UFCW International President Advocates Raising Minimum Wage

Joe Hansen UFCW International President Advocates Raising Minimum WageUnited Food and Commercial Workers (UFCW) President Joe Hansen wants to increase minimum wages to $10.10 and index it to inflation- a bad move for workers.

As times have gotten harder across the country, people are having to find ways to do more with less. As people in all industries work longer and harder shifts to make ends meet, it’s often tempting to think how great it would be if only the federal government were to step in and help out. Never worry- the United Food and Commercial Workers International President is supporting a plan to help:

Joe Hansen, International President of the UFCW, today released the following statement in support of a bill… that would raise the federal minimum wage to $10.10 an hour and index it to inflation. “CEO pay has risen 725 percent over the last 30 years yet workers making the minimum wage are still living in poverty. This is a national disgrace. Raising the minimum wage and adjusting it to inflation is an important step in helping millions of American workers make ends meet.”

Now all of this sounds like a good idea, right? More money in your pocket, better economy, right? Except that historically, this is not the case. In fact, at this point, raising the minimum wage might be the worst thing UFCW could propose for our economy. Americans for Limited Government Communications Director writes about what happened after the first minimum wage increase in 2007:

The first bump in pay did not cause much damage since it occurred rapidly and the economy was operating at pretty close to full employment. But the second installment of the increase, which went into effect in the summer of 2008, was devastating.

The economy was beginning to slow in the spring of 2008, and thousands of employers independently decided that they could not afford to hire as many summer workers at higher costs. The result: the unemployment rate jumped from 4.9 percent to 5.4 percent in May 2008.

Bring that to today, and we’re currently looking at an unemployment rate of 7.7%. Our economy is still not in the best condition, and is barely making any progress in decreasing unemployment. Now is the worst time for the UFCW to promote a policy which could cause unemployment to skyrocket.

Tying the minimum wage to inflation also leaves the question of what happens when inflation drops while unemployment is still high. Inflation costs don’t always include the price of basic necessities. What the UFCW is supporting is short-sighted, and could leave workers with higher bills and less pay.

Ultimately, an increase of the minimum wage hurts employees far more than it could help, as unemployment will necessarily skyrocket. Sure, if you can get a job, you’ll be paid well- in a situation that is quite reminiscent of a quote from the Great Depression; “the Depression was not so bad if you had a job.” In a world with an unsustainable minimum wage, that quote may become real again. The UFCW should know better than to sacrifice worker job security for temporary pay increase.

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