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Economic Whopper Of The Day

I've long since passed the point when anything that comes out of a congressman's (or congresswoman's) mouth surprises me, but this evening I saw something that made the hairs on the back of my neck stand-up straight. Regarding passage of an increase in the federal minimum wage to $7.25, a committee chairman who allegedly understands this stuff uttered the following:

"This is a great day for America's middle class," said Rep. George Miller, D-Calif., chairman of the House Education and Labor Committee. "America's workers have been waiting for a raise for a long time."

Even the AP reporter could help but note that full-time wages at the new rate would amount to just over $15,000 a year. I defy anyone to classify and income of $15,000 a year as middle class when the poverty line for a single individual under 65 is between $10,210 and $10,488 [1, 2] a year.

The Congressional Research Service has a paper on the definition of "middle class" (PDF), which it turns out isn't really defined anywhere.

There is no consensus definition of "middle class," neither is there an official government definition. What constitutes the middle class is relative, subjective, and not easily defined. The mid-point in the distribution is the median and in 2005 median household income was $46,326. How far above and below that amount the middle stretches remains the question. The Census Bureau publishes figures breaking the income distribution into quintiles, or fifths. The narrowest view of who might be considered middle class would include those in the middle quintile, those households with income between $36,000 and $57,660. A more generous definition might be based on the three middle quintiles, those households with incomes between $19,178 and $91,705. Surveys suggest that 1% to 3.3% of the population consider themselves to be upper class. Comparing those figures with the income distribution would put the dividing line between middle and upper class close to if not above $250,000. Similarly, survey responses suggest that the lower end of the middle class might be close to $40,000.

As the AP article points out he liberal-leaning Economic Policy Institute estimates that 5.6 million workers - or 4 percent of the work force - earn less than $7.25. That's nearly an identical figure to the Census Bureau's classification of 3.4% of households with income of bottom quintile (1/5th) of less than $19,178.

By any measure Miller is being dishonest in his characterization; no one truly in the "middle class" will notice any positive effect from this legislation. They stand a much better chance of footing the bill for the increase when dining at a restaurant or if they own a small business. Perhaps that's why he's trying to spin this as some sort of victory for "the middle class," since the truth of the matter is that "the middle class" are by and large the ones who will be footing the bill...


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Comments (17)

The only result of this bil... (Below threshold)
Scrapiron:

The only result of this bill will be an increase in the high school drop out rate. They will have the same mind set (empty brain like the elitest congress critter) that they can make a living on $7.25. I live in a small town and don't know one person making less than $7.25 (other than the criminal Mexicans being used as slaves) in the area. Even McDonalds pays $7.25 to start with regular raises if you stay more than a week, which most don't. Not because of the money, because they are too sorry to work at anything.

'chairman of the House Educ... (Below threshold)
Scrapiron:

'chairman of the House Education and Labor Committee' Missed the 'education committee'. Need we wonder why the education system in the United States has dropped from number 1 to number 19 in the past 20 years? With fools like this we'll be number 119 in two more years.
Are you holding your breath until the antique MSM calls him on this?

I believe the "middle class... (Below threshold)

I believe the "middle class" has been considered to be those in the middle three quintiles.

Of course, the system is skewed to ensure a sufficient number of people qualify as "poor," being "below the poverty line," by not counting the in-kind benefits the poor receive. Hence, the value of Medicaid coverage, Food Stamps, and other "free" government services are not counted as income.

Never mind that American "poor" families have indoor plumbing (99+%), air conditioning (90+%), televisions (95+%), automobiles (70+%), and other amenities which would be considered the mark of middle or upper class incomes in most countries.

It's this game which enables people like John Edwards not only to get $400 haircuts/facials, but to have a staff person who arranges such things, and still be able to talk about "poverty in America" without being laughed off the stage.

Of course, the increase in ... (Below threshold)
cirby:

Of course, the increase in the minimum wage will also help some other folks, like union members who have their wages tied to the minimum (2x, 3x, 4x, whatever).

There's not enough of those to make a difference, though.

Jim:"... and s... (Below threshold)
marc:

Jim:

"... and still be able to talk about "poverty in America" without being laughed off the stage."

He was certainly laughed off the Wizbang stage.

Well... except for the very few that attempted to excuse the clown Edwards.

Cirby , ya beat me to it... (Below threshold)
Rob LA Ca.:

Cirby , ya beat me to it . I thinks it's 3x. Some people don't even have a clue about this.

I rather think the costs wo... (Below threshold)

I rather think the costs would fall upon those the increase supposedly benefits: the lowest-income workers.

Quite a number of those workers would find that their employers, faced with a mandatory raise or the need to discharge them, would opt for the latter choice. How, then, would this federally mandated increase be to their benefit? And how could anyone who understands that little about economics have the brass to parade this measure as a triumph for anyone -- except, of course, his statist / socialist kindred?

I would put myself in the m... (Below threshold)

I would put myself in the middle class, but I sure as hell don't work for $7.25 an hour.

Real economic victory for t... (Below threshold)
Jeff Blogworthy:

Real economic victory for the middle class involves tax cuts. Of course, then we are not middle class but "rich." An adjustable economic strata to fit the rhetoric of the moment.

Please remember.Thes... (Below threshold)
mathman:

Please remember.
These are the remarks of a PROFESSIONAL POLITICIAN. His views are intended solely and simply to maintain his premier position at the public trough.
His remarks are not made to benefit any but his peers (fellow lifetime members of the House). Remember: election to the House of Representatives is not Democracy, African style-- one man, one vote, one time.
The congresscritter is not interested in the people who will be harmed by this bill. After all, the laws of supply and demand cannot be repealed. If one has, let us say, $100,000 for salaries, one will hire as many persons as can be accommodated with that money. If the minimum wage is raised, the number of persons employed will correspondingly decrease.
It is the same law as governs gasoline. For a fixed amount of money, the amount of gas varies inversely as the price per gallon.
So just cut the poorest out of their jobs. They don't vote anyway!
Cynical politics at its worst.

But those in the middle cla... (Below threshold)
Amphipolis:

But those in the middle class who have teenage children that would benefit from those low wages (me, for instance) will lose, as fewer of these jobs will be available.

Americans no longer have the freedom to work for less than $7.25. And this is a good thing?

I don't have the stats at h... (Below threshold)

I don't have the stats at hand, but most families, especially low-income families, are two-earner couples out of necessity. Their combined incomes may push them into the middle-class.

And the 5% who make min. wa... (Below threshold)
Mitchell:

And the 5% who make min. wage are mostly kids working at places like McDonalds; they're moving up eventually and the min. wage isn't going to help that.

I don't have the stats at h... (Below threshold)
langtry:

I don't have the stats at hand, but most families, especially low-income families, are two-earner couples out of necessity. Their combined incomes may push them into the middle-class.
Lee, from the half-heartedness of that response, I think you, too, are pretty skeptical of that claim. Come on: you know you're reaching to justify your party on this one!

If the Dems are real... (Below threshold)
macofromoc:


If the Dems are really interested in the poor why don't they allow for tax deductions for renters and or bring back tax deductions for interest on car loans??? Seems to me that most poor people rent and or pay car loans..

(note I'm not a CPA and don't rent - so I'm not even sure if rent can be used as a deduction)

The Congressman said: "Amer... (Below threshold)

The Congressman said: "America's workers have been waiting for a raise for a long time." If he can find someone who was making the minimum wage for years and years that would have been a miracle. People who start at the minimum don't stay there, so of course they've had a raise since the last time there was a minimum wage increase. It's not the same people, it's a different group who move through the wage scales every time. The only ones affected in any large measure are those who now are not worth the new minimum wage, and who now will be unemployed.

So people who earn minimum ... (Below threshold)

So people who earn minimum wage are now middle class, in Democrats' eyes.

Wow.

It finally makes sense why they want to legitimize the underclass of foreign nationals illegally working in America. They are the "true poor," the ones who need a hand up to survive. Never mind that their home country doesn't care about them, can't serve them, and is using them to gain money. These "true poor" are working illegally, often at wages lower than minimum, with no unemployment, no health care, no workers comp. They are refugees and slaves in all but name.

The "middle class" is now a label, for people who want to feel good about themselves without having earned it. It no longer applies to small business owners, who are "the rich" regardless of how small their business may be. It applies to those they "oppress."




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