The last time the minimum wage was changed was in July of 2009 when
it moved from $6.55 and hour to $7.25 and hour. President Obama in his SOTU
address says it is time for it to change, and he suggests $9.00 an hour. The
time seems right.
Even a narrow majority of Republican leaders are not in favor of a
raise even if their leaders are opposed to it; oh, the crazy Republicans. Paul
Krugman, of the NY Times believes that the Republican leadership has little
regard for ordinary workers. He uses as an example Eric Canton who on Labor Day
said, “Today, we celebrate those who have taken a risk, work hard, built a
business and earned their own success.” Or in other word on Labor Day he
totally ignored laborers to applaud bosses.
Krugman also goes on to point out that working couples with 2
children earning the current minimum wage do not pay income tax, rather they
get a refund. They are paying payroll taxes, sale taxes and the like, but that
is largely ignored. The Republicans just see them as a drag upon society.
Republicans love to talk about raising the minimum wage will
decrease jobs because their employers won’t be able to afford them. That is
like arguing to reinstitute slavery because of its economic benefits for bad
managers. What we do know is that if more money is placed in the hands of these
workers they spend it and the economy benefits in contrast to more money going
into the hands of the wealthy which will not spend it. Trickle down economics
does not work ~ thirty five years of trying have shown that.
America’s minimum wage is low compared to international standards;
about 38% of the median wage in 2011. Thus the current minimum wage is equal
what it was in 1998 in real value. Obama’s proposal would bring it into the
range it was in 1979 and then index it to inflation.
Other (i.e. IPI) argue that if the minimum wage was increased to
$9.80 an hour it would create 100,000 jobs.
Minimum wages were developed to increase the standard of living for
workers, reduce poverty, inequality, and boosts morale and forces businesses to
be more efficient. Opponents claim it increases unemployment particularly among
poorly skilled workers. I would refer you to an earlier article I wrote about
the wages Wal-Mart pays ($8.81) in contrast to Costco as models that don’t work
equitably (Wal-Mart) and models that work (Costco) which deal with these
populations.
As Lewis Carroll wrote:
“The time has come,” the Walrus said,
“To talk of many things:
Of shoes—and ships—and sealing wax—
Of cabbages—and kings—
And why the sea is boiling hot—
And whether pigs have wings.
To which I would add, to talk of minimum wage.
I am so completely set against this for two main reasons:
ReplyDelete1) It is an unfunded mandate. A welfare program where instead of the government handing out the money, the government forces employers, mostly small business owners, to hand out massive amounts of unearned gift money without regard to the work being done.
2) It is entirely not means tested. Most of this unearned money doesn't even end up going to people in poor families. It goes just as equally to kids in middle class and wealthy families as it does to those in poverty.
There are many other reasons to oppose it, but those are the main two.
I believe in a social welfare safety net. A generous one. But I believe it should be paid by tax dollars, and means tested so it only goes to those who need it. Is that so inhumane? Minimum wage policies do neither.
One more point, having to do why there are so many reasons to oppose this type of policy and none to support it:
"What we do know is that if more money is placed in the hands of these workers"
The business owners aren't just sitting on massive piles of unearned welfare money to hand out for this purpose. Small business owners and mom-and-pop shops barely hang on. So what this means is no more money in the hands of workers at all. If they can't afford unearned raises, they they end up being forced to fire people or they will go out of business.
"Paul Krugman, of the NY Times believes that the Republican leadership has little regard for ordinary workers."
As with most things, his beliefs are in line with not reality. It is the Dems, by supporting a policy which forces companies to fire thousands of people rather than pay them a fair wage for their work, that have little regard for ordinary workers.
His use of the "ordinary worker" term deserves scrutiny also. According to the Bureau of Labor Statistics, 3% of workers were at minimum wage level. That's too small a group to call "ordinary worker".
And even though small, these ARE real people. The group that will have large numbers fired, wages going from low to $0, due to the government forcing threadbare small employers fire them because the aren't equipped to be welfare agencies and hand out piles of unearned cash to their workers.
For more on Krugman, click here.
ReplyDeleteKrugman considers a President who raised taxes on the rich a whopping 152%, extended government control in a huge and over-reaching way into the arena of international trade, and increased government spending significantly to be some sort of laissez-faire person.
I decided just to write another article that deals with some of your critiques. The Krugman link made no sense to me but included a lot of firey inflamitory language that add little to serious debate; Faulknarian in the sound of fury signifying nothing. If they numbers are so small as you point out, what is all the todo about? If one is to critique Krugman it seems best to go to original sources of what he says rather rants of his opponents.Where does the 152% number come from and how does it compare to pre Reagan income tax levels? Also to say that the Republican party is the party favorable to big business is just history that few would quarrel with.
ReplyDeleteIt was very relevant. Krugman is discussed a lot on an excellent blog. He gets it wrong on so many things.
ReplyDelete"If they numbers are so small as you point out, what is all the todo about? "
The same sort of logic can be used to support the death penalty: if the numbers of innocent people killed are so small, why does it matter?
When the fact is that the 'small' number of people fired as a result of the government forcing employers to fire people through the minimum wage are actually real people with real lives.
"Also to say that the Republican party is the party favorable to big business is just history that few would quarrel with."
Might have been true at one time, but things have changed in the 21st century. When massive government handouts to big business (banks, auto industry, agro corps, "Green" energy, etc) the Republicans are more likely to oppose this, while the Dems end up using the former Republican hollow rhetoric in favor of taxpayer gifts to big business: to save jobs.
It was the language that bothered me, more heat than data or logic. The numbers bit was a bit of sarcasm, sorry that was not clear. The Republican party of the 21st century is even more pro wealthy than ever before; the same can be true for Democrats for that matter just not as extreme. Republicans may make a big deal of "handouts" but they have a strong history of just that with tax breaks and incentives for their corporate buddies with strong lobbies.
DeleteWhat's the 152% increase in taxes?
After the supposed "pro-wealthy" tax breaks, the wealthy end up paying more real dollars, a higher percentage of income personally than the non rich, and as a group pay the overwhelming majority of total tax revenues... compared to the non-wealthy. That surely can't be "pro-wealthy" by any stretch.
DeleteAnd sorry, Rev. D, your "just that" does not factually connect. A tax break is not a handout. Forcibly appropriating a little less of someone's property is definitionally not a gift to the victim. In contrast, the Dems are really a lot more extreme by favoring actual handouts of record size.
The 152% matter concerned how Krugman is usually flat out wrong on the facts. He claimed thag Herbert Hoover was some sort of laissez-faire President, despite all evidence