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tv   Inside Story  Al Jazeera  December 7, 2013 5:00pm-5:31pm EST

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>> you are watching al jazeera america live from new york. i'm jonathan betz with the headlines. the north american war veteran detained by north korea is home. merrill newman arrived at noon and re united with his wife and son. he was released after six weeks of being detained. >> inspectors from the international atomic agency is in iran. hassan rouhani defended iran's deal with western nations to freeze the nuclear program in exchange for reduced economic sanctions. u.s. secretary of state chuck
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hagel's trip to afghanistan was successful. a deal will be signed to keep american soldiers in afghanistan beyond 2014. >> a prison sentence for 21 women and girls has been reyoued doofed. the group was convicted for participating in a violent protest, demanding the reinstatement of mohamed morsi. those are the headlines. you can find us online at
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employment and people not getting--leaving and having to be retrained. >> so i am dead serious when i say this is--the effects of minimum wage increases the employment. a part of it because the data is there. labor economists are excited because you have states raising minimum wage at different times at different levels so you can dig in and find out what the effects were.
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what we know the increases in the minimum wage that we have seen have not caused job loss. that's the evidence we have. so applyin applying that evideno what d.c. just did, our best guess is that her increased pay is not going to come at the expense of laid off colleagues. >> mark wilson, $8.25 to $11.50 is more than 30%. how would you answer that question? where is that money going to come from? >> as your opening clip pointed out it's not free. someone will have to pay for it. the restaurant owner in d.c. suggested it would be a $1 more increase in price for hamburgers. consumers will pay for it. fewer hours perhaps, employers will be careful about watching employee hours. and if the business is slow they're likely to let them go an hour or two early.
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applesbee's announced they're going to deploy 100,000 ipads and tablets so their customers could order their food and pay their bills. why are they doing that? they probably won't need as main waiters and waitresses in the future. it's not that people will be laid off. i agree with heidi in that point but there will likely be fewer job opportunities in the future. we're pumping our own gas. when i started as a minimum wageworker in 1970s i was pumping gas, and most people now a days pump their own. that's another example of job opportunities lost when minimum wage rises. >> job opportunities or jobs that were going the way of the gas pumpers. >> both. applesbee's is a good example of an employer using technology to increase productivity. we
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either workers are working harder for the same output or fewer amount of hours are being worked for the same amount of output. >> richard, could you make a case that people paying a quarter or a buck extra because it helps the niya potts of the world? >> is absolutely does. i think one of the things that the records show and the studies show is that increased minimum wage, in particularly at times like this when there has been so much wage stagnation, and so much pent up demand will lead to increased consumer confidence, increased consumer spending and that in turn translates to additional jobs as more successful economy for everyone. by the way, we can look back in history and see in 1968, for example, the minimum wage in
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real dollar terms or in fixed dollars terms would be $9.44 now. and the unemployment is less than half of what it is today. the notion that minimum wage destroys jobs is disproved. and when you think about it, the common sense that says people at the lower end of the income spectrum are going to spend the money that they make, that will create jobs and will be good for everyone. >> low wage workers as customers. that's where i want to come back. we'll take a short break with our guests and we'll be back. this is inside story.
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>> fault lines investigates... fracking >> shale gas development could actually double the economic growth rates in the province. >> this is our land for thousands of years... >> do you drink money? you must have a lot of money to drink... >> as tensions rise, and protests turn violent, where will the debate lead? >> the situation was no longer peaceful or safe... >> they were bashing my head with their boots... they had their guns on me and everything.... >> how much more real can this get? >> fault lines only on al jazeera america >> welcome back to inside story. i'm ray suarez. we're talking about the minimum wage and issues that surround raising it. again our guests heidi from the economic policy institute. richard with the campaign for america's future. and mark, former deputy
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assistance sector employment standards at the u.s. department of labor in the bush administration. mark, is there a balance to be struck here? are there jobs that are, well, vulnerable in this economy any way? perhaps helping 90% of low-wage workers while disadvantaging some works out in the macro-economy even while it's hurting in the near term some of those very low-wage workers we're trying to help. >> yes, there will be workers that will be helped by the increase in minimum wage, that is a certainty. they'll spend almost likely all of the money they get in that wage increase. how difficult it is to ascertain whether the macro-economy will be helped substantially or not because there will be so many things swirling around. potentially increasing interest rates. things that may happen. tax increases, spending increases at the federal level.
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so many possibility it is difficult to disentangle-- >> is it really had a hard if millions of people have more money to spend we don't know what the effect will be? >> sure' we're talking about 300 million people and 15 million would be independentin benefitingfrom the wage increas. so in the context it will b be a small number. >> we are it will be a shot in the arm to the macro-economy, but it won't be huge. it would shift $35 billion to minimum wage workers. so the economy is 15 trillion-dollar. so it will generate jobs when those people will spend that money. but it's not a jobs program. it's a wage program. that increase, that economic activity, those people will
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spend that money. it will increase the amount for foods and services. who produces the goods and services? more workers, more workers will be willneed to be hired. >> and richard, help me out here. will you be less reluctant to add another worker or two on a shift if your marginal costs per hour have gone up 10% to 25%? >> well, you have to put that question in context. first of all most of our low wage jobs are in the retail and service industries. a study was done on impact of raging minimum wage to $12.25. in the real retail industry that would amount to 1 hers of annual sales. 6% of payroll. so we're not talking about a dramatic shift, number one. number two, would you hire them? i think the answer is if you
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want to stay in business and want to stay competitive, yes, you will. no question about it. we're looking at--the reason why i mentioned the job creation aspect of this earlier not to suggest that it was a transformative jobs program but to merely point out that the net effect would be positive. identifiy says 75,000. i've seen 100,000. it's relatively small but the net effect would be positive, not negative. you would be lifting three-quarters of a million people off the assistance roles for government assistance. you'll be providing all sorts of additional services to these people and you would be doing what is fair and just. i think that's what we need to concentrate on here. >> earlier in the program mark referred to the minimum wage as a blunt instrument. there are places in los angeles, where i'm sitting in washington, d.c. that persistent demand is high enough that you
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won't see any difference in the clientele or bills in the restaurant. but go a couple of miles away where demand might be slack more, episodic, and suddenly jobs may be in trouble the way they weren't, or pushed to the margins to match their hourly productivity with their wage so much closely, and less of a clearcut slam dunk for an interand worker, no? >> no, you have to look first of all again who these minimum wage workers are. 66%, two-thirds of low wage workers work for companies with 100 employees orego or more. we're not talking about mom and pop operations by and large in those kinds of neighborhood. we're talking about the taco bells, mcdonald's, walmart with 1.4 million employees. we're talking about companies that can make that calculation and make that adjustment. many of whom have seen record
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profits even since 2008, and they're in an excellent position to make these adjustments. there would be very little kind of a problem that you describe, and the advantage, the economic benefits of that are likely to accrue most to the kinds of neighborhoods you just described. >> more with our guests in a moment. stay with us. you're watching "inside story" i'm phil torrez. coming up this week on techknow. >> shots fired. a neighborhood under attack. >> last warning, okay? i don't want to put you in handcuffs. >> now the innovative technology that can spot a stolen car parked in the middle of a city block. >> there were multiple gunshots fired. >> it can track a gunman thousands of miles away. >> if you can track it then you can predict it.
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>> i'm ray suarez. this is "inside story." we're talking about the minimum wage and mark, i'm wondering with so many low wage workers working for very successful companies we've seen that many
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of their intake procedures involve advising their own workers on how to take advantage of federal and state benefits for low-wage people. as a taxpayer and a customer, am i better off paying my tax money to give those people benefits like snap, or am i better off paying a little extra so they're not poor any more. >> you're probably better off paying a little extra so they're not poor any more. if you look at the dead weight loss as economists look at it with the transfer of your money through the federal government and then back through the social service programs that a lot of minimum wage workers are available for, there is loss added to that through the transaction. you're probably better off paying a little bit more. but again that's the cost. the minimum wage, increase in minimum wage is a political argument. it's never been an economic argument. people should be aware that there is a cost associated with
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it and if people are willing to pay that cost as people in seatac were willing and you'll see an increase. >> seatac was an unusual market because all of the employees involved in that minimum wage increase work at an airport. it's not like i'll go buy my lunch somewhere else, you're stuck there. but will we have better laboratories to sob the effect of the better minimum wage. >> meaning? >> if we'll see the effect the raise in minimum wage will have and gauge it soon? >> yes, we look at it in terms of the aftermath. what is happening to employment, hours, price increases. when these cities, states,
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counties and the federal government, when they make thee moves people are looking to see what the affect affects are. that's the thing to fall back on. we have so much information on what the affects have been. been. i don't have any reason to believe that the effects that that we're seeing now will be anti-different. it has increased wages but not job loss. >> let's talk about those workers who make more than minimum wage. so much of this focuses on people at the very minimum. if you're already making $10 an hour. if they raise it to $10, are you going in to the boss to ask for a raise so that you're no longer a minimum wage worker? is there going to be a bump up for people who are close to the minimum wage? >> well, common sense would say that there would be because at
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that point you've got a worker with some seniority making an entry level wage. while that may not change overnight presumably the worker who has six months or a year on the job who is making $10 or $9.50 will be expected and will be expecting to make more than that. so yes, there is absolutely, and i think heidi can confirm this but the studies are pretty clear there is a benefit not only for workers at or below the minimum wage but those near and above it as well. i think you start to see a lot of households benefiting from that in addition to those directly effected by the minimum wage. >> potentially larger still. do we know how much? >> 10 to 15%, some estimates as much as 20% above the minimum wage. somewhere between $10 and $12 an
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hour employers will adjust the wages for folks , boost those wages to maintain the wage structures. if you index the minimum wage for inflation you're likely to get a price increase followed by a wage increase followed by a price increase followed by a wage increase. that's a vicious cycle. >> the program may be over but the conversation continues. we want to hear what you think about the issues on this or any day's show. you can log in to our facebook page. send us your thoughts on twitter. our handle is @aj inside story am or reach me direct ly @ray suarez news. in washington, i'm ray suarez.
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