Approaching elections raise questions about wages

Katie Smith, Online Editor

Recent protests and political campaigns have brought to the forefront of workers’ minds whether they might better survive off an increased minimum wage.

Currently, in Illinois, the state minimum wage is set at $8.25 an hour, while the federal minimum wage rests exactly one dollar lower at $7.25 an hour. With elections approaching in November, gubernatorial candidates like democratic party’s Pat Quinn and republican party’s Bruce Rauner, have debated the issue of raising or maintaining the state’s minimum wage.

Zachary Yeakel, a senior marketing major and president of Eastern’s Republicans said that raising the minimum wage would likely result in a further drop of employment and prove detrimental for small businesses.

“Minimum wage was started for employees not as a living wage but as a starting base point,” he said. ”Raising the minimum wage almost takes away a little bit of the initiative because the idea of having a minimum wage job isn’t to stay in a minimum wage job. Granted, the opportunities aren’t available for everybody but nonetheless minimum wage was never meant to be a living wage when it was set up by the government.”

Mike Olson, a junior history major and member of Eastern’s democrats, said however, that whether or not minimum wage jobs are meant to be short-term, many work for hourly rates full time and long term.

“The common criticism of raising the minimum wage is that it is introductory, it’s an entry-level wage. It’s not meant to be a wage that people will live on. Well, no it’s not supposed to be a wage that people live on, but too many people do, given the economy right now,” he said. “The idea behind a minimum wage is that it’s a living wage, it’s a subsistence wage. When it was created almost 80 years ago, president Roosevelt said any business that is worth patronizing should not be paying poverty wages. It should be paying a living wage to their employees, and that’s what I believe.”

Quinn has publicly endorsed raising the state’s minimum wage to $10 an hour, even volunteering to attempt to survive off only $79 for one week.

The congressional Budget Office estimated that an increase in the federal minimum wage to $9 an hour would reduce employment by less than .01 percent. The resulting increased earnings would total $9 billion, with 22% of that sum accruing to families with incomes below the poverty threshold and 33 percent to families earning more than three times above the poverty threshold.

The organization also estimated that workers with increased earnings would pay more in taxes and receive less in federal benefits than than they would have otherwise, while people who became jobless from the increase, business owners, and consumers facing higher prices would see a reduction in real income, but would collectively pay less in taxes and receive more in federal benefits.

Olson believes raising the minimum wage would result in increased disposable income, and have a positive effect on the economy.

“Take a look at Australia. They raised their minimum wage to, I think, the equivalent of $12 an hour and they have record low unemployment,” he said. “They have a booming economy, and they aren’t seeing the, what you might call the parade of horribles that republicans are predicting will happen here, because their economy is thriving as a result of raising the minimum wage.”

Alternatively, Yeakel said an increased minimum wage is likely to result in the suffering on smaller businesses.

“I think raising the minimum wage really stagnates the growth of small companies and prevents companies from pulling in and employing more people,” he said. “I believe that having a lower minimum wage it does help with of course employments rates. I don’t know about you but I’d rather have a job making 8.50 an hour thank looking for a job for 3-4 months that pays $10 an hour.”

In a study conducted by the United States Bureau of Labor Statistics, the six smallest businesses looked at, (249 employees or smaller) have seen their shares of private sector employment decrease since the early 1990s, while the three largest size classes (250 or more employees) have seen their shares of total employment increase.

“Profits are increasing but wages are stagnating. It’s not a matter of they don’t have the money. I’m not talking about your mom and pop,” Olson said.  “They’re not hiring because they’re not putting their profits into wages, they’re putting their profits into other areas of their business.

A large debate regarding the question of raising minimum wage is who exactly works minimum wage and for how long.

In the Midwest, 18,149,000 people earned hourly wages in 2013, with about 2,300 of those workers earning at or below the federal minimum wage level. In Ill. alone, 3,026,000 were paid at an hourly rate with four percent making at or below minimum wage.

With the largest demographic of minimum-wage workers being comprised of those aged 25-34 years, Olson said there is a misunderstanding on what having a minimum wage job means.

“You see a lot of these college graduates in their 20s and 30s and they’re going into minimum wage jobs because nobody else is hiring. Nobody wants to hire and nobody wants to pay a decent wage,” he said. “I think it just has a lot to do with the kind of economy we had. It’s a simple a things as, ‘well, why don’t you go get another job?’ because working at McDonalds tells me that you tried.”

In 2012, Coles County’s unemployment rate was larger than that of both the state and national percentages.

Despite the financial crisis and drop in employment, Yeakel believes minimum wage jobs serve as a stepping stone to better-paying careers, even if the duration one works for hourly wages has increased.

“I understand how working 50 or so hours a week is a lot of time, but I feel like if other job opportunities present themselves, you can take personal time off to go on interviews, and I feel that’s not uncommon either,” he said. I feel people who switch, even low-paying jobs, they still find time and if you were working a lower job and your boss knew you were searching for another job, I feel like that wouldn’t be a shock to your boss.”

Katie Smith (@Kat_Smith05) can be reached at 581-2812 or [email protected]