Coming up on "Need to Know", what matters more to workers than
the money they earn.-
And for some 42,000 people in Rochester they earn the minimum
wage.-
We are going to debate the minimum wage and have the business
section with the Democrat and chronicle.-
Stick around for need to know.-
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>> I would like to see the minimum wage increase across the
board.-
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[Captioning Made Possible by the U.S. Department of Education]-
(For "Need to Know")-
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>> Thanks for joining us.-
I'm Michael Caputo.-
How would you fare making $206 a week?-
That would be your gross pay if you made minimum wage in New
York state.-
Supporters ofen increase say that nearly 700,000 New Yorkers
are paid at that level and that is too many.-
Those opposing a hike say 85% of those who earn it are people
who either their parents or are the second earner in a family
or are single with no children.-
In other words they are not dependent on it as a primary source
of income.-
The New York rate of $5.15 an hour is in line with the national
rate and as usual there is a push to increase it in the halls
of the New York state legislature but senate Republicans are
waiting for the national to take a step.-
But 12 other states and the district of Columbia have higher
rates.-
A debate for low income workers and those representing small
business continues to rage in New York.-
Let's start our discussion on the pros and cons by first
hearing the voices of employees who make this wage and the
people who have to pay them.-
Take a look.-
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>> They work in some of your favorite stores.-
They wash dishes in some of your favorite restaurants.-
They are minimum wage workers, those who make $5.15 an hour, a
wage that means even with a full-time job they earn below the
mat poverty line.-
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>> I have seen too many workers struggle to make ends meet
working two jobs, 50 or 60 hours a week of what I consider hard
work.-
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>> It has been four years since New York state raise the rate.-
Joe Spencer is the owner of Hogan's hideaway and he supports
proposed legislation to race the state's minimum wage from
$5.is 15 to $7.10.-
Food service workers would see their wage of $3.30 increase to
$4.65.-
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>> I would like to see it increase across the board.-
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>> The proposed across the board raise would be phased in over
two years, the first to $6 an hour effective October 1, 2004.-
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>> It is is what I call a no brainer.-
I think if you can pay people better, they have more
self-esteem, maybe time to go to school and instead of working
60 hours a week.-
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>> While he often works many of those long hours with his
employees, he is on the opposite side of many business owners
who oppose increase being the minimum wage.-
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>> I haven't heard negative from other business owners, but I'm
sure it is out there.-
The restaurant association is against raising the minimum wage
feel -
>> But Spencer edge did hear from another business owner who is
a customer.-
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>> Alexander and his son own a recycling business in the
Syracuse area.-
Like many businesses against the increase he says the increase
not only hurts businesses but workers.-
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>> My son and I are in the planning stages of opening another
operation in Casanova.-
But the point is that we can't make it and won't be hiring
three or more people but if we can't get some relief, it is
probably going to make sure that those three or four people
won't get hired.-
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>> Opponents of the minimum wage increase say the increased
wages could mean increased costs to customers.-
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>> An unfortunate part is paying more will not make it that
much better because as soon as it increases like in the early
1980'S, prices will increase just like Mr. hogan said he would
increase his prices.-
They will increase every place else so you are back where you
started.-
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>> But Carla Helena us agrees.-
She says the increase could mean a great deal to minimum wage
workers and their families.-
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>> That could be a whole week of groceries.-
It depends on how you budget yourself, but that is a lot of
money.-
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>> Helena says the wage increase is about more than money.-
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>> It gives you hope, a sense of the future, a better quality
of life.-
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>> The mother of one believes businesses could benefit as
well.-
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>> An employer would benefit from raising the wage a little bit
out of just getting more out of their employees and if
everybody did it, nobody would really have to compete with
losing any money.-
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>> In the studio to continue this discussion are two people who
have their eye on public policy in New York, frank Mauro the
executive director of the fiscal policy institute a nonprofit
think tank in Albany.-
They support a minimum wage increase.-
And Kent Gardner is also here.-
The argument, I think, seems to biology down to what it means
to the worker.-
Either it means better conditions or it means decreased job
opportunities.-
So let's start there, Mr. Mauro.-
What does it mean?-
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>> I think historically economists said it would reduce
employment but we have had enough experience now to know that
when we have had minimum wage increases we haven't seen that.-
In effect what is going on over time since the last minimum
wage increase all the other costs of doing business go up and
the prices go up and it just seems strange that this one
segment of cost should be frozen.-
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>> Kent, what does it mean to the worker?-
Does it mean it reduces their opportunity?-
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>> If you are comparing input, labor costs have gone up but for
the same reason that the cost of electricity and cost of fuel
and all sorts of other things have gone up because they are
increasingly scarce.-
A lot of fast food -- many, many fast food restaurants pay more
than the minimum wage.-
Getting back to the question, it is is not that it wouldn't be
good for many workers for the minimum wage to go up.-
But the question, I think, does come down to what happens, who
wins and who loses.-
And it is a complicated question.-
Economists have, in study after I had to after study after
study have included that an increase in minimum wage does have
some modest impact on total employment opportunities.-
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>> I don't think the current and latest research -- -
>> Card and Kruger.-
There are four studies subsequent to 1994.-
Is -
>> Let's talk about our most recent report on the 12 states
with above minimum wage.-
What we did was to look at both total employment and employment
in small business sectors using county business patterns using
employment in firms with less than 50 employees.-
And what we found is during the period from 1998 to 2001 the 11
states, there are 12 now but the 11 that were most of that
period had higher minimum wages than the federal government,
employment grew faster in those states than the other 38
states.-
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>> But the mentality in business this general across the board
is do more with less.-
You tell somebody they will have to increase the minimum wage,
doesn't it stand to reason they will cut one employee and make
somebody part-time?-
They will do more with less?-
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>> Well, it depends on whether or not there are other factors
going on.-
It isn't just, you know, the salaries that workers get.-
It is the overall profit margin and it is the cost to
consumers.-
So it isn't just one thing that changes.-
It is dynamic that, of economic factors.-
Around the salaries generally have been going up, so the cost
of living goes up and the amount that other people earn goes
up.-
So here you have workers who are being paid the minimum wage.-
They are lessable -- the biggest argument that the defenders of
not increasing the minimum wage make is, well, people can get
the earned income tax credit in food stamps.-
I would rather see a situation where somebody has the pride of
earning a decent living.-
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>> So, would I and so would most people.-
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>> In the late 1960'S a mother with two children earning
minimum wage was not in poverty.-
Today a mother with two children earning the minimum wage
working full-time is about 20% to 30% below poverty.-
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>> Layers no disagreement that an increase in minimum wage is,
if it didn't displace unemployment would not an good thing.-
I'm not arguing that people should be paid less than they need
to survive.-
I'm not arguing that people should be paid less that we
shouldn't try to reduce poverty.-
All we are saying is that the vast majority of economists have
argued and study after study after study has shown that there
is a modest reduction this the number of people at the low ends
of the skill level in terms of the job opportunities that they
face.-
You are looking at 12 states and we've got -- we have 12 units
against 38.-
Statistically that is a very weak argument.-
And so statistically -- -
>> Your argument doesn't about prove the other side.-
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>> But there are many studies.-
You are up against hundreds of studies.-
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>> You know what?-
The change in employment is so small and society weighs that
and in terms of the total well-being of all of the workers, and
to keep a significant segment of the workforce at this level is
just amazing.-
And -- -
>> Let me interrupt you but you brought up the cost of living.-
The cost of living goes up.-
Shouldn't it at least keep up with the cost of living?-
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>> Again the question is what are the implement packets of the
policy.-
The unintended consequence of well intentioned policy is
something we often don't pay a lot of attention to.-
Let me also say on the record I think a modest increase in the
minimum wage is not a problem for the economy, it is not going
to drive up employment -- unemployment -- dramatically.-
And there will be some people it will help.-
But many economists have come to the conclusion that you have
two sets of workers that are affected by minimum wage.-
You have people whose productivity is very low.-
Most of the studies have focused on teen workers because
statistically it easier to look at workers that you can segment
in terms of employment statistics and they argue that
employment among teen workers particularly minority teen
workers, unemployment tends to rise with the minimum wage
increase.-
So you are looking at most of the people who receive it
generally are unskilled.-
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>> Doesn't it increase the competition?-
If you raise the minimum wage, doesn't it increase the
competition among highly skilled young people, teens who may be
just looking at this job as a kind of lark, increase the
competition against someone who is an adult who may need the
job?-
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>> It is kind of like a preposterous argument.-
I think that kids work because they need money for college.-
One argument I think is fairly amazing is we shouldn't increase
the minimum wage because a lot of people that get paid the
minimum wage are teenagers.-
In New York state from the current population survey the people
who earn between $5.15 and $7 an hour about 5% are teenagers,
74% are 20 or older.-
50% in the minimum wage group are working full-time or more.-
Has college tuition gone up?-
Working at the minimum wage 20 years ago you could cover a lot
more of your college costs than today.-
I don't think that is a legitimate argument.-
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>> I would like to go back to the thing of changes over time.-
Everyone seems to agree that small changes in the minimum wage
don't create a problem.-
What creates the problem is we let the minimum wage erode, then
to restore the purchasing power we have to have a more
substantial increase.-
So you can think of it this way.-
Every year you don't nominally increase the minimum wage you
are reducing it really, because the purchasing power goes
down.-
So you are allowing the minimum wage to go down every year you
don't increase it.-
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>> And it has been four years since we increased it in New
York.-
Longer.-
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>> The real minimum wage was last increased in 1997.-
You are porting to an embarrassing -- -
>> We are lower that were the national rate.-
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>> For the first time this history of the minimum wage for any
prolonged period of time New York state, from 1997 to 2000
allowed its minimum wage to be lower than the federal.-
Under governor Rockefeller there were two periods, one about
four years when our minimum wage was high are than the federal
wage.-
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>> The state legislature brought this up and assembly passed it
and the senate has not and the senate majority leader has said
let's wait to see what congress does with the national minimum
wage rate.-
I want to ask you first, Kent, should this be a state or
federal issue?-
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>> If you can see from the way most states handle it, most
states do not have one that is different from the federal.-
The way the rules work if you have one lower than the federal
wage you are not doing anything and the state minimum wage
doesn't apply of the federal applies.-
So most states just let the federal government thrash this
issue out.-
Certainly economies of states are often deeply endefined in
economies of surrounding states.-
Whether it makes sense for a state to have its own economic
policy is questionable.-
Seriously, I think a modest increase in the minimum wage
nationally or at the state level is not going to have a
negative impact and it will help some people.-
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>> I think what you are saying is we have to catch up.-
We have not done modest increases over years.-
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>> We are at the federal level.-
So if we are talking about federal, state versus federal, we
should just focus on the federal level and the discussion isn't
really any different.-
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>> What do you think, state or federal?-
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>> Well, there are people who are covered by -- most are
covered by the federal minimum wage but there are several
hundred thousand workers in New York state not covered by the
federal minimum wage and there are people covered by neither
the federal nor the state.-
So when New York state raised its rate from $4.75 to $5.15 it
got an additional $r,000 to 300,000 workers into the minimum
wage.-
Farm workers and others.-
So the law is complicated as to who is covered by which.-
But the question is should New York state have a higher minimum
wage than the federal and why.-
We argue that there should be a relationship between the floor
and average wage in the cost of living and New York and New
Jersey are the only two states with high average wages that
don't have a minimum wage above the federal minimum wage.-
The 12 states that have higher minimum wages are overwhelmingly
high wage states.-
And the result is that all of the higher than average wage
states except New York and New Jersey have minimum wages above
fodse.-
Connecticut is $7.10.-
What are the occupations that are affected by the minimum wage
primarily?-
Primarily service jobs.-
So in sort of rank order we use the data from the U.S.
Department of Labor's wage surveys and it is things like man do
you rememberists, waiters, waitresses, bartenders, dish
washers, barbers, cashiers, service station attendants.-
I don't think you are going to tell me that in, on the
Connecticut side of the border we don't have fast food
restaurants and we don't have man curists.-
Of course we have them.-
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>> I want to make a point that a number of states, Connecticut,
Vermont, Massachusetts, are all higher than our $5.15 rate.-
What is the impact of having border states that pay a higher
minimum wage?-
Is there any impact?-
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>> Again, the argument most economists make is there is a --
what happens with the higher wage is you continued to resort
the income between those that receive if and those that
actually lose job opportunities.-
So it tends to be a local redistribution of income between
people of generally lower wage.-
And given that the differences are not dramatic it would be
hard to perceive a difference between the two.-
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>> I can conceive that in sa different demand for them of it
just that the once in kmp get paid a hill more so maybe the
profit margins are a little less but the economy reach a
equilibrium.-
We know in New York state that the 25 percent cents tile wage
for manicurists is $6.5.-
That means 25% of them in New York state earn less and I would
be willing to wager that none of them work ining New York.-
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>> I have a few minutes left and I want to get at this topic.-
Who actually benefits from a hike.-
Kent, isn't it true that those without an advocate, without a
union, outa voice are the ones that the government needs to
thereby to lift their wage because 19else will do it for them?-
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>> The argument -- that presumes that the problem is that we
have capitalists who pay them too little.-
There is an argument to be made that it is largely small
businesses that are just squeaking by that are largely paying
the minimum wage and, yes, in fact.-
It would be possible for them to be, in some cases when you are
going to sort them into categories, some can afford to pay
higher minimum wage and some can't.-
And some will hire fewer week, and use more family workers.-
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>> But by keeping the minimum wage low you are competing a
competitive environment where as we see even in the intro the
restaurant owner understands that it would be better he is
caught in the bind where if the floor was high are for everyone
society would be better off and that small business wouldn't
have to worry about competitive pressures from another business
that will pay less.-
So raising the floor in service industries makes up for the
lack of unionization.-
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>> There's another argument that some economists make and I
think it just important to put it on the table and that is that
one of the reasons why you have a lot of support for an
increase in the minimum wage among unions is despite the fact
that very few unionized workers are earning minimum wage is
because the argument that it ratchets up the entire wage system
and that an increase in the minimum wage will increase the
ability for a unions to argue for higher wages.-
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>> Which is a big impact on businesses across the board.-
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>> Well, I don't think that is true.-
I think that what all of the research we have looked at shows
is that the increase in the minimum wage has an impact on the
lower scale, maybe going up a dollar or so, but I would be --
there are -- a small business organization in New York state
that makes this argument that unions support an increase in the
minimum wage because somehow union contracts are tied that, I
don't think -- -
>> There's a relationship.-
And in a full disclosure, frank, I think ults acknowledge that
fiscal policy institute is heavily union supported
financially.-
So, -- -
>> We are getting a lot of the original seed money from unions
but unfortunately today a declining share of our budget comes
from unions.-
But they helped us get off the ground and I think they do -- -
>> I'm going to have to wrap this up.-
I really appreciate this good conversation.-
This is an issue that I don't think will go away until June at
least when congress does something.-
This conversation should continue and you can be part of this
discussion.-
Email us at NEEDTOKNOW@WXXI.org or you can call our response
line any time.-
The number is 258-0250.-
Let's open up the business section with the Democrat and
chronicle.-
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>> Joining us is Ellen Rosen the business editor for the
Democrat Dell.-
Thanks for being here.-
Unemployment remains above 6% in the Rochester region.-
Tell us what these numbers are telling us.-
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>> Unemployment for a second month in a row was at 6.5, the
highest for March since 1986.-
We didn't get the typical dips that we get with the
construction season starting.-
We usually get -- things got off to a slow start T. an
interesting number because of the way they get the rate.-
There are more people working, about 700 more working, the
economy and jobs but when you factor it in it is a rate to so
there are more people working and fewer people looking for work
but the rates different.-
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>> I wonder what that means.-
It makes it sound like we may be growing but I don't want to
making that leap.-
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>> I don't think it is anything like that.-
It certainly things are looking better than in other places.-
We are below the level for the state.-
Our unemployment rate is lower than Buffalo and Buffalo
continues to lose jobs as we are gaining but not as many as we
need to have the growth.-
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>> And manufacturing in terms of what is going on in the labor
market, that is what is behind it?-
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>> Actually, the local economist of the state Labor Department
laid a lot of it at the feet of the Kodak layoff which we are
only going to continue more of.-
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>> First quarter numbers for the big three are out and we
should talk about Kodak first.-
It was a strong quarter.-
Tell us how good and how much of it was this digital movement
by Kodak.-
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>> It was very strong for them.-
They were up, profit was up 150% from where it was a year ago.-
It really was a lot of it digital.-
Digital grew faster and more strongly than they expected.-
Film didn't decline as much as the industry thought it would.-
So the two of them offset each other nicely.-
It was a strong quarter for them and gave the company, so
showed confidence in the strategy that they laid out that it
has a chance for working.-
They were aiming those comments at that that said Kodak
couldn't turn itself around as digital and they say this is
what we can do.-
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>> The naysayers, are they completely turned around, the local
business community?-
Do they say Kodak is on the way to go?-
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>> One quarter won't do that.-
There's lots of things that go into this currency factors,
Kodak got a bump for some currency factors.-
You need a much more consecutive plan of growth for Wall Street
to say you have got this down.-
It took Xerox a your for Wall Street to get confidence.-
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>> Let's talk about Bausch and Lomb.-
First quarter you would have to say is positive.-
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>> Positive news for Bausch and Lomb.-
Strong sales.-
Again they were favored by a currency bump.-
A lot of things that happened for them.-
But no, they had another strong quarter.-
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>> Skeerks?-
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>> They just property reported a strong quarter.-
And they do really seem to have a consistent turnaround.-
They are building.-
Some are questioning some of whether the company can continue
to do this because sales are not growing that fast.-
And it is a very competitive market that Xerox is in so with
sales just in single digital hit-and-runs can they sustain it.-
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>> If the companies are looking strong maybe what we hope for
down the line is maybe the job situation will start turning
around but I would have to think a lot of what they are doing,
restructuring, streamlining, that is helping.-
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>> That is helping if you look at the numbers you do see
decreased costs and increeksed profits that.-
Is what if is is coming to.-
Increased revenue and decreased costs.-
But if you ask the C.E.O.'s you won't see a lot of new jobs.-
What Kodak does in the future requires fewer people than to
make film.-
Digital doesn't require the amount of manpower.-
Ann Mulcahy said Xerox is taking seriously when they hire
someone, they want to hire for life so they are being careful
before they and anybody and they are not expecting to and
substantial numbers.-
Their employment dropped in the quarter.-
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>> New York's energy crisis, they are always cited by
businesses as a millstone around their neck.-
You had the P.F.C. chairman talk to us.-
What did he say?-
-
>> He said they have come down.-
If you look at a 10-year period to 2001 they have dropped.-
We are almost 50% higher than national.-
What he thinks we need to see is some relief for retention
customers.-
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>> Tell us what you are highlighting Sunday.-
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>> Speaking of the employment market and jobs we have a special
section that looks at the employment market, one of the best
years for college grads and things are looking up.-
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>> How many schools do we have?-
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>> We have a lot of schools.-
A lot of these kids will be taking jobs out of the area because
our economy is not as strong as other areas but they will
question jobs.-
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>> I'm sure we will address how to keep them.-
Thanks for being with us.-
Add your comments to anything.-
You can email us at NEEDTOKNOW@WXXI.org or call us at
258-0250.-
Next week we have the race to replace Emo Houghton, the
mounting budget loads for mayor Johnson and county executive
brooks.-
It sounds like it is time for a political roundtable.-
We will see you then.-