TN votes on wage hike; it's good business

The Tennessee legislature will vote today on whether to boost the minimum wage, joining several others states (including North Carolina) seeking to shore up the federal wage floor which languished nationally since 1997.

Powerful business interests are, predictably, claiming the heavens will fall if family wage earners bring another $1 home an hour. As for Tennesee's Democratic Gov. Phil Bredesen, he's waffled -- at first echoing the business line that small boost would drive business to other states. He now says he supports higher wages.

As my blogger-in-arms R. Neal persuasively argues in a recent Knoxville News-Sentinel editorial, Bredesen needn't be flip-flopping -- a wage boost makes both good political and economic sense:

If Bredesen truly supports higher wages, this would seem like a good opportunity to join 18 other states in setting a higher minimum wage.

Politically, he's ten feet tall and bulletproof. Until recently, he wasn't facing any serious opposition for re-election, and a state minimum wage would appease his more liberal and progressive Democratic base, which isn't too happy with him right now because of the TennCare cuts.

As for a higher minimum wage sending jobs to other states, do we really need more minimum wage, no-benefit, low-skill call-center jobs in Tennessee?

Besides, who's going to turn down $200 million in incentives, such as the package Nissan received?

Furthermore, Florida's higher minimum wage -- which was approved by more than 70 percent of voters and signed into law by Republican Gov. Jeb Bush -- doesn't seem to have hurt Florida's economy. The last time we were down there, we saw "help wanted" signs everywhere. According to the Bureau of Labor Statistics, December 2005 unemployment in Florida was 3.4 percent. It was 5.4 percent in Tennessee.

Keeping the standard federal minimum wage doesn't seem to be helping South Carolina, either, where unemployment was 7.2 percent, or Mississippi, where it was 8.8 percent.

It should also be noted that, according to the Bureau of Labor Statistics, the median hourly wage in Tennessee is already $12.59, more than twice the federal minimum wage. The average hourly wage is $15.74, more than three times the federal minimum.

According to an Economic Policy Institute report on the effects of higher minimum wages on small businesses, "the number of small business establishments grew twice as quickly in states with higher minimum wages (3.1 percent vs. 1.6 percent)," and "employment grew 1.5 percent more quickly in high minimum wage states."

Read the whole piece here.