It seemed impossible but last week Republicans argued, and in public too, against the minimum wage. How evil can they be? Don't poor people deserve a living wage? Republicans were actually against poor people! Isn't that sad;even tragic?
Here are the, so called, arguments, Republicans used: they claimed that if you raise the minimum wage cost the price of goods made by those who earn the minimum wage would go up just as it would go up if any of the costs to make goods went up. So then, according to Republicans anyway, there is no net benefit since those who receive the minimum wage have to then buy goods at a higher price with a new minimum wage that doesn't have higher purchasing power. They concomitantly believe, that if you do raise the minimum wage, those who had previously been given raises above the minimum wage would then be back to earning the minimum wage again, and so would demand a raise so as not to be on the bottom again. In fact , they claim, everyone would demand a raise so as to maintain their relative position in the wage pecking order, and thus all wages and all prices would go up yielding a net loss based on all the minimum wage distortions from optimal free market wages and prices.
Then, they had the audacity to argue that if wages go up there will actually be fewer jobs, and so again there would be no net benefit, and in fact, another net loss. To be honest it does seem that employers are a little sensitive to the cost of wages. I guess that's why you have to walk the isles of Home Depot, for example, for two hours to find someone to help you, or why when you want computer support you end up waiting on hold or talking to a computer forever, and then finally get to talk to an employee in India who doesn't speak English or know what he is talking about, or why when you buy something it is made in low wage China. It seems wages at the bottom do directly determine the exact number of jobs here in the United States. What a surprise that must be to Democrats?
Republicans also claim that with a fixed amount of money in circulation, if wages and prices go up because of say, a higher minimum wage , people will be able to afford less from minimum wage industries and so employers will need fewer or less employees. Again , what a surprise? Perhaps all that talk about outsourcing to lower wage countries does in the end have something to do with the high cost of labor in America? In fact, millions and millions of jobs, particularly low wage jobs, have been exported already because of high wages; so raising wages further might not be the best idea in the world. It might be the worst idea and this might explain why Democrats love it.
Republicans then argued that if a minimum wage of $8 showed genuine compassion, a minimum wage of $100 would show super genuine compassion. They argued for it on the grounds that it would quickly teach the Democrats the real effects of price/wage fixing that are often hidden by the normally small wage increases for which they ask. Republicans feel Democrats want small increases in part because they are too dumb to understand the economics and in part because poor people then can't see the damage done to them by the seemingly benign small increases.
Then, of course, you have the problem of entry level workers: teenagers, recent immigrants, the unskilled, and those reentering the work force. The higher the minimum wage the fewer of these people can earn money, get work experience, learn a trade, figure out what they like to do, find part time work, and/or be integrated into society. Thanks to Democrats, unemployment is very high among these people during what are very critical and formative years for them because the minimum wage is high.
The perspicuous Democrats had a wonderful argument on their side though to counter all of the Republican common sense. They felt in their deeply compassionate hearts that if they could just sneak new minimum wage legislation through the Congress many ignorant people would feel their compassion and vote for them never suspecting how damaging the minimum wage really is.
All of this goes to show that too much democracy will always produce too many Democrats, and that Jefferson was right that freedom from gov't schemes is best , no matter whether they are thrust upon us by generals, kings, tyrants, dictators, communists, or Democrats.
comments welcome at bje1000@aol.com
Ted Baiamonte
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No vile, obscene, purely insulting or purely emotional comments that prove you are a "Dumb Democrat" will be published. If you have facts, logical arguments, or questions to ask, your comments will be welcomed. Remember, a skilled attorney makes his case by asking questions that cannot be satisfactorily answered.
See, I totally agree with this. I used to live in a poor hick county in PA where the locals have to beg for companies to come in. The democrats have pushed for a state min. wage hike which i just think will drive businesses away from rural areas. Big cities like Philadelphia and Pittsburgh aren't affected by the min. wage because the local market has already set their wages above $5.15, so its the rural areas that are going to lose out.
A few months ago, someone named Ted Baiamonte began sending me email versions of posts on his blog, The Dumb Democrat. I asked him to stop, but he persists, most recently when he posted this little missive about minimum wage laws.
*****so why complain if it helped you think and write?
If you click on these links, you will see that Baiamonte largely resorts to ad hominem attacks (beginning with the title of his blog), and recycled right-wing talking points. There is not a lot of fact or analysis here (he can't even spell Scott Ritter's name correctly), and when he does bring in a statistic or two, he twists them in interesting ways--
******so far school boy name calling
as when he compares combat losses in Iraq to casualties during the Civil War, and argues that this difference in magnitude means that "By that standard, no one has even been killed in Iraq yet." Tell that to the families of the brave soldiers we've lost, some of whom are former colleagues of mine. But his is an opinion blog, I suppose, and he is entitled to his.
*******families of dead soldiers don't make policy. Would you want that in the Constitution?
30,000 die in auto accidents every year. Would you want their families to then determine how safe and how expensive automobiles ought to be?? See how much fun thinking can be??
Baiamonte's argument against mandating a minimum wage must have seemed humorous to him--the whole rhetorical "how evil can Republicans be" schtick stands out as fine op-ed writing--but it really just rests on the standard conservative stuff: it will cause higher prices, because businesses will raise them to recoup higher labor costs, and it will cause unemployment, because employers won't hire as many workers at the higher wages This effect, for Baiamonte, worsens because the finite amount of money in circulation means that higher wages and prices will reduce demand. I'm not so sure.
*******you repeated some of the arguments anyway
First, Baiamonte probably overstates the effect of a slightly higher minimum wage on prices.
*****one does not overstate the effect of production costs? Million and million of jobs have been disappearing overseas because production costs have gone up; not down- get it now?
Do you want to be responsible for families without jobs, dummy??
For one thing, minimum wage laws have very little effect in places where the prevailing wage is higher--that is, if the local White Castle is paying $8.50/hour to attract burger flippers, a $7.25 minimum wage would affect few workers.
******this is true and exactly why I pointed out Democrats support it in tiny increments only for the PR value. Any idiot knows it is harmful to the economy.
Further, as Galbraith pointed out in The Affluent Society (page 161),
******Galbraith was a socialist and unrepentant New Dealer even though MIlton Friedman buried him? A silly choice from another era. Few modern economists would dispute that. Even Harvard written Econ 101 text books now acknowledge this. Where have you been???
firms that could raise prices would have done so before wages increased, because prices are driven by demand and supply, not production costs.
*****the goods that a firm can supply at a given price are determined in large part by the cost of production (basic econ. 101 which you obviously have not studied). GM will go under because wages are higher than competition-get it now??
Instead, firms would likely reduce costs in other areas--
******competition always puts maximum pressure on a firm all the time to reduce costs further than the competitions as a way to survive in business. A wage increase will dramatically harm the effort to stay in business.
and to the extent that a higher paid worker is more productive (happier in the job, stays around long enough to develop skills, wants to work harder to keep the higher wage), the wage increase itself may reduce costs by attracting better employees.
******great idea, lets pass a law doubling wages to reduce costs??
In the end, increasing the minimum wage by $2.10/hour (to $7.25, the current proposal) only increases the cost of each full-time worker by $4368/year (and most of these workers are part-timers, so the increase costs less), and doing so for all of the estimated 2 million minimum wage workers in the US would cost only $8.736 billion dollars to the entire economy even if they were all full-time--a drop in the bucket for US corporations,
******yes I pointed out very clearly the Democrats support only a tiny increase for the PR value to stupid people knowing it will do nothing. They don't support a significant increase because all know it would merely send more millions of jobs over seas.Get it now??
whose profits totaled $1.35 trillion in 2005, and surged another $176 billion during the first quarter of 2006. I expect that most firms can find the money to pay the workers--
******yes they find the money to pay workers by moving million and millions of jobs overseas where workers cost less-get it now??
who help to generate this profit--a little more without raising prices. Cutting executive pensions a bit springs immediately to mind.
******pensions are part of wages. If you pay executives less you get less skilled executives and they then provide and maintain fewer jobs. If a company pays its executives too much versus world wide competition their costs go up and they go out of business. Its called capitalism or maximizing everyone's standard of living-get it now??
Baiamonte's second argument relies on his first--that firms will cut hiring because higher labor costs and prices will reduce demand,
*****exactly this is why a Rolls Royce will sell less than a VW
and therefore the need for more workers. Of course, if a higher minimum wage does not raise prices, then we can ignore this argument,
*****all cost increases result in higher prices and the greater the cost increase the greater the price increase. This econ 101: The law of supply and demand
as least as a reason to oppose a minimum wage.
******ok we'll pray as the soviets did that the laws of supply and demand are mistaken
Still, even if a higher minimum wage resulted in higher prices in minimum wage industries, it only reduces demand if the price increase outpaces the wage increase. This is happening--inflation recently has risen faster than wages--but it is not a result of higher minimum wages.
*****no idea what you are talking about, only the Federal Reserve can cause inflation and it effects all prices and wages equally over time. So a cost increase caused by a minimum wage law will still have the identical negative effect.
And it exposes a fundamental unfairness: that more productive workers are not sharing in the proceeds from their increased output.
******business is competitive so if productive workers were not paid enough they would change jobs to get the maximum pay. But if they were paid too much their companies would be driven out of business. Only free workers and employers can make these decisions because they have the most knowledge. The gov't would be guessing in complete ignorance and getting it wrong as the Soviets found out- get it now??
Higher wages for very low-paid workers might actually increase demand and employment, and thereby strengthen the economy, because these workers will spend almost all of their higher wage, and they will spend it all here.
******great so lets triple wages I'm sure there is at least one nut case somewhere in America who thinks that would be an intelligent idea. Or better yet lets let the gov't determine all prices and wages like they did in all the countries throughout world history that have since given up and are now letting the market place set wages and prices inorder to have our standard of living
If they buy more goods, firms will hire more workers. Wealthy executives and shareholders spend more of their money overseas or gambling on stocks, which do nothing to improve productivity or increase demand.
******productivity is maximized with technical advancements and wages and prices that are set precisely by the free market. For example, if wages are too low you get only bad workers while a competitor sets them higher and gets all the good workers, but if too high he is not competitive and goes out of business-get it now??
[Someone will argue that investing in stocks improves the economy by capitalizing firms, and this may be true of initial stock sales.
******why would you say maybe?? IF firms were not capitalized there would be no economy
But when one investor buys IBM stock from another, he or she is simply betting that its value will rise.
*******yes betting that it will rise because its earnings will rise and the stock asset will then have more value which it should. Try to imagine betting on stocks that would earn less?
It does not stabilize the economy by providing information about the health of companies,
*******wrong, stock price and earnings correlate exactly
because of the perverse incentives it creates to show short-term profitability at the expense of long-term corporate health. Just ask the Enron folks.]
******why ask Enron if they are not a typical stock? And anyway only the market can determine if a corporation should manage for the future and how far into the future at that.
Do you know if the future is Plasma or DLP, diesel or hybrid, hydrogen or ethanol-get it now?
This is really about requiring firms to disburse more of their rising profits to workers instead of to shareholders and executives.
******if they give too much to workers then they will have no investors; if they give to little they will only get poor workers. ITs a moment by moment, firm by firm, industry by industry decision making process that explains exactly why we have the highest standard of living in the history of the world. A few dumb Democrats in Washington making all those decisions for everyone will give you a soviet result-get it now? Chairman Mao is dead and so is Galbraith.
Baiamonte might call this redistribution of wealth,
******no its called stupidity. IT doesn't redistribute it merely decreases wealth for everyone as Mao and Stalin and Castro found out.
and I suppose it is, if you think that more productive workers, who help to increase a firm's profits, should not share the results of their improved work ethic, skill set, and drive.
*****see above
If this is the real criticism, then just say so--and then complain about redistributing wealth to corporations,
******you did not explain how we redistribute wealth to corporations? Generally redistribution refers to a communist concept wherein the gov't steals money that was gotten in voluntary transactions form one group and gives it to another. So far as I know corporate money is not stolen rather it is given voluntarily in exchange for goods and services that consumers choose to buy in a competitive global free market when they have determined that the good or service is the best in the world tha freedom could produce.
which arguably distorts the economy even more by keeping large firms in business that would fail without government support.
*****you should like that because it maintains jobs? or do you just want higher minimum wages only for those who have no jobs??
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