Minimum Wages' Pulls, Pushes

Pennsylvania continues to be one of the few Mid Atlantic states that has failed to increase its minimum wage. Heck, not many people are even talking about it in the commonwealth because it's not the will of the political party in control.

The debate is raging throughout the country, however.

Ever hear of "middle-out economics?" Author Nick Hanauer is pushing this idea in a new book and it's his solution to trickle-down economics, which conservatives love and believe to be the solution to helping the poor and lower middle class help themselves. History has shown trickle down doesn't work.

Hanauer says middle-out economics is based on one premise: "If workers have more money, businesses have more customers. Which makes middle-class consumers, not rich businesspeople like us, the true job creators. Which means a thriving middle class is the source of American prosperity, not a consequence of it. The middle class creates us rich people, not the other way around."

A Forbes.com columnist, Tim Worstall, quickly called Hanauer's idea "near insane" because it points to Henry Ford's idea that paying his workers more per hour would help lift all personal economic boats.

But in criticizing Hanauer, Worstall made a point the author and I have been making during my fight to increase Pennsylvania's minimum wage: "The problem is that that isn't why Ford raised those wages. Rather, he wanted to reduce the turnover of staff and thus to reduce his training and recruitment bill."

Exactly! While not the only argument in favor of increasing the minimum wage, retention is certainly a good one.

The Congressional Budget Office report on the minimum wage - the one every critic likes to borrow snippets from to "back up" his claims - said a higher minimum wage would lower "the additional cost of hiring a new employee, leading to increased employment.

"Because those low-wage workers tend to spend a larger fraction of their earnings, some firms see increased demand for their goods and services, boosting the employment of low-wage workers and higher-wage workers alike. That effect is larger when the economy is weaker, and it is larger in regions of the country where the economy is weaker," the CBO study found.

"Middle-out economics," even if Seattle isn't calling it that, could be the Washington city's policy and the reason why it upped its minimum wage earlier this summer to an historic $15 an hour. But that rising tide possibility has drawn the ire of a prominent constitutional attorney known for siding with the conservative establishment.

Paul Clement, aka the Hobby Lobby attorney, has filed suit against the city, claiming the $15 base rate violates interstate commerce clause.

Fortunately, not everyone wears the Ebenezer costume when it comes to this vital economic issue.

Raymond Burse, Kentucky State University's interim president, recently decided to give back $90,000 of his $349,869 salary so the school could increase the base hourly rates for 24 KSU employees from $7.25 to $10.25.

Earning nearly $350,000 is a lot of money, but so, too, is $260,000. Congrats to President Burse for showing America how it can be done.

And, kudos to former U.S. Labor Secretary Robert Reich for keeping the heat on companies that refuse to even consider an increase in the minimum wage.

Writing on his Facebook page this week, Reich chastised Walmart for ignoring the issue and linked its stubbornness to its recent quarterly earnings performance.

"If you supported an increase in the federal minimum wage, you'd (1) put more money in the pockets of your customers, which would boost your sales, (2) force your smaller competitors to pay their employees more, which will be a bigger drain on them than on you, relative to sales, and (3) buy you some good PR to boot. This would be good for your bottom line. It would also be good for the country," Reich said in his memo to Walmart.

Urgent Need for Better-Skilled Workers

It's too bad the 2014-'15 Corbett budget slashed the Department of Labor & Industry's Keystone Works budget by 90 percent to balance his $29.1 billion spending plan.

A new survey of private businesses that said they plan to hire over the next year or two said they fear they will not be able to find enough properly skilled candidates to fill those positions.

"Finding the right people with the right skills - at the right place and cost - will require more than hanging up a "help wanted" sign. When we asked geographically expanding Trendsetter businesses why they're heading into new US markets, they said that tapping a better skills base was their top reason," reads PWC's Trendsetter Barometer Business Outlook.

If we cannot properly train - or retrain - some of Pennsylvania's very capable workers, companies will move to find deeper talent pools, as this survey suggests.

The good news in this is more than half of employers are planning to hire.

"Hiring does remain a priority for 56% of the private companies surveyed. 84% intend to prioritize "workforce investment," which spans anything from training programs to talent retention benefits, over the next two years," reads the analysis of Forbes.com's Naomi Shavin.

Senate Democrats have a detailed plan to help get people re-trained and back to work. If you need a refresher, click here. In addition, I have re-introduced Senate Bill 233 --  a plan to build upon the successful Georgia Works model, which has helped reduce unemployment and enabled unemployed individuals to quickly return to the workforce.

Made in America

Do the summertime blues have you down? Then it's time to use those last few vacation days, and head to your favorite lake or beach spot.

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For more than 30 years, Lifetimer Boats has been providing products relied on by seasoned and new boaters, alike. The company was created to meet the consumer demand for high-quality boats that would stand up to the wear and tear of water sports and recreational activities that throngs of boating enthusiasts engage in each day.

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To meet your boating needs this summer and in the many summers that lie ahead, try durable, affordable, union-made Lifetimer Boats.