Friday, August 05, 2005

Increases in Minimum Wage Hurt Small Business and Employees

The growing concentration of wealth in America and the deterioration of living standards for most people are emerging as a most important part of the political debate in our cities, States, and nationally.

It's a topic with plenty to debate, and consider. But certainly the solutions for improving one’s quality of life is not to be found in partisan political bickering, nor the language of the self serving, whose nauseating conflicting sounds only serve to lock us into the perpetual nothingness that continues to disgust us about Washington and Sacramento.

It seems from a fair reading of the many opposing views relative to Minimal wage and Living wage that opposition to any increase in, or institution of these wage formulas, is not only reasonable, but the more prudent of public policy.

As a “Safety Net” a minimum might be a reasonable protection for all of us? At the most, perhaps a place to begin, from which to earn a self generated market driven living earned income.

Mandatory wage increases hurt not only small businesses, but their employees as well. The pervasive and destructive effect of minimum-wage legislation on employment has been continually sorely misrepresented, and underestimated.

Big corporations do not have to absorb the cost because most minimum-wage jobs are offered by small businesses.

Government manipulation of the starting wage has consistently failed as a tool of social and/or economic justice. It has repeatedly been shown to be a job killer, and a universal disincentive to small business, as just one more onerous unfunded mandate and irrational regulatory tax burden further suffocating small business.

The proponents argue for a "fair" minimum wage, as if government could actually legislate wealth into existence. Laws don’t make jobs, people make their jobs.

Minimum wage laws discriminate against the less productive (Those who can still profitably be employed at a lower wages.), such as: teenagers, the retired, minorities, the disabled, and the less skilled.

The very job growth desired by such dangerous Pollyanna entitlement thinking is prohibitive in its ability to create any real personal financial incentive or help.

Such laws succeed only in redistributing the existing wealth of a society. The distortions caused by fixing the price of labor produce definite losers and winners; it is the least employable, the truly needy, who are the losers -- who lose their jobs. The winners either earn above the new fixed price or have protected jobs.

Furthermore, some people don't need a "living wage", as they are simply supplementing retirement income, and may prefer a mix of money income and other kinds of compensation.

Such unfunded mandated formulations have not been proven to reduce poverty nor narrow the income gap and puts a stranglehold on America's top job creators: small businesses.

It seems to make good press and photo OP’s, but not good public policy.

Interestingly most of the people who support such efforts, don’t live on, and never have lived on minimal wages, fixed wages, or living wage limitations themselves. But they want you to.

The overwhelming majority of economists and social scientists continue to affirm the job-killing nature and societal immobility of such mandatory wage increases.

Mandatory minimum or living wage increases end up reducing employment levels and their intended resultant life style for those people with the lowest skills, who need the work and increased income the most. There is no arguing that sad fact.

The question then seemingly is, in the face of that truth, what can be done to improve the real job opportunities, income levels and lifestyles of our fellow citizens and neighbors?

2 Comments:

Anonymous Anonymous said...

First two paragraphs are fine, great way to start.

Why does it seem reasonable to oppose "minimum wage" and
"living wage" proposals? You don't explicitly state what they are, or provide factual references about who's promoting them.

Have there--ever--been any benefits to a minimum wage law?
Do you quote any SLO labor officials about it? Any local critics?

Perhaps you might talk with a young employee about whether she (or he) would like to receive even less per hour than the state mandated $5.75 per hour?

It doesn't pass the "smell test" of a passable argument.

On the other hand, you might be closer to why you oppose mandatory wage increases, when you say it will hurt small business.

If the "destructive effect" of this type of legislation has been misrepresented, by all means, represent it as you think it should be represented. It's your full page on the Internet to give us the real scoop! Tell us the real truth about how it wrecks the economic engine of this country--small business.

How has the minimum wage law been a job killer? How many jobs have been killed due to this legislation in California? In San Luis Obispo county? In Arroyo Grande? Surely you can get some data on this. Bankruptcy figures are available. You could call up and talk with a number of shop owners who closed. You could cite facts and sources. You could include links to web pages with this information.

Your statement "big corporations do not have to absorb the cost" of minimum wage requirements because most of these job are offered by small business" is not quite true. Ever apply for a job at Staples? Wal-Mart? These huge corporations must deal with minimum wage law as certainly as the doctor down the street.

How does this minimum wage law "discriminate" against the "less productive" workers? Can you cite any actual case as an example? The so-called "less productive" workers you list might each feel appalled and insulted at your statement that they are less productive. Says who? Based on what measurement?

When you say these people can still "profitably" be employed at a lower wage what do you mean? Profitable to the worker, or to the employer?

Interestingly, many of the proponents of minimum wage and living wage proposals have lived with the former for a time. Some for a long time. Do you know any of these people? Talk with them about it. Quote them.

You statement about "redistributing income" is worthy. But let me ask, don't massive tax cuts "redistribute income"? Aren't small business people currently rewarded with multi-thousand dollar tax incentives for buying a gas-guzzling SUV from an Arroyo Grande car dealer?

Do you have a list of the "majority of economists" and "social scientists" who say minimum wage guarantees are "job-killing?" How many are we talking about? How many are on the side favoring these wage level protections?

Can you offer ANY proof that minimum wage laws or living wage increases end up reducing employment levels? Where? Who do you quote? Where does this assertion (minimum wage laws or living wage increases) "reduces empoyment levels" come from?

The real question is, how can you make an argument out of unfounded, unreferenced, uncorroborated assertions with no factual basis?

You close by asking "what can be done to improve the real job opportunities" of our neighbors. Why don't you try using actual facts, from your actual neighbors?

You might expect to learn a lot, but what you learn might not be what you expect.

3:46 PM  
Blogger don regan said...

So, Anonymous … Lot of you Anonymouses out there??? :)

I’m just guessing you are in favor of minimal and living wage laws?

I am grateful for the reply.

From the tenor of your reply I would ask though, that this not sink into partisan contrasts.

My posting was to not to create argument, but state an hypothesis, and see where the solutions might be, or the discussions take us.

New ideas to create opportunity.

A middle constructive ground if you will. If there is any?

I live in hope.

Your lengthy request/questions of information is sound, so I will offer you some links by which you can begin to seek those answers. (See below.)

This is by no means a comprehensive list. I will leave it to you to research your answers, and I will look forward to seeing what you come up with.

As to the impact here locally, we can ask, and I will! We’ll see what is said.

That is also the purpose of this local blog, to seek out answers, not just opposing arguments. Hopefully a fellow reader might also contribute such answers to your questions.

Thank You for staying in touch. I look forward to your research, and continuing this discussion.

Don


http://www.commondreams.org/views04/0312-12.htm

http://www.cato.org/pubs/pas/pa106.html

http://www.yaf.com/minwage.shtml

http://www.sacbee.com/content/politics/columns/weintraub/story/13153956p-13997644c.html

9:01 PM  

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