Jeannette Wicks-Lim: A proposal to combine minimum wage and earned income tax credit policies to guarantee a decent living wage

Peter Jay of Real News interviews Jeannette Wicks-Lim about the proposal to help poor people with a minimum wage combined with an earned tax credit. Wicks-Lim is an Assistant Research Professor at Political Economy Research Institute located at the University of Massachussetts, Amherst:

• One in seven Americans now live in poverty
• Current policy terms gurantee a decent living standard for only 12 percent of low-income working families
• PERI recommends a 70% raise in minimum wage rates, from today's Federal Minimum wage rate of $7.35 to $12.30 per hour
• In conjunction, PERI recommends the maxiumum EITC benefit would rise from $5,028 to $9,040 and households with income up to $57,000 would receive some benefit
• Hence, this program would take current minimum wage earners making $15,000 per year and push them into a $30,000 a year bracket
• PERI says their studies show costs of minimum wage increases in restaurants was only 3-4% on average. Hence a restaurant bill which used to cost $20.00 would cost $20.60 and that small increase would help pay for the minimum wage increase of all the workers in that restaurant
• The EITC could be paid for with a doubling of the current $51 Billion outlay for the smaller EITC. Money from the defense budget could go to helping Americans at home.

Wicks-Lim also says that PERI does not look at the extra income as something adding fire to the demand side in the Economy; instead, it looks at it as a more equal distribution of income throughout an Economy. She says with more equal income distribution, the Economy is much more robust and stable.

She points out the following:

1. Labor costs generally represent less than half of overall business costs
2. Low-wage workers make up a small proportion of their workforce
3. Many low-wage workers only receive a fraction of the actual size of a minimum wage hike because their current wages are already near what would be the new minimum rate

Business/Economic/Housing News for Jan. 2 through Jan. 8, 2010

Government News:

Illinois Has Days to Plug $13 Billion Deficit That Took Years to Produce

Incoming New York Governor Andrew Cuomo cuts pay for himself and senior administration officials

Governor Brown says he will release a "painful" new California budget next week

Half Moon Bay, CA, fighting insolvency, might outsource its police department

New Jersey wants to seize your unused gift cards

Housing News:

Bank of America agrees to pay Fannie Mae and Freddie Mac $2.8 Billion in settlement over 12,045 bad Countrywide loans it sold the two

Florida Condos: Banks no longer making loans to condo buyers if 15% of units in a condo building are not up to date on their condo fees

Housing specialist says now is the time to sell before banks flood the market with stealth inventory

Economic News:

Gold hits all time closing high, silver close highest since 1980

Oil hits 26 week high ($92.66 a barrel) on first day of trading in 2011

Optimism riding high in Alberta oilpatch: 2011 seen as 'largest year ever' for drilling

Generation Y: the new depression generation?

European debt markets 'face second credit crisis'

Google to be your next phone company?

Layoffs/Hirings:

My Space to downsize half its employees in preparation for possible sale

Cape Canaveral to layoff 150 United Space Alliance workers this week

Dollar General plans to open 625 new stores in 2011 and hire 6,000 people

Tech, gaming support firm to add 408 jobs in western N.C

Best of the Web:

Public Workers Face Outrage as Budget Crises Grow - New York Times

Why Mortgage-Backed Securities Aren't (Backed by Securities): How MERS Toasted the Banks - L. Randall Wray, Huff Post

Hiding A Depression: How The Government Does It - Daniel Amerman, Safe Haven

Baby Boomers' Retirements In Jeopardy - Time Magazine

Dude, Where's My Job? - The Burning Platform

George Carlin: "Who Really Controls America"

Governor Pat Quinn Signs "Pension Reform Bill" Into Law - Will Chicago Be Forced To Raise Real Estate Taxes By 60%?

Governor Pat Quinn of Illinois just signed the Pension Reform Law Bill. Here is what this means for those affected by the bill, both taxpayers and recipients of pensions in the State and municipalities of Illinois:

• Mayor Daley of Chicago says Pat Quinn's signing of the "Pension Reform Bill" will signal the largest increase in property taxes in the history of Chicago
• The Pension Reform Bill means cities in the state of Illinois must now contribute more money into the pension funds of firefighters and law enforcement officers
• Mayor Richard Daley of Chicago said, "The direct result's of the Governor's actions will be a massive property tax hike for Chicago residents of at least $550 million, or about a 60% increase . . . "
• The new law forces municipalities to raise contributions to their underfunded pension funds.
• In exchange, benefits will be decreased for officers or firefighters hired on or after January 1, 2011.
• The Pension Reform Law pushes back the full retirement age from 50 to 55.
• The Pension Reform Law will limit the maximum salary at which a pension amount is based.
• Lastly, the new law stops the practice of promotions and raises in the last year of service so as to pump up one's pension benefits.

Best Stories For Week of Jan. 2 - Jan. 8, 2010

Economic News:

Generation Y: the new depression generation?

European debt markets 'face second credit crisis'

Best of the Web:

Why Mortgage-Backed Securities Aren't (Backed by Securities): How MERS Toasted the Banks - L. Randall Wray, Huff Post

Hiding A Depression: How The Government Does It - Daniel Amerman, Safe Haven

Baby Boomers' Retirements In Jeopardy - Time Magazine

Dude, Where's My Job? - The Burning Platform