Negative Campaign Ads and Their Affects on Voters

Kenneth MoulesMBA 592Dr. Jennifer EdmondsApril 30, 2016An Analysis of the Federal Minimum Wage

Why This Topic?Wanted to choose a topic with both established data to analyze and current findings.

2016 Presidential Election

Relevancy is far-reaching-Affects many more than simply minimum wage earnersPersonal professional experience-TJ Maxx/Workers United Labor Negotiations

What Will Be CoveredHistory of the minimum wage-Where and how it originated?-How it has transformed over the yearsArguments for raising the minimum wageArguments against raising the minimum wagePolitical Influences on the issue-Where do presidential candidates stand?-Political parties influence on the issueOutcomes of government action

What is a Minimum Wage?The minimum wage is a base wage floor that protects workers by guaranteeing a minimum amount a worker can be paid for one hours work.

Power lies with the Legislative branch of government-States have grown increasingly powerful-Local municipalities have power as well

Employers are bound by law to follow subsequent legislation all the way down to local government levels.

Legislation with the highest wage applies at all times

Last federal minimum wage hike was in 2007-Three phase plan-Last phase was completed in 2009

What Workers Are Protected?Full and part-time workers are eligibleLaw is designed to cover non-exempt employees and establishes that this wage covers all hours worked within a 40 hour work weekNon-Exempt list-Basic hourly employees-Commission employees-Employees who have dependence on their current positions for everyday lifeSeparate legislation for overtime qualifications and rules Employee records are vetted by IRS for employer wage fraud

Who is Considered Exempt?There are a good number of job types/employees that do not qualify for minimum wage protection.These employees still have basic protection for standards and in some states, a limit on hours worked per week.Computer professionals-Earning at least $26/hourInternships/Externships/Medical School residenciesFarm Workers-Exempt from both minimum wage and child labor laws

Exempt ContdSeasonal EmployeesExecutive and administrative assistantsWorkers with disabilitiesHomeworkers-Self-EmployedCompanions for the elderlyNewspaper delivery personnelNewspaper employees of limited circulation papersSeaman on non-commercial vessels

Current Minimum Wage Numbers

Current minimum wage is $7.25/hour-Currently in line with modern countries such as the U.K. and Germany

Trend nationally is to raise the minimum wage to over $10 an hour.

26% of the workforce is currently making within $1 of the rate.

Highest concentration of minimum wage workers is in the South and Southwest

Ironically, many of the states leading the charge on wage reform have the least amount of workers currently making such a low rate.

Women and young people have risen in dependency on the minimum wage each of the last 17 years.

Examples of Local Ordinances for MWWe have seen trends with traditionally more progressive states such as California, Oregon, and Washington enact state and local laws that supersede the federal mandate.Some cities have begun making changes:-Seattle up to $15/hour-Portland up to $12.50/hour-San Francisco soon to $12/hour-Many other California cities such as San Jose, San Bernadino, Santa Cruz, Sacramento, and Oakland have all introduced legislation to raise their local wages as well.https://www.youtube.com/watch?v=O8OSeyP9SB4

Adkins v. Childrens Hospital 1923Revolved around Washington D.C.s decision to implement a new minimum wage law for women and children. These two groups were the most underpaid at that time.Reached the Supreme Court in 1925Childrens Hospital was refusing to pay its nurses and employees the new wages mandated by law.In a 5-3 decision, the Supreme Court struck down the legislation as unconstitutional. According to Chief Justice Sutherland, the D. C. minimum wage law, by contrast, was "an arbitrary interference with the liberty of contract which no government can legally justify in a free land."

West Coast Hotel Company v. Parrish 1937Instrumental in its disagreement with the Adkins case.

West Coast Hotel Company was challenging the state of Washingtons new mandate that women receive a fair wage.

Many assumed the case would follow in line with that of the Adkins case a decade earlier.

In a major surprise, the Supreme Court of Washington ruled against the hotel company.However, inParrish v. WCHC,the Court, on a 54 vote, rejected the freedom of contract doctrine. Chief Justice Charles Evans Hughes noted that the Constitution does not refer to freedom of contract. Rather, it proscribes deprivation of liberty without due process of law. Hughes pointed out that freedom is not absolute. Moreover, "the liberty safeguarded is liberty in a social organization which requires the protection of law against the evils which menace the health, safety, morals, and welfare of the people." Thus, constitutional liberty is "necessarily subject to restraints of due process" as long as government regulation is reasonable and furthers the interests of the community.

Origins of the LawThe minimum wage was established by the Fair Labor Standards Act of 1938.During this time of economic boom, many employees were working long hours, for extremely low wages, and in terrible conditions.Franklin D. Roosevelt-Voice for the IssueFirst wage was set at $.25/hour and the work week was established at 44 hours/week.This is where we see the first resemblance of the definition of a worker. Legislation also abolished cruel child labor.

Portal-To-Portal Act 1947First act to establish what time at work is considered

However, this is groundbreaking legislation that threw the first wrench into the FLSA.

Out clauses were now established for employers who were found to violate the minimum wage. This was very common in this time period without true accounting and reporting practices of today.

Established the Good Faith clause where employers could argue, some successfully, that the misjudgment was in good faith and

Also established a statute of limitations of two years for any possible violations of the FLSA.

Equal Pay Act of 1963First legislation to establish gender equality under the FLSA. Although women were a much smaller part of the workforce, many of the subsequent gender/wage legislations to follow were built off of this act.Also the first legislation to establish penalties for violators.-Large fines to corporations-Restitution to victims which could include punitive damages-Possibility of regular government check0ins with prior violators-Estaablished the Dept. of Labor as the chief investigative body, with support from the IRS and Dept. of Justice

Age Discrimination in Employment Act 1967Built off of the same framework as the gender equality legislation.The Age Discrimination in Employment Act of 1967 (ADEA) protects individuals who are 40 years of age or older from employment discrimination based on age. The ADEAs protections apply to both employees and job applicants. Under the ADEA, it is unlawful to discriminate against a person because of his/her age with respect to any term, condition or privilege of employment, including hiring, firing, promotion, layoff, compensation, benefits, job assignments and training. It is also unlawful to retaliate against an individual for opposing employment practices that discriminate based on age or for filing an age discrimination charge, testifying or participating in any way in an investigation, proceeding or litigation under the ADEA. The ADEA applies to employers with 20 or more employees, including state and local governments. It also applies to employment agencies and labor organizations, as well as to the federal governmentADEA is the most commonly referenced Act in current judicial cases today.

Fair Minimum Wage Act of 2007Even though it is nearly ten years old, this is the most recent minimum wage legislation at the federal level.Introduced by Congressman George Miller (D-CA). He stated, This is a simple up-or-down vote on whether or not we as Congress believe the poorest people in America deserve a raise.Bill received 315 votes in the House.Raised minimum wage from $5.15 to $7.25.Three-phased plan to raise wages in three cycles ending in 2009.No new legislation appears to be on the horizon.

Trends and Statistics Over TimeIn terms of who currently makes a minimum wage rate, the list seems to revolve around four groups:-Disproportionately young: 50.4% are ages 16 to 24; 24% are teenagers (ages 16 to 19).-Mostly (77%) white; nearly half are white women.-Largely part-time workers (64% of the total).-Service IndustryMinorities make up a large percentage, most notably in the age group of 16-24.Latinos are the largest race classification growing in the minimum wage bracket.

Types of Jobs Mostly Covered by MW

MW Chart Over Time

Current MW Statistics (2013)

Arguments in Favor of Raising the MWMajor push in recent years to raise the wage.Mainly supported by Democrats at the federal, state, and local levels.Current presidential candidate Bernie Sanders has been one of the staunchest proponents of such legislation.The argument sis support of a wage hike, predominantly center around these core arguments:-An overall strengthening of the Economy-Raising poverty levels-Public Health Argument-Increased worker productivity

Overall Strengthening of the EconomyThis aspect has been very much trumpeted by Barack Obama and his administration.Of course, nothing helps families make ends meet like higher wagesand to everyone in this Congress who still refuses to raise the minimum wage, I say this: If you truly believe you could work full-time and support a family on less than $15,000 a year, go try it. If not, vote to give millions of the hardest-working people in America a raise (SOTU, 2015)At the federal level, the Obama Administration has expressed support for the Raise the Wage Act proposed by Senator Murray and Representative Scott, which would increase the minimum wage to $12 by 2020. The President has also taken action to raise wages for workers on all new federal contracts to $10.10 or higher. Raising the minimum wage nationwide will increase earnings for millions of workers, and support the local economies where they live, work and spend their earnings (WhiteHouse.gov)Lowers poverty levels and wanes people off of government programs.

Public Health ArgumentBased on the premise that low wage earners dont have an opportunity to seek adequate living conditions or adequate preemptive medical care.

Studies have show that those earning less than $10.00/hour have a 56% higher chance of dying before the age of 65 than those who earn a wage of $13.00/hour. The relationship between health and income is not just about individual access to medical care, but how income affects a range of opportunities for health. Communities of residents with higher incomes are likely to have better recreational amenities, housing stock, food access, and schools, and tend to be safer all of which impact health. Income is also associated with other factors that create the opportunity to be healthy, such as employment opportunities, reduced environmental contamination, and greater transportation options. Health improves with increasing income, and the impacts of a rise in income are greatest for those at the lowest end of the wage scale. Moving from the lowest income level to the next lowest provides the largest percentage increase in life expectancy and health status. In other words, a family living on minimum wage realizes greater health benefits from an increase in salary than a middle-class family receiving the same raise (Dept. of Health Spokesperson, 2012).

Human Impact Partners 2014 Health StudyStudy was to forecast potential outcomes of raising the California minimum wage to $13/hour by 2017.Major Findings:-Californians in families whose income increased as a result of the higher minimum wage would be more likely to be born healthier, develop stronger bodies and brains, and suffer from fewer chronic diseases as adults and into old age.-Fewer Californians would live in poverty, ensuring that they would get enough to eat. Fewer would be forced to live in the unhealthy environments of substandard housing and poor neighborhoods. More Californians would have adequate health care and access to health insurance.-More of Californias children would be well prepared for school and achieve more in school, which In itself leads to healthier adult lives. Children would miss fewer school days.-Fewer people would smoke. In California, adults in families in poverty are 50% more likely to smoke than those in families earning more than three times the poverty level.-More would exercise regularly and fewer would be obese or overweight. In California, teens in families living below the poverty level are 2.5 times as likely to be overweight or obese as teens in families whose incomes are at least three times the poverty level.-Fewer Californians would suffer from emotional and psychological problems, such as depression and poor self-esteem. Families who live in poverty are over twice as likely to face serious psychological distress and to suffer from family life impairment as those in higher income families.

Increased Worker ProductivityBasically equates to an incentive program built into an hourly wage.Helps solve the question of how to motivate lower wage earners for increased productivity.

Gazette & Leddy StudyBehavioral study of worker incentive-based productionTwo groups of data entry workers where one group was told they were getting a $1 raise for their great performance, with the ability to earn an extra $1/hour if the company hit some time of unspecified goal. The other group was given a $2 raise right off the bat and was told it was simply a new company policy.Which group do you think had higher, and longer durations, of increased productivity moving forward?This study helped illustrate that workers truly appreciate being incentivized and will work harder and longer when they feel appreciated.

Arguments Against Raising the MWThis main premise is supported by most, but not all of economists.

Many will argue that the foundation of Capitalism is a free market system, and government interference halts growth.

Traditionally conservative politicians are against raising the wage. Their main argument focuses around the belief that a wage hike will actually hurt those it is intended to help.

Employer manipulation

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Large Unemployment RiseOne fear is that employer backlash could have a devastating affect on our countrys job market.-2014 CNN poll showed that 37% of small businesses said they would have plans to cut, or severely limit the amount of hours employees are scheduled.Fast food workers of New Jersey & Pennsylvania-Neumark & Wascher vs. Card & Kreuger-Fast food workers were given mandatory raises with an interest in seeing how the companys reacted.-Updated study, using employer records, show that job elasticity reached -2.4 with a 4.6% decrease in the amount of workers those companies hired as compared to the average, for those months, in previous years.

Teenage Joblessness

Cost To EmployersMany small business are very fearful of this.Besides the increase in pay, employees will pay increased taxes and employer increased matching and employer deductions. Most employers have a burden that is, costs in addition to payroll of 28%. These costs include matching the social security contribution, state disability, unemployment and a host of others. As hourly wages increase, so does the dollar amount of the burden.San Francisco example:-Former rate was $10/hour, plus $2.80 of burden on the employer.-With a plan in place to get up to $15/hour by 2020, the burden will then go to $4.20/hour.. That is a $6.40 rise an HOUR for employers.Employers will now offer less in benefits to make up the difference.Manufacturing and assembly will be hit the hardest. Two areas where minimum wage workers make a living.

Overall Economy HealthPotential for higher inflation numbers-Does the value of the dollar decrease if productivity does not climb at the same rate?Does raising the minimum wage truly help low earning workers, women, and minorities.-If groups who have higher unemployment numbers arent able to find work, does it actually help them?Small business growth will come to a standstill.Do wages actually bring people out of poverty, or does it simply redefine a new poverty level?Will jobs stay in the U.S.?

Political FactorsElection years tend to not get much government action accomplished.Our federal and state governments are very divided by numbers and ideology. The chances of getting something accomplished in that environment are remote at best.

Republican Candidates For PresidentThe party as a whole is not interested in a pure wage hike. Conservative politicians and economists are against it.

Big business lobbying will be hounding Republicans to halt any type of potential action.

Ted Cruz-Purely against a wage increase.- The undeniable reality, the undeniable truth, is if the President succeeded in raising the minimum wage it would cost jobs for the most vulnerable. The people who have been hurt by this Obama economy would be hurt worse with the minimum wage proposal before this body. In 2013 the President in his State of the Union address proposed raising the minimum wage to $9.00. Now a year later the request has magically changed to $10.10. The only reason (theres no economic justification) the only reason is politics. And I suppose if the approval ratings of democratic members of this body continue to fall in another month well see a proposal for $15.00 an hour and then maybe $20.00 or $25.00 an hour. But I think the American people are tired of empty political show votes. The nonpartisan congressional budget office says that raising the minimum wage could cost a loss of 500,000 to 1 million jobs.

Donald TrumpA unique opinion on the issue as a businessman-Nearly 19% of Trump employees earn a minimum wage rate.Was at one time a proponent of raising the wage, as recently as 2007.At the most recent debate, Trump emphatically said he would not raise the minimum wage. He believes that raising the wage would only entice more low earning jobs and deter employers from keeping jobs in the U.S.He has cited his belief that jobs will vacate the U.S., who already has higher costs of labor compared to other competing countries.

Hillary ClintonAlthough vague in her answers in debates, Secretary Clinton will most likely continue the policy of President Obama.Increase to $12/hour-Higher than Obamas current planIncrease subsidies for corporations to keep jobs in the U.S.Clinton has come out in support of Gavin Newsome and his fight for a $15/hour in SanFrancisco.She has cited a study by Paul Krugman, a Sanders supporter, who believes a $15/hour wage would lock workers out of jobs in desperate areas of the country.

Bernie SandersThe biggest proponent by far in Washington D.C.The only candidate who has tried to introduce legislation on the Senate floor about this very issue.Sanders has said he would like to see a wage increase incrementally, and that the $15/hour model is one that is enticing to him.It is a national disgrace that millions of full-time workers are living in poverty and millions more are forced to work two or three jobs just to pay their bills. In the year 2015, a job must lift workers out of poverty, not keep them in it. The current federal minimum wage of $7.25 an hour is a starvation wage and must be raised to a living wage.Traditionally cites the example he used in a Senate Finance committee hearing in 2013. Sanders help up a chart showing the year by year rise in CEO compensation, next to a chart for minimum wage earners.Has come under scrutiny on the issue of late-Sanders Senate Intern Program

Where Do We Go From Here?Very little chance of new legislation being presented prior to Obama leaving office.Very much dependent on Presidential and Congressional 2016 races.States and municipalities will be moving forward with higher wages. New Jersey and Colorado are planning to move forward with legislation with the next Congress.Increasingly younger workforce-Will they vote for higher wages?In the end, its about us, THE PEOPLE!!!

Thank You

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