Third Party & Independents Archives

January 26, 2007

Min. Wage - Small Business

Sen. Mike Enzi (R) is trying to hold up the minimum wage bill in the Senate arguing small businesses will be hurt by having to lay off workers. Sen. Enzi is wrong, and in dire need of a business 101 course. This is a ruse and red herring. Sen. Enzi does not want to see the minimum wage increase.

Here's the deal from business 101. If the cost of labor goes up, the small business owner has 3 choices, allow the increase to eat into their profits, dismiss an employee or two, or, pass the cost on to the consumers.

Now, there are very few industries in America that pay the minimum wage. And in those industries, the small business competitors also will be experiencing increased costs of labor since competitors too are paying minimum wage, or they wouldn't be competing. Therefore, amongst small business owners, two choices are available, pass the increase cost of labor to the consumers, in which case they will all be acting in tandem, and none will lose business over it. Or, some of the small businesses may decide to pass only some of the labor costs on to the consumers but, not all, giving them a competitive pricing advantage to offer customers and increase market share.

Now, this latter option for business is the most likely to occur. Some small businesses will pass the full cost on to customers, and some will pass only some of the cost on, and perhaps a very few will not pass the cost on at all, but, instead sacrifice some profits for a short time to increase market share. But, all of these options are matters of competition, which Republicans say they are for in a free market.

Yet, here we have a Republican Senator trying to pass the cost of minimum wage increases for small business on to the taxpayers through tax deductions, the lost revenues of which will have to be made up from other taxpayers, or other spending cuts. In other words, Sen. Enzi is to trying to prevent small businesses from having to compete with each other on how they handle the costs of the minimum wage increase, by sticking the taxpayers for the bill.

Why would he do this? I checked his web site, and found the motivation big as day, and I quote: "U.S. Senator Mike Enzi, R-Wyo., is inviting Wyoming business representatives to Casper soon to expand their knowledge and explore ways to increase their sales." No doubt, Sen. Enzi is paving the way to attend that conference boasting how he saved small businesses from having to absorb or compete for ways to absorb the minimum wage increase. A minimum wage Republicans refused while in power to move forward in the first place.

This is why Republicans cannot be trusted to govern as a majority party. They will sell out their convictions and principles and the nation at large regarding free markets, competition, small government, no deficits, in a heartbeat if they can cater to a special interest group that will fund their reelection. Sure, small business lobbied against a minimum wage increase. But, their motive is to prevent the situation in which small businesses will be forced to compete with each other as to whether or not to pass the cost on to the consumer or not. Most will want to, but, fear increasing their price opens a competitive edge to rivals. So the bottom line here is this, small business and Republican Sen. Mike Enzi are trying to prevent competition in the market place.

This is precisely what Republicans have been doing for years. Cutting the costs of business and passing the costs on to the taxpayers of tomorrow through deficit spending and growing national debt. It is wrong headed policy and thinking for our nation and has grown our national debt through subsidies to the Oil industries and Pharmaceutical industries and many others which have seen record profits, and would have had very high profits without the subsidies in the first place.

I highly recommend voters, regardless of party, who believe in free enterprise and competition for business as a benefit to both business and the consumer, to contact your Senator and tell them to halt this attempted giveaway of tax revenues for small business which is currently blocking the passage of the minimum wage increase legislation.

The minimum wage increase will put more disposable income into the hands of young, old, and entry level unskilled workers, which will in turn, mean they will consume more business products and services, and that is good for both business and workers alike. Help Republicans understand that these are the reasons they lost. Help them to rediscover their core values of competition and free markets and living wages which in the grand scheme of our economy benefits everyone in the long run, without running up deficits and national debt with compensating subsidies.

Posted by David R. Remer at January 26, 2007 11:06 AM
Comments
Comment #205181
The minimum wage increase will put more disposable income into the hands of young, old, and entry level unskilled workers, which will in turn, mean they will consume more business products and services, and that is good for both business and workers alike.

Well, except, as you note, for those who lose their jobs because of the increase and the increase in income will go to paying for the increase cost of goods and services that will be passed onto the consumer.

the small business owner has 3 choices, allow the increase to eat into their profits, dismiss an employee or two, or, pass the cost on to the consumers.

Never forgetting of course that a NATIONAL minimum wage law assumes that all labor cost of living expenses in the country are the same. They aren’t, not by a long shot, and even setting a national minimum wage without taking that into account ENSURES inequities to be the result.

Posted by: Rhinehold at January 26, 2007 12:25 PM
Comment #205183

Rhinehold:

IIRC weren’t these same arguments made (and proved untrue) the last time there was a significant (or any) raise in the minimum wage?

Posted by: womanmarine at January 26, 2007 12:32 PM
Comment #205185

Never forgetting of course that a NATIONAL minimum wage law assumes that all labor cost of living expenses in the country are the same.

Name one area where you can live comfortably on minimum wage in this country.

It seems like a free marketer would want to make businesses bear the real cost of their labor, instead of forcing the working poor to enroll in WIC or other Entitlements.

Posted by: gergle at January 26, 2007 12:34 PM
Comment #205189
IIRC weren’t these same arguments made (and proved untrue) the last time there was a significant (or any) raise in the minimum wage?

No, they were not proven untrue.

Even David admits that one of the three options a business has will be exercised and those results will take place.

Posted by: Rhinehold at January 26, 2007 12:46 PM
Comment #205190

Rhinehold, on balance, far more good for far more people results from raising the min. wage than not.

There is an opportunity cost and consequential cost to any decision. That should not paralyze decision makers into inaction when it is clear a course of action will do far more good than harm.

Posted by: David R. Remer at January 26, 2007 12:47 PM
Comment #205191

David,

Of course, any decision should be weighed against the costs, I just want to make sure those costs are accepted and agreed upon instead of trying to be ignored just like Womanmarine is trying to do by saying that they ‘don’t exist’.

Posted by: Rhinehold at January 26, 2007 12:49 PM
Comment #205193

BTW, I find it interesting that the initial minimum wage law was deemed unconstitutional. I wonder what changed to make it pass muster in 1938…

Posted by: Rhinehold at January 26, 2007 12:51 PM
Comment #205196

The Great Depression and the end of the era of the great robber barons. The country was run by the robber barons before the Depression. It was run much more by representatives attending the American people and workers after that. That was the sea change that Republicans today are still trying to reverse, and in so doing, have brought us dangerously close to another Depression to come in 15 to 25 years as baby boomers retire either as consumers, hopefully, or destitute and consumer less.

Imagine that huge bulge of population, 75 to 80% of whom cannot afford to live without SS and Medicare, and finding the government cannot afford to sustain those safety nets. The economic consequences or mind boggling. Workers will be diverting their wages from their own savings to provide for their retired parents, and geriatric poverty becomes multi-generational, not unlike that of black sharecroppers during the 19th and first half of the 20th century.

Posted by: David R. Remer at January 26, 2007 12:59 PM
Comment #205197

Rhinehold:

I never said nor implied that they didn’t exist. The intent of my post was that there was no where near the dire results that were projected the last time. Of course some did, but not to a disabling effect.

Posted by: womanmarine at January 26, 2007 12:59 PM
Comment #205200

Womanmarine,

So a little bit of government intrusion is ok as long as someone gets something out of it, right? The inequities that individuals my encounter are good enough if the country as a whole isn’t harmed too badly by it so that one political party can reap the rewards?

Posted by: Rhinehold at January 26, 2007 01:03 PM
Comment #205202

Rhinehold:

Frankly, I don’t understand that question. Any action taken by the government affects someone, some good, some bad. The balance overall, the good of the country as a whole is what should matter.

Otherwise there would be no laws passed. We have had federal minimum wage laws for a long time, this is nothing new.

Posted by: womanmarine at January 26, 2007 01:06 PM
Comment #205208

We’ve had federal minimum wage laws for a relatively short time, the first one that wasn’t considered unconstitutional (though I suspect it still is) wasn’t put into effect until 1938. That’s less than 70 years, the last increase was 10 years ago…

And I understand that you don’t understand the question, few people do. It has to do with the reason for the government, it SHOULD be to protect the rights of the minority over the will of the majority but instead these days it’s simply a means to an end, a way to enforce the will of the majority over the will of the minority at the hands of the police force…

There is no net good that the minimum wage brings in todays world, eventually the chaos created by it will bring the economic gains and damages to equilibrium and those on minimum wage will be in the exact same place. It is the rich that exploit that chaos who makes anything at all off of the minimum wage laws that are put into place, never mind it being used as a tool to damage minorities, blacks, hispanics, etc.

But the individuals are not important, only the almighty political gain…

Posted by: Rhinehold at January 26, 2007 01:13 PM
Comment #205211
And I understand that you don’t understand the question, few people do.

Perhaps there’s a reason for that?

Posted by: womanmarine at January 26, 2007 01:17 PM
Comment #205216

There’s no such thing as a completely free market in the terms of government being unable to interfere with decisions that have financial consequence.

Regulations concerning safety for airlines and maintenance requirements cut into the profits of these airlines by requiring that they pay to keep the airlines in good condition. Now, an airline could go cheap on all this, and only address problems that rarely become a problem, but then that would end up costing lives quite often. We fly nearly constantly in this country without incident because we obligate people to keep their jets in good condition in order to fly.

In a simplistic business world sense, it’s a breach of the free market. But we don’t live in the free market. We live in the real world, with real people whose lives are fairly precious to us. The market is an overlay on that, and it makes little sense to make things ideal from a business world perspective, if the reality of the situation suffers for it.

The minimum wage increase is long overdue. How much have executives siphoned off in huge salaries from business, without truly earning the increase, or doing much good in return? The CEO of one hardware company could have probably given substantial raises across the board for his employees from his severance pay alone. Whatever happened to rewarding work? Whatever happened to making it more attractive to be employed than to remain on government assistance? If you don’t pay people enough to survive without the government, you’ll never convince them that it’s in their interest to remain off such assistance.

Posted by: Stephen Daugherty at January 26, 2007 01:23 PM
Comment #205218

Stephen,

What you say just isn’t backed by evidence. The VAST majority of people who are working for minimum wage are chilred and ‘second wage earners’ for a household. Very few people are currently trying to live off of minimum wage. These people are not people who will be going onto government assistance, and once the minimum wage is increased and the unemployment rate rises, there will be fewer jobs for those who are trying to live off that wage causing MORE people to have to go onto government assisstance.

As for CEO’s getting huge salaries, this isn’t going to change by the minimum wage law, they will still demand, and get, those high salaries because businesses are willing to pay them because they feel that the individual they get for the money they pay him is better for the company and will increase their profits MORE than the difference between his salary and the second best candidate. And I have to say, if that wasn’t true, businesses would have figured that out by now and stopped paying it.

Posted by: Rhinehold at January 26, 2007 01:29 PM
Comment #205219
Perhaps there’s a reason for that?

Yes, it’s the nature of the cycle of governments. Once the population figures that they can VOTE THEMSELVES A RAISE out of the government treasury, the idea of a democracy is only a few decades from disappearing altogether.

Let’s keep it up, after all, we are helping no one but the rich and political saavy, but they need that help, don’t they!?

Posted by: Rhinehold at January 26, 2007 01:32 PM
Comment #205221

Rhinehold:

Perhaps there’s a reason for that was addressing that most people don’t understand the question, for good reason.

Posted by: womanmarine at January 26, 2007 01:34 PM
Comment #205229

Yes, and I explained it. Let me try again though…

What is the purpose of government. Choose A or B.

A - Enforce the will of the majority onto the minority

B - Protect the rights of the minority against the will of the majority.

Now, how you answer the question says a lot…

Posted by: Rhinehold at January 26, 2007 01:41 PM
Comment #205231

Rhinehold:

You didn’t explain it. And your question is not answerable in that form.

Posted by: womanmarine at January 26, 2007 01:45 PM
Comment #205232

How is it not answerable? These are two points at odd with each other, they can’t both be right…

Posted by: Rhinehold at January 26, 2007 01:47 PM
Comment #205235

Studies have shown the down-side of minimum-wage increases to be small, and the over-all advantages to somewhat small too.
It’s another good wedge issue (detractor) for some politicians (to pit voters against each other; like illegal immigration pits American citizens and illegal aliens against each other, and the circular, distracting, divisive partisan warfare that pits voters against each other, etc.).
The minimum wage is not anything to get too worked up about.
Especially when more pressing problems still go ignored.

Posted by: d.a.n at January 26, 2007 01:56 PM
Comment #205237

The answer is B (partly).
It can’t be A.
However, A occurs (unfortunately).
A can be true as long as the will of the majority is NOT violating the human and civil rights of the minority.

Posted by: d.a.n at January 26, 2007 01:58 PM
Comment #205238

d.a.n.,

Very good, you are close. Now let’s examine what the civil rights of the minority are in the context of the constitution, specifically the 9th and 10th amendments…

The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.
The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.
Posted by: Rhinehold at January 26, 2007 02:05 PM
Comment #205240

I have to disagree with you David. Small businesses are not trying kill competition. We’re trying to survive in a business climate that is getting very difficult to survive in. And increased cost either means lower profits or higher prices. Neither of which are very viable in today’s business climate. We have to set our prices to compete with larger companies that can purchase their supplies at a lower per unit cost than we can because of the larger quantities they buy. We also have to compete a lot of times with imports form countries that don’t have minimum wage laws. Most of us are on a slim profit margin now and can’t really to afford to cut into them.
I doubt the raising the minimum wage will cause very many small business owners to lay off employees to keep profits up. Like you said most of us will absorb what we can and pass the rest to our customers. But some small business just might have to shut down because they can no longer compete with big businesses or imports. This would lead to an increase in unemployment claims and end up costing the taxpayers in other government programs like food stamps.
Also employers like me that pay more than minimum wage (and there’s a whole heap more of us than those that only pay minimum wage)are going to have to pay our employees more just to keep them at the same rate above minimum wage that they are now.
If the minimum wage bill passes I will raise my employees pay and try to absorb as much as possible. But how much profit do you think I should lose before I raise my prices? And how much do you think I can raise them before I can’t compete anymore?
I’m against Sen. Enzi’s idea of a tax break though for more than one reason.
1. If small businesses get this tax break big businesses are going to want it to. And if they get it (and I’ll be they do) small businesses are back where they started.
2. The deficit is bad enough without reducing taxes for anyone anymore than they already have been.
3. Giving small businesses a tax break will put a burden on someone else.

Posted by: Ron Brown at January 26, 2007 02:18 PM
Comment #205244
disparage: (1) To speak of in a slighting or disrespectful way; belittle. See Synonyms at decry. (2) To reduce in esteem or rank.
    Amendment IX: [Non-Enumerated Rights (1791)] The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.

OK, that makes sense. The Amendments apply equally to all. Also, the majority can not modify the Constitution if it violates the rights of another. The 9th Amendment ensures that fundamental rights are not denied at a later time merely because they were not specifically enumerated in the Constitution.

However, there is some debate of this.
Too bad the amendments aren’t a little more explanatory, which leads to much debate over meaning and interpretation.

    Amendment X: [Rights Reserved to States (1791)] The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.

Now, Amendment 10 is constrained by 9. But, 10 limits the powers of the federal government.

No ? Perhaps, I’m missing your point.

Yes, it’s the nature of the cycle of governments. Once the population figures that they can VOTE THEMSELVES A RAISE out of the government treasury, the idea of a democracy is only a few decades from disappearing altogether.
Exactly.
    “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largess from the public treasury. From that time on the majority always votes for the candidates promising the most benefits from the public treasury, with the results that a democracy always collapses over loose fiscal policy, always followed by a dictatorship.” (Alexander Fraser Tytler, 1742-1813)

Congress has already figured it out, as evidenced by the fact that they have given themselves 8 raises (between 1997 and 2006) while our troops go without adequate body armor, medical care, and promised benefits (not to mention the pork-barrel, graft, fraud, corruption, waste, massive borrowing, debt, spending, and excessive money-printing).

Let’s keep it up, after all, we are helping no one but the rich and political saavy, but they need that help, don’t they!?
Yes, the nation will continue to decline, and become increasingly fiscally and morally irresponsible, until: (a) it perishes (essentially), (b) or there is reforms, and the nation survives.

Either way, the motivation will be the pain of the inevitable consequences of so much fiscal and moral irresponsibility.

In a voting nation, education is paramount, and the voters’ painful education (of their own making) is on the way.

It’s a cycle:

… and there is no guarantee we (as a nation) will survive it. Thus far, we survived the Revolution (1776), American Civil War (1861), the Great Depression (1929) and World War II. Will we survive the next go-around?
If we do, we will probably be better for it.
If not, then we may go the way of thousands of great nations before us.

Posted by: d.a.n at January 26, 2007 03:04 PM
Comment #205256

and once the minimum wage is increased and the unemployment rate rises,

Can you cite an instance where this has happened?

If I recollect, it never has.

Posted by: gergle at January 26, 2007 05:37 PM
Comment #205257

Rhinehold-
Both. They aren’t mutually exclusive.

In terms of employment, you’re assuming the market isn’t elastic enough to take the wage hike. Despite that, many states that have raised minimum wages of their own ended up losing not much of anything in terms of employment.

Another aspect of this is what happens to the money. Typically, at that level, it gets spent! Maybe it goes to an auto worker because some teen can afford a car now. Maybe it goes to an energy worker because that teen already has a car, but can pay for more gas, or pays more for gas to get them to the places they might shop at. Maybe it goes to software manufacturers when the teens buy video games, or the food companies when they pay for more cheetos or chips. Maybe it goes to a computer company when they buy their new PC, or to a credit card company as they pay for interest.

Or maybe it doesn’t come out of your pocket so much when somebody can earn rather than be given the money to heat their home or buy their food.

The economy feeds back into itself. That’s the whole selling point of tax cuts. Trick is, though, people don’t earn anything more because of a tax cut, they just keep more of what they earn already. If wages and salaries among the lower and middle economic classes don’t keep up with inflation (which they haven’t), and don’t see increases, buying power is reduced.

There are other things as well: If a person earns more, they can afford to work jobs they might not have otherwise been able to afford. The market itself makes it difficult for people to afford certain jobs. If you can’t pay for the transit costs, for example, the job’s not going to be worth it.

You’re looking at Minimum wage from a deterministic, balance sheet-oriented point of view, and that’s not the sum total of how an economy works.

Posted by: Stephen Daugherty at January 26, 2007 05:42 PM
Comment #205260

To answer my own question, since lately Rhinehold seems to ignore my comments, the short answer is no.

However some may argue to a presumed coorrelation between unemployment and minimum wage:

A simple classical economic analysis of supply and demand implies that by mandating a price floor above the equilibrium wage, minimum wage laws should cause unemployment. This is because a greater number of workers are willing to work at the higher wage while a smaller numbers of jobs will be available at the higher wage. Companies can be more selective in who they employ thus the least skilled and unexperienced will typically get excluded.

However, there are many other variables that can complicate the issue such as monopsony in the labour market, whereby the individual employer has some market power in determining wages paid. Thus it is at least theoretically possible that the minimum wage may boost employment. Whilst single employer market power seems unlikely to exist in most labour markets if understood in terms of the traditional ‘company town’ exposition, information and mobility imperfections, together with the ‘personal’ element of the labour transaction give some degree of wage-setting power to the majority of firms.


The more common debate is on changes to minimum wages. This unified view was challenged by research done by David Card and Alan Krueger. In their 1997 book Myth and Measurement: The New Economics of the Minimum Wage (ISBN 0-691-04823-1), they argued the negative employment effects of minimum-wage laws to be minimal if not non-existent (at least for the United States). For example, they look at the 1992 increase in New Jersey’s minimum wage, the 1988 rise in California’s minimum wage, and the 1990-91 increases in the federal minimum wage. In each case, Card and Krueger present evidence ostensibly showing that increases in the minimum wage led to increases in pay, but no loss in jobs. That is, it appears that the demand for low-wage workers is inelastic. Also, these authors reexamine the existing literature on the minimum wage and argue that it, too, lacks support for the claim that a higher minimum wage cuts the availability of jobs.

The traditional economic argument views the labor market as perfectly competitive. In perfectly competitive markets, the market price settles to the marginal value of the product. Therefore, under the perfect competition assumption, absent a minimum wage, workers are paid their marginal value. As is the case with all (binding) price floors, minimum wage laws are predicted to result in more people being willing to offer their labor for hire, but fewer employers wishing to hire labor. The result is a surplus of labor, or, in this case, unemployment.

An alternate view of the labor market has low-wage labor markets characterized as monopsonistic competition wherein buyers (employers) have significantly more market power than do sellers (workers). Such a case is a type of market failure and results in workers being paid less than their marginal value. Under the monoposonistic assumption, an appropriately set minimum wage could increase both wages and employment, with the optimal level being equal to the marginal productivity of labor[58]. This view emphasizes the role of minimum wages as a market regulation policy akin to antitrust policies, as opposed to an illusory “free lunch” for low-wage workers. Detractors point out that no collusion between employers to keep wages low has ever been demonstrated, asserting that in most labor markets, demand meets supply, and it is only minimum wage laws and other market interference which cause the imbalance. However, it is important to note that collusion is not a pre-requisite for market power; segmented markets, information costs, imperfect mobility and the ‘personal’ element of labour markets all represent movements away from the idealised perfectly competitive labour market.

I suppose if you believe that the employment market is perfectly efficient and the power of minimum wage employees is equalto their employers, then your assumption is true, but then I don’t believe in fairy tales.

Posted by: gergle at January 26, 2007 06:17 PM
Comment #205267

Rhinehold,

I swear, I’ll never understand your constitutional conservatism. Do you really want America to revert to the days of servitude? Life never stands still. There is either progression or regression.

The great American railroads were largely built thru the exploitation of labor due to unfettered immigration. We’re seeing that happen again today in order to undermine the existing labor laws and the result is more impoverished Americans. I just don’t get it!

If an American business can only survive by paying far below poverty level wages then maybe we should look at other problems, but the words “working” and “poor” should never be combined. There is no excuse for having a class in the USA that bears the moniker of “working poor”.

Universal healthcare would sure help put our corporations in a more competitive light. It would also put the “mom-n-pop’s” in a competitive situation with the Wal-Marts.

Nothing stands still. It either progresses or regresses.

Posted by: KansasDem at January 26, 2007 07:13 PM
Comment #205275


The corporations, their shareholders and the federal reserve just love this kind of stuff. Small business at war with workers, what could be better.

Posted by: jlw at January 26, 2007 08:37 PM
Comment #205285

Ron Brown said: “I have to disagree with you David. Small businesses are not trying kill competition. “

I never said they were trying to kill competition in general, just the competitive advantage that some would competitors will achieve when the min wage hike kicks in. But, there the min. wage increase will kick in, Republicans have already signed onto that proposition. The only barrier is another government subsidy for businesses by Republicans.

“But some small business just might have to shut down because they can no longer compete with big businesses or imports.”

That is true enough, Ron. But that occurs everyday. I don’t remember the exact figure but, a very large percent of small startup businesses fail in the first 3 years. That has always been the way of entrepreneurism.

But the business environment at large will actually benefit from the increase in consumer capacity by those now on the margins of consumerism at $5.15 an hour.

“Also employers like me that pay more than minimum wage (and there’s a whole heap more of us than those that only pay minimum wage)are going to have to pay our employees more just to keep them at the same rate above minimum wage that they are now.”

Perhaps, perhaps not. It will depend on what your competitors do. That is the nature of competition. If your competitors don’t raise wages for their employees already making more than the $7.25 new min. wage, (which is phased in), then the pressure to raise your employees wages will not exist since your employees won’t find higher wages elsewhere. And if they don’t find higher wages elsewhere and you treat them well otherwise, you won’t be losing good employees.

But, in all liklihood, there will be some upward pressure on wages above min. wage, and that again is a broad stimulus to consumerism which benefits the business community at large.

Posted by: David R. Remer at January 26, 2007 09:58 PM
Comment #205288

A - Enforce the will of the majority onto the minority

B - Protect the rights of the minority against the will of the majority.

Now, how you answer the question says a lot…

Posted by: Rhinehold


Stephen beat me to it. I say both as well.

The desires of the wealthy class minority do not suprecede the desires of the working class majority when it comes to how we set the rules for business.

Posted by: muirgeo at January 26, 2007 10:06 PM
Comment #205289

Gergle,

I find it telling that you quote the part of the wikipedia article that supports your point of view and ignore the rest that details how the Card and Kreuger research was overwhelmingly flawed and goes against all of the other data that supports the unemployment rates do increase after a raise in the minimum wage…

Posted by: Rhinehold at January 26, 2007 10:10 PM
Comment #205291

David wrote,

“Therefore, amongst small business owners, two choices are available, pass the increase cost of labor to the consumers, ……. Or, some of the small businesses may decide to pass only some of the labor costs on to the consumers …… “

I disagree that these are the only 2 options.
I had a small business once and when we were losing employees to others paying more we increased their pay and took a pay cut for ourselves. The price of our product was uneffected and the income gap between us top wage earners and employers lessened. We still made 5 x an hour more then are base employees so we were still well rewarded for our leadership and risk of running the business.


Posted by: muirgeo at January 26, 2007 10:13 PM
Comment #205292

Stephen,

You’re looking at it from a ‘everyone who works needs to make X to live on’ point of view. At is has been stated repeatedly, over 80% of those people who do make minimum wage were doing to because they were kids working part time jobs or other members of a family picking up a few extra bucks. These jobs are not long term jobs, anyone working for more than a year and is still making minimum wage has serious problems that a raise in the minimum wage will NOT address.

All you do you when you set artificial wage minimums is ensure that some of those jobs, most notably the ones the young ones have that will help teach them what it means to work and earn money, gain experience, etc, won’t be there anymore, for a while.

As we have shown and experienced for decades, all that will happen is that labor costs artificially increase, prices increase, cost of living increases and everyone ends up pretty much in the same place they were in before the wage hike. Only the people who know how to manipulate the time of flux will benefit. As for the minorities who will lose their jobs because of the excuse of increased labor, those people are just SOL I suppose…

(I need to let a couple of you guys go because I can’t afford to pay you all the increase in minimum wage. Joe, Billy, Mandy, you are staying on. Tercell, Jose, Laquitia, you’ll have to go…)

Yeah, that would never happen in America.

Posted by: Rhinehold at January 26, 2007 10:18 PM
Comment #205294

muriego, read the article, I said there was a third option, the employer eats the increase in reduced profitability. But, that is still the employer’s choice amongst 3 options, and largely the one least taken, though some employers will elect it, especially if they value their particular set of employees.

Another option is to seek increased productivity as a means of offsetting the wage increase by increasing revenues which would keep profitability relatively constant.

I was trying to keep the argument focused and simple. Running a business can be quite complex regarding this mix of costs, production capacity, revenues and profits. The toughest course I ever took in college was Managerial Accounting.

It is all about what if scenarios regarding this mix of labor cost, other overhead costs, widgets/hour/employee, price of product, market share, revenue level, and profit outcome. A very intensive math course requiring even some calculus for some kinds of operations involving time/motion/productivity schedules.

Posted by: David R. Remer at January 26, 2007 10:22 PM
Comment #205295
I swear, I’ll never understand your constitutional conservatism. Do you really want America to revert to the days of servitude? Life never stands still. There is either progression or regression.

You’re exactly right, I want to subjigate people and bring back baron lords (wait, did they actually leave or are they still here in disguise…?)

Please…

Yeah, I want to follow the constitution and keep the federal government within the limits it sets out. What a strange notion, I know.

The problem is, if you ignore any part of the constitution in order to pass what you think is a ‘good idea’, then how can you get upset for Bush doing the exact same thing? Really, if any part of the constitution is ignored, none of it is worth the paper it is written on. Bush’s statement that it is just a goddamn piece of paper sadly starts to ring true.

If you want something that the constitution doesn’t allow for, why not just change the constitution to allow for it! Of COURSE there should be ‘progress’ but it should be done within the rules that are set out to accomplish it, not just by majority rule. Because we know that the majority in this country would NEVER do anything to hurt the minority, right?

And really, you think what we’ve seen in this country in the past 50 years can be labelled as ‘progress’? Since the creation of the Dept of Education the test scores of our youth in this country have dropped like a stone. More and more people choose to be dependant upon government assistance and we turn our eye to illegal immigration because we know that those people will work for minimum wage and we need those jobs done but don’t want to allow our own citizens to do them.

What great strides forward, there’s no way we could have done better and still worked within the confines of the constitution, is there? I mean, it’s just a goddamn piece of paper…

Posted by: Rhinehold at January 26, 2007 10:27 PM
Comment #205297

Rhinehold said: “You’re looking at it from a ‘everyone who works needs to make X to live on’ point of view.”

Anything less than living wage, whether part time, full time, or otherwise, is exploitation with negative moral consequences and eventually reduced profitability consequences. Businesses which survive on labor costs too low to provide a living wage, are exploiting labor while running afoul of the golden rule, do unto others as you would have them do unto you.

Adam Smith wrote extensively about moral sentiment being the base level of labor cost price setting. To exploit labor at less than living wages is not a stable situation and will invite and even create forces to increase the wages, forces like unions, sabotage in the work place, moral social institutions taking activist roles, and even boycott. He laid these precursor parameters for labor down in his Theory of Moral Sentiment, the book upon which the Wealth of Nations advanced propositions of the human spirit and sense of fairness into economic systems for entire nations and international relationships.

Posted by: David R. Remer at January 26, 2007 10:31 PM
Comment #205299

Rhinehold, the Constitution was written for a largely agrarian society of individual and family entrepreneurial systems, for 13 states containing a population of only a fraction of todays.

The Constitution was written in a fashion that it could be amended and grow with the needs of the nation and states in future centuries. The Constitution has been amended, and minimum wages are part and parcel of an ethical society that seeks to liberate individuals potential, not enslave them, which of course, non-living wages perpetrate.

Posted by: David R. Remer at January 26, 2007 10:36 PM
Comment #205305

David
Close to half of new businesses fail in the first five years. Most of the time it’s because of mismanagement or the folks starting them don’t have enough capital to get them through the five years it usually takes to start seeing any kind of profit.
But those weren’t the businesses I was talking about. I was talking about businesses that have been around for longer than five years.
It doesn’t matter how y’all want to spin it. When the cost goes up so do prices. So the raise in the minimum wage will be cancelled by increased cost of living. Folks will make more money but still won’t have any more in disposable income. They just could end up with less. But that depends on how much on how much the cost of living goes up. But I doubt they folks will really be all that much better off.
Not every employer that pays above minimum wage will give their employees a raise. This will mean that more folks are closer to minimum wage and they sure won’t be better off. Some that make more now will end up making minimum wage. How would they be better off with the increase than they are now?
The minimum wage sounds good on paper but in the real world it’s a hoax.
I’ve noticed that the unions always support minimum wage increases. Because when it goes up they can run to the companies they’re bilking and demand more for the members. Then they can increase their dues and bilk their members.
Of course the union companies then raise their prices. And good by any benefits from the minimum wage increase.
The only ones that win are the unions and politicians.

Posted by: Ron Brown at January 26, 2007 11:33 PM
Comment #205308

One thing y’all have to remember. When a business raises it’s prices because of increased cost they don’t just riase them by the amount of the increase.
Most prices are set on a percentage of profit. If it cost $10 per unit to produce a product and the manufacturer wants to make a 20% profit they set their price per unit price at $12. A profit of $2 per unit.
If their cost goes up $1 the cost is now $11 per unit. They don’t just raise their price $1 to $13. They figure the new price at a 20% profit. So the per unit price goes up $1.20. The new price is $13.20 per unit. A profit of $2.20 per unit.
Now mulitply that buy the 1,000 of products on the market and explian how the consumer is better off with a minimum wage increase.

Posted by: Ron Brown at January 26, 2007 11:57 PM
Comment #205312

Ron wrote,

“So the raise in the minimum wage will be cancelled by increased cost of living. Folks will make more money but still won’t have any more in disposable income. ……. How would they be better off with the increase than they are now?
The minimum wage sounds good on paper but in the real world it’s a hoax.”


Here is the evidence that what you say is not consistent with historical facts.

Back in the 50’s the minimum wage in current dollars was equivalent to about $9.50 an hour. The economy was humming, the wage gap was far less then now, employment levels were good, real wages we greater then now, inflation was OK and an average family of 4 could live off ONE wage and actually afford medical care and to send their kids to college.


History has prooves you claims invalid.

Posted by: muirgeo at January 27, 2007 02:00 AM
Comment #205313

Ron using your figures it now seems the small business will also benefit from the increase in the minimum wage. You use to put $2 per widget in your pocket and now you will be putting $2.20 in the same pocket.

For all those who begrudge those making the minimum wage a raise for the first time in 10 years, why dont you take a minute and go to Andre’s recent post on the SOTU speech. He has posted the real state of this union and has documented the rather large increase in the cost of living the past 6 years.

For the small business trying to work and compete against the cheap foreign imports coming into this Country,instead of arguing over this raise why not call your congressmen and fight to get tariffs on the slave labor countries products coming into this Country. You will have a lot more clout than those making minimum or near minimum wages. You might also try kicking the big business types from behind your figurative skirts, as they have been hiding there far to long.

Posted by: j2t2 at January 27, 2007 02:19 AM
Comment #205314

muirego, that was then, during the time of the new deal and classic economics of FDR, this is now, the time of the raw deal and the trickle on economics of Reagan and his followers.

Posted by: j2t2 at January 27, 2007 02:27 AM
Comment #205315

Rhinehold,

I see, you want me to make your arguments for you. Please indicate where it is shown that there were “overwhelming” flaws and where there is that supporting data. If you can show absolute data that supports your point of view, I’ll be greatly surprised. There may be some loose correlation of trends at the margins of the economy, but overwhelming? I think what is overwhelming is your assertion. I’m glad you at least googled to find out what i based my opinion on. What was your basis? Economy’s are elastic, my friend, marginal changes do not produce the absolute conclusions you have made.

Jack has already made these arguments. In it he pointed out that only teenagers and part-timers work at the minimum wage. Either the market for minimum wage workers is higly elastic or it has significant effect. I agree it’s elastic, even though many do support themselves on it. Given that effects are difficult, if not impossible, to demonstrate, why do feel you now that there is significant effect on employment. The charts on Wikipedia, I must warn you, won’t help your argument. They are inherently flawed in the way they evaluate minimum wage. I nearly posted them and then realized why they make no sense.

You didn’t respond to my first question, where in America is it possible to support yourself on minimum wage above mere subsitence? Also, I wonder, have you ever worked for minimum wage?
My points here being you are out of touch with this market.

Posted by: gergle at January 27, 2007 06:11 AM
Comment #205329

j2t2
Small business would benefit from a wage hike if it could raise it’s prices to off set the increased cost. The problem is the market is being flooded with cheap imports from countries that don’t pay minimum wage. In order to stay competative we have to hold the line on prices.
At some point though prices will have to go up or the business will have to shut down.
But given the record of those pushing for a higher minimum wage on other thing’s like getting this country energy independent, I’m beginning to believe they want this country depended on other countries for everything just like it is for oil.
I’ve been after my Congressman (D) and both my Senators (R&R) to do anything that would stop the dumping of cheap products from other countries in this country. But they’re like the rest of that bought and paid for crowd up there in DC. They’re only listening to the money.
BTW, When I say ‘cheap’ I don’t mean just the price. Most this products aren’t made very well and don’t last near as long as US made products. But the price is cheap so folks buy them instead of a quality product.

Posted by: Ron Brown at January 27, 2007 11:10 AM
Comment #205330

muirego, that was then, during the time of the new deal and classic economics of FDR, this is now, the time of the raw deal and the trickle on economics of Reagan and his followers.

Posted by: j2t2


Yeah but at least the 80% of us in the selfish wealth transferring majority labor class are no longer discriminating against the unfortanate 1% minority wealthy elite class. I mean I feel bad for them only making 30% of all wages( and a lot of that is only because they collect dividends…which is hard work) and owning 60% of all wealth. We really do need to follow the constitution and protect these unfortunate minorites and their rights…especially their rigths to spend money to set up the rules of business as THEY see fit (money is free speech right?..cus money talks so it must be free speech), to spend money on lobbyist, advertisments, fund raiser/access dinners and such. And also their right to influence policy to make things more fair for them and their corporations and to protect themselves from the greedy majority workers. Yeah… at leastI feel good about that.

Posted by: muirgeo at January 27, 2007 11:15 AM
Comment #205331

I’m beginning to believe they want this country depended on other countries for everything just like it is for oil.

Posted by: Ron Brown

It’s certainly not the Democratic base that’s protecting the current trade practices/ agreements and coming to the defense of China/Wal-Mart. And it’s certainly not the Democratic party that’s willing to look the other way and support all sorts of favors and advantages for large and multinational corporations that effect small businesses far more then a minimum wage increase…..keep writng your elected officials…good on you for that.

Posted by: muirgeo at January 27, 2007 11:21 AM
Comment #205332

Yesterday Senator Wayne Allard (R-CO) introduced legislation to repeal the federal minimum wage. No $h!t.

http://thomas.loc.gov/cgi-bin/bdquery/z?d110:SP116:

“Notwithstanding any other provision of this section, an employer shall not be required to pay an employee a wage that is greater than the minimum wage provided for by the law of the State in which the employee is employed and not less than the minimum wage in effect in that State on January 1, 2007.”

Twenty eight Republican Senators voted for this turkey:

* Alexander (R-TN)
* Allard (R-CO)
* Bennett (R-UT)
* Bond (R-MO)
* Brownback (R-KS)
* Bunning (R-KY)
* Burr (R-NC)
* Chambliss (R-GA)
* Coburn (R-OK)
* Cochran (R-MS)
* Cornyn (R-TX)
* Craig (R-ID)
* Crapo (R-ID)
* DeMint (R-SC)
* Ensign (R-NV)
* Enzi (R-WY)
* Graham (R-SC)
* Gregg (R-NH)
* Hagel (R-NE)
* Hatch (R-UT)
* Inhofe (R-OK)
* Isakson (R-GA)
* Kyl (R-AZ)
* Lott (R-MS)
* McCain (R-AZ)
* McConnell (R-KY)
* Sununu (R-NH)
* Thomas (R-WY)

Among those were presidential hopefuls McCain and Brownback. Yes, Brownback of Kansas where the State Minimum Wage is $2.65 an hour.

http://www.dol.gov/esa/minwage/america.htm#content

Luckily it was DOA on the Senate floor, but I have no doubt they’ll try and try again if they’re reelected. I suggest if your Senator is on this list a letter or an email is in order. Brownbutt can expect one from me.

Posted by: KansasDem at January 27, 2007 11:32 AM
Comment #205333

muirgeo
The biggest reason that folks need two incomes today is because most of them use to much plastic. Then the payments come due and there’s no money left to buy such luxury items as food, gas to get to work so they can pay on the vinyl, clothes for the brats, and so on. So the wife has to leave home every day singing ‘we owe we owe so off to work I go’.
I was talking to a guy a few months ago and he was complaining about how they couldn’t make it on two pay checks. He was telling me that with the car payments (06 Cadillac), mortgage (on a $175,000 house, median price is $45,000), truck payment (05 GMC), SUV payment (05 GMC), motorcycle payment (04 Harley), boat payment (don’t know), private school tuition ($1,200 per child per semester X 3), RV payment (03? Starcraft), plus credit card payments, his pay check ($595/wk) wasn’t enough and his wife’s check ($420/wk) barely covers daycare for 1 child and after school care for the other 3 kids.
Am I the only one seeing a problem with this type of thinking. And this goes on all over the country and in every income level.

Posted by: Ron Brown at January 27, 2007 11:59 AM
Comment #205334

KansasDem
Good for Sen. Allard. Leave minimum wage to the states where it belongs if there’s going to be one at all. The Federal Government has no business setting wages. The states know their economies better than the feds do.
And I’m glad to see that my Senators are finally waking up and smelling the coffee. Maybe this last election shook them up a bit and they finally realize that they can lose their jobs.

Posted by: Ron Brown at January 27, 2007 12:09 PM
Comment #205335

muirgeo

It’s certainly not the Democratic base that’s protecting the current trade practices/ agreements and coming to the defense of China/Wal-Mart. And it’s certainly not the Democratic party that’s willing to look the other way and support all sorts of favors and advantages for large and multinational corporations that effect small businesses far more then a minimum wage increase…..keep writng your elected officials…good on you for that.

HORSE HOCKEY! The Democrats are just as guilty as the Republicans on this. Both parties are just as corrupt. That’s why we need to get both parties out of DC as fast as possible.
I plan to keep pestering my Congresman and both Senators until they start adressing the problems this counrty faces. And then I’ll bug them some more to make sure they’re doin it right.

Posted by: Ron Brown at January 27, 2007 12:17 PM
Comment #205336
I see, you want me to make your arguments for you.

Sorry, I’d rather make sure that the arguments were right and not flawed, I’ll take care of them myself.

Please indicate where it is shown that there were “overwhelming” flaws and where there is that supporting data. If you can show absolute data that supports your point of view, I’ll be greatly surprised.

Well, first let’s continue on with the wikipedia article you quoted from:

According to economists, Donald Deere (Texas A&M), Kevin Murphy (University of Chicago), and Finis Weltch (Texas A&M), the Card and Krueger study are contradicted by “common sense and past research.” They conclude about the Card and Krueger research,

Each of the four studies examines a different piece of the minimum wage/employment relationship. Three of them consider a single state, and two of them look at only a handful of firms in one industry. From these isolated findings Card and Krueger paint a big picture wherein increased minimum wages do not decrease, and may increase, employment. Our view is that there is something wrong with this picture. Artificial increases in the price of unskilled laborers inevitably lead to their reduced employment; the conventional wisdom remains intact.”

The importance of Card and Krueger’s work does not necessarily lie in its empirical findings (which have been challenged by several studies more rigorous than Deere, Murphy and Weltch) but in its emphasis on the importance in recognising that theoretical economics is not incompatible with positive employment effects from the minimum wage

Then let’s continue on with another study:

The Effects of Minimum Wage Increases on Retail and Small Business Employment, a much more in depth study that took in several years of increases:

Using government data from January 1979 to December 2004, the effect of minimum wage increases on retail and small business employment is estimated. Specifically, a 10 percent increase in the minimum wage is associated with a 0.9 to 1.1 percent decline in retail employment and a 0.8 to 1.2 percent reduction in small business employment.

These employment effects grow even larger for the low-skilled employees most affected by minimum wage increases. A 10 percent increase in the minimum wage is associated with a 2.7 to 4.3 percent decline in teen employment in the retail sector, a 5 percent decline in average retail hours worked by all teenagers, and a 2.8 percent decline in retail hours worked by teenagers who remain employed in retail jobs.

These results increase in magnitude when focusing on the effect on small businesses. A 10 percent increase in the minimum wage is associated with a 4.6 to 9.0 percent decline in teenage employment in small businesses and a 4.8 to 8.8 percent reduction in hours worked by teens in the retail sector.

Coupled with a survey of the same industry after the last Minimum Wage hike:

This is just what happened after the last federal minimum wage increases of 1996–97. According to a survey of National Restaurant Association members, the last federal minimum wage increase led to the loss of 146,000 entry-level jobs. In addition, restaurants postponed adding another 106,000 positions, and 42 percent of respondents said they increased menu prices to cover the higher salaries. And that is just a sampling of businesses in one industry.

In 2004, the California legislature passed a measure to increase the minimum wage by one dollar an hour, just as Gov. Schwarzenegger and the Democrats in Sacramento are proposing now. The increase would have imposed an estimated $2 billion in costs on businesses statewide, and a study by the Employment Policies Institute estimated that it would have resulted in the loss of nearly 19,000 jobs the year after it was to be enacted.

I can continue if you like but until you provide more than the one supremely flawed study by Card and Kreuger you’re not going to have much to stand on.

You didn’t respond to my first question, where in America is it possible to support yourself on minimum wage above mere subsitence?

I could point out places in Arkansas, Alabama, Mississippi, etc. Urban areas have a higher cost of living so they would need a higher rate.

But that brings me to the biggest problem I have with a national minimum wage that many want to be a ‘living’ wage. Unless the minimum wage is tied to the area cost of living then you are going to be short in some areas and higher in others. In those areas where you will be short it matters little because these areas are already paying more than minimum wage for most jobs. Take Manhattan for example, this area would probably be able to absorb a $10 minimum wage without blinking. However, try that in Kansas City and you will see the economy slow down tremendously.

Are you willing to support a minimum wage law that ties the minimum wage of an economic area to the cost of living in that area? Try running that past a congressman or two and see if they are willing to support it…

Also, I wonder, have you ever worked for minimum wage?

Not that it has ANY bearing at all on the discussion but yes I have. And as nearly 75% of all people who work for minimum wage, I experienced a raise due to displaying my value or using the experienced earned to obtain employment elsewhere within the first year of working for it.

As I said earlier (you seem to be affronted that I ignore your points when you have never once discussed any of mine including the effect of the minimum wage increase has on minorities and low skilled labor) the increase in minimum wage takes away an opportunity for someone to work for less than minimum wage for someone for a short period of time in order to prove their worth. To do this now they have to take on the title of ‘intern’ and make NO money instead of less than minimum wage.

For all of the talk about helping the ‘working man’ all that the increase seems to do is harm the low-skilled and minority worker at the expense of helping those with protected jobs and higher-skills. What compassion…

My points here being you are out of touch with this market.

When you actually learn anything about me you might earn the right to comment on what I am or am not ‘out of touch’ with. Until then it seems highly presumptuous.

Posted by: Rhinehold at January 27, 2007 12:17 PM
Comment #205340

“Over 650 economists, including 5 Nobel prize winners and 6 past presidents of the American Economic Association, believe that increasing federal and state minimum wages, with annual cost-of-living adjustments for inflation, “can significantly improve the lives of low-income workers and their families, without the adverse effects that critics have claimed.””

http://www.epi.org/minwage/epi_minimum_wage_2006.pdf

Posted by: KansasDem at January 27, 2007 01:38 PM
Comment #205341

Rhinehold says by raising the minimum wage it takes away the opportunity to work for someone for less than the minimum wage for a short period of time to prove their worth. I find this to be a very profound statement. I can’t even refute the logic at all because it is true if you are to remain legal in this Country. However now that these very same people have the opportunity to work for a higher wage to prove their worth I would bet they are still accepting of an even higher wage once they have proven their worth. If this old merit system Rhinehold speaks of had continued to work after Reagan and his followers busted the unions then we would probably not be here arguing about the merits of a minimum wage today as it would not be required. Walmart is a good example of why raising the minimum wage is a good idea.

Posted by: j2t2 at January 27, 2007 01:51 PM
Comment #205342

Ron Perhaps people more established have these “problems” however thats not the reason most young people need 2 paychecks to support their families. The rents for a small 2 bedroom house starts at 1000.00 here. The wages dont support that and the other necessary expenses of a younger family here in a right to work cheap state.
The playing field has been changed since we were coming up, its a different game out there now and the rules that kept the game fair and equitable have been altered by the “free market ” policies of Reagan and his followers. Trickle down hasnt worked and wont work for the majority of people in this Country. Its time we wise up and level the playing field again.

Posted by: j2t2 at January 27, 2007 02:04 PM
Comment #205346

J2t2, the CEO of Walmart has actually campaigned for raising the minium wage. And not because it would effect the salaries they pay, because they already pay their full timers an average of over $10 an hour. They just want their customers, many of whom are low income, to buy even more of their cheap goods.

The number of people actually making the federal minimum wage for any length of time is EXTREMELY low, many states having higher standards, and those jobs are usually not the most vital to any company. Anybody paying minimum wage, will very likely cut at least of them jobs if the federal minimum wage rises.

It’s pretty simple. When wages go up, you have inflation. When you have inflation, real buying power falls back to where it was before, and the cycle starts all over again and everybody starts hollering for yet another increase in wages.

CEO compensation and cheap imports based on foreign labor are other issues that aren’t addressed by raising the minimum wage, so I’m not sure why people are interjecting that.

Posted by: Loyal Opposition at January 27, 2007 02:56 PM
Comment #205359

Where I am in the Uk, the minimum wage is the equivalent to $10.48 per hour for over 22’s and $8.72 per hour for 18-22 year olds and $3.30 for under 18’s.

Now these are minimum wages with only approx 1.4% of teh population on such a low wage - over here it is merely a ‘starting point’.

As an employer, since these rates where set, and they go up every year with inflation, my companies annual turnover has continued to increase, inflation has remain pretty low, and everyone wins, with me having happier staff.

I cant’t believe that in the US adults only get $5.15 per hour, that is the eqivalent to only 2.68 Sterling which would only buy someone over here 3 litres of gas or 3/4 of a US gallon - FOR ONE HOURS WORK! That ain’t living!!!!

Basically, the way we look at it over here, is that if you can’t pay a ‘living’ wage to your employees, you shouldn’t be in business and only the good will succeed. With the ‘bad’ businesses being replaced with better businesses and better managers.

Mark Skillen
UK

Posted by: mark skillen at January 27, 2007 05:43 PM
Comment #205360


Mark Skillen: I thank you for your perspective.

Posted by: jlw at January 27, 2007 06:03 PM
Comment #205363

Rhinehold,

I’m glad you have responded. We have at least entered into a discussion of the economics behind your statement. You used bold font to indicate a phrase you liked, and felt supported your position, but ignored the rest of the sentence. To wit:

The importance of Card and Krueger’s work does not necessarily lie in its empirical findings (which have been challenged by several studies more rigorous than Deere, Murphy and Weltch) but in its emphasis on the importance in recognising that theoretical economics is not incompatible with positive employment effects from the minimum wage

Another analysis of Card and Krueger finds no effect (neither positive nor negative)on employment. I think there is much debate about this issue, which is fun for economists, but sheds little light on the subject.

Of course, you also ignored the words contrary to my argument included in the text I copied,whilst accusing me of cherry picking, but in adversarial debate, I guess that’s to be expected.

I could point out places in Arkansas, Alabama, Mississippi, etc. Urban areas have a higher cost of living so they would need a higher rate.

I glad you can find the south on the map, but I would still like a demonstration of how someone can support themselves on minimum wage. Even in Missisppi, one may be able to skin by, but just barely, and a slight breeze would sink you.

I must presume we now agree that minimum wage is not a supporting wage, even if raised as currently discussed. Your example of $10.00 is on no one’s agenda.

To correct a few of your notions of minimum wage law however:

It is permissible to pay a “training wage” (below minimum wage)for an indeterminate length of time. American Airlines used to do it while sending stewardesses to stewardess school for up to several months. I do not know if they still do.

I worked for a company that did for 2 weeks, because many trainees quit at 2 weeks, where upon they weren’t paid at all. They were the only business of that type in town that did. The owner was a crook in my opinion.

This same company paid some emplyees piece meal rates by calling them subcontractors. Questionable, but quasi-legal.

He also told legal immigrant employees that he only paid overtime for more than 80 hours in two weeks. I refused to sign payroll on this issue. He began following federal wage law after that, as far as I know. He paid above minimum wage because he needed trainable employees and was competing with other firms who paid above minimum wage.

My first job was a bus-boy in a restaurant. Restaurants were then, and I presume still are, exempt from minmum wage law.

While I disagree that minimum wage, well below a critical wage has any effect on employment (or at best marginal effects), it is a hotly debate issue in economics, but not a given to either point of view.

It has never been my view that minimum wage is a supporting wage. It is a fairness issue. There is not, in my opinion, a level playing field between minimum wage employers and those they employ. If you cannot pay a fair wage, perhaps you shouldn’t be in business. I think this debate is a parallel to the illegal immigrant issue. In a capitalistic economy there will always be those who take advantage.

I think an earned tax credit might be a better way to acheive a livable wage than minimum wage, but there are problems with that as well.

As to presumptions about you, I only surmise my views based on your comments. I always enjoy debating you because I know you can and will rise to a level few compare with. I am sorry if my clumsiness with language somehow offends you, it isn’t intentional.

Anyway, as always thanks for the debate.


Posted by: gergle at January 27, 2007 07:19 PM
Comment #205365

Ron Brown, sorry to disagree with your simplistic arguments that raising minimum wages does not increase disposable income, but, history and the facts do not support your argument.

History - Henry Ford sold far more cars by raising his employees wages - and he became far wealthier as a result. Many, many other historical examples of this exist. I suggest you research them.

If min. wage goes up 1$ per hour for 1 million workers, 1 million dollars more per hour is available for disposable income. The price of the product or service may go up 1 cent to cover the min. wage increase, because 10’s of millions of products are made per hour requiring the price to increase to meet 1$ raise in wages only 1 cent.

Now, one must also ask how it is that CEO salaries and bennies have risen 2000% in 10 years with low inflation? Wage increases do not directly correlate with cost of living increases. Many other factors are in this equation, including whether or not the wage increases stimulate greater sales which increase revenues and maintains profitability at the levels prior to the wage increase.

Most of the minimum wage increase jobs will be in the service sector. Cost of living is far more dependent on the cost of imports than on unit cost per hour for service sector jobs. Therefore, this minimum wage increase is not likely to raise cost of living even a fraction, if at all.

A recent study of all the states who have raised their min. wages above the federal level demonstrate that those state economies were not negatively impacted, and some even so economic activity increases.

One only need to look at the dramatic rise in oil prices over the last 5 years and its consequences to realize that unit cost increases do NOT necessarily raise cost of living in any dramatic way. There are many factors at play in this equation and simplistic 1 for 1 arguments of correlation between wage costs and inflation have been proven wrong time and time again.

One factor at play is household budgeting. If the cost of gas jumps .20 per gallon, that household may buy more generic brands of items at lower cost at the supermarket. Which means the number of products sold do not decrease and economic activity does not change. The only difference is that generic product makers see an increase in sales while premium priced brand names see a drop in sales, which is absorbed by decreases in many other areas of operation like advertising or, as we will see shortly, reductions in CEO compensation packages.

Posted by: David R. Remer at January 27, 2007 07:37 PM
Comment #205372

CEO componsation is a scandal, but it has only a peripheral bearing on this issue. The only thing that federal minimum wage increases and CEO compensation have in common is that they’re bad economics. They both raise the price of labor beyond their market value.

CEOs get their insane compensation packages even when their companies are failing, and it’s an example of the cozy and corrupt relationships between a class of individuals in our society who watch each other’s backs while screwing shareholders, employees and consumers.

It’s an example of companies destroying themselves, and the government can’t save companies from lousy management, especially in a world marketplace. Companies that engage in such shoddy practices lose whatever competive edge they’d otherwise enjoy, and will eventually be eclipsed by better run companies either here or in foreign countries.

Look at happened when the dot-com bubble burst. Low-wage earners lost their jobs. Shareholders lost their money—many people lost their entire life savings. Management, however, rode off into the sunset with their pockets stuffed with money—their reward for running, in many cases, businesses which never did anything but lose money.

A lot of arguments here for mininum wage increases could just as well be used to support price controls on products. In a way, that is what they do support.

Because people need bread, and it would be “fair” to make it easier on the poor to buy it, how about mandating that a loaf of bread costs a quarter? A chain reaction is then inevitable in which it becomes impossible to grow and harvest wheat, mill flour, bake bread, transport it and then sell it in the stores. We’d end up not having bread at all—or importing it from overseas.

There is market value for every commodity. This is a sometimes harsh but undeniable fact. Labor is in fact a commodity—it’s what you can sell your time and skills for in the market.

Whenever you artificially raise the price of one commodity, something has to break down somewhere else. It’s that simple. It’s just as true for raising the minimum wage as it is paying a CEO of a failing company millions of dollars.

The dirty little truth about federal wage legislation is that it’s yet another means whereby the haves screw over the have-nots. The ONLY ones who benefit from it are the unions, and not because union members make minimum wage. It’s because union members enjoy compensation above market value, and to keep this possible, they have to push anyone who’d compete with them off the bottom of the economic ladder.

Look at Detroit to see where this leads in an era of global competition. We’ve got CEOs making millions of dollars. Union members (while they still have jobs) making more than they’re worth, and meantime our highways fill up with Hondas and Toyotas.

Adressing one bad economic practice (CEO compensation) by proposing another bad economic practice is suicide.

Posted by: Loyal Opposition at January 27, 2007 08:19 PM
Comment #205386

Loyal Opposition, You shouldn’t hide your love of slavery. You see slavery is the freest market enterprise their is. Labor costs are reduced to room and board, occasional medical care if the slave is valuable, and containment measures.

No moral sentiment involved to jack up labor prices. I love it when the conservative right reveals their underlying assumptions. There is nothing in purist free enterprise economic philosophy that prohibits slavery, cheating, monopolies, or 50 to 100% interest usury rates. The freest markets in America are the illegal drug markets. Bound by no morality, sentiment, or do gooder regulations. Just money and drugs for exchange and guns and death to back up the deals.

Slavery is a moral issue, and conservatives don’t like mucking up free enterprise with moral issues like slavery, empathy, or minimum wages which value all peoples work at a living wage. Thanks, for your honesty.

Posted by: David R. Remer at January 28, 2007 12:52 AM
Comment #205387

David,

A little hyperbolic in your reply there weren’t you? LO, made his point, you disagreed, and then you decided that he was a slave-loving, usurious, scumbag.

There are merits to the premise behind LO’s post, just as there are behind your original post, Rhinehold’s, and gergle’s response. The issue of where to set a minimum wage for the country that is both Constitutionally and economically challenging.

You have invoked the term, “living wage,” I have to ask what would such a wage look like in today’s dollars? Ten, fifteen, twenty dollars an hour? More, less? My guess is that most would set it at greater than $7.5/ hour. If so, why aren’t you shouting from the rooftops that this isn’t enough. Why be satisified with half a loaf?

Btw, the term “living wage” connotes nothing short of pure Marxist “From each according to his ability, to each according to his need.” Am I wrong to have those words from the Communist Manifesto ringing through my ears when I hear “living wage”? If so, why?

Posted by: Rob at January 28, 2007 01:55 AM
Comment #205388


Actually, in this system, slaves woukd be more expensive than workers. You have to provide slaves with housing, food and medical care if you value your property.

Posted by: jlw at January 28, 2007 01:59 AM
Comment #205389

Rob, I would direct you to Adam Smith’s book, Theory of Moral Sentiment. It is the book that lays down the framework and ethical guide to understanding his following book, Wealth of Nations.

Anyone who believes markets should not be regulated for the protection of market players against the unscrupulous are to be stopped dead in their tracks, because if they have their way, revolution is just around the corner.

A minimum wage that permits sustenance for a modest lifestyle is what is referred to here, and no, it is not Marxist to call for a minimum wage. Marxism calls for all to be paid an equal wage. Huge difference. Read up on it, it is very enlightening.

Posted by: David R. Remer at January 28, 2007 02:32 AM
Comment #205390

jlw, that is entirely wrong. The slaveowner answers to no one regarding the standard or quality of clothes, food, or housing. Hence, the cost of same can be very, very cheap and very, very substandard for human health and welfare.

If you would like to see what slave owners provided in terms of housing, visit some Indian Reservations which have not benefited yet from gambling revenues and which have no commerce concentrations in the area of the reservation. The Lakota Sioux reservation for example.


Posted by: David R. Remer at January 28, 2007 02:36 AM
Comment #205397
A minimum wage that permits sustenance for a modest lifestyle is what is referred to here

Except it’s not, is it? The raise of the minimum wage to 7.25 will not provide a living wage for nearly anyone who is making it, will it? In fact, it is creating the harm of interfering into market forces without gaining the benefit of doing so, providing a ‘living’ wage.

That’s another problem I have with the minimum wage and why it is obvious to me, at least, that it is only a tool for political power wedge issues and use by the unions to advance arbitrary increases during collective bargaining. No one is fooling themselves into thinking that the wage one gains from it will provide the very things that they argue is necessary for it to be passed.

Posted by: Rhinehold at January 28, 2007 06:04 AM
Comment #205407

Rhinehold, just because $7.25 is too low, doesn’t mean it won’t improve the lives of those earning it over $5.15 and hour. Your argument falls flat.

A minimum wage increase will decrease some poverty in this country for working people. That is ethical, moral, and just. It is not enough, but, it is an improvement. In some areas of the country with the lowest costs of living, $7.25 does nearly meet the criteria for a living wage.

If the Congress had tried $10 per hour, the measure would have met with enough resistance to kill the measure and no workers would have benefitted. So, I find you argument flat that it is not a good thing to raise it.

Truly free market forces can be found in our illegal drug trade. That is the freest market of all in America. And look at the violence and retribution and theft and cheating and consumer fraud which attend this freest of all markets.

I don’t want a pure free market system. I want an overseen and well regulated market system that gives as much freedom to the market players as possible while maintaining truth in advertising, responsible behavior toward the nation and her people, and amongst the market players.

Adam Smith was very clear on this point, that the ultimate freedom is anarchy. Only responsible freedom is civilized.

Posted by: David R. Remer at January 28, 2007 08:31 AM
Comment #205410
If the Congress had tried $10 per hour, the measure would have met with enough resistance to kill the measure and no workers would have benefitted.

Please explain why a $10 per hour minimum wage would have failed if it would have provided all workers with a living wage? There is a reason why it would fail, it’s an important one…

Truly free market forces can be found in our illegal drug trade

No, sorry David, but the illegal drug trade is ANYTHING but a free market. By making a specific drug illegal they introduce costs into the making, distributing and selling of the drug that would not normally be there. Those who interact in the trade are forced to avoid jail time and death and are not provided their basic rights granted to them by the constitution to conduct their trade without fear of their basic rights being violated.

So, as you say, your argument falls flat.

I don’t want a pure free market system. I want an overseen and well regulated market system that gives as much freedom to the market players as possible while maintaining truth in advertising, responsible behavior toward the nation and her people, and amongst the market players.

I don’t think we want differing things here, David. Just because we don’t want the government interfering with the free market, anyone participating in it has to follow the laws of the land and basic rights that individuals have in order to exist in that society. Only an anarchist would demand that no governmental protection of civil rights are necessary or needed, and most libertarians are not anarchists.

I don’t dispute or even suggest anything against what Adam Smith has written about.

Posted by: Rhinehold at January 28, 2007 08:55 AM
Comment #205416

But when the market players control the lobbying and campaign funding of politicians, how can the nation or her people be assured of sound and responsible regulation and safeguards from greed which observes no bounds?

Your view that the drug market exists within a real world of influences does not distinguish it form any other theater of economics, Rhinehold. The illegal drug market has the fewest rules governing its markets. They are 1) Don’t get caught. 2) Don’t get cheated. 3) Kill those that cheat you. And 4) promote addiction to your product.

Well, that last one is not dissimilar from many legal products rules like cigarettes, alcohol, and prescription meds, but, you get the idea.

That is damn few rules for the market, compared the 100’s of thousands of rules and regulations for legitimate businesses. This is why the illegal drug market represents the freest market of all in the U.S. Supply and Demand dictates price and quantity, and government busts are just the cost of doing business like Ford’s Pinto bolt burning its occupants - cheaper to pay off families of the dead than recall all the Pintos and fix them.

Posted by: David R. Remer at January 28, 2007 10:04 AM
Comment #205422

Mark Skillen, You have introduced common sense and logic into this debate on the American economic system. How dare you. This goes against the very grain of economic theory espoused by those right of center in this country, after all labor is a commodity not a living breathing human being. If the capitalist is to have rules and regulations to live by democracy might have a chance to survive in this Country, then what? I plead with you to reconsider your workable solution to the problem at hand before the American economic system is left in ruins by such ideas.

Posted by: j2t2 at January 28, 2007 10:17 AM
Comment #205443

Mark Skillen said: “Basically, the way we look at it over here, is that if you can’t pay a ‘living’ wage to your employees, you shouldn’t be in business and only the good will succeed. With the ‘bad’ businesses being replaced with better businesses and better managers.”

That is indeed how it should work, isn’t it? Markets never leave voids in place for very long. That’s for doggone sure.

Posted by: David R. Remer at January 28, 2007 01:51 PM
Comment #205455

David
I don’t know where you get the 1 cent figure from. It might be true of some big factory where they produce 15,000 to 20,000 units a day. But in my case a $2 raise means a per unit increase of $.56. While this alone isn’t enough to force me to raise my prices what about when my suppliers raise their prices? I very well could see a per unit increase of $2 to $3. That will force me to raise my prices. Then the warehouse will raise theirs prices not only to cover my price increases but to cover their labor cost also. And guess what the store you by your auto parts at is going to do with the increased cost to them? They not only will cover their per unit increase but their increased labor cost too.

I personally don’t think that the federal government has any business setting minimum wages. That’s something the states should be doing. Each state knows it’s own economy better than the feds do. Like with everything else the feds think that one size fit’s all.

A Google of minimum wages laws shows that 29 states have minimum wages laws higher than the feds, 15 are equal to the feds, 1 lower than the feds, and 5 with no minimum wage laws. But I reckon that those states with no minimum wage and the one with a lower rate have to conform to the feds rate. So I reckon that technically they have the same rate as the feds.
BTW David, Both Texas And Georgia are equal to the federal minimum wage. And how does Kansas get away with having a lower rate?

Posted by: Ron Brown at January 28, 2007 03:43 PM
Comment #205476

David,

I will grant you it’s been a while since I’ve read him, but I know Marx. It took me a while to remember which work the phrase came from (I actually had to google it). I understand Marxism. The German Idealogy is a cornerstone work for sociology which was my major in college. Overall, he had some decent insights into society; however, his political philosophy was too teleological for me to take it seriously a century later.

My misunderstanding arises when we discuss, “the living wage,” versus “the minimum wage.” To me they are very different things. The minimum wage is a regulatory construct to ensure that there is a price floor for which labor should be valued. It is a price floor enacted for moral reasons that you mentioned above. I understand and have no problem with that construct. I voted for the minimum wage hike in Ohio this year for those very reasons. My only gripe is that I believe that it should be enforced at the State not the Federal level.

The living wage on the other hand to me is more about the needs of individual worker rather than setting a minimum value for labor. While there is some overlap between the two concepts, the second to me invokes, the “to each to their needs” concept. That to me is an entirely different kettle of fish.

Posted by: Rob at January 28, 2007 06:48 PM
Comment #205484

An interesting note here.

In Houston a manufacturer of pallets was recently raided and shut down because all his workers were illegals. Other manufacturers of pallets were bouyed by this. They were having to compete with this guy while following wage and hiring laws. They were constantly finding themselves undercut.

This demonstrates why minimum wage is important. Without this wage there is a race to the bottom in a market that is dominated by those hiring.

Who bears the cost of this? The workers. Unemployment rose for the illegals, perhaps, but not for the legal employees. The market just got fairer.

Posted by: gergle at January 28, 2007 07:22 PM
Comment #205506

Ron, what do you sell. If its made overseas, you have nothing to worry about from the suppliers.

Posted by: David R. Remer at January 28, 2007 08:14 PM
Comment #205507

Ron Brown asked: “And how does Kansas get away with having a lower rate?”

I don’t know! I guess you can put anything on your books. But, we also know our federal government is very lenient on enforcing some laws and not others, especially when it comes to blue and red states.

Posted by: David R. Remer at January 28, 2007 08:17 PM
Comment #205515

Rob, one of the symmetries I respected in Marx was that wealth and poverty should be distributed equally. Most folks only recall wealth being distributed equally. But, Marxist theory also says that when a nation’s economy tanks, all should experience the same amount of losses, whether equal if all are enriched equally, or by percentage if other factors allow wealth to accrue differentially among the population. In practice of course, none of this works as theorized.

That is what separates Karl Marx from Adam Smith who allowed for inequalities of outcomes and chance, but, argued that cultural unity and empathy (moral sentiment) in a free society would not permit the least in the society to suffer while making an earnest effort. Of course, in America today, we are proving that even Adam Smith’s assumptions are not necessarily valid. In Europe they are. In America, they increasingly aren’t thanks to the libertarian philosophy which has become an arm of the Republican party and dictates that each should suffer according to their circumstance.

Rob, prior to the last decade, I would have agreed with you wholeheartedly that determining a living wage is not practical. But, today, we have the computing capability and data resources to compute an objective living wage for every community in America. Doing so only requires the willingness to take that step. But, there are no longer any physical impediments to knowing what an objective living wage is regardless of where one lives and works.

Of course, doing so raises all kinds of party extremist differences over federalism vs. state’s rights. Frankly, I find state’s rights arguments to be an anachronism to a bygone age of different religious and ethnic communities based on varying agricultural and production capacities.

Posted by: David R. Remer at January 28, 2007 08:33 PM
Comment #205517

Gergle, that is an excellent real world example of what many of us have been describing. When are Democrats going to get with it? Nevermind, I know the answer to that question. When illegals start voting Republican.

Posted by: David R. Remer at January 28, 2007 08:39 PM
Comment #205545

David,

I’m still not sure that I understand what disticntion you are making between a living wage and a minimum wage. I understand that we can compute it, but I’m still not sure I understand what you think the variables ought to be.

As to State’s Rights, I invite you to rethink that topic. The minimum wage is another excellent example where individual state representatives can decide what the minimum wage ought to be (in fact most do already). These kinds of issues that have so much local variance should be regulated at the State level the way originally intended.

As for bygone age for Federalism, I’m baffled why you are so willing to let go a central tenent of our governmental framework while fighting tooth for others. Next time you find yourself arguing with someone unoffended by the Patriot Act remember your willingness to let the central tenents of our Constitution go for expediency is offly similar.

Posted by: Rob at January 28, 2007 10:52 PM
Comment #205555

Rob, I have let go of no central tenet of government. I am just accepting a reality that was growing on the day I was born in 1950. Federalism was growing beyond state’s rights at the end of the Korean War, and it has been moving like a freight train in that direction all my life.

I had nothing to do with it coming to be what it is. But, it is what it is. And now that the efficiencies of centralized governments like China, India, the EU, Malaysia, Indonesia, APEC, and Russia now again, are the future economic and military engines to compete with, it would be foolhardy to say the least, for Americans to struggle with each other to go back in time to a weaker federal government with such competition facing us dead ahead in this century.

I want to fight to keep the individual liberties and national security and quality of life my, and previous generations, worked and fought so hard to create and protect for our future. Our future lies not in state’s rights to underperform and impede national unity, identity, educational standards, adaptability, and agility to meet the competition on the global stage prepared. Our future lies in preserving what we have achieved in individual liberty and national power through a strong federalist system.

They’d still be lynching blacks in trees in the South were it not for federalism. We would have seen many more stock market crashes and depressions were it not for federalism and we would not be such a wealthy nation today. Weak laws and state oversight in certain states are causing a credit crisis for 10’s of millions of Americans today. We could still be fighting the Cold War if it were not for federalism. And women would still be denied the vote in many southern and western states were it not for federalism.

You are right to fear strong central government. It requires Americans to become what they were always supposed to be in a Constitutional democratic Republic, informed, vigilant, and highly protective of their individual rights and liberties. God help us all if we don’t undertake that responsibility in real damned hurry.

But state’s rights from the governors on down, have far more often been the vehicle to impede our nation’s growth than to enhance it since the turn of the 20th century. Speed traps, false arrests, and abuse by officers of the law would be rampant in this country if state’s rights had their way. I was an adult in the Army when such a speed trap caused national controversy just 40 miles from where I now live in Selma, Texas. Trapping out of state victims while following local license plates going equally fast, and taking advantage of their out of state condition was within the right of the state. But it was not fair nor civilized to drivers of 49 other states, especially if they were female and attractive or wealthy.

Texas has another perfect example of State’s Rights having outlived their usefulness. Texas has one of the most, cumbersome, lengthiest, and costly state Constitutions to work with, in the entire nation, and Most Texans aware of it, are damned proud of it. It permits selective enforcement of the law because no one knows what all the laws are anymore. They are too voluminous and contradictory.

That’s state’s rights for you. Texans won’t change it. They are scared to change it. That has been the legacy of state’s rights - resistance to change and growth leading toward the vision in our U.S. Declaration of Independence.

Posted by: David R. Remer at January 29, 2007 01:19 AM
Comment #205605

David
We rebuild electical parts for cars and trucks at the factory. I try to use parts made in the US as much as possible. But that’s getting harder to do everyday. While a overseas manufacturer might not raise their prices, my suppliers just very well could to cover their increased labor cost.
At the farm supply store most the items are made in the US. Here not only could my suppliers raise their prices, but the manufacturers could too.

Posted by: Ron Brown at January 29, 2007 11:06 AM
Comment #205609

Ron, it is important to keep economies of scale in mind here. First, it is unlikely your distributors are paying their delivery personnel minimum wage. But, even if they do raise their delivery personnel wages say $2.00 per hour, that delivery driver and helper are only going to cost you $4 more per delivery of hundreds or thousands of components with each delivery, which breaks down to an incremental cost to you per item of just a cent or far less depending on volume. Easily passed on to the customer without forcing consumer store choice reevaluation.

Posted by: David R. Remer at January 29, 2007 11:27 AM
Comment #205876

David,

Federalism and the notion of keeping power at the lowest level possible is a central tenent of our Consitution. It is embodied in the 10th Ammendment. Why that one gets less respect than any others except the 16th is beyond me.

“And now that the efficiencies of centralized governments like China, India, the EU, Malaysia, Indonesia, APEC, and Russia now again, are the future economic and military engines to compete with, it would be foolhardy to say the least, for Americans to struggle with each other to go back in time to a weaker federal government with such competition facing us dead ahead in this century.”

We certainly made that decision in the 17th century in the face of successful highly centralized governments in France and England.

“They’d still be lynching blacks in trees in the South were it not for federalism.”

Federalism does not prevent lynching blacks any more today than it did 100 years ago. The enforcement of the 14th is a State responsibility. Ensuring it is enforced is a Federal responsibility.

” We would have seen many more stock market crashes and depressions were it not for federalism and we would not be such a wealthy nation today.”

I’m not sure how that can possibly be proven true or false. Moreover, I’m not sure what market regulation has to do with Federalism. The constitution clearly has laws governing interstate commerce that allow for this regulation. This was true even before the eradication of the 10th.

“was an adult in the Army when such a speed trap caused national controversy just 40 miles from where I now live in Selma, Texas. Trapping out of state victims while following local license plates going equally fast, and taking advantage of their out of state condition was within the right of the state. But it was not fair nor civilized to drivers of 49 other states, especially if they were female and attractive or wealthy.”

This again has nothing to with the 10th or State’s Rights. The privlidges and immunities clause directly out of the Constitution prescribed the bouderies for this kind of action.

“Texas has another perfect example of State’s Rights having outlived their usefulness. Texas has one of the most, cumbersome, lengthiest, and costly state Constitutions to work with, in the entire nation, and Most Texans aware of it, are damned proud of it. It permits selective enforcement of the law because no one knows what all the laws are anymore. They are too voluminous and contradictory. “

Not sure what this means in relation to State’s Rights. This is a problem for Texas regardless of State’s Rights.

“That has been the legacy of state’s rights - resistance to change and growth leading toward the vision in our U.S. Declaration of Independence.”

Again, not sure what this means at all. At the time the Declaration was written, the idea of State’s Rights barely existed because there was no thought of a Federal government for much of anything. Can you expound here?

Posted by: Rob at January 30, 2007 07:06 PM
Comment #205943

Rob said: “Federalism does not prevent lynching blacks any more today than it did 100 years ago. The enforcement of the 14th is a State responsibility. Ensuring it is enforced is a Federal responsibility.”

Enforcement is responsibility. Without enforcement there is no responsibility. You are playing with semantics here, and illogically so. Were it not for the federal troops enforcing desegregation and investigating the deaths of the 3 civil rights students in the South, blacks would still be swining in trees. The enforcement defines where the responsibility (Ability to Respond Appropriately) actually lies. And it is in the Federal government.

“This again has nothing to with the 10th or State’s Rights.”

Bullcrap. The speed trap was on Interstate Highway 35, Rob. Which gave the Federal government jurisdiction, even if it was arguable that speed traps set for out of state travellers didn’t violate equal protection laws of the Federal government.

Rob, those who want to put the genie back in the bottle are not realistic. We are not going back to the original Constitution and society of its day. Our Constitution and our nation have evolved to what it is today, and mostly for very important and good reasons.

I know the Commerce clause has been abused, but, the concept of government is abusive to individual freedom, fix the abuses the will of the people demand be fixed, and move on. Ours is still the among the least abusive governments in the world toward its own people, save perhaps for the death penalty, right to a speedy trial, and environmental protection of the people.

We cannot remain competitive in the world without a strong centralized government, which increasingly is going to mean a nationally agreed upon educational standard, national health care system which covers everyone for necessary medical care, and national standards for voting in federal elections, to mention just a few.

But, I agree with your central concern, it is folly for the people to allow a strong centralized government without accountability and responsibility to the will of the people. Which means diminishing the power of money in the hands of special interests regarding government action, among other agenda items already mentioned.

Posted by: David R. Remer at January 31, 2007 02:20 AM
Comment #205944

Rob, P.S., to bring this debate back to minmum wage standards, consider the reality extant. In a competitive and relatively free business environment, if employers are left free to determine wages, there will be a race to the lowest cost of labor achievable, in order to remain competitive with the least responsible and corrupt employers who will seek free labor if allowed (slavery and indentured servitude). A nation of horribly under payed and overworked workers sets that nation up for revolution (remember taxation without representation and the revolution that caused?)

Therefore, federally established minimum wage laws are necessary in a relatively free business environment. It is not because most employers have no regard for their employees, it is because some employers have no regard, and they gain competitive advantage causing that race to lower labor costs.

The logic and reality of the situation is inescapable.

Posted by: David R. Remer at January 31, 2007 02:36 AM
Comment #205991

David,

Taking the P.S. first. Nearly all States have minimum wage standards now. Over half exceed the Federal Minimum wage standards. Without a Federal Minimum wage standard, I posit that all would have one. It would not be the same everywhere, nor would it need to be. It could reflect the vagaries of the local economies. As for the revolution argument. I think we are a long, long way from there. No do I see as necessary to prevent such a step. Neither did several of the framers.

Your argument seems to be that without a Federal law that State Law would go unenforced. However, there are no Federal Laws on speeding. State laws are enforced everywhere on that without problem. Btw, the Feds don’t have jurisdiction on the Interstate. In most states the State Highway Patrol does. There is no Federal Highway Patrol.

I’m not playing semantics by the way. I said that enforcement was a State responsibility. It always has been. With the expcetion of some very targeted crimes, nearly all of which involve crossing state lines, Federal currency, or other crimes involving the Federal government, there is no Federal law enforcement in criminal matters. That was until the ridiculous drug laws came into place. Do you approve of the Fed’s mandating sentencing on drug crimes?


“Rob, those who want to put the genie back in the bottle are not realistic. We are not going back to the original Constitution and society of its day. Our Constitution and our nation have evolved to what it is today, and mostly for very important and good reasons.”

You realize that the evolution argument is the same one behind the Patriot Act right? We have to evolve our laws in order to fight the enemy that can’t be defined and lives within our midsts. Do you buy that?

As for the economic arguments, “We cannot remain competitive in the world without a strong centralized government, which increasingly is going to mean a nationally agreed upon educational standard, national health care system which covers everyone for necessary medical care, and national standards for voting in federal elections, to mention just a few.”

This is for the most part I disagree with. I think that the Nationalizing of local problems is overrated. Our schools are not failing nationally. They are failing in local areas many times. The solutions are not national, they are local. For Health Care, I disagree with the notion of Health Care being a right, so we’ll have to put that one aside for another debate.

I can actually embrace national voting standards for Federal elections; I do see that as a Federal issue worth an ammendment. However, I don’t think it is that big an issue to be quite frank about it. We’ve had a spate of some very tight elections that allow for statistical variance to intersect with the winning totals. Those get close scrutiny as a result; however, no matter the amount of standards or oversight, they will never be accurate to 99.9% without comprimising the sanctity of the polling booth.

David,

I’ll be frank. My bigger problem is that you refuse to consider the advantages of State Right’s within your framework of reform mindedness. Many of the problems that you point to are the direct result of consolidation of power too far removed from the people. This removal leads to disenfranchisment, apathy, as well as the fraud and abuse we have witnessed. Not everyone has the time to stay current on the many events going on in Washington. However, the less meaningful debates in Washington would likely be front page news in local papers were they conducted in the State capitals.

Posted by: Rob at January 31, 2007 02:20 PM
Comment #205999

Rob, two states have no min. wage that I know of. Another has a min. wage set below current federal. No state in the union allows a minimal quality American lifestyle on our current min. wage, and that includes low cost of living states like Mississippi and Alabama. Hence, your argument does not hold up that all states would elevate min. wage if there were no federal min. wage. In fact, historically, the federal min. wage was established precisely because workers in the Appalachians for example could not afford running water or phone, even after such services were finally made available.

As for federal laws on speeding, you are right we don’t now, but we did in the ‘70’s I think it was, mandatory 55 mph on all interstate highways. It was to compensate for the oil shortage crisis caused by the embargo.

No, I oppose mandatory sentencing on anything. I am not opposed to federal sentencing guidelines, but, not to the extent that they usurp the authority of the courts to take all factors into account when sentencing. Justice cannot be served with mandatory sentencing.

You realize that the evolution argument is the same one behind the Patriot Act right? We have to evolve our laws in order to fight the enemy that can’t be defined and lives within our midsts. Do you buy that?

The Patriot Act violates the Constitution protections in some ways. That is a very different issue than the Commerce clause contained in an Amendment to the Constitution. The Commerce Clause is Constitutional by definition of it having been an amendment. World of difference here. The Patriot Act’s warrantless snoop capacity is a direct violation of the Constitution.

They are failing in local areas many times. The solutions are not national, they are local.

You are absolutely wrong about this Rob. The majority of the failing schools in this country lie in districts where the income base in that district will not support the costs of maintaining and improving schools infrastructure, security, and educational curriculum such as sufficient salaries to draw better teachers. Just as the states could not afford the Interstate Hwy system, our educational system cannot afford to millions of students either dropping out or graduating with little more than 8th grade competency.

Those financially troubled school districts need federal assistance to elevate the quality of education the students receive. Research this even cursorily, and you will find that what I say here is factually supported.

Universities across the country have complained that the ever greater numbers of their students entering as freshman are ill equipped to handle standard college curriculum materials. And the ratio of students entering college to those graduating has been widening for many years now. This bears directly on both why our government and industry are importing vastly more students and graduates from other countries, and on businesses relocating outside the U.S. to places like India and China and Japan where education far exceeds our own standards, through junior college. The differences diminsh rapidly from Junior year of college to doctoral programs.

The federal standards for elections are not just about methodology and accuracy oversight, but, participation as well. With a federal standard, federal elections could be declared a national holiday, or to take place on a weekend, and provide standardized, accountable versatility and ease in registration and early voting procedures. In other words, our participation rate in elections would increase significantly, especially in places like Alabama and Georgia.

Render unto the states that which is the state’s without national impact. When however, the diversity of state methodologies or standards negatively affect that nation’s well being and future, federal leadership and standards and oversight are required. I have never, and will never, advocate elimination of state’s rights over issues and policies of no consequence to the nation.

But, in a highly transitory and mobile population such as we have developed, far more conventionally viewed state’s rights are now negatively impacting our nation’s future. And that is of concern for all Americans, especially those with children.

Posted by: David R. Remer at January 31, 2007 03:33 PM
Comment #206005

David,

Point of clarification, the Commerce Clause is not an ammendment. It is in the Enumerated Powers section of the Constitution. State’s Rights is an Ammendment.

Also, there have never been Federal laws on speeding. The laws for 55 mph were set by the States based on the extorsion of the Federal Government with holding funds for State’s that didn’t comply. The same was done to establish the drinking age.

“Those financially troubled school districts need federal assistance to elevate the quality of education the students receive. Research this even cursorily, and you will find that what I say here is factually supported.”

I’ve researched it at least more than cursorily, and there are as many sites that will say that money has no correlation with achievement. There are also studies that show funding more directly correlates to the direction that the average age in the population is moving than financial status.

Moreover, my point is not that there are not general trends; however, there are more school districts and schools succeeding than those that are failing. When we make policy based on the outliers we run the risk of affecting the whole in a negative manner.

“our government and industry are importing vastly more students and graduates from other countries, ”

David, this is not new, and it is folly to believe that it is. There was a brief lapse in our history from the late 60’s to the mid 90’s when the opposite was true, but that was more the anomally than the reverse.

“Render unto the states that which is the state’s without national impact. When however, the diversity of state methodologies or standards negatively affect that nation’s well being and future, federal leadership and standards and oversight are required. I have never, and will never, advocate elimination of state’s rights over issues and policies of no consequence to the nation.”

Who gets to decide when this happens? These kinds of arguments are convienent because it ensures that you never have to adhear to the general principal because you can always rule what you believe to be the exception important.

Posted by: Rob at January 31, 2007 04:00 PM
Comment #206048

Rob, thanks for correcting my erroneous reversal.

Rob, the 55 mph was enforced, was it not? And it was enforced by the Federal Government, not voluntarily by the states. Ergo, the federal government changed the speed limit to 55.

I am sorry, but these kind of word games and semantics are tiresome. When you refuse to acknowledge such simple historical facts, debate is no longer possible.

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