A minute’s pause for the minimum wage

posted at 8:01 am on March 8, 2013 by Jazz Shaw

The President may not be doing well on the gun grabbing or tax re-hiking fronts, but apparently there’s one area where the nation is still backing up his vision. And that’s the idea of “helping” everyone by jacking up the minimum wage.

A solid majority of Americans support President Obama’s proposal in his most recent State of the Union to increase the minimum wage.

Some 71 percent of those surveyed said they supported raising the federal minimum wage to $9 an hour from $7.25, while 27 percent opposed it, according to a Gallup Poll released Wednesday.

The results attest to the popularity of Obama’s plan, wrote Gallup’s Lydia Saad in the poll’s release.

Not everyone in the country will have to wait to see the results of this debate. Out here in the Empire State, President-In-Waiting Andrew Cuomo has already put the plan into action.

The New York state Assembly voted March 5 to make employers pay 25 percent more to their minimum-wage workers.

The bill boosts the required base hourly pay in New York by an extra $1.75, from $7.25 to $9. The bill would also impose automatic future increases, tied to inflation.

As we all know, anyone who opposes yet another steep jump in the minimum wage to a “living wage” hates poor people, minorities, puppies and unicorns. Allow me to join the elf kicking crowd for a moment by brandishing the one weapon which seems to flummox them entirely… math.

When you raise the minimum wage for people working in the lowest skill level, easiest to qualify for jobs with the greatest possible labor pool, you do – without a doubt – benefit those earning that wage. But as we have repeatedly pointed out, you drive up the labor costs for the primarily smaller business outlets who rely on this labor, offering a disincentive to hire and, quite likely, a cause to let some people go to keep costs down. You also drive up the cost of basic services and products which employers must charge to break even. But that’s not the entire picture I’m asking you to consider today.

Stop for a moment and think about the portion of the labor force who have worked their way up from minimum wage jobs or taken training in the trades and are working at jobs which pay something higher… let’s say in the range of 12 to 15 dollars per hour. Some of you living in the larger cities may scoff at such a wage, but trust me, there are many people living in suburban and rural areas across the nation who still compete for and get by on wages in that range. They have put the time in, worked their way up, learned some skills, and hold positions which pay a fair percentage more than a minimum wage job flipping burgers or whatever else falls in that category.

When you raise the minimum wage by 25% for minimum wage – and skill – jobs overnight, you may indeed be helping the minimum wage worker who manages to keep their job. But as the associated costs rise, all of those people making 12 or 15 dollars an hour do not suddenly get a 25% raise to 16 or or 18.75 per hour. Their costs go up for their daily expenses, but the raise they see – assuming they get one at all in this economy – will be on the order of 5%. They take the hit for the government’s largess. Further, their skills are devalued in comparison to people doing jobs you can get straight out of high school.

Is this the “defense of the middle class” which the President loves to crow about? Because he’s hurting a lot more people than he’s helping. The market sets wages based on demand. When you artificially warp that through government mandate, it will adjust. And the adjustment is not to the benefit of the masses.


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Comment pages: 1 2

you drive up the labor costs for the primarily smaller business outlets who rely on this labor,

Small?
WallMart and other major retailers and restaurant chains are small?

Some small business but many of these jobs are in large business.

Did NOT see any actual math just a lot of speculation most of it did not add up either. WallMart can not replace it’s workers neither can those other department stores or restaurants.

So far as adding to cost I would imaging raising energy cost have already added more thus part of the need for a higher minimum wage. The poor are far more effected by raising cost as their wage stays the same. Well now if this passes they will get a raise.

Steveangell on March 8, 2013 at 1:56 PM

I worked part-time at Wal-Mart once, dippy. Wal-Mart pays more than minimum wage. Restaurants pay less to servers because said servers also receive tips and many make more than YOU do.

PJ Emeritus on March 8, 2013 at 2:03 PM

I worked part-time at Wal-Mart once, dippy. Wal-Mart pays more than minimum wage. Restaurants pay less to servers because said servers also receive tips and many make more than YOU do.

PJ Emeritus on March 8, 2013 at 2:03 PM

Barely.

But mostly less than the new minimum wage at least to start.

Again restaurants also pay perhaps a bit less than minimum but less than the new minimum would be.

But it is a Straw Man to talk about jobs that pay the exact minimum because anyone making less then the new minimum will be effected in fact almost everyone even making 10% more will be because many employers pay a bit more for very good reasons and will have to continue to do that to get people.

Steveangell on March 8, 2013 at 2:30 PM

Please fight the increase wingnuts! Corporate profits & the Dow at record highs yet you want people working full-time to still live in poverty so profits can get even higher. Party of the Rich much???!!!

DBear on March 8, 2013 at 9:16 AM

Was that sarcasm or just honest ignorance?

ROCnPhilly on March 8, 2013 at 10:39 AM

Try low intelligence. Remember, Romney won the college graduate vote in 2012, while DBear’s Dear Leader set an alltime record high with 80% of the high school dropout vote.

As to your excellent smackdown of this poor sap, here’s an addenda: here in New Hampshire, the Democrats who just took over are trying to ram thru the same minimum wage hike. But when the Republicans provided them with ample (and irrefutable) evidence proving that raising the minimum wage would not lower the unemployment rate, they…backed down.

Del Dolemonte on March 8, 2013 at 5:01 PM

The thing you HAVEN’T consider is that driving up the minimum wage ALSO drives up the incentive to hire ‘off-the-books’ illegal immigrant labor- at whatever wage level they’ll take.

michaelo on March 8, 2013 at 8:52 AM

Indeed.

AesopFan on March 8, 2013 at 9:55 PM

Lets face it, the vast majority (dare I say 71%) of Americans are challenged in the arcane science of economics, including those who work in the real world. But it sounds good, and they can feel good about doing something for the less fortunate. And remember, they are the same group that elected not just the President, but also the boobs that make up the House and Senate.

georgeofthedesert on March 9, 2013 at 6:07 PM

Stop for a moment and think about the portion of the labor force who have worked their way up from minimum wage jobs or taken training in the trades and are working at jobs which pay something higher

You make a great point, Jazz.

But when these people are working their way up, they need to be reached to start voting R–because the D party doesn’t care a whit for people who better their own condition.

rwenger43 on March 10, 2013 at 11:04 PM

My boss says that if he has to pay some high school kid a higher wage than he pays himself, he’ll close the business that had over 500K in sales last year.

He’s worked 7 years to start making a profit, and now that he’s finally making it, he has no intention of over-paying the help.

Expect business owners to contemplate mandatory tipping policies or drastic price hikes to stay afloat. The last MW hike, in 2009, was largely absorbed by small businesses, because they didn’t dare raise prices during a recession.

With profitability rates slashed to the bone by this “adjust-your-expectations-downward” administration, businesses don’t have much room to give employees a mandatory 30-50% raise.

Are we all gonna do 30-50% more work?

If not, by definition a business will become less profitable.

rwenger43 on March 10, 2013 at 11:28 PM

I miss Neil Boortz’ talking on this topic.

The lying Dems don’t really care about the MW workers, anyway. That’s just smoke for the benefit of the LIV.

The MW argument has always been a payoff to Big Labor, whose union contracts are all measured against the existing MW, just like lending rates are measured against the Prime Rate.

If by contract an apprentice janitor is stipulated to earn 1.8x minimum wage, and the minimum wage worker is looking to get a $3 raise–the apprentice janitor is getting a $5.40 raise.

Considering that your highly skilled union employees are making at least 4x MW, you can see how the union payoff will have ripple effects all throughout our economy.

This is not about your Greeters at Wal-Mart.

rwenger43 on March 10, 2013 at 11:40 PM

Comment pages: 1 2