Tuesday, November 14, 2006

Minimum Wage

One of the first matters of business for the new congress appears to be the minimum wage. Of course the trailer park millionaires on the right are out to defend the greedy and point out how it is a bad idea. I was recently pointed to this piece by a righty as an example of insight. Let's take a look at this piece of economic genius and popular opinion.
The minimum wage is an emotional issue that sounds good on the face, but if you dig deeper and look at facts most people will see that raising it will do more damage than it will do good.

Oh really, every state that had a minimum wage issue on the ballot passed it. Somewhere around half a dozen if I remember correctly. Over 80% of Americans favor raising the minimum wage. I guess the overwhelming majority of people are just uninformed?
The first question that needs to be asked is not why the MW should be raised, but to what level?? Should it be raised to $7 an hour or $10? And if you can agree on a number, why that number?? The other question that must be asked is, why does the fed think that the minimum wage is a one size fits all proposition??? It costs a hell of a lot more to live in NY City than it does in Westfield WI. That is why any minimum wage issues should be handled at the state level. If a ‘fair wage’ is $20 an hour, why not make the MW $20 an hour or even more. Many people on the left will say that a fair income for a family of four is $40,000 a year and that at 40 hours a week is overworking us. Many unions want to go to a 32-35 hour work week. So why not make the MW $22.86 an hour. That would be based on 50 – 35 hour work weeks with two weeks of vacation. Hell, why not also create a federal minimum vacation time too. Everyone gets 5 weeks of paid time off a year… Why not – the dems want to artificially inflate wages – we might as well artificially PTO hours as well.
I take the point to be that it is all arbitrary and just how generous do we want to be anyway? Do we just give workers everything they want? First let me say that arguing about giving people willing to work more money coming from the same people that complain about the “lazy welfare bastards” seems much like circular logic to me. Damned if you do, damned if you don't. Next lets look at what he is saying about differences in areas. Yes this is true and it is why we have regional and even city differences in what the minimum is. The federal law is meant to be a bottom line floor. A bottom line guarantee. It does not inhibit local action and is in most instances handled by the states. As a matter of fact most states DO have minimum wages above the national level. It is apparent to anyone that follows politics that this group that is opposed to the federal minimum wage also has or would fight local ones too. He's throwing out a red herring. What does he think the minimum wage should be in Wisconsin or NYC? Additionally to reverse his argument(as long as we are “digging” into the issue) if 7 dollars is too much why not 4 dollars or 2 dollars?

By raising the MW will regulations be loosened?? For example, right now by Wisconsin law, day cares are limited to the number of children that each licensed adult can watch. Will those ratios be loosened to allow for a proportionate increase in productivity? Or will the cost of the MW raise have to be born by the consumers?? Day cares currently operate on an extremely tight budget. In addition, if anyone thinks that business owners are going to sacrifice their 4% margin to raise the MW 25-30%, you are on crack. And when was the last time that a liberal repealed regulations on a company? So don’t expect them to start now.
That means that consumer prices for everything just went up. That $4 extra value meal will now cost $4.50. It will now cost you an extra dollar to get your pants dry cleaned. It will cost an extra $3 to stay at a hotel when you visit out of town friends and family. That gas that you need to visit that family just went up. It already costs $30 to go see a movie on a Friday night, now it will cost $35.
Because of the extra costs, people will be doing less spending, which will put those people that the dems claim to want to help out of work. That puts them back on the welfare or unemployment rolls… but don’t worry, the dems will be handing out more taxpayer money in the form of entitlement programs to those people that their policies put on unemployment and on welfare in the first place. That will increase gov’t spending and create more of a burden on the taxpayers which will force them to spend less money which will hurt the economy which will put more people out of work…. And the endless spiral will continue.
The dems own policies will destroy the economy
That sound that you hear is the economy going down the toilet… and the only people that will still have jobs will be those that work for the government… the people that put the dems in power to begin with…
Wow! That is economics by brainwashing if I have ever heard it. Mr. Free market productivity thinks the only way you can cut the cost of doing business is labor related. He thinks giving people more money will result in LESS spending. Oh and the horror of welfare raises its ugly head and it is all because we gave some people at the bottom of the ladder, that are willing to work, a raise. Laughable.
Will there be inflation? Likely some. The best businesses, the ones that deserve to survive, will find a way to make it work. Let's look at ways to cut costs without raising prices. How about more efficent uses of energy and investments in alternatives that may cost less in the long run and have tax advantages now? What are the costs of your product, your building and infrastructure? Are there ways to get a better deal in another location or from another supplier? How about streamlining or reducing costs in other areas of the business beyond the people that make it hum? How about efficient marketing and advertising and special services to bring in new business? How about the guy at the top taking a bit less so the people that operate it everyday can have a pittance more? These are just a few ways to pay more to people who will eventually use or buy your services resulting in more profits not fewer. More money in more hands will result in more spending and a more diverse economy not less. Certainly the guy writing this has little experience in the business world or just wants to ignore the challenge and tough choices.
Beyond this better payed workers are happier workers. If Target pays 10 dollars an hour and Walmart pays 7 where do you think people are going to want to work. Who do you think will have the larger pool of the best workers? Who do you think will have the better business in the long run? That sound you hear is wingnuttia going down the toilet.

14 Comments:

Blogger Clint said...

Oh really, every state that had a minimum wage issue on the ballot passed it

Using that argument means that Gay marriage is a bad idea (except in AZ)

You might want to actually take an Econ 101 class before you make such moronic statements regarding my facts.

1:00 PM, November 14, 2006  
Blogger Clint said...

If Target pays 10 dollars an hour and Walmart pays 7 where do you think people are going to want to work. Who do you think will have the larger pool of the best workers?

What happens if the fed steps in and makes the min wage $10 an hour, then Target no longer has the best employees that they were paying for before...

Do you actually read what you write before posting???

To answer your question - I think that the minimum wage is just right where it is at.

I take the point to be that it is all arbitrary and just how generous do we want to be anyway? Do we just give workers everything they want?

Good employees get what they want (within reason) from good employers. Good employees will always find good employers. By raising the minimum wage you have a fallacy that you believe everyone is a good employee. A lot of $6/hr employees suck (from someone who has worked retail and run small businesses) Paying a $6/hr employee $8/hour doesn't make them a better employee - just a more expensive one.

He thinks giving people more money will result in LESS spending.

No - they will have more money - but it will cost them more for their daily purchases. It is this thing called purchasing power. Obviously you have never heard of that term before.

How about streamlining or reducing costs in other areas of the business beyond the people that make it hum? How about efficient marketing and advertising and special services to bring in new business? How about the guy at the top taking a bit less so the people that operate it everyday can have a pittance more?

You just described Wal-Marts business practices to a Tee - I bet that you absolutely hate that....

pay more to people who will eventually use or buy your services resulting in more profits not fewer.

Why not double welfare payments to people too... then they will have more money to spend.

Wealth is created not distributed... too bad you will never understand that principle.

I also noticed that you are too chicken $h!t to actually leave the comment where the author of the article would respond...instead you keep your comments on your blog where no one will read them.

1:11 PM, November 14, 2006  
Blogger Ron said...

Clint:Using that argument means that Gay marriage is a bad idea (except in AZ)You might want to actually take an Econ 101 class before you make such moronic statements regarding my facts.

Ron: Frankly it probably is a bad idea to make people who are religiously opposed to gay marriage be forced to marry them. I am for civil equality. Religion is another matter...you might want to take a common sense 101 class before you make such moronic statements regarding my facts.

Clint:What happens if the fed steps in and makes the min wage $10 an hour, then Target no longer has the best employees that they were paying for before...

Ron: Duh..first they still have the same employees they had before. They need to know how to hang on to them. 2nd your argument is a red herring. Plug in any numbers you want the point remains the same. Those who pay more or provide a better place to work in some other way will have the better pick of the labor pool. Do people actually fall for your silly logic?

C:A lot of $6/hr employees suck
R: making my above point..gee wonder why the lowest paid workers suck..got any clue clint?

C:Paying a $6/hr employee $8/hour doesn't make them a better employee - just a more expensive one.
R:And the employer has no options? They cant fire the bad ones until they get a good one? They can't inspire and motivate people and make them feel an important part of the team? Make them a better employee that takes pride in his or her work? Good employers mold good employees. No wonder your business ownership is past tense.
C:You just described Wal-Marts business practices to a Tee - I bet that you absolutely hate that....

What would make you say that? It is an outstanding business model. The part I hate is there are 5 or 6 people at the top worth billions more than they will ever spend making billions more every year and they are so greedy that they force their employees onto public health care that you and I end up paying for and pay a huge percentage of their employees barely past sustinence wages. THAT is what I hate.
C:Why not double welfare payments to people too... then they will have more money to spend.

R: Because contrary to popular belief I believe that is not the purpose of welfare. It should be a safety net and not a living.

C:Wealth is created not distributed... too bad you will never understand that principle.

I am in favor of capitalism but unfettered capitalism is doomed to failure. More money in more hands is spent more widely benefiting more business and more employees. More money in fewer hands turns the country into the aristocrats and the peons. The minimum wage is a way to provide some balance to the playing field.

C:I also noticed that you are too chicken $h!t to actually leave the comment where the author of the article would respond...instead you keep your comments on your blog where no one will read them.

The article was posted on games blog and I left a link for those interested. Seems YOU were able to find it. I have spent much time there commenting and there is no interest in what I have to say there. Why waste my time. I though my friends and others who read this blog(yes people do read it) would be interested in the debate. The post was also too long for the comments section. Or maybe I'm a big chickenshit.

4:24 PM, November 14, 2006  
Anonymous Anonymous said...

Ron, mean-spirited social darwinists don't care about justice. The people who are the worst employees usually make the worst bosses and employers for the same reason. Wealth of course can be transfered as has been evident with the Bush Admin domestic policies and the Haliburtons in Iraq. More wingnut "reality" Here.

Larry in New Mexico

9:15 PM, November 14, 2006  
Blogger The Game said...

you have this RIGHT on clint...your post that I linked to is perfect

9:34 PM, November 14, 2006  
Blogger Ron said...

Larry, as you so aptly point out there is transfer of wealth happening all the time. They are very hard pressed to acknowledge it though. They only see one side of the issue. As long as they have theirs everything is fine. Justice and fairplay doesn't even enter their mind. Life's not fair and they are doing their part to make sure it stays that way. It is selfish, narrow thinking but whatca gonna do. As far as the article you linked to..I saw that yesterday and just shook my head. There are stories out there everyday like that. Thank goodness there are people out there who refuse to sign on to stuff like that.

5:17 AM, November 15, 2006  
Blogger Clint said...

So Ron your answer is to simply have the gov't regulate giving $hitty employees more money.... It is obvious that you have never run a business. You can pay $hitty employees $40/hour - they will still be shitty employees.

They can't inspire and motivate people and make them feel an important part of the team?

Typical liberal feel good statement. Make a loser feel good and they will still be a loser. Giving some one self-esteem by making them feel that they are an 'important part of the team' doesn't make them an important part of the team. In fact all that they will do is exactly what they did the first time that you artificially inflated their ego which was nothing.

You have zero logic in your argument. And you have no real plans... just like the democrats in office

6:56 AM, November 15, 2006  
Blogger Ron said...

If they are a shitty employee no matter what you do fire their ass and get someone else. It is obvious you think you are stuck in your life circumstances and have no power to effect them.You obviously think even trying to motivate is useless. God am I glad I'm not you. It must be miserable to be so powerless over your own circumstances..at the whim of others and the government. I feel for you buddy.

12:35 PM, November 15, 2006  
Blogger Ron said...

I have a proposition for you Clint. How about if we include some kind of tax break for small businesses, say like 50 employees or less, with the minimum wage bill? We could get the money by eliminating the tax break given to large corporations. Like the 9 billion we gave to Exxon. I am not anti business at all as much as you may think I am. I would much rather see 50 small businesses than 1 giant corporation though. It gives far more people more independence, more workers far more options and inspires far more competition which after all is what the free enterprise system is suppose to be about.

7:09 PM, November 15, 2006  
Blogger Dedanna said...

WOW interesting how the sore losers start flocking to the liberal sites to attack right after an election. lol.

However, I do have to say that I'm not much for the minimum wage hike. I've explained my reasons before, but it has nothing to do directly with employees good/bad. That's not the point of the minimum wage hike anyway.

9:26 AM, November 16, 2006  
Blogger The Game said...

clint, you must have really got to ron...all emotion from him...and dedanna...well done sir.

9:10 PM, November 16, 2006  
Blogger Ron said...

Game, anything anyone says that doesnt agree with you is "emotional" like that is a bad word in the first place. I layed out my thoughts on the issue,proposed alternatives and even proposed a comprimise. How is that "emotional"? All Clint did was say that it couldn't be done. Mr negativity. Is emotion a negative game? Is love and caring for your fellow citizens a "commie inspired" thought? Better emotional than goofy.

10:02 PM, November 16, 2006  
Blogger The Game said...

Come on Ron...this response can not be seen as ANYTHING BUT emotional:

If they are a shitty employee no matter what you do fire their ass and get someone else. It is obvious you think you are stuck in your life circumstances and have no power to effect them.You obviously think even trying to motivate is useless. God am I glad I'm not you. It must be miserable to be so powerless over your own circumstances..at the whim of others and the government. I feel for you buddy.

9:08 AM, November 19, 2006  
Blogger Dedanna said...

Actually, that's not emotional, game. It's factual. Look at it from an objective point of view, and see what Ron's saying here, and you'll see what I say is true.

12:39 AM, November 20, 2006  

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