Why most debates about the Minimum Wage tend to be Bullsh*t!
Should we raise the minimum wage? If we raised it a bit, maybe a dollar, I think few people would have a problem. Maybe some republicans, perhaps a few libertarians would complain, for the most part, though, a small raise wouldn't be a bad thing. But, since we're talking about it, why not a much bigger raise. How about a ten dollar an hour minimum wage, possibly even fifteen dollars an hour. Everybody would have more money, people would spend and it would help the economy. Right?
Why stop there? Why not raise it to twenty dollars an hour! That would give all minimum wage workers an actual living wage. In fact, why not raise it even further. How about twenty five dollars an hour. This is where people start to get uncomfortable. “Don't be ridiculous!” they say “Now, you've gone too far!” But, if the issue is just about passing a law to give working people more, why not?
Generally, people stop at fifteen dollars an hour, based mostly on the notion that people doing basic jobs would now be making more than they are. So, they'd need a hefty raise too. “We don't want to be unfair now, do we!” It also probably helps that $15.00 an hour has been thrown around so much in the media, that the number has gained a certain acceptance.
I've had this conversation with many educated people—some with Masters degrees, even doctorates—and, it's amazing how few people, even highly educated ones, seem to be clueless about how employers arrive at what wage to pay. This is especially true when talking about a fair wage in the abstract, disconnected from actually having to pay that wage out of their own pockets. Instead, they look at billion dollar corporation like McDonald’s and argue that they're just being greedy.
This simple formula is offered by many well-intended people, including many politicians, our president being the best example. They seem to believe that it's just a question of doing the right thing! And, since businessmen are apparently unscrupulous capitalists, someone, somewhere has to be willing to speak for the common-folk—someone like them—the enlightened politicians.
Here's the real problem; most people don't work for billion dollar corporations. Somewhere between 50% to 70% of the nation work for mom and pop businesses. Those same small businesses fail at a staggering rate, 80% are out of business in the first year, 90% in the second. Imagine what would likely happen to all those small businesses struggling to keep their doors open, if they suddenly had to pay their employees 30% to 50% more, whether they can actually afford to or not. The fact that we're presently in the worst recession since the great depression adds significantly to the problem. That is what's being proposed.
In other words, does this question really need an answer beyond the obvious one!
Even in the case of billion dollar corporations, their profit margins are a good deal lower than one might think. Those billions in profits that reporters love to write about, are in fact, spread around their many stock holders, including millions of small share holders who rely on these same companies for their meager retirement—grandma and grandpa included. Companies would likely deal with the substantial labor hike by raising their prices, passing the cost along to the public. That would mean inflation across the board. When things cost more, people's hard earned money buys a lot less. In reality, you didn't really get a raise, you just got a bit more money, that now has less value.
No, the real problem is, that the economy sucks—big time, in fact. It sucks, in no small part because government interference through regulation and paper work is far greater today than it was fifty years ago. That would be one very big reason. The more that government creates costly mandates out of thin air, the more those same mandates slow the economy. Think of them like so many regulatory speed bumps in the road.
In the 1950s 1 in 20 workers were government regulated. Today, that number is 1 in 3. We also have the highest corporate tax rate in the industrialized world. We've also recently raised the capital gains tax, which punishes investment, hurting everyone, including people who may have inherited a small sum from a parents will. It also includes those businesses who need reserves of capital so they can safeguard their future.
CEOs making huge salaries, with severance packages that would cause Solomon to blush, are statistical anomalies, so small they don't register as a blip on the economic radar. They make for compelling propaganda, though. In politics, you always need a bad guy. Why not greedy businessmen, frequently defined as greedy for no reason greater than their desire to make a profit.
Here's the simple truth, wages rise when the demand for goods and services increases. Then, the demand for the labor used to produce it, or sell it, increases as well.
In other words, when business is good, companies pay more, hire more and expand and grow. That’s when a boss is generally happy to give you a raise, because he's also getting a raise. And then, everyone's happy.
This tends to be true, even if your boss really is a greedy jerk? And, for one simple reason; they can't run their business alone, they need you. In a healthy economy you can always take your skills someplace else, where the boss isn't a jerk. In a truly free market the right people generally win and the wrong ones lose.
Make no mistake, there will always be powerful rich people who will take advantage if they can. In a free market, however, that is much harder to do. It's when they can get politicians to enact laws to protect them from competition that problems arise. Why? Because the market is no longer free—and then everyone suffers, leaving what is essentially a monopoly in it's place. Of course, this may only apply to workers who've made themselves valuable by being good employees. Not when some politicians arbitrarily says they need a raise, regardless of their productivity. But, when the economy is good—and it hasn't really been good for a long time.
Why has the economy been so unproductive? Is it because of greedy businessmen?
There are lots of reasons, too many to write about without a much, much longer article. The simplest answer is, that the economy was, and continues to be, heavily manipulated by cronyism between the banking industry and the government. The same cronyism that created the Dot. Com bubble of the 1990s, led to the housing bubble of 2007 and beyond—and continues to wreaks havoc throughout every part of our economy.
Let me be clear, this isn't capitalism, it's cronyism, which is really a form of socialism for favored business interests. The answer to this problem isn't more socialism. Or, socialism for everybody. "Hey, why not, If it's good enough for billionaires, it's good enough for me!" That seems to be the logic. Like my mother used to tell me "Just because some people drink poison, doesn't mean you should."
No, it's because of greedy politicians and ignorant, if well-meaning voters buying the latest line of self-serving propaganda from their would-be political benefactors. In the end, the arguments never really change. After all, why change what works? If it puts them out of a job, at least, they'll have justice. If not real justice, then, the justice they deserve, will be good enough.
Mark Magula
Why stop there? Why not raise it to twenty dollars an hour! That would give all minimum wage workers an actual living wage. In fact, why not raise it even further. How about twenty five dollars an hour. This is where people start to get uncomfortable. “Don't be ridiculous!” they say “Now, you've gone too far!” But, if the issue is just about passing a law to give working people more, why not?
Generally, people stop at fifteen dollars an hour, based mostly on the notion that people doing basic jobs would now be making more than they are. So, they'd need a hefty raise too. “We don't want to be unfair now, do we!” It also probably helps that $15.00 an hour has been thrown around so much in the media, that the number has gained a certain acceptance.
I've had this conversation with many educated people—some with Masters degrees, even doctorates—and, it's amazing how few people, even highly educated ones, seem to be clueless about how employers arrive at what wage to pay. This is especially true when talking about a fair wage in the abstract, disconnected from actually having to pay that wage out of their own pockets. Instead, they look at billion dollar corporation like McDonald’s and argue that they're just being greedy.
This simple formula is offered by many well-intended people, including many politicians, our president being the best example. They seem to believe that it's just a question of doing the right thing! And, since businessmen are apparently unscrupulous capitalists, someone, somewhere has to be willing to speak for the common-folk—someone like them—the enlightened politicians.
Here's the real problem; most people don't work for billion dollar corporations. Somewhere between 50% to 70% of the nation work for mom and pop businesses. Those same small businesses fail at a staggering rate, 80% are out of business in the first year, 90% in the second. Imagine what would likely happen to all those small businesses struggling to keep their doors open, if they suddenly had to pay their employees 30% to 50% more, whether they can actually afford to or not. The fact that we're presently in the worst recession since the great depression adds significantly to the problem. That is what's being proposed.
In other words, does this question really need an answer beyond the obvious one!
Even in the case of billion dollar corporations, their profit margins are a good deal lower than one might think. Those billions in profits that reporters love to write about, are in fact, spread around their many stock holders, including millions of small share holders who rely on these same companies for their meager retirement—grandma and grandpa included. Companies would likely deal with the substantial labor hike by raising their prices, passing the cost along to the public. That would mean inflation across the board. When things cost more, people's hard earned money buys a lot less. In reality, you didn't really get a raise, you just got a bit more money, that now has less value.
No, the real problem is, that the economy sucks—big time, in fact. It sucks, in no small part because government interference through regulation and paper work is far greater today than it was fifty years ago. That would be one very big reason. The more that government creates costly mandates out of thin air, the more those same mandates slow the economy. Think of them like so many regulatory speed bumps in the road.
In the 1950s 1 in 20 workers were government regulated. Today, that number is 1 in 3. We also have the highest corporate tax rate in the industrialized world. We've also recently raised the capital gains tax, which punishes investment, hurting everyone, including people who may have inherited a small sum from a parents will. It also includes those businesses who need reserves of capital so they can safeguard their future.
CEOs making huge salaries, with severance packages that would cause Solomon to blush, are statistical anomalies, so small they don't register as a blip on the economic radar. They make for compelling propaganda, though. In politics, you always need a bad guy. Why not greedy businessmen, frequently defined as greedy for no reason greater than their desire to make a profit.
Here's the simple truth, wages rise when the demand for goods and services increases. Then, the demand for the labor used to produce it, or sell it, increases as well.
In other words, when business is good, companies pay more, hire more and expand and grow. That’s when a boss is generally happy to give you a raise, because he's also getting a raise. And then, everyone's happy.
This tends to be true, even if your boss really is a greedy jerk? And, for one simple reason; they can't run their business alone, they need you. In a healthy economy you can always take your skills someplace else, where the boss isn't a jerk. In a truly free market the right people generally win and the wrong ones lose.
Make no mistake, there will always be powerful rich people who will take advantage if they can. In a free market, however, that is much harder to do. It's when they can get politicians to enact laws to protect them from competition that problems arise. Why? Because the market is no longer free—and then everyone suffers, leaving what is essentially a monopoly in it's place. Of course, this may only apply to workers who've made themselves valuable by being good employees. Not when some politicians arbitrarily says they need a raise, regardless of their productivity. But, when the economy is good—and it hasn't really been good for a long time.
Why has the economy been so unproductive? Is it because of greedy businessmen?
There are lots of reasons, too many to write about without a much, much longer article. The simplest answer is, that the economy was, and continues to be, heavily manipulated by cronyism between the banking industry and the government. The same cronyism that created the Dot. Com bubble of the 1990s, led to the housing bubble of 2007 and beyond—and continues to wreaks havoc throughout every part of our economy.
Let me be clear, this isn't capitalism, it's cronyism, which is really a form of socialism for favored business interests. The answer to this problem isn't more socialism. Or, socialism for everybody. "Hey, why not, If it's good enough for billionaires, it's good enough for me!" That seems to be the logic. Like my mother used to tell me "Just because some people drink poison, doesn't mean you should."
No, it's because of greedy politicians and ignorant, if well-meaning voters buying the latest line of self-serving propaganda from their would-be political benefactors. In the end, the arguments never really change. After all, why change what works? If it puts them out of a job, at least, they'll have justice. If not real justice, then, the justice they deserve, will be good enough.
Mark Magula