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1.4 Million Workers To Benefit From Minimum Wage Increase In 2012

In January, San Francisco will officially be the first U.S. city to have a minimum wage of above $10, nearly $3 more than the federal minimum wage of $7.25. And that won’t be the only locale in which workers will see a little extra pay in 2012. In fact, eight states will be raising their minimum wage next year, which, according to the Economic Policy Institute, will benefit 1.4 million workers:

There are eight states that have legislated annual, inflation-linked increases in their minimum wage. This “indexing” of the minimum wage ensures that the real value of the lowest-paid workers’ wages does not shrink as normal costs of living go up. On Jan. 1, 2012, minimum-wage workers in Arizona, Colorado, Florida, Montana, Ohio, Oregon, Vermont, and Washington will all see an increase in their paychecks.

The table below describes the workers affected by the increase. Across these eight states, an estimated 1,045,000 workers will be “directly affected.” These are workers whose current wages are between the existing state minimum wage and the new Jan. 1 minimum wage. In addition, another 394,000 workers will be “indirectly affected” by the increase. These indirectly-affected workers are those whose current wages are just above the new Jan. 1 minimum, and are likely to also see a wage increase as employers adjust their overall pay structures to reflect the new minimum (the “spillover” effect).

The extra money pumped into the economy by the increases should also create about 3,000 jobs. But even with these increases, the minimum wage has a long way to go: It would actually take a minimum wage of about $9.92 today to match the buying power of the minimum wage in 1968.

NEWS FLASH

Bank of America Will Pay $335 Million To Settle Claim Its Subsidiary Discriminated Against Minorities | Bank of America will pay a $335 million settlement to address federal claims that its subsidiary, Countrywide Financial, “systematically discriminated against minority home-buyers at the peak of the U.S. housing boom.” The Department of Justice alleged that Countrywide charged higher interest rates and other fees to African-American and Latino home buyers compared to white home-buyers with similar financial backgrounds. The Los Angeles Times reports that Countrywide “frequently pushed minorities into risky subprime loans rather than into safer prime loans,” a practice that helped spark the economic collapse in 2008. Bank of America insisted that these practices occurred prior to Bank of America’s acquisition of Countrywide.

NEWS FLASH

Unlike Romney, Gingrich Weighs In On Payroll Tax Debate | While GOP presidential candidate Mitt Romney has been unwilling to take a clear stance on the GOP’s strategy regarding the payroll tax extension debate, his rival, former House Speaker Newt Gingrich, offered some support to House Republicans today in Iowa by saying Senate Democrats performed a “total dereliction of duty” when they extended the holiday for only two months. Still, Gingrich, said, “I have no idea how I would try to handle it if I was in John Boehner’s position.” In two TV interviews this morning and then again at a campaign stop, Romney wouldn’t say whether the House should approve the two month extension of the payroll tax holiday approved by the Senate. He dismissed the issue as an “internal battle,” “deep in the weeds,” and “sausage making.”

Reminder: Payroll Tax Mess Could Also Cost Millions Their Unemployment Benefits

House Republicans today blocked a Democratic attempt to hold a vote on the clean bipartisan payroll tax cut extension that passed the Senate last week, shutting down C-Span’s cameras in an attempt to hide their obstruction. The GOP has refused to hold an up-or-down vote on the Senate’s bill, instead preferring its own version of the legislation that is loaded down with unrelated policy riders.

But more than the payroll tax cut is at stake in this debate. Without an extension, unemployment benefits will expire in the new year for millions of Americans, as the National Employment Law Project details in a new report:

If Congress fails to reauthorize the federal UI programs, up to 1.8 million workers will lose benefits by the end of January. Up to 1.1 million additional people will lose this crucial lifeline in February, meaning that by the end of this two‐month period, more than 2.8 million people and their families will be without benefits they otherwise would have received had the House of Representatives passed the Senate’s bipartisan bill.

House Republicans have approved a bill that would dramatically limit unemployment benefits, even though there have been more than four job seekers for every available position for 34 straight months. The GOP bill would knock more than three million currently eligible Americans out of the program.

Failure to extend benefits would suck more $50 billion out of the economy in the first quarter of next year. A recent study even rebutted the conservative contention that those on unemployment benefits are less likely to find work. And as more and more attention gets lavished on the payroll tax cut, the fate of benefits for these jobless Americans also hangs in the balance.

Oops: Perry Doesn’t Know His Own Tax Plan, Needs Rescue From Jindal

Texas Gov. Rick Perry (R) has had his fair share of missteps during the 2012 GOP presidential primary campaign, including his now famous “oops” moment, when he couldn’t recall one of the three federal agencies that he wants to abolish. (It was the Department of Energy.)

Yesterday, Perry added to his list of gaffes, misstating how his tax plan — which would supposedly implement a 20 percent flat personal income tax — treats deductions. Fortunately, he had Louisiana Gov. Bobby Jindal (R) there to bail him out:

During a question-and-answer session with the audience, Perry was asked if his flat tax plan would include the standard deduction in the current tax system.

After Perry first indicated that it wouldn’t, Jindal reminded him that the plan actually raises the standard deduction to $12,500 per person in a household. “Thank you for correcting me on that,” Perry said to Jindal. “Not that I ever make a mistake.

Removing the standard deduction — which is the set amount that every person gets to claim tax-free on his or her tax return — would make Perry’s wildly regressive tax plan even worse. As it is, the plan already gives millionaires a tax cut of half a million dollars every year, while raising taxes on most of the middle class.

Perry has admitted as much, conceding to the Des Moine Register’s editorial board that under his plan, low-income people get slammed while it would be possible for a millionaire to pay literally nothing. When CNBC’s John Harwood noted that the plan gives millionaires hundreds of thousands of dollars in tax breaks, Perry replied, “I don’t care about that.” And he evidently doesn’t care enough to learn the details of his plan either.

Speaker Cuts Off C-SPAN Cameras When Dems Attempt To Bring Vote On Payroll Tax Cut

During a quick pro-forma session of the House this morning, Republicans rebuffed a Democratic attempt to force an up-or-down vote on the Senate-passed payroll tax holiday extension, which Republicans have thus far refused to allow. Rep. Michael Fitzpatrick (R-PA), who was serving as the speaker pro-temp, ignored shouts of “Mr. Speaker!” from Democratic Whip Steny Hoyer (D-MD) and Rep. Chris Van Hollen (D-MD), quickly adjourning the House.

Hoyer continued talking undeterred, saying, “You’re walking away, just as so many Republicans have walked away from middle-class taxpayers [and] the unemployed.” “We regret, Mr. Speaker, that you have walked off the platform without addressing this issue of critical importance to this country,” Hoyer added.

Moments later, the mic appeared to cut out. A few seconds after that, the video feed switched away from the House floor to a still image of the Capitol Dome. It appears someone in House Speaker John Boehner’s (R-OH) office cut the feed, as C-SPAN tweeted afterwards: “C-SPAN has no control over the U.S. House TV cameras – the Speaker of the House does.”

Watch it:

Romney Refuses To Take Position On Payroll Tax Holiday

In two TV interviews today, GOP presidential candidate Mitt Romney refused to take a stance on the biggest issue in Washington today: the extension of the payroll tax holiday. A huge bipartisan majority in the Senate passed a two-month extension of the cut, but the House rejected that yesterday.

A number of Republican senators have slammed House Republicans for blocking the extension, but on Fox News this morning, Romney wouldn’t say whether he sided with the House or Senate, dismissing the issue as an “internal battle.” “I’d like to see this payroll tax holiday extended,” Romney said, without saying for how long.

Later, on MSNBC, Romney downplayed the debate as being “deep in the weeds.” He offered only platitudes about hoping that the House and Senate “come together” to “get the job done.” “I’m not going to throw gasoline on what is already a fire,” he added. Watch it:

While Romney won’t take a side in the debate, at least he now acknowledges that the payroll tax cut needs to be extended. Previously, he had dismissed it as just a “temporary little Band-Aid.”

Update

In an event in New Hampshire today, Romney — for the 3rd time — avoided taking a position on the House GOP’s position on the payroll tax holiday. Watch it:

Conservatives Pan GOP Strategy On Payroll Tax Cut: ‘A Fiasco,’ ‘Entirely Outplayed’ By Obama

Most of the House of Representatives left for the holidays yesterday after House Republicans rejected a bipartisan Senate compromise to extend the payroll tax cut that is expiring at the end of the year. Several Republican senators took the House GOP to task, with Sen. Scott Brown (R-MA) calling the House’s action “irresponsible and wrong,” while Sen. John McCain (R-AZ) said the standoff is “harming the Republican party.”

Now their concern has migrated into the wider conservative movement. In an editorial today, the notoriously right-wing Wall Street Journal called the GOP’s strategy “a fiasco,” saying “the GOP leaders have somehow managed the remarkable feat of being blamed for opposing a one-year extension of a tax holiday that they are surely going to pass. This is no easy double play.”

On Fox News last night, both the Weekly Standard’s Steve Hayes and conservative columnist Charles Krauthammer continued the hand-wringing, with Krauthammer saying that “the Republicans have been entirely outplayed.” “Ultimately, the Republicans will cave,” Krauthammer predicted. Watch it:

Allowing the payroll tax cut to expire would, according to several economic analyses, knock a substantial amount off of U.S. GDP growth next year and cost hundreds of thousands of jobs. While House Republicans claim that they are actually interested in extending the tax cut, Speaker of the House John Boehner (R-OH) assigned members who oppose the cut entirely to negotiate with the Senate.

Econ 101: December 21, 2011

Welcome to ThinkProgress Economy’s morning link roundup. This is what we’re reading. Have you seen any interesting news? Let us know in the comments section. You can also follow ThinkProgress Economy on Twitter.

  • Foreclosure sales are still hammering home prices. [CNN Money]
  • The Federal Housing Finance Agency “is weighing a proposal that would reduce bankrupt homeowners’ loan balances.” [Financial Times]
  • The bulk of House Republicans left for the holidays yesterday after rejecting a bipartisan bill that would have extended the payroll tax cut that expires at year’s end. [Roll Call]
  • Under new rules released by the Federal Reserve, “the biggest U.S. banks will be required to limit their financial ties to one another.” [Wall Street Journal]
  • Banks took advantage yesterday of “almost half a trillion euros in cheap three-year loans from the European Central Bank as part of its unprecedented effort to keep credit flowing.” [New York Times]
  • According to the Commerce Department, “housing starts increased by 9.3 percent in November to a seasonally adjusted annual rate of 685,000 homes, the highest level since April 2010.” [The Hill]
  • Chinese hackers breached the computers at the U.S. Chamber of Commerce “and gained access to everything stored on its systems, including information about its three million members.” [Wall Street Journal]
  • The Commodity Futures Trading Commission may vote in January on a key rule meant to rein in risky trading at the nation’s biggest banks. [Bloomberg]

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