Many economists and analysts struggle with the politics associated with increasing the minimum wage. The increase to $8 in January 2008 for California is due to be signed this week by Gov. Schwarzenegger, but most Democrats are quick to remind voters that he vetoed the past two proposed increases.

There are a couple of differences between this proposal that passed and the previous proposals. A missing element in the current increase is an indexed wage increase, which is essentially a cost-of-living adjustment added annually. That would, according to some, take the politics out of increasing the wage floor.

One of those advocating for stripping the wage increases of political tinges is Paul Karr at the San Diego-based Center on Policy Initiatives, which focuses on the working poor and labor-related issues. I talked to him about the wage increase last week and included this position on the politics of it all:

Karr posited that the concept of a minimum wage increase is inherently political. Often, he said, the debate results less often in workable solutions and more often in a wage increase that is just a sign of “goodwill and kindness toward the people” from government officials.

Karr favored the vetoed indexed proposals that would have meant increases each year, adjusted to the cost of living in California. In addition to taking politics out of the equation, by making the wages somewhat self-regulated, it would allow businesses to plan long-term for their augmented costs, instead of being “blindsided” by increases every few years, Karr said.

And national policy makers are getting caught in the political web of the minimum wage, too. The Wall Street Journal reported this weekend that disagreements between Republicans and Democrats – and between Republicans themselves – may lead to an increase in the national minimum wage, which currently stands at $5.15.

It’s a mid-term election issue for Republicans – many don’t want to face voters in November without having tried to raise the wage floor. But other GOP members say there would have to be substantial considerations made for their business community constituents.

Here’s WSJ reporter Sarah Lueck’s summary of the potent politics:

While few voters earn the minimum wage, the fact that Congress hasn’t raised it in nine years has become a tool for Democrats as they try to tap into the public’s economic insecurity and cast Republican incumbents as part of a “do-nothing” regime that is out of touch with constituents.

It seems the GOP members aren’t the only ones jostling for position as they anticipate November’s elections. Here’s more from the WSJ:

But rhetoric aside, Democrats may actually be angling against passage, calculating that failure to pass the measure could do more to help them in the elections.

A news poll conducted by the WSJ and NBC News of 1,010 adults in July revealed that 59 percent “strongly favor” raising the minimum wage from $5.15 an hour to $7.25 an hour. Seventeen percent “somewhat favor” that proposition, 10 percent “somewhat oppose” and 10 percent “strongly oppose” it. Four percent were undecided.


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