Opponents, supporters to debate minimum wage hike in Elkhart

Would an increase of the present rate of $7.25 an hour help or hurt the economy?

Posted on Feb. 20, 2014 at 5:06 p.m.

ELKHART — The heated debate over whether to raise the minimum wage, expected in Congress next month, will ignite at Indiana University Elkhart on Monday night.

"Should We Raise the Minimum Wage? Diverse Perspectives" will feature panelists Kyle Hannon, president/CEO of the Greater Elkhart Chamber of Commerce; Tony Flora, president of North Central Indiana AFL-CIO; and Jim Rogers, Leighton School of Business & Economics at Indiana University South Bend. The forum will run from 7:30 to 9 p.m. Monday, Feb. 24, in Room A220. The event is free and open to the public.

President Obama made income inequality the focus of his Jan. 28 State of the Union address, and Republican Congresswoman Cathy McMorris Rodgers echoed his theme in the official Republican response. Sen. Tom Harkin, D-Iowa, has authored a minimum wage bill the Senate plans to debate in March.

The nonpartisan Congressional Budget Office this week released a report concluding that a gradual increase to $10.10 hourly by 2016, which is what Obama and congressional Democrats are seeking, could have both positive and negative effects on the economy. It would increase pay for more than 16.5 million people and lift 900,000 people over the federal poverty threshold. But it could also reduce jobs, anywhere from no job impact to 1 million jobs, the CBO found.

Hannon said he's been talking with employers, trying to see if anyone other than restaurants and retail is paying minimum wage, now set at $7.25 an hour. He thinks it would be mainly "high-school kids and other part-timers" who would find fewer job opportunities if the minimum wage is raised.

"Companies in this area are paying way above minimum wage," he said. "So is this a crisis issue or is it a manufactured crisis? Increase the minimum wage and you will see the job opportunities for high school kids and other part-timers vanish. Raising the minimum wage does not increase wealth in the community. But it removes wealth from the very people it is trying to help."

But Flora says hiking the minimum wage has the opposite effect, actually growing jobs because low-income workers have more income to spend.

"The discussion around the federal minimum wage really needs to focus on this one point: nobody can survive on wages of $7.25 per hour," Flora said. "That is a life of poverty and no one who works should work just to be impoverished. It is not a question of whether or not the minimum wage should be raised, it's a question of when to do it and how to do it."

Rogers, the IUSB professor, will argue against a federal minimum wage increase, instead suggesting that a more comprehensive set of three changes are needed to reduce income inequality.

"The minimum wage should not be political and is too complexly intertwined with other federal policies to be considered as a stand-alone issue," Rogers said.

Rogers will argue that the earned income tax credit should be paid in monthly increments like income to actually aid in meeting expenses rather than annually via income tax returns.

He thinks the minimum wage should be regional or even state-by-state, since local elected officials and business owners have a clearer, closer picture of area economic activity and entry-level income markets.

Finally, Rogers thinks the minimum wage could also be bifurcated to reflect two types of earners: adult, non-student, pirmary and secondary earners' hourly pay by region or state, and then student earners and below. This would lower the costs of hiring unskilled young people in high-unemployment areas, he said.











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