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 October 24, 2014 17:58 GMT

NEW HOME SALES

WASHINGTON (AP) -- U.S. sales of new homes were essentially flat in September, after the government sharply revised downward what was initially an August surge in buying.

The Commerce Department says new-home sales edged up 0.2 percent last month to a seasonally adjusted annual rate of 467,000. The report also revised down the August sales rate to 466,000 from 504,000.

The pace of sales for newly built homes has improved a mere 1.7 percent so far this year compared to 2013. Only the South has experienced gains in buying year-to-date.

Housing has struggled to fully rebound since the recession ended more than five years ago. Many potential buyers lack the savings and strong credit history needed to afford a home, causing them to rent or remain in their existing houses instead of upgrading.

EARNS-FORD

DEARBORN, Mich. (AP) -- Ford's net income dropped 34 percent to $835 million in the third quarter, dragged down by the cost of launching its new F-150 pickup.

The company closed its Dearborn truck plant for five weeks during the quarter and cut back on truck sales in order to preserve inventories while it readies the new aluminum-sided truck. That hurt pretax profits in North America, which fell 39 percent to $1.4 billion.

Ford earned 21 cents per share, down from 31 cents in the July-September period a year ago. Without one-time items, including separation costs in Europe, Ford earned 24 cents. That beat Wall Street's expectation of 19 cents, according to analysts polled by FactSet.

Revenue fell 2.5 percent to $34.9 billion, better than the forecast of $33.7 billion.

UPS-HOLIDAYS

ATLANTA (AP) -- UPS is expecting an 11 percent jump in December shipments as the holiday shopping season heats up.

UPS recently announced that it would hire up to 95,000 people to handle the tremendous volume. That's up from last year when the Atlanta company initially planned to hire 55,000 seasonal workers. Major U.S. shipping companies were overwhelmed by a shift in American shopping habits, namely the success of Amazon.com. with its free shipping, and UPS was forced to hire an additional 30,000 people.

United Parcel Service Inc. also maintained its guidance Friday for 2014 adjusted earnings between $4.90 and $5 per share. Analysts polled by FactSet predict $4.95 per share.

PROCTER & GAMBLE-DURACELL

Procter & Gamble removes the batteries

CINCINNATI (AP) -- Procter & Gamble is removing the batteries and making Duracell a stand-alone company.

P&G, which acquired Duracell in 2005, announced earlier this year that it would shed more than half its brands around the globe over the next year or two.

If a split off occurs, P&G said that its shareholders would have the option of exchanging some, none or all of their P&G shares for shares of the newly formed Duracell company.

The Procter & Gamble Co., based in Cincinnati, said Friday that it is also considering a spinoff, sale or other options for Duracell.

CHIQUITA-FYFFES

CHARLOTTE, N.C. (AP) -- Chiquita shareholders have rejected plans to merge with Irish fruit importer Fyffes that would have made the world's largest banana supplier.

Chiquita Brands International Inc. said Friday that the shareholders didn't approve a revised transaction agreement between the two companies during a special shareholders meeting.

Chiquita said it now expects to enter talks with investment firm Safra Group and juice company Cutrale Group on their competing offer of $14.50 per share. Chiquita previously rejected buyout bids from the two Brazilian companies.

CHILD SEAT RECALL

DETROIT (AP) -- Evenflo is recalling more than 202,000 rear-facing infant seats because the buckles can become difficult to unlatch.

The recall affects Embrace 35/9999 models with an AmSafe QT1 buckle. Documents posted by U.S. safety regulators say that if the buckles don't release easily, it may be difficult to get a child out of the seat in an emergency.

The affected seats were made at various times from December 2011 through May of 2013.

Not all Embrace 35 models are covered by the recall. For others, the company will provide replacement buckles if requested by customers.

The recall comes after an investigation by the National Highway Traffic Safety Administration.

Owners with questions can call Evenflo at (800) 490-7591.

HALAL FOODS-INVESTIGATION

IOWA CITY, Iowa (AP) -- The founder of a popular brand of food for observant Muslims has been indicted on charges that he shipped beef to Malaysia and Indonesia that didn't meet those countries' import requirements.

A federal grand jury returned the indictment Thursday against Bill Aossey Jr., who founded the Midamar Corp. in 1974. The Cedar Rapids company grew into the leading U.S. halal brand, selling more than 200 products in the U.S. and abroad.

A 19-count indictment charges Aossey with directing employees to change labels and fabricate documents to make beef products appear that they originated from a slaughterhouse that met Malaysia and Indonesia's strict requirements. Halal meat is supposed to be killed in ritual slaughter.

Aossey's attorney called the indictment unfair Friday, saying the allegations were "a minor regulatory violation" at most.

NBC INTERNS-SETTLEMENT

NEW YORK (AP) -- NBCUniversal will pay $6.4 million to settle a class action lawsuit brought by unpaid interns who worked on "Saturday Night Live" and other shows who claim they are owed wages, according to court documents.

The interns claim NBCUniversal wrongly classified them as non-employees in an effort to avoid labor laws. NBCUniversal said in court documents that even though it is settling the suit, it denies the allegations and doesn't admit any wrongdoing.

The average amount that class-action members of the suit will receive is $505, although the main plaintiffs will receive more. The number of class members is capped at 8,975.

The interns had been seeking recovery of unpaid wages, attorneys' fees, interest and liquidated damages. The settlement still has to be approved by a judge. The lawsuit was filed in federal court in New York.

NBCUniversal is owned by Philadelphia-based cable provider Comcast Corp.

CYPRUS-ECONOMY

S&P upgrades Cyprus on commitment to bailout deal

NICOSIA, Cyprus (AP) -- Rating agency Standard & Poor's has given Cyprus a one-notch upgrade to its credit grade, raising it to B+.

The agency cited the country's commitment to the terms of its bailout program and better-than-expected economic growth. It also said the outlook for Cyprus is stable, with good economic progress offset by lingering challenges to its banking system, which is still burdened with a huge amount of bad loans.

BRITAIN-ECONOMY

LONDON (AP) -- Official figures show Britain's economic recovery is continuing, despite a gloomy global environment.

The Office for National Statistics said gross domestic product grew 0.7 percent in the three months through September compared with the previous three months. That is down slightly from a 0.9 percent quarterly rate in the April-June period but remains among the strongest growth rates among developed economies.

Compared with a year earlier, the economy was 3.0 percent larger.

Treasury Chief George Osborne says the figures show Britain "continues to lead the pack in an increasingly uncertain global economy."

Samuel Tombs, the senior U.K. economist for Capital Economics, says growth in Europe's third largest economy has become broader-based, though recent falls in stock markets, manufacturing surveys and eurozone growth have intensified concerns over the recovery.

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