Raising the minimum wage

Updated: Friday, February 21, 2014
Raising the minimum wage story image
KALAMAZOO, Mich. (NEWSCHANNEL 3) - The White House effort to raise the minimum wage nearly three dollars-an-hour over the next two years has drawn huge criticism from the right.

But our Tom Van Howe, who tonight is back in his corner, says once you get past the rhetoric, a wage hike for some of our poorest people is an idea that’s long overdue.

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Are there problems with this new wage proposal? Sure. There are with any new law.

But getting straight to the heart of the matter: getting by--assuming you’re working full-time--on less than $15,000 a year is no picnic. This proposed wage hike would put a substantial amount of cash--something like $100 a week--in the pockets of more than 16 million workers.

It would move roughly a million people out of poverty.

And guess what those workers will do with that extra money? They’ll spend it. They’ll pump billions of new dollars back in to local markets.

One writer for a national magazine says those billions don’t mean that much in our $17-trillion dollar economy; that it’s hardly worth the effort.

He’s missing the point.

It would mean working people, young and old, would get a 30 percent wage increase. These are working people. These are not people on the dole. We’re not talking about handouts or welfare fraud.

And while twenty grand a year is hardly the American dream, it’s a step toward dignity...Toward a tiny bit of breathing room.

Republicans are citing a Congressional Budget Office report that says a wage increase will cost us a million jobs.

Well, that’s not quite what it said. The CBO report  was vague  and said the hike could cause the loss of somewhere between none and a million jobs. Many economists are leaning toward the White House  view that job loss will be at the low end of the spectrum.

Some job loss is probably inevitable. It’ll push some employers to cut back, others to accelerate automation. But that’ll happen eventually anyway.

And before you absorb all the anti-wage hike rhetoric, take a closer look at the growing disparity between the people we’re talking about here and the incredibly rich.

  • Even at $10.10 an hour, the U.S. minimum wage will be lower after adjustments for inflation that it was in 1975.

  • The 85 richest people on earth have the same amount of wealth as the lower half of the world’s population.

  • Those 85 people are just a handful of the richest one percent who have 65 times the total wealth of the bottom half of the population. Sixty-five times!

  • American corporations have more than $2 trillion tucked away in off-shore and foreign banks to avoid the reach of the IRS. Actually, its probably more than that. We don’t know for sure.

  • In this country, since the start of the recovery four years ago, 95 percent of the gains have gone to the top 1 percent. No trickle down. They got two great tax cuts in the last decade, but nothing trickled down.

  • CEO's are still taking home 300 times the earnings of the average worker.

So can someone please give me a convincing argument that those who struggle most don’t  deserve $2.85 an hour more than they’re getting now?

In this corner...I’m Tom Van Howe.

Business News

Last Update on August 04, 2015 17:10 GMT

FACTORY ORDERS

WASHINGTON (AP) -- Orders to U.S. factories increased in June, driven by a big gain in commercial airplanes. A key category that reflects business investment plans posted a modest rise.

The Commerce Department says factory orders advanced 1.8 percent in the month. The jump reflected a surge in demand for commercial aircraft, an often volatile sector.

A key category that serves as a proxy for business investment plans edged up 0.7 percent after declines in April and June. In the first half of the year, demand in the investment category is down 3.5 percent from the same period a year ago.

Manufacturing has been held back this year by a rising dollar, which dampens demand for exports, and falling oil prices, which have cut into energy industry investment spending.

EARNS-FREDDIC MAC

WASHINGTON (AP) -- Mortgage giant Freddie Mac reports net income of $4.2 billion for the second quarter, up sharply from the same period of 2014, as it increased its purchases of home loans and sold off greater volumes of riskier mortgages.

The April-through-June results posted today marks the government-controlled company's 15th straight profitable quarter. Freddie also benefited from rising interest rates.

The McLean, Virginia, company will pay a dividend of $3.9 billion to the U.S. Treasury next month. Freddie will have paid $96.5 billion in dividends, exceeding its government bailout of $71 billion.

The government rescued Freddie and larger sibling Fannie Mae at the height of the financial crisis in September 2008, after they suffered huge losses from risky mortgages in the housing market bust.

DELTA AIR LINES-TRAFFIC

ATLANTA (AP) -- Delta says traffic is up from last year but a key revenue measure is down, indicating that fares are likely declining from last summer.

The airline says revenue is being hurt by the strong dollar, lower fuel surcharges on international routes, and lower prices in some U.S. markets.

Delta Air Lines Inc. says passenger revenue for every seat flown one mile fell 3 percent last month compared with July 2014. Delta filled a higher percentage of seats than last summer, so it's likely that the drop in the closely watched revenue figure means average fares were lower.

The decline is not a surprise. Analysts have worried that after several years of holding down supply, airlines are adding flights and seats too quickly, causing prices to fall.

TOY RECALL

NEW YORK (AP) -- The Manhattan Group is recalling about 2,800 My Snuggly Ellie activity toys because a wooden ring can break into small pieces, posing a choking hazard.

The company has received one report of the wooden ring breaking. No injuries have been reported. But consumers are advised to immediately take the toy away from young children.

Approximately 2,700 of the toys were sold in the U.S. and 100 were sold in Canada.

The plush brown elephant toy has white crinkle ears. There is a green hanging loop on top of the elephant toy's head so that it can be attached to a stroller or crib. There is a mini mirror on the elephant toy's stomach, while a teether and a wooden ring hangs below its body.

The item number is 212520, which can be found on the small white tag sewn into the bottom of the toy.

ATM FEES-LAWSUIT

WASHINGTON (AP) -- A federal appeals court has revived a lawsuit accusing MasterCard, Visa and three major banks of illegally fixing ATM prices at the expense of consumers.

The federal appeals court in Washington ruled today that a group of consumers and independent ATM operators could pursue antitrust claims against the companies.

A federal district judge had thrown out the lawsuit in 2013 after finding the plaintiffs failed to show any conspiracy to overcharge consumers.

But the appeals court said challengers could argue that the payment processors coordinated with Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co. to adopt anticompetitive fees.

The lawsuit claims the companies impose contract terms preventing independent ATM operators from charging less when consumers use debit cards that can tap cheaper processing networks.

EARNS-KELLOGG

BATTLE CREEK, Mich. (AP) -- Kellogg says its U.S. cereal division saw another decline in quarterly sales but that trends in the category were improving.

The maker of Frosted Flakes, Froot Loops and Kashi is trying to revamp the marketing for its cereals as Americans reach for other breakfast options, like Greek yogurt and fast food. One strategy has been trying to reposition Special K to be more in line with changing health trends.

For the quarter, Kellogg Co. said sales in its flagship U.S. Morning Foods segment fell 2.3 percent when stripping out the impact of currency exchange rates and other one-time factors. Its international division was hit by unfavorable exchange rates.

Profit fell to $223 million, or 63 cents per share.

EARNS-AETNA

UNDATED (AP) -- Aetna's second-quarter earnings jumped 33 percent and the health insurer raised its 2015 forecast again after receiving a boost from a government business it plans to feed with a $35 billion acquisition.

Shares of the Hartford, Connecticut-based company started climbing today before markets opened and after it released results.

Aetna said Thursday that higher underwriting margins or improved profitability helped balance a jump in operating costs. The nation's third-largest health insurer easily topped Wall Street expectations.

For the second quarter, Aetna brought in $731.8 million. That compares with $548.8 million last year. Adjusted results in this year's quarter totaled $2.05 per share.

Health insurance is Aetna's main product, but the company also sells dental, group life and disability coverage. The company announced last month that it would buy rival insurer Humana Inc., the nation's second-largest provider of federally funded Medicare Advantage plans.

EARNS-CVS HEALTH

UNDATED (AP) -- Pricey specialty drugs helped CVS Health cope with tobacco withdrawal to top analyst expectations in the second quarter.

The nation's second-largest drugstore chain says revenue from its biggest business, the pharmacy benefits management segment, jumped 12 percent to more than $24 billion, spurred in part by specialty drugs.

Specialty drugs are complex medications that treat certain forms of cancer, multiple sclerosis and hepatitis C, among other conditions.

Overall, CVS Health earnings climbed 2 percent to $1.27 billion in the second quarter while revenue rose more than 7 percent to $37.17 billion. Adjusted earnings came to $1.22 per share.

SHIRE-ACQUISITION

NEW YORK (AP) -- Irish drugmaker Shire PLC Is offering to buy Baxalta Inc. for about $30 billion in stock in a move to solidify its position in rare disease treatments.

Deerfield, Illinois-based Baxalta was spun off of Baxter International Inc. in July and focuses on bleeding disorders. Dublin-based Shire makes treatments for a range of conditions including attention deficit hyperactivity disorder, epilepsy and hunter syndrome.

In a statement, Shire urged Baxalta to engage in negotiations. It made the offer to the company on July 10 and said the offer implies a value of $45.23 per share, a 36 percent premium for Baxalta.

Shares of Baxalta rose more than 20 percent to $40.10 in premarketing trading. Shire's stock fell nearly 3 percent to $260.92.

GENERAL MOTORS-PLANT INVESTMENT

FLINT, Michigan (AP) -- General Motors says it's investing $877 million to upgrade an assembly plant in Flint.

The company plans to build a new, 883,000-square-foot body shop for Flint Assembly, which makes full-size pickups for the Chevrolet and GMC brands.

The new body shop will be closer to the Flint Metal Center, which supplies sheet metal to the plant. Construction is expected to begin in early 2016 and finish in 2018.

Flint Assembly, which opened in 1947, is GM's oldest plant in North America. GM says the upgrade will reduce the time and cost to ship parts between the two plants.

PAYPAL-UNITED CONTINENTAL-CFO

NEW YORK (AP) -- PayPal says it has hired United Airlines chief financial officer John Rainey for the same position at the payments company.

Rainey has been United's CFO for the past three years.

Last month, PayPal split from eBay Inc. into a separate publicly traded company. Rainey will join the San Jose, California, company on Aug. 24. He will replace Patrick Dupuis, who will stay at the company as a senior vice president.

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