Minimum wage and market forces

Market forces dictating the minimum wage? Shocking. Absolutely shockingly inhumane! But the market dictated minimum wage is higher than the current AND Democrat proposed minimum wage! How could that possibly be?

According to federal data, the median hourly pay for all workers in the Washington-Arlington-Alexandria area is $19.14 — about 72 percent higher than Lubbock, Tex., where it is $11.13.  ~washingtonpost.com

Reality is hard for the left to grasp. It rarely fits the ideology. Even when it does you just have to scratch the surface to see that details contradict the theories of exploitation, theft, and slavery. I almost feel sorry for those stuck in the 19th century pseudoscience of Marxian economics. Almost.

Druskin's experience suggests that increasing the federal minimum wage might be irrelevant for many of this region's workers and employers, given the extent to which market forces -- high demand for labor, low unemployment and the lofty cost of living -- have already raised the floor for hourly salaries.  ~washingtonpost.com
The duality of so many liberal fantasies is indisputable. That is, from public education to the minimum wage there are multiple hidden effects that would rather be ignored by the left but which are ugly realities. The minimum wage increases unemployment and hurts the economy but that's not the reason that the left promotes minimum wage laws.

Supporters assert that the minimum wage is a matter of social justice which helps reduce exploitation and ensures that workers can afford basic necessities (cf. living wage). Supporters deny claims of causal links between the minimum wage and adverse impacts upon employment, and suggest that in any event, greater social benefit derives from the minimum wage~wikipedia

"Social benefits," meaning, of course, that the cause of social justice is furthered, never mind the side effects. But such laws have the tendency to eventually be used as the blunt instruments that they are. Which just goes to show how the face behind the mask of egalitarianism is really based on force; the naked use of the blunt instrument of the state.

Minimum wage legislation may be interpreted as making it either unlawful for employers to pay workers less than the minimum wage, or unlawful for workers to provide labor or services for less than the minimum. For example, during the apartheid era in South Africa, white trade unions lobbied for the introduction of minimum wage laws so as to exclude black workers from the labor market. By preventing black workers from selling their labor for less than white workers, the black workers were prevented from competing for jobs held by whites. Although it is the employer who is fined and/or imprisoned for violations, the workers also lose their freedom, albeit indirectly.  ~wikipedia


Posted by Eric Simonson at December 5, 2006 8:07 AM
Comments
Comment #197751

You’re pretty funny, Eric. If the market has already raised the minimum wage, then why get in a tizzy? Oh yeah, you cite claims raising the minimum wage has an adverse effect, somehow, even though, according to your implications, no one receives the minimum wage. And then you imply that Democrats have a racist agenda.

Somehow, though, the economy has managed to survive despite past increases in the minimum wage. You should have more faith in this country’s economic resilience. Democracy kind of sucks, eh?

Posted by: Trent at December 5, 2006 8:22 AM
Comment #197752

Eric,

Your argument is too empty of relevent facts.

Citing the median wage in an effort to debunk the impact of the minimum wage is meaningless. The fact you are not addressing is how many workers are paid a wage below the proposed new minimum wage. I haven’t seen the research the Washington Post cites, but I do know as a long time reader of that rag that it does an extremely good job of getting economics just plain wrong.

Secondly, while not having the facts in front of me, I recall the DC and MD both already have minimum wages above the new Federal proposed minimum, making the impact of this law moot in the region (although I suspect it will affect Virginia).

Third, you write:

The minimum wage increases unemployment and hurts the economy

In the late 1990’s unemployment fell to 3% and there was nary a problem with the economy. Since then unemployment has risen (slightly), yet wages have stagnated and purchasing power has barely registered. Can you cite opposite examples?

Finally, get off the Marxist rant as your strawman for the minimum wage. You can do better. Cite some trained economists who have reseached and experienced more recent economies.

Posted by: Steve K at December 5, 2006 8:25 AM
Comment #197759

Eric,

Thanks for pointing this out. The Dems are just being stingy, greedy, republicans. We need to start giving people a living wage. I think $20 sounds fair.

Posted by: JimmyRay at December 5, 2006 9:53 AM
Comment #197760

“Market forces” have perverted the wages paid to the working people of this Country for years. Hiring illegal immigrants, anti union laws and court decisions, and sending jobs to 3rd world and developing countries have artificially driven wages down. When the system is broken…

Posted by: j2t2 at December 5, 2006 10:06 AM
Comment #197761

FYI….median means middle. Half above and half below.

It’s not an average. It’s a number in the middle. So, how far above or below are those above and below the median? who knows?

In addition, you say its bad for the economy and then state or elude to the fact that it won’t matter because most employers pay above the proposed new minimum anyway. which is it?

Posted by: Tom L at December 5, 2006 10:42 AM
Comment #197768

In 1968 the minimum wage in TODAYS dollars was about $9.82/hr and the economy prospered.

Posted by: muirgeo at December 5, 2006 11:27 AM
Comment #197769

Eric: There is no case in American history where an increase in the minimum wage has increased unemployment or harmed the economy. This very incongruence of the facts and market-forces theory has been and contiues to be one of the most interesting economics condrums of the 20th/21st centuries. However, a money supply explanation does appear most likely. To wit, not every $1 in the economy is equal; hence, an additional $1 in the hands of a minimum wage worker is more productive (turns over more often) in the economy than is a $1 of corporate profit.

Posted by: Allen at December 5, 2006 11:34 AM
Comment #197772
median means middle…how far above or below are those above and below the median? who knows?… Posted by: Tom L at December 5, 2006 10:42 AM
Find out here


Posted by: Dave1-20-2009 at December 5, 2006 12:11 PM
Comment #197773

Congress has given itself 8 raises since 1997.
Raising the Minimum Wage, Homeland Security, and enacting 9/11 Commission Recommendations, but still refusing to enforce illegal immigration laws, and continuing to ignore wide-open borders and ports is a big of a joke.

Congress is full of hypocrites, as evidenced by their selective enforcement or total ignoring the existing laws, ignoring wide open borders and ports, ignoring employers of illegal aliens, 2.3 million displaced American workers, the many burdens on schools, hospitals, ERs, law enforcement, border patrol, prisons, healthcare, CDC, Medicaid, welfare, insurance and voting systems, resulting in over $70 billion in net losses annually to U.S. tax payers.)

And, while Congress is pretending to care deeply for the poor, watch them continue to vote on massive pork-barrel, corporate welfare, graft, and waste.

If Congress had really turned over a new leaf, they would finally resolve some of the nations most pressing problems, now.

There’s not anything to fear from the minimum wage. History has shown it has never caused much harm and may have caused some minor improvements. But, that was before we had massive, uncontrolled, illegal immigration.

Posted by: d.a.n at December 5, 2006 12:14 PM
Comment #197774

Trent & Stephen

There are some things that should not be decided by a majority vote and some things that cannot be. No majority has succeeded in repealing the law of supply and demand. There are many things we all want, but cannot have.

In the case of N. Virginia, minimum wage would have little or no effect. Fast food places around here start off at $8. (BTW -Virginia’s economy is by far the biggest. It affects DC and Maryland much more than it is affected by them.) The market has moved beyond proposed minimum. Drive a few hundred miles south and you are in a different place. Cost of living is much lower and so are wages. Imposing the minimum wage on them would make a hardship.

So you can raise the minimum wage as high as you want, as long as it is below what the market will pay for the lowest paid workers. There is probably some slack in the system, but not much. We also have the anomaly around here of a labor shortage and people claiming they cannot find jobs.

Allen, Muriego et al

It has an effect over time. It is not always a bad overall effect. A rise in the cost of labor causes firms to adapt by using more mechanization or just not doing some tasks at all. Think of all those guys who used to make shakes at McDonalds. All replaced by a machine. Some low level task will not be done at all. More people will mow their own lawn or let it go a bit longer if it costs more to have someone do it. If I thought a rise in the minimum wage would get rid of all those fools with leaf blowers, I would support it for that reason alone.

I am in favor of driving the leaf blower operators out of business with higher wages. But there will be collateral damage to other unskilled workers, who just produce less value than $8 an hour.

Posted by: Jack at December 5, 2006 12:15 PM
Comment #197780

This is a generic question but somewhat related to the topic.

I have a question for all the conservatives thinkers here.

Since the Reagan era the ratio of CEO salary to worker salary has gone from like 50:1 to like 500:1. Do you think that is a good thing?

Likewise in your idealized economy would the ratio rise or fall; would wealth be more greatly concentrated in the highest earners or less so.


Fnally, name a time or a coutry when the economic conditions you favor existed. Inother words what would be your MVP economy from both US history as well as world history.


Mine would be the economy pf the 60’s and early 70’s in the US of A. Not sure there has ever been a better one. And that one occured after 30 years of Democratic policies.

Now I’d say the best economies our in some of the social democracies of Scandanavia.

Posted by: muirgeo at December 5, 2006 12:40 PM
Comment #197782

Thnx for the link Dave!

Posted by: Tom L at December 5, 2006 12:44 PM
Comment #197783

“…CEO salary to worker salary has gone from like 50:1 to like 500:1.”

very, very bad. in fact… it’s absurd.

“…would wealth be more greatly concentrated in the highest earners or less so.”

the percentage of those who are wealthy (the highest earners) should be much larger - the disparity between the richest and the poorest should be somewhat lesser… we’re talking the ideal…

the problem as i see it is that most (all?) republicans these days seem to believe that any regulation - nationwide, or even collectively, between states - is a bad thing… they favor corporations’ rights over the rights of citizens…

(in addition, i believe that the work done by ceo’s is insignificant compared to a great many other jobs - this is certainly not a job i would assign the top pay grade.)

Posted by: Diogenes at December 5, 2006 1:02 PM
Comment #197784

Muirgeo

I think high CEO salaries are very bad, but attempts to remedy them with legislation are worse. It was to some extent that attempt that gave us the stock options and other forms of corruption.

Owners (stockholders) need to be more involved in keeping salaries in line. One good reform may be to go back to the future and make takeovers easier. Too many firms have various traps and poison pills that make a takeover nearly impossible. Takeovers are often nasty business, but they tend to clean up the dead wood, sort of like a forest fire. In the attempts to avoid them, firms behave better.

I also like the Nordic model, but it is not scalable. We cannot have it in the U.S. AND, BTW, most Americans would not want it. Nordic countries are small and homogenous. They have about as many people as a medium sized American state. Minnesota, Wisconsin, or Washington leap to mind for good reason. Many of the social indicators are similar in these states because many people are similar in their culture. Scandinavians work cooperatively (and push down anyone who tries to stand out) because it is a natural part of their culture built over 1000 years. They are having significant problems with diversity today and there is a big question re whether the Nordic social model can survive significant immigration and integration.

The U.S. is the most diverse country in world history and it is continental in size. You could never come up with the kind of consensus you can find in Finland or Norway. The comparison of a Nordic country to the U.S. is not valid. Compare Norway to Wisconsin (and throw in the UP) and Finland to Minnesota (along with N. Dakota) and you will find very similar outcomes.

Posted by: Jack at December 5, 2006 1:09 PM
Comment #197785

muirgeo,

(Since the Reagan era the ratio of CEO salary to worker salary has gone from like 50:1 to like 500:1. Do you think that is a good thing?)
It isn’t up to me. It is up to the stockholders. I’m sure you could say the same thing about baseball players.

(would wealth be more greatly concentrated in the highest earners or less so.) Less so of course. The problem is you want to take from the top. I would prefer to build from the bottom. Question for you, who is the biggest friend to corporations? Answer: big government. What is the biggest obstacle to small businesses which would build wealth from the grassroots? Answer: the same big government.

(Mine would be the economy pf the 60’s and early 70’s in the US of A) Yes it was good that Kennedy cut the capital gains.

Posted by: JimmyRay at December 5, 2006 1:12 PM
Comment #197795

Eric:

We can’t leave what the lowest-level workers make to “market forces.” A market works well when individuals are fairly equal in the information they get and in the power they may exercise.

Low-level workers cannot negotiate for the wage they deserve. They take what they get and like it.

By passing a minimum wage the government helps in the negotiation. It should follow the rule that there should not be such a thing as the “working poor.”

Some outfits pay more. That’s great. But many get only the minimum wage. It’s time to increase it. It should be about $10/hour, the poverty level.

Posted by: Paul Siegel at December 5, 2006 2:22 PM
Comment #197801

Eric,

even if basic humanity doesn’t cause you to care about the poor, which I sense you don’t, you raise the minimum wage for the same reason Rome was generous with it’s lowest classes - it causes political stability.

The Pareto principle works - although here it’s much more efficient. It takes less than 20% of the population to own 80% of the wealth.

The corollary also holds true - redistribute it all and over time we will return to the same wealth ratios.

The rich will get richer and the poor will fall further back - because that’s what happens without government intervention.

However, greater income disparity is VERY BAD for countries that claim to be democratic. It leads to autocracy and dictatorship and the pendulum force of revolution.

Even with all the BS right-wing think tanks arguing against it, it is in the best interests of the very rich to make sure the poor catch some.

Posted by: CPAdams at December 5, 2006 3:27 PM
Comment #197806

Jack, The CEO picks the board of directors by and large. The board of directors sets salaries for the CEO. The stockholders really dont have much of a say in the matter. Yes I know the stockholders vote for board members but when do they actually choose who gets to be the few they vote for? That system is rigged and unless it is cleaned up voluntarily then the feds should look at regulations to level the playing field.

Posted by: j2t2 at December 5, 2006 3:49 PM
Comment #197807

JimmyRay you wrote,

muirgeo,

(Since the Reagan era the ratio of CEO salary to worker salary has gone from like 50:1 to like 500:1. Do you think that is a good thing?)
It isn’t up to me. It is up to the stockholders.


I think it is up to us as voting citizens.
One of the big reasons CEO’s salaries are going up is do to decline in unions and unfair free trade agreements that require our workers and high standards to compete with slave wage laborers and communist workers with no oversight or regulation.

We need to leave all those treaties and put up proper teriffs to equalize the playing field.

Not only are CEO’s getting richer, they don’t return their money to our economy, the shield their companies from paying taxes using off-shore accounts and the our destroying the dollars in doing so.

And I absolutely agree with this;

“Question for you, who is the biggest friend to corporations? Answer: big government. What is the biggest obstacle to small businesses which would build wealth from the grassroots? Answer: the same big government.”

Although this contradicts your above statement that it isn’t up to you/us to adress these income inequities. Indeed it is in my opinion. Solve the corporate welfare issues and you’ll see greater equity.

Posted by: muirgeo at December 5, 2006 3:52 PM
Comment #197808

So it looks to me like everyone pretty much agrees that income disparity should not be getting greater.

Is this something both sides can agree on?

So what are some possible common agreeable solutions to make it happen?

I’d guess we could agree on a simplfied tax code with no loop holes…although I’d still argue it’s likely have to be progressive.

I think getting pork riders out of legislation might help.

I think demanding greater transparency of our elected politicians actions would help as well.

Any others?

Posted by: muirgeo at December 5, 2006 4:01 PM
Comment #197809

Paul,
I’m sure you’ll call me names, but…..

What about the person who was hired at minimum wage 5 years ago and worked his tail off and now earns $10 per hour. Tomorrow, the minimum wage goes up to $10/hour. Now the person who had a strong work ethic and cares about his performance makes no more than the person that was just hired and no more than the person who has been chronically late for the last 3 years, does not care about the job he does and has only earned $1.00 in raises since he started.

I started with a minimum wage job as a junior in high school, which was $4.25 per hour at the time, if I remember. I did not stay at minimum for long. In less than a year, I was nearly a dollar an hour above, a crew trainer and a team leader. I took some college (associates degree from a technical school - not exactly a doctor or lawyer) and now earn about 6 times that amount (plus benefits, stock, profit sharing, etc.) and I’m still climbing.

Point being is that there will always be a “poor class” - no matter how much you raise minimum wage. Some members of that class are temporary, due to various conditions beyond their control. The chronically poor are the result of failed welfare programs that make an entire group of people dependant on politicians instead of being responsible for their own lot in life.

You may now aim your flamethrowers at me…I’m wearing my Nomex boxers!!

Posted by: Rich at December 5, 2006 4:08 PM
Comment #197810

Rich:

Those same arguments were against the recent (ha) minimum wage increases too. Doesn’t wash.

Posted by: womanmarine at December 5, 2006 4:17 PM
Comment #197813

All this argue back and forth is academic and doesn’t go to the heart of the matter. It is all based on shifting wealth from those who have it to those who don’t while causing the habit of dependence on those who were so generous with other people’s money. What is so hard to understand. If you produce less than what you get paid, you will not have a job no matter how “generous” the fat cats are. The easiest way to illustrate how absurd any minimum wage is the example given by another poster, why is $7 the cutoff, why not $20, or $30.

Posted by: frankxcid at December 5, 2006 4:30 PM
Comment #197815

J2T2

It is not the Feds business. An investor can always vote by selling his stocks. You are not talking about powerless people here. I invest in stocks. I do not like CEOs getting paid so much, but it depends on whether they are making money for the firm or not. If they do not make a decent return, I get rid of the stock. I do not want the help of the Feds.

Murgieo

It is not up to you as voting citizens. It is up to the owners of the company (see above). The voting citizens are entitled to tax as they please. It really is none of your business how much I am paid (and it is none of mine how much you get).

There is the problem with big government protecting big firms. Government is by definition status quo. It will tend to protect established interests against those it does not know about by definition.

Rich & Womanmarine

Most of those earning minimum wage are under 25 years old and not supporting a family (or even themselves). When you raise the minimum you do have a problem of crowding out. A suburban teenager may well be a more attractive worker than a 25 year old HS drop out with a spotty work record. As you raise the wages, more of those teenagers come into the market and they work more. As I wrote above, not all the effects are negative, but it depends on your point of view. Suburban teenagers already live in the area where they work and it might allow better off communities to avoid having poor people around. In other words, they become more self sufficient in labor and the well of families get a little better off. This might lower the demand for unskilled immigrant labor, which I think is a good thing, but not everyone agrees.

BTW - if you are on the job more than a few months and still making minimum, you should consider other options.

Posted by: Jack at December 5, 2006 4:40 PM
Comment #197821

The Republicans have a simple choice: require business to pay more for work, or require taxpayers to pay more for public assistance. If your goal is to wean people off of socialist programs, making the work the source of the money rather than just loafing around is to your advantage.

Posted by: Stephen Daugherty at December 5, 2006 5:14 PM
Comment #197825

Stephen

The third and most effective choice is the earned income credit. That allows the workers who really depend on the money to keep more of what they earn. The teenager earning pocket money while staying a dependent on his parent’s does not get it. So sorry.

I would support raising that. It is the most effective help for the working poor.

Posted by: Jack at December 5, 2006 5:46 PM
Comment #197830

muirgeo,

“In 1968 the minimum wage in TODAYS dollars was about $9.82/hr and the economy prospered.”

That is one instance at one point in time. There has been no solid consistent relevance between minimum wage and the over all economy.

Also, you shouldn’t raise minimum wage till AFTER you raise the maximum benfit caps.

For instance, if you are a low income family barely scraping by and minimum wage goes up $9.25 so now you have an additional 75% increase in wages, but you no longer qualify for any state aid programs and so your bills are larger (no EIC qualifications) and you don’t qualify for the free clinic anymore. So now you have 75% more money and 350% more bills and no medical. Not to mention you lose your tax benefits.

If you don’t believe it will happen like this, look into the IRS tax laws that give benefits to indiviuals making less than $3 an hour. They are still there, but no one qualifies for them legally!

So… as I do believe that the current minimum wage should be $9.25, we are not ready for it. You can’t travel a road that has not been made.

First grade it, pave it, then take a smooth ride on it.

The democrats have a billion great ideas and no good plans. Mean while the republicans have a billion good plans that support no-good ideas.

Why can’t the two just work together and do something right (the first time) for once.

This trial by fire political experimenting is getting old and redundant.

Posted by: Bryan AJ Kennedy at December 5, 2006 6:20 PM
Comment #197831

More than half the workers in this country make less than $25,000 per year. That my friends is class warfare at it’s finest. If those at the top continue down this road, they will need all of their Big Brother surveillance equipment and a great big security police apparatus. Those who think that the Patriot Act is to catch terrorists had better think again. The people are helpless without leaders.

The number one market force controling this economy is GREED!

Jack: I challange your assurtion that in areas such as where you live, the wages are higher and the cost of living is also higher than in say rural areas of the country where wages are lower and the standard of living is also.

In the small city and surrounding community where I live the median income is $23,000 per year. However, the number of workers who make less than the median is quite a bit higher than the national average. Most teachers and nurses dont make that much. Fast food resturants start workers at the minimum wage. WalMart-$6 per hr.

As to the standard of living here, rent and preowned housing are cheaper. They have to be or they would be vacant and many many families would be homeless. As a matter of fact, many many familes would be homeless if not for Federal housing assistance. New housing is almost on a par with the large cities in Ohio. Food is higher. Gas is higher. We have the highest gas prices in the state. Yesterday gas went to $2.45 and today back to $2.39.

Fourty miles north uf us is another community the same size as ours. The median income there is $10,000 higher at $33,000. Anyone here who can afford a new car that buy’s it here is foolish because they can save a minimum of $1,000 by going 40 miles north. Quite a few people here drive up there to buy groceries.

The market forces controlling this community are the old and wealthy families that make up most of the local chamber of commerce. They have made it their business, over many years, to tell many companies that they aren’t welcome in this community. Companies like VW of America and Miller Brewing Co. The companies that they welcome with open arms are minimum wage sweat shops. If not for the little village that is surrounded on three sides by the city, there would be no WalMart or KMart. In the 70’s when they built the KMart they had to fight and defeat an injunction won in the local court by the chamber in federal court. I am sure that there are many communities in this country where the people are similarly trapped in a situation where they can either grin and bare it or get out. Many of our young people choose the latter. Fortunately for many of our business leaders, there is a new source of cheap labor coming into the community these days.

Posted by: jlw at December 5, 2006 6:26 PM
Comment #197846

The operative statistic is household income. Not all workers are working to support themselves. My household has four workers. Two of those worker make less than $2,000 a year. Do you really think we should count them? They are not living independently. Beyond that, families often work together. Some members make money while others work part time for various reasons like study or children. Beyond, beyond that, most American families have some income besides wages. Some of the poorest wage earners are older folks, who have low wage income but might collect rents and annuities.

Re where you live, I would move. If wages are higher and costs are lower, why stay put? Some places have less opportunity; others have low cost of living, but if your current location combines the disadvantages of both it better be the most beautiful place in the world, in which case that is what you are paying for.

Posted by: Jack at December 5, 2006 7:53 PM
Comment #197858

Jack-
The trouble with your angle is that EITC depends on income, and does not actually increase it. It only decreases what’s taken out of it, and then past that subsidizes that person’s income with other people’s money.

It basically ends up being government subsidy for people not being paid enough by employers. Why are the taxpayers footing the bill for employer’s cheapness? Why should we subsidize businesses that cannot pay their employees living wages? Is it not the definition of market economics that some people just aren’t cut out for business? Isn’t it silly for the government to keep them afloat by allowing them to lowball people’s wages?

The effect may be positive in the short term, but it’s not the free lunch you take it to be.

There are many job markets where the cheapness of the employers has created artificial shortages of people to take the position. This is my worry with all the outsourcing and everything: we’re rewarding American companies that try and lowball people who not only have to support themselves on the wages and/or salaries given, but often have huge sums of money in college loans to pay back. If we think we can get away with this, we are cruising for a market bruising. The focus of the people on top on filling their own pockets, and the cooperation of those in Congress who aid and abet this through tax write-offs and regulatory laxity about incorporation, has resulted in a system where there is less incentive than ever for American companies to be market competitive based on performance and not just cheap bastardry.

We rewarding laziness in the corporate leadership, rewarding a corrosive attitude towards the work force that increases economic instability, and thereby lowers real productivity.

The Republicans went past trying to free corporations of onerous regulation and committed the opposite era to big government liberals, becoming legislative enablers through regulation, shaping it to help the upper eschelons increase abstract numbers and profits generated from speculative behavior. The bubbles and financial misbehavior we’ve seen in the past decade are no coincidence in terms of Republican legislature. This is what they’ve been about. Talk about free markets have simply been a fairy tale, told to conceal the true extent to which corporate welfare and cronyism has become the rule in Washington.

This isn’t about good and evil but instead who is benefiting from Congress’s internventions, and who is having to take the hit.

It can also be said that over the years of Conservative ascendancy that it is no coincidence there as well that we see the decline in real incomes for people, the increase of volatility in the job market, the cratering of healthcare, and the general decline in corporate responsibility to the public.

A general selfishness and self-centeredness has pervaded the system. This is no coincidence, but the inevitable result of the insistence on pure competition as the benchmark for behavior.

Although the GOP has spoken time and again about morality, the party in general has no interest in it once you get above people’s waists. Accountability, transparency, unconflicted service to the public- all these are shot down as market-unfriendly. Never mind that a rule may be right and cause a loss of profit for those employing such means because it prohibits them from such illegitimate methods. No, the big wrong for many Republicans is the intervention of greater authority.

Our government has become paralyzed between the dictates of intervening on behalf of companies, and not intervening in ways that cost those companies money from taking any action that might benefit the public in general, but not those business in particular.

It’s a devil’s bargain, and its done a lot of damage in the time it took for America to finally lose its patience with the conservative movement.

It is time for the government, which is supposed to represent the public’s interests to start paying attention to the needs of the average person.

Posted by: Stephen Daugherty at December 5, 2006 9:02 PM
Comment #197859

agreed.

Posted by: Diogenes at December 5, 2006 9:10 PM
Comment #197866

Reality really hurts. All this talk about the “average” person. Give me a break. You either have valuable skills or you don’t. If you want to be “taken care of” go move to Europe.

Over the last 20 years or so I have employed 5 - 15 “minimum wage” workers. Why the swing? When the minimum was raised I fired between 8 - 10.

I look at the min wage as welfare. I always try to help out some folks. But when it is artificially set higher well, the bottom lose. That’s the way it is. They have no real skills so I use the money to keep my productive people. So go ahead and raise it to “help people” …. for me it just ends up hurting 6 people at my business - that’s how many I will cut back this time.

As if…..gov’t can really figure this out - what a joke. But what is really laughable is that the six people I fire will no doubt have voted Dem…..so typical….ly pathetic.

Posted by: echop8triot at December 5, 2006 9:25 PM
Comment #197868

Oh, by the way.

I paid my way through all of two grad schools. Risked my life savings to start a technical manufacturing business. And I draw a salary 150x the average wage at my business….why? I deserve it. No one else shared the risk with me at the start …. my salary reflects both the entrepreneurial risk I took and my irreplaceable position at the company.

Oh yeah….I provide health care to all, a matching 401(k), and other perks. Gee I must be heartless because my pay is so high.

Laughable….all you people who spout about the CEO pay ratio all suffer from the same myopic argument you make about “medians”….its all numbers dingalings…..Most CEO’s aren’t at that high rate - its only some of the big public companies that skew the “average” results.

Jokesters all of ya. Go start and run a business by meeting payroll every two weeks - then you can post on this thread.

Posted by: echop8triot at December 5, 2006 9:30 PM
Comment #197873

you, sir, are hardly what i would refer to as a ceo. oh yes, and you’re very wrong (all around). go punish your employees if it makes you feel better (from what i’ve seen, they’re probably better off getting fired).

Posted by: Diogenes at December 5, 2006 9:47 PM
Comment #197876

my apologies. i should not have taken the bait.

Posted by: Diogenes at December 5, 2006 9:50 PM
Comment #197883

Diogenes,

His posts called to mind this Robert Herrick poem:

Upon Grudgings
Grudgings turnes bread to stones, when to the Poore
He gives an ames, and chides them from his door.

Posted by: Trent at December 5, 2006 10:43 PM
Comment #197889

JimmyRay,

Thanks for pointing this out. The Dems are just being stingy, greedy, republicans. We need to start giving people a living wage. I think $20 sounds fair.

I was hoping that someone would bring up the Living Wage. Because this is where this issue is actually going.

Posted by: esimonson at December 5, 2006 10:56 PM
Comment #197891

trent,
both potent and pertinent.

Posted by: Diogenes at December 5, 2006 11:06 PM
Comment #197904

Raising the minimum wage is the same as giving a pay increase to those who have no skills and/or no experience. The government would do better to give incentives for citizens to learn skills. We need marketable citizens, not higher wages for the unskilled and inexperienced. No wonder illegals are flooding our job market!

Posted by: Don at December 6, 2006 12:02 AM
Comment #197906

Stephen

Re government representing the average person. The average person is not poor. I am not sure how much the average person cares about the poor. I am not even sure how much the average poor person cares about the poor. The liberals who so like the poor are usually not themselves poor. most people want to help the poor if they will help themselves. The earned income and child credit does this.

Re tax credits. If we want to help the poor, WE should help them, not force somebody else to do it. Not many breadwinners make minimum. If you just raise the minimum wage, you are most passing money to teenagers and others who are not the primary earner. Raising the minimum, for example, would benefit my family as I have three kids who work sporadically. Thanks, but frankly I do not need it.

The tax credit gets at the people who really need it. The minimum wage makes the non-poor feel better and probably helps a lot of middle class parents whose kids can buy their own video games. More perniciously, if it draws more middle class teenagers into the labor force, they can replace the poor and mitigate the need to have so many poor people hanging around the neighborhoods.

Posted by: Jack at December 6, 2006 12:08 AM
Comment #197908

don,

a good plan. i think you are referring to active labor market policies - and i think they would prove far superior to simply increasing the minimum wage.

provide training, and allot funds for relocating workers to areas specific to their training, if need be. this benefits business and workers, alike (as well as spurs the economy). it can also help lessen or even avert the negative effects of outsourcing.

moreover, rather than directly providing funding for these programs, incentives can be given to businesses that provide these services themselves.

these measures, alone, might not be quite sufficient; yet there are many other aspects to such active labor market policies worth exploring, and they have proven exceedingly effective elsewhere.

Posted by: Diogenes at December 6, 2006 12:19 AM
Comment #197913


I have been very confused about the illegal immigrant issue. It seemed to me that the Democrats and Republicans were each taking the wrong side of the issue. Democrats have always championed the cause of the American workers. While the Republicans, if they could, would pay their workers their daily bread if they could get away with it and they are always looking for ways to cut their labor costs.

I think I have it figured out. Most of the poor Mexican and other Latin American workers who are coming here illegaly are Leftists who look up to leaders like Castro and Chavez and who hate their rich right wing overlords who’s greed and policies have forced them to risk the trip into the U.S. to support their families back home. I think that the Democrats and the Unions are expecting half of them to be down at the local the day after their emancipation to buy their books. Six million new Union members, now wouldn’t that be something. I wonder if echop8triot hires illegals?

Posted by: jlw at December 6, 2006 1:52 AM
Comment #197914

jlw, You are 100 percent right that the Patriot act has little to do with the radical Islamic rterrorist and more to do with US citizens.
The illegals that come here are use to the Mexican economic system and the poverty, a few more years of the current economic policies here and they will feel right at home. After all the repubs want the mexican system because it works so well there.
Jack. So Im supposed to go to the next stock and CEO and get more of the same, why that just doesnt seem to make to much sense and I will be paying short term gains to boot. If you have a crooked system you get crooks running the system, and everyone else suffers. The its bad but we should let it continue instead of having govt fix it should work for a lot of things, drugs dealers, child predators, and CEO’s.

Posted by: j2t2 at December 6, 2006 4:34 AM
Comment #197916

j2t2

No system is perfect and most include a fair amount of mendacity and dishonesty. The free market has the advantage of generally pitting ambition against ambition and greed against greed. It has, in other words, checks and balances.

If you investing in stocks over the past 20 years, you made about 12% on your investment. That is not bad. I do not know how much the big CEOs are worth, but if they can increase return by millions, I do not mind giving them a piece of the action.

Take a case of GE. GE is the only one of the original Dow Jones firms that remains on the index today. For many years, it lanquished. A new CEO, Jack Welch, came along and revitalized the culture. He made billions for the stockholders and got millions in return for himself. I owned GE stock during some of that period. I did not mind him making those big bucks.

The system of exectutive compensation is not good, but when you look at the leadership in politics, would you prefer these guys calling the shots? Politicans rarely understand business. The incentive systems are very different.

So you are left with two sub optimal choices.

One more thing, CEOs are sometimes paid more because of the sheer size of the firm. If the CEO is getting 1/2 of 1% of the profits and the profits are really big, so is his salary.

In any case, what the CEO makes is none of our business unless we are stockholders in those firms. Stockholders do not mind paying CEOs big bucks if they think they are making money. It may appear stupid or unjust, but that is the choice of the people involved.

Posted by: Jack at December 6, 2006 8:49 AM
Comment #197918

Jack-
You fault others for being generous with other people’s money. What do you think the EITC is? It’s an entitlement. It is being generous with other people’s money. With the Minimum wage though, you’re simply requiring those who pay wages to be more generous, in keeping with the needs of the public. What’s more, people who earn a living wage do not have to receive tax dollars to remain afloat. They can be a burden on no one, instead of being one on everyone.

The trick with minimum wage is that our economy and our standard of living could not survive if wages were set lower than a certain rate. As it is now, people are feeling the pinch despite the fact that the economy is growing. That should tell you something. A person who can’t support themselves is a person without disposable income to drive the economy with.

Do you want people dependent, locked into the system, or do you want them upwardly mobile? Do you want market forces to set wages from both sides, or do you want businesses lowballing wages such that qualified people literally can’t afford to work at that rate? That’s what’s happening to the tech industry, by the way.

When employers and corporations get too cheap, it becomes impossible to sustain the job markets and the economy. When our system underutilizes the skills of those it has trained, it’s wasting a resource. Not everything can be solved by screwing with the tax code (I think that, more than the progressive nature of the system is the cause of all the overcomplication of the tax laws). Not everything can be solved by leaving it up to the corporations to solve it.

This is a long overdue change, Jack. We need to make an honest days work pay an honest day’s wages.

Posted by: Stephen Daugherty at December 6, 2006 8:59 AM
Comment #197929

Stephen

Their no fair price or fair wage. The fair price is what someone is willing to pay.

Think of it from your own point of view. You may hire some kid to mow your lawn at $5 but would not at $10. You can force people to pay more in the short run, but in the longer run they will only pay for what is worth it to them.

I hope the higher wages drive those leaf blowing fools out of business, but that is the only good effect.

In most parts of the country and for most workers past their teen years, the market has moved wages beyond the minimum.

Re earned income credit - You are right that nobody can be generous with other people’s money. I am not being generous. It is a public policy. It is good because it makes us all (i.e. government) pay for the good we are demanding instead of bossing somebody else around and making them do it. It has the added benefit of targeting real need and real working people.

Posted by: Jack at December 6, 2006 10:12 AM
Comment #197932

re: generosity with someone else’s money. i.e. government… i.e., my tax money. it’s all public policy.

Posted by: Diogenes at December 6, 2006 10:26 AM
Comment #197937

Jack, We now have the Business CEO’s running Government. OF course they have floundered terribly and have gotten us into incredibile debt. It just goes to show that they may not be worth as much as we think. As a stockholder we really have little choice as to compensation for the executives running the company. Again, they load the board with their cronies and then loot the cash register.They and if I was in their shoes are only human and when the till is opwn you can justify a lot of trips to the till, you can rationalize that its the best for the shareholders that you are over compersated for your efforts, but its still robbery of the shareholders investment and robbery should be penalized by law. At the very least give the shareholders(the real owners) a shot at fairness. As a CEO you can always leave the company and work elsewhere if the compensation does not meet your requirements. The politicians are not that good, I would not disagree however the business leaders of today are no better, and we are not in general getting what we are paying for. The shareholders deserve a very strong say in the compensation of all employess of the company and for the most part its out of their hands at this point.
One more point, for every GE and Jack Walsh their is an Enron and Kenny boy.

Posted by: j2t2 at December 6, 2006 11:51 AM
Comment #197938


We can raise the standard of living for the poor workers by forcing the employers to pay them more but, that is group rights over individual rights and could hurt small business. Some would say that is Socialism.

We could have everyone pay higher taxes and let the government redistribute some of it to the low income workers. Some say that is Socialism and leads to bigger government.

We could do it the Capitalist way and say it is a dog eat dog World and it is every man for himself. We should face up to the fact that low skill level workers are worth about as much as dirt. As a matter of fact, some dirt is worth much more. Now, that is Capitalism.

The hoarding of wealth by the few is a World problem and many of the workers in other countries are fighting back. Many Latin American countries are moving towards Socialism. They sense the a weakness in the U.S. because of our problems in the Middle East.

There are approximately 6.2 billion people on Earth and 124 million (2%) own half the wealth. No statistic shows that class warfare is alive and doing very well better. Some countries are quite open about rule by the wealthy and have their army’s, secret police or right wing death squads to enforce it. In America the wealthy pit the Middle class against the lower class, the non union against the union. Now they are using new tools to divide the workers. They are called 401K’s, portfolios and online trading. Many who are seeing a benefit from this have bought into the rich mans system and have become calous towards those less fortunate, calling them stupid or lazy.

I appologize for my rant. I realize that we are all different, we have different skills and abilities. We all must travel our own path. What I can’t understand and find hard to accept is that one of us can be worth a billion times as much as another one of us.

We have been fortunate in America. We have had the ability to bend the system and make it more equitable. Many who argue the most against this ability benefit the most from it.

We are all in this little ark called Earth. It is a mighty fine boat, no one can point out there to one that even comes close to this one. We should all be working together to make our little boat better because we have no other. Instead, we cheat each other, abuse each other, kill each other and crap all over our ark, our Earth. May God have mercy for all of us because we sure don’t.

Posted by: jlw at December 6, 2006 11:58 AM
Comment #197941

jlw

Most Latin American countries never really moved away from socialism. That is their big problem.

re less fortunate - some are unlucky. Many are indeed lazy or dishonest. It also depends on what you call poor. If we call the lower 20% poor, the upper 20% rich and the other 60% middle, we have a rough basis to say that most people will never be rich or poor, although many of will have a taste of poverty when they are young.

Posted by: Jack at December 6, 2006 12:39 PM
Comment #198050

Okay some one up there said:

“More than half the workers in this country make less than $25,000 per year.”


For the love of everything holy, if you are going to argue something, LOOK IT UP FIRST!!!

Go to www.wikipedia.org and make at least a half-assed attempt to know what you are talking about.


——————————————————————-
Seriously, the ACTUAL NUMBERS ARE AS FOLLOWS:


25% of households make under $22,500 annually;
this includes unemployed, retired, welfare aids and some part time minimum wage workers.

50% of households make between $22,500-$77,500 annually; this includes retirees and 60% of labourers (yes 40% of labours make over $77,500)

25% of households make over $77,500 annually; this includes 40% of labourers, retirees, 90% of politicians and 50% of CEOs.
——————————————————————


Most of you also fail to realize that the CEOs are the owners of the companies.

Legally and morally they can take what ever they want, it’s there company. Ralhp Lauren doesn’t make 16mil a year because no one likes the Polo brand.

Seriously, there are a thousand products that are cheaper and more effective and owned by small businesses available everywhere all the time. The rich are rich because you give them the money.

You don’t like it, then don’t patron their businesses.

You don’t like the CEO of Disney pulling nearly a billion dollars in one decade then don’t buy the stupid Ice Age #47 for your kids.

You don’t like the CEO of FOX being on the Forbes top 400 list, then start watching C-SPAN.

You the consumer make the rich wealthy. If you don’t want them getting richer stop buying their products.

That is all there is to it. Everyone on this blog has purchased something from Disney at one time. Everyone here has owned a name brand article of clothing or pair of shoes.

It doesn’t matter if you got your Nikes at Goodwill, your still advertising.

Posted by: Bryan AJ Kennedy at December 6, 2006 10:02 PM
Comment #198052

Oh and another thing…

If you raise minimum wage, you raise cost.

If you raise cost the livable wage goes up.

If the livable wage goes up then your minimum wage increase is pointless.

Minimum wage is what you get when you fail to be effective at anything valuable.

There is 26 position down at Tacoma’s docks that I know of right now. All start at $12/hour or more.

They turn people over like crazy, because no one works for shit.

Those people get fired and go make minimum wage.

That is just how the world works, if people want to make more then they need to work harder, other wise they will always be poor.

Poor means you just make less then some one else.

If your the poorest and you come up $10 then now you just made some one else the poorest and by liberal definition are a corperate devil.

Good job a-hole that’s what you get for being the second poorest in the world.

=)

Posted by: Bryan AJ Kennedy at December 6, 2006 10:06 PM
Comment #198053

Just for the record:

The a-hole comment wasn’t directed at anyone here, it was directed at an imaginary second poorest person in the world concieved by my own imagination.

If you are the second poorest person in the world come prove it to me and I’ll make you the third poorest as compensation for the offense.

=)

Posted by: Bryan AJ Kennedy at December 6, 2006 10:08 PM
Comment #198109

Muirgeo,

You say the best economies were during the 60’s and 70’s after thrity years of Democratic policies??????

Reagan came into office in 1981 with double digit unemployment. Black unemployment was over 12% itself. We were quickly losing jobs in droves. The automotive and manufacturing industries were collapsing. You obviously couldn’t have been around at that time, or you would remember these things! In eight years the Reagan policies dropped Black unemployment to under 8%! That is a drop of unemployment within one ethnic group of over 4%; unheard of before Reagan. He cut the overall unemployment rate to aroud 6%. Further tax cuts going into G.H.W. Bush’s Presidency cut Black unemployment and overall unemployment even further. In fact, G.H.W. Bush was the first President to have virtually equal unemployment rates between White and Black four year college graduates, at just over 4%. You better start reviewing your economic history books. Or, at least, stop reading the ones rewritten by liberal elites!! No economy had ever matched the Reagan / Bush economic policies of the eighties, and much of it was due to a guy named Jack Kemp. You might remember him as Presidential candidate Bob Dole’s running mate.

Posted by: JD at December 7, 2006 12:40 AM
Comment #198164

It is instructive that those quoting supply and demand as a reason not to raise the minimum wage, ignore that minimum wage has neither increased unemployment, nor hurt the economy in any way.

Reality be damned, it is wrong to tell employers that paying the underprivileged and uninformed wages that can at least approach some sort of living wage. Civility has no place in the market place. If I recognize that I can take advantage of your dire situation, then I should take full advantage.

Eric and Jack point out that no one works for minimum wage. Eric or Jack have not had a minimum wage job in years, if ever. They never talk to the mini mart guy, the lawn service guy, or innumerable other invisible people at the dregs of society.

Someday the tables may turn, poetic justice may be served and those guys will have to slave for someone who holds all the cards. Then I’ll listen to their spews about economics they have no relationship with.

Posted by: gergle at December 7, 2006 1:53 PM
Comment #198167

I once worked for an employer who hired illegal aliens to perform laboratory testing. He hired three illegals and one legal who could speak spanish.

I was hired to manage the laboratory. I observed the lead guy spend his entire day talking on the phone, presumably to girl friends, and continued to lose samples, perform incorrect tests, and generally screw off.

When I explained to the owner that he was losing money by hiring 4 people at below minimum wage to perform the work of at most 2 with some semblance of ability to adequately perform the work. I kept two of the illegals, got them paid a fair wage, and hired a third American to work part time in two different departments.

The moral of this story, there are some business people (a lot of them, actually) who think cheaper is always better. In actuality it isn’t, but that doesn’t stop them from screwing their employees who then, quite reasonably, screw them back.

Posted by: gergle at December 7, 2006 2:05 PM
Comment #198182

Bryan AJ Kennedy-
Some high muckety-mucks own their companies. Most CEOs, though, boss everybody around at the sufferance of the investors, who are the real owners of the company. Legally, they are obligated to work on behalf of the profit and prosperity of the company. In fact, any decision that can’t be justified in terms of the financial wellbeing of the company, no matter how well-intentioned, can get them in trouble.

So can raiding the company’s finances, or doing something that harms the company. But why are these thing illegal? Because the law says so.

The character of corporations and the law are inextricably connected. If we allow the law to get too lax, and the market can’t put an end to bad behavior, then bad things happen.

We have to give the system credit for its complexity, for its intimate interconnection. Minimum wage is a start, but we got to hit other areas, reform other aspects of the labor equation. We also have to respect that some parts of the economic equation don’t show up in the numbers and the math, but in the less quantifiable sides of life. We’ve strangled much of the work-force out of being healthy, out of having a homelife, out of having dependable hours, and have made it infinitely easier for people to be laid off or replaced by foreign simply for the sin of demanding a fair market wage. We’re letting China and other countries cheat at the free trade game because its good for some businesses back here. We’re letting our internet infrastructure fall behind that of our major competitors, despite promises we wrung out of the Telephone companies to deregulate them.

An economy is more than a numbers game, its what reality comes of that game, and of other factors.

Posted by: Stephen Daugherty at December 7, 2006 3:42 PM
Comment #198508

Gergle,

Lay off the class warfare thing with Eric and Jack! I’m sure they stop by the Mini Mart to buy their coffee on the way to work, or hire the lawn guy to mow their lawns, if they don’t do it themselves when they get home from a busy day at their real jobs. You assume those who don’t have money have no association with those who do, and vice versa. Where do you live Bel Air or Hollywood? That’s certainly not the real world I live in. And furthermore, what right do you have calling minimum wage workers the dregs of society? That isn’t a bit of that liberal elitist “we have to save the victims” mentality showing its true colors is it?

JD

Posted by: JD at December 9, 2006 8:52 PM
Comment #199067

I just need to simply point out that the reason labor unions back raising the minimum wage is that it pushes overall wages up. Which means that everybody in low skilled jobs gets a raise. This then leads to companies having to increase prices to pay for the higher labor cost. So go ahead and triple the minimum wage if you want to just be prepared to pay triple for the car that you drive, the groceries your buying and the houses that you live in.

Posted by: Ron at December 13, 2006 1:13 PM
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