increases into law.)  Notes Johnston:
Each raised the minimum by 70 cents, lifting it to $7.25 an hour. Before Bush signed the increases into law, minimum wage workers had gone a decade with no increase. By 2007, inflation had reduced the value of their hourly pay to 77 cents on the 1997 dollar...
Moreover, the spillover effect raised wages. Johnston explains:
...those who made up to about $2 an hour above the minimum also benefited from its increase, as their pay also rose because of what labor economists call thespillover effect, one of the best-documented and most studied areas of how minimum wage increases affect the economy. Raising the minimum wage in steps until it reaches $15 in today’s money would benefit workers making as much as $20 an hour because of this spillover effect...
...if cities, counties, states and Uncle Sam raise the minimum wage in steps until it is $15 in today’s dollars, the spillover would improve the pay of the almost 2 out of 3 workers who make less than $20 an hour. 
Here's why:
Higher pay draws more people into the labor market, and it means workers have more to spend on goods and services, which creates more demand to hire more workers as well as generating more profits for business owners. It also means less demand for food stamps and other government benefits, easing taxpayer burdens, even as prices rise a bit to cover higher labor costs.