What's wrong with this thesis? "Min wage should not be raised if small busnesses fail"

[Katzenjammer]

There's another thread with this thesis and for some reason none of the several dozen responses points out the really basic, fundamental problem with this idea. Is that because DUers can't see that core problem, or what?

[unblock]

1. what's wrong with this thesis: "small businesses should not be permitted to thrive on low wages"

du'ers are not idiots, we know that higher wages might mean the short-term suffering of businesses dependent on wages so low they keep families in poverty no matter how many hours they work.

but we also know that the social costs of such businesses are not worth having.

further, we also know that as the income of the lowest-earners rises, so does their local spending, which creates the demand for more businesses. so, while businesses may need to adjust, and perhaps some may fail in the process, on the whole, business will be better off with a reasonably paid work force.

[SharonAnn]

68. Small businesses should not be permitted to thrive by slavery.

It´s really the same kind of thing.

Small businesses don´t have a constitutional right have labor at the price they want. If they did, they´d want it at a price of $0, which means slavery. Actually, there is the cost of buying the slaves and then housing, feeding and clothing them.

Just because I want a 99 cent hamburger doesn´t mean that people must sell me one that was made on slave wages and sell it to me for that price. I may have to pay more for my hamburger, but everyplace will have to include the cost so prices will remain competitive. What might happen is that I choose to buy something else or make the hamburger at home. Nonetheless, I´m not entitled to cheap goods and the owner is not entitled to the profit they want if workers have to be underpaid to ahieve those ends.

We´ve gotten so confused about the costs of things. We want more services yet we want our taxes cut.

It´s past time to grow up.

[Donald Ian Rankin]

78. Those are two completely and utterly different claims.

Low wages is when you say to someone "I will pay you this much money to work for me; you can accept it or you can refuse to" (and go and look for another job or live on unemployment benefit.

Slavery is when you say "You will work for me; you do not have any choice in the matter".

They're completely and utterly different, and the comparison is deeply misleading and weakens the case for a minimum wage.


The argument for a minimum wage is that the people who would otherwise be being paid less than that amount are instead paid that much. As soon as it reaches a level where a non-trivial fraction of those people are instead being paid nothing at all, because the (mostly small, I suspect) businesses that would otherwise be employing them cease to be economically viable, it becomes a bad thing rather than a good one.

[stansnark]

2. does any business have a constitutional right to earn a profit ?

i don't think so. but what do i know ?

[Starlight]

8. Slavery is illegal. If a business doesn't make enough money to afford to hire employees, they

need to do the work themselves, get friends/relatives to volunteer or give it up. They can't expect their paid employees to subsidize their business.

[Donald Ian Rankin]

79. That's not relevant.

Slavery is work backed up by disincentives. Low wages is work backed up by (small) incentives.

"I will offer you twopence to work 20 hours a day" is still doing someone more of a favour than "I will not offer you a job"; and that's doing them less of a disfavour than "I will do something bad to you if you don't do this job".

Slavery has nothing whatsoever to do with a minimum wage.

[ayeshahaqqiqa]

19. They have a right to earn a profit

but it isn't a guaranteed right. In my experience with small business, which started when I was 16 and my mother married a small businessman, the success of the business is in direct proportion to the amount of time and effort put into it by the business owner. My stepfather assessed a niche market (rewiring old houses-a nasty job none of the big companies in our area would touch)and then worked like a dog to make sure the job was done right and on time. That sometimes meant working nights and weekends, and always meant long hours doing bookwork, dealing with delinquent accounts, etc. And he died a very well off man.

I've done bookkeeping for small businesses, and it is amazing to see the wide range of differences in management styles. By and large, the successful small business is owned by an individual who, like my stepfather, was willing to put in the long hours and to do the quality work it takes to build up a satisfied customer base. They had high expectations for their workers, but then they set the standard, and people were willing to work for them because of it. I've also observed many a small business that failed because the owner figured he could go play on the golf course while the people he hired did the work for him. Morale in places like that was low; there was no oversight on their work, and you can imagine what happened to the reputation of such a place.

What is also interesting is that in the places I've contracted to do bookwork, few or none of the people were at minimum wage. So I know that it was not a factor in the failure of the business mentioned.

I wonder about a business whose sole criteria for success or failure is the wage scale. There are too many other factors involved-the most important being the behavior of the owner.

BTW, welcome to DU! :hi:

[Infinite Hope]

40. Helping a family succeed is the point of minimum wage increases. If that hurts small businesses, it

defeats part of the purpose.

The test isn't whether it hurts small businesses in general, because it will always hurt some. It should be whether it causes an "undo burden."

[Debs]

52. The word PROFIT

Does not appear in the Constitution anywhere.

[cornermouse]

3. Here's a question for you.

Watching this morning's news, I was struck by the idea that it looks we're supposed to rejoice and be happy because tourists are coming to the U.S. with empty suitcases to buy things on the cheap, yet I look around and don't see that we're actually producing that much, so is it a case that we're importing things from elsewhere and selling them cheaper due to the falling dollar? And if so, how does that translate to a booming economy and does it indicate that we have already been relegated to second possibly third world status?

[sam sarrha]

18. the Dow Jones is an indicator of that situation.. how much the poor are screwed

[still_one]

4. Most of those "minimum" wages are paid to illegals, though not all

Two things happen with that:

1. Business, big or small, exploit illegal workers
2. Illegal workers whose wages are sometimes even below minimum wage keep wages in general lower, and out of the reach of those that would do them

The argument that is used for both illegals, and minimum wage is that if they paid the workers more, then it would cost consumers more money. The real truth is that companies would NOT make as much profit.

Yes, if minimum wage was more, people would make more, but also those people would spend more

[lumberjack_jeff]

69. Why would an employer pay an illegal worker minimum wage?

Who's the employee going to complain to?

An illegal worker will work for the highest bidder - even if it's only $20/day.

[iamjoy]

5. I Feel Bad For Small Business Owners

it seems there are so many forces against them and it's stifling the entrepreunerial spirit that is America. Would you rather have an America that is all big-box retailers?

That being said, I have no respect for some one who supports (through regulation) a competitive environment that allows Big Box to thrive (tax cuts, etc) and then encountered with doing something to help the worker drags out the violins for the small business owner.

My idea is to eliminate the minimum wage as a number all together, but regulate that the highest paid worker cannot have a total compensation higher than a certain factor of the lowest paid. That will help the few Mom and Pop groceries they have left, Mom and Pop aren't looking to rake in millions while paying their clerk as little as possible. They just want their nice house in the suburbs, a new car every five years and a vacation now and then.

[cornermouse]

6. Eliminate the minimum wage?

You are naive if you think "they" would allow the total compensation higher idea to stand more than a year or two if at all. As we've seen over the last 6 years especially, "they" have a lot of power on our legislature and "they" use it very effectively.

[stonecoldsober]

24. If it's the law, then 'they' will just have to go to prison

"WE" the people should dictate these things, not corporate vultures.

[The Count]

9. And while at it, mandate that workers work for no wages when Mom&Pop

so demand....Honor thy parents and all that...Long live Mom & Pop....
That's why BFEE can thrive here - because people equate business with their parents. And people with garbage...:puke:

[aquart]

17. Do you have a small business?

Workers wages are not the problem. Healthcare for them is. Workmen's comp, something else that would be less burdensome if there were national healthcare, is crippling for small businesses. There are many people we could have hired if workmen's comp didn't insist that a part-time employee cost as much as a full-time one.

There are many people who would have happily worked for us if we could have given them healthcare.

Small businesses are used as cash cows for local governments. Giuliani was a hero for reducing the damned rent tax. We paid a tax to use our air conditioner. We were fined if the drunks in the bars on Saturday night made a mess at our storefront alcove and we didn't come out on our one day off and clean it up.

And preventing the next Ken Lay from becoming a billionaire, while a laudable goal, doesn't help "Mom and Pop" who are working 80 hours a week to satisfy every stinking thing the state and city asks of them and still keep the shop clean, the merchandise safe, and the store open for business every possible hour it can be.

Keeping yourself pure for the big completely ridiculous and impossible goal does nothing for the businesses going under while you hold out for the fulfillment of your lofty ideals.

[iamjoy]

27. But That's What I'm Saying

I don't like this idea that people in government or who claim to be in favor of small business do so much to help big business and nothing to help small business.

It's like they only drag out the small business owner examples when it suits their needs.

And yes, I know wages are only part of it.

[ProudDad]

39. HEALTHCARE IS THE PROBLEM

You got it!

Universal, single-payer is the answer... Medicare for ALL...

[ayeshahaqqiqa]

20. That might work

but only if the owners choose to take a salary. Many small businesses are incorporated, and the owners simply take money out of the till without having a set salary. I've seen this done again and again in small businesses in my area (I'm privy to this information because I do books for small businesses), and some simply pay all their household expenses out of the business, even if they aren't related. Thank heavens I only do payroll and writing checks and inventory; I'd hate to see the contortions their CPAs go into to make their capital draws look legal to the Feds.

But I agree about the unfair advantage of Big Box stores. I think there is hope for smaller towns, though. The one I work in is having a resurgence in small businesses filling niche markets--health food stores, fitness centers, resale shops, specialty services, etc. Most folks I talk to say that they hate going to Walmart any more; they prefer the friendlier feel of the small business.

[rucky]

34. Maybe then my wife can draw as much as she pays her employees.

eom

[The Count]

7. 1ST THING WRONG: WHO'S DEFINING "SMALL"?

It's all in packaging. they make you think Mom&Pop but it's really Carlysle and Halliburton they are protecting. And somehow, we've been conditioned to empathise with the fictional Mom & Pop more than with Joe Lunchbox, so we can be manipulated like scmucks by the crony capitalists.
When the workers in transportation did strike in NYC they were vilified and insulted by the media, that "darling" Bloomberg and all politicians - yet somehow we all identified with them, not with the "small business" profiteering from all this.
Repeat after me:

business is not your parents

This is exactly like the "devious plan" Jebbie was concocting to pit education against health insurance while he and his cronies kept having their taxes cut.

[sam sarrha]

13. a .."Small" Business is one making under something like $20,000,000 gross annually.. they redefine

things for their own purposes..

all the stats show that raising the minimum helps the economy.. minimum wage is a curse, Fascists believe that Poverty is a Vice.. and they get what they deserve and really dish it out hard on them.

if anyone thinks minimum wage is a fine thing, then they need to go get a minimum wage job and shut the _____ up.

i've been there and done that.. add up rent in a neighborhood lined with Whores and drug dealers, utilities, roach spray, rat poison.. cheap food/pasta oatmeal instant Ramin mystery meat hot dogs rice, car insurance/maintenance/gas or a bus pass that will eliminate nearly all available jobs or add at least 2 to 6 hours a day to you work schedule, and laundromat costs $1.50+ a load-dollar to dry and a lot of time sitting with strange scary people..

while your kids do what..?? child care for one child will cost more than you make on minimum wage..

and the Dow Jones is not any kind of economic indicator at all except for determining how much more the rich are getting richer than that poor making minimum wage.

[The Count]

29. Don't like minimum wage? become a billionaire! And have some cake with that

Marie.

[zanne]

56. That's a very good question.

What exactly is a "small" business? Up the street from me is a corner store. I know that's a small business. A few blocks away, there is a steel cable plant. They employ a few humdred people. Is that a "small" business? I think everyone is all for truly small buinesses; we all want them to do well. But when it comes to employers of hundreds of people being paid minimum wage qualifying as "small", we lose our patience. So, can anybody give me the facts about "small" business?

[xchrom]

10. as the former owner of a small business -- a little clothing store --

who paid his employees well above the minimum wage -- i paid between twelve and fifteen dollars an hour back during the bush1 admin -- it wasn't wages that were my problem.

excessive rents -- landlords asking for a part of my profit{they build such things into leases}, tax breaks that weren't available to me because i wasn't big enough, and big stores who could run endless, endless sales designed purposely to hurt small businesses like me.

if america REALLY wants mom and pop businesses -- there are myriad things that could be done that would be TRULY helpful

none of them have to do with wages.

[spooky3]

15. you raise really good points

[ayeshahaqqiqa]

22. You've got that right

I work around and with small businesspeople, and I hear the same thing. And, like you, most if not all of them hire people for above minimum wage.

[KansDem]

48. I worked as a bartender for a family business--a comedy club--for two years...

The biggest hindrance I saw to small business was...big business.

For example, we served frozen cocktails. These were made from a liquor and a frozen pre-made mix that we would blend together. The distributor of these pre-made mixes required by contract that the business owner would take a certain number of mixes each month, even if he didn't sell his quota for the previous month. So we were always under pressure to "move" a certain drink during the last week or so before the next shipment came in. Many times we had to throw out old mixes that didn't move but the owner had to pay for...

Then we had vendors "lend" the business owner some refrigerator units to be used behind the bar. These units had the vender's brand name all over them (ie, "Coke"). No problem, they wanted to advertise their product. But then they'd come around and bitch and moan about what products went into the fridges. They would claim that the top xyz shelves carry their product only. The way I saw it, they loaned the owner the fridges for advertising, but then they would dictate what he could and couldn't put in them.

Also liquor distributors were always a problem for the owner. Often the owner would order up some extra bottles of something (in addition to the standard order) in preparation for an upcoming busy weekend, and the distributor would respond with a really crappy attitude. If the distributor felt the order wasn't really big enough, it would get low priority (while he serviced the larger accounts) and the owner was lucky to get the extra spirits in time for the event.

While I'm on the subject (not really pertinent to the topic at hand)...
Then came the GOP-led revision of taxes for servers. We had a certain amount taken out of our paychecks to cover what the GOPers thought we were making in tips! This really burned me up. Since we were a comedy club aimed at family entertainment, many of our customers were families who wanted nothing more than soft drinks and candy or popcorn. In this regard we were acting as concessionaires. And who tips the concessionaire? Damn few people! We made tips on Fridays and Saturdays when the drinkers were out, but on Wednesdays and Sundays, I often left at the end of the evening with no tips. Yet, I had a certain amount taken out of my paycheck to cover the tax on the tips the GOPers thought I made!

I worked there two years and came away with the notion that big business is small business's worse enemy...

[xchrom]

51. yeah -- i've ben a bartender as well.

but you've a nailed a very partucular problem.

and that big business controlling the over all environment.

i.e. -- IF happened to order something for my clothing store that happened to be in macy's -- the manufacturer certainly wanted to be promptly in 90 days -- but not necessarily macy's.

why? because macy's orders often in the ten's of thousands of units -- BUT THEY ARE A VERY, VERY SLOW PAY.

the manufacturer feels they have to have macy's businesses -- but lean on small businesses especially when the economy is slow to make up for macy's lack of payment.

[Gman]

11. How do you know if small businesses fail without raising the MW?

You can draw the graphs that show price rises, but they've never come true.

[sam sarrha]

16. go Google the small business admin and see what they define as Small.. it is in the million$, they

are not talking about 'small' like you and me starting a little family cottage buisness..

i went to them and they laughed at me.. they told me they were there to help factories retool not an individual start something in a garage .. i mean there were 3 or 4 guys really yucking it up, they thought i was funny

[Captain Hilts]

12. They're exempt from Min. Wage legislation. I worked for the NYMets for below....

minimum in their AAA ballpark in Norfolk.

I worked for my university library for below minimum.

You'd be surprised how many businesses/organizations are exempt.

[ayeshahaqqiqa]

14. Small businesses can fail for many reasons

most of them related to how the owner handles his business. Does he sell goods/services at a reasonable profit? Does he work like a dog to keep the business afloat, or does he hire a couple of people to do all the work and goes off and plays without paying any attention to what they are doing? Does he keep his business records straight? Does he read the market right to know that the goods/services he is offering will have a customer base? Is he interested enough in the business to stay with it for the long haul?

I could go on and on and on about this--I've been associated with small businesses for most of my adult life. What I see as the biggest failure is the owner who thinks he can start a business, hire a couple of lackeys, and then not work at all. This happens over and over again in the auto repair business. The owner thinks that all he has to do is rake in a percentage of their work and doesn't take into account upkeep on the shop, tools, reviewing quality of service, and drumming up new customers. If a small business fails, it has nothing to do with wages, and everything to do with the owner's attitude and actions-at least that's what I've observed.

[sam sarrha]

23. sounds like you are referring to 'Cottage Industry', SBA has another definition for small business

it needs to be looked up to really continue the conversation.. years ago when i talked to them it was millions gross annually.

they deliberately redefine things so people like us dont understand what is going on.. when i tried to deal with them it looked like there was a War on cottage industry, i couldn't get enough money to do work already lined up and the taxes i had to pay reduced/no eliminated my income.. no profit but just cents per item.. i was dead in the water before i started.

in california starting a business is suicide.. the paper work is a trap to ensnare people into hundreds of thousands of dollars in fines for the state and a death knell for individuals wanting to earn their own living.. it is extortion to force incorporation

[eallen]

25. Most businesses are destined to fail, for reasons that can't be foreseen.

Yes, many fail for foreseeable reason, because the owners hadn't yet learned the basics. But even those that are started right are risky. Capitalism can be viewed as an evolutionary algorithm to discover what businesses are best tailored to future consumer demand. If that could be predicted ahead of time, capitalism and entrepreneurial ventures wouldn't be necessary.

But it can't be predicted. No one has a perfect crystal ball. Starting a business is always a gamble.

That doesn't mean wages should be a gamble. One of the functions of the venture capitalist and the entrepreneur is to carry risk, losing most of the time, and hoping for the hit that more than pays off for all the past times lost.

[librechik]

21. aaccording to their side, NOBODY is actually getting paid min wage

except for a few teenagers. Are they saying that bumping teen wages 60 cents an hour will actually kill a business? Seems like that is simply bad management.

They are simply wrong. Or lying.

[zalinda]

26. Most small businesses pay above min wage

Most mom and pop businesses pay above min wage so they can keep good employees. Unlike Walmart, K-Mart and other big box stores, small businesses cannot afford to keep training people. What most people don't understand is that it costs to train people to do a job, banks figure that it takes 3 months to train a good employee. Now on the other hand, we all know that those working in large chains are always changing employees, they aren't depending on providing service to the customer, but low prices.

zalinda

[donsu]

28. it's been proven that raising minimum wage raises everybody up even

small businesses.

that thesis (Min wage should not be raised if small busnesses fail) is aimed at changing the subject

[On the Road]

30. You Know, I Hadn't Realized That

What I think you're pointing out is that this is exactly the same argument that was used to justify slavery -- it was economically necessary for cotton production. And it's surprising that people fall for that argument here on DU.

Eveb $7/hour isn't enough to live on -- the minimum ought to be about $10/hour. Small businesses who fail because of that should fail -- 90% of business never make it anyway.

[Lucky Luciano]

31. I have never heard of min wage increases

destroying the economy...it has never happened. Every dollar increase in min wage is $2000 for a full time worker for one year. A small business with 15 employees will have an extra $30K to dole out. If a business with 15 employees is make or break based on $30K, then something is wrong. A business should be earning several hundred thousand per year in profits with 15 employees, so the $30K should not be a killer. If it is a killer, then the business was already in trouble independently of wages - it is just being run incorrectly or demand for what they are selling is gone.

[msongs]

32. most small business fails due to incompetent management or under funding nt

[leftofthedial]

33. if a business model does not support at least minimum wage income for its employees

it SHOULD fail

[Coaster City]

36. The Grinch that Stole Christmas

Christmas eve talk with my uncle who owns a bar is some meaningless little town in Ohio. He acts like he is a king and he knows everything. Drives a caddy and takes a month off to go to Florida. To his credit he did pass 2 of his 3 classes when he went to the Community College for some small business classes. Anyway, he was talking about how raising the minimum wage will hurt his business. The funny thing is that I worked for him when I was home from college 10 years ago and his chicken dinners were $4.95. I noticed a couple of months ago that those same chicken dinners before raising the minimum wage were $7.95. Why did his meal go up $3 without an increase in labor cost? I wonder if he bitches every time his food suppliers raised the prices? Right......... it is the minimum wage that is the problem.

[leftofthedial]

41. the unconscionable fact is

that a full-time job at minimum wage is in many ways worse than slavery. It is nowhere near a living wage. Plus all the risks inherent in owning a slave (the necessity of food, shelter, health, etc.) are externalized back to the worker.

Capitalism is an indefensible system, designed to be anti-human (unless you are the "owner") and to exploit workers and to keep them in a position in which they are perpetually exploitable.

[NotGivingUp]

45. totally agree

[enough already]

64. We need a Prez candidate with the balls to say exactly this

I'm not holding my breath.

[Donald Ian Rankin]

80. No, it isn't, at least not in terms of the morality of the employer.

*Offering* someone a job working 20 hours a day for tuppence a year is still doing them more of a favour than not offering them a job at all.

*Threatening* someone with disincentives above and beyond what they'd get if you didn't exist (which slavery implies) if they don't do something for you is worse than not interacting with them at all.

There's no equivalence between using slave labour and offering low wages.

And while I don't know for certain, I'd be very surprised indeed if there were many examples of slave labour where the living conditions of the slaves were not considerably worse than those of Americans on unemployment benefit.

[Kber]

35. Wanna help small businesses? Three words

National Health Care.

In our small business, we gotta pay more than minimum wage to attract qualified workers, plus we provide health care and pay 50% of the premium for employees, their families and domestic partners. I'd like to pay more, but it is really all we can afford and still pay our mortgage. I'd gladly pass 100% of whatever savings national not-for-profit health insurance brings along to our employees.

[leftofthedial]

37. bingo

but corporations don't want that

they believe that only they get to externalize their costs

medical coverage should be utterly and completely seperate from employment.

[MGKrebs]

38. Global economy is changing that attitude.

As more and more companies have to compete with foreign companies whose employees' health care is subsidized or managed by the government, they find themselves in an uncompetitive situation. The citizens of those countries still pay for their health care through taxes of course, but it is spread out more evenly and is a much more efficient system than our fragmented system.

[renie408]

43. Amen

Health insurance for the self-employed is killing us.

[renie408]

42. I have been pondering it....

And I am not sure what you are getting at. What IS the basic, core, fundamental problem with that thesis? Other than that every really small business I know is already paying better than minimum wage, including ours. We pay twice the minimum for our single unskilled laborer. My husband has a small construction business and to get someone who is reliable, hardworking and legal we have to pay at least $12 an hour.

[Lone_Wolf]

44. I believe it's called a false dilemma...

First, raising the minimum wage doesn't necessarily mean small businesses will fail.

Second, the biggest beneificiary of keeping the minimum wage low is not small businesses it is the major stockholders of some large corporations. Many large corporations rake in huge profits because many worker's are not paid what they are worth. These profits go into the back pocket of the major stockholders.

[Hippo_Tron]

46. We're basically at full employment, therefore I'm really not that concerned

Yup, a some small businesses will have setbacks and some jobs will be lost. If we were in a recession I'd say that such a consideration would be important. But we're not in a recession and thus I don't believe such effects merit not doing something that will improve the lives of millions of Americans. Raising the minimum wage $2 an hour simply isn't going to have a dramatic impact on the economy especially considering that money gets re-spent anyway.

[Manifestor_of_Light]

74. We're at full employment? You really believe that?

What planet are you living on?

Everybody knows the government LIES about the employment statistics. They don't count lots of people. They don't count me because I got disgusted and stopped looking. And don't tell me I can't get a job because I should go back to school. I went to grade school for 12 years, and I went to college for 12 years and earned three degrees.

The real unemployment rate is FAR HIGHER than the government statistics.

The idea that businesses will fail if the minimum wage is raised is pure right wing Chamber of Commerce Good Ole Boy Bidness Propaganda.

:banghead:

[robcon]

47. Small businesses fail all the time. Most of them do not survive.

Trying to find out if the minimum wage increase "caused" failures in some or all of them is fruitless. There are a lot of reasons why most small businesses fail.

[SanCristobal]

49. The minimum wage doesn't hurt business nearly as much...

as it hurts workers. Businesses can usually get away with cutting their staff and hours, and although that hurts their ability to be competitive it's the workers who are most hurt. The minimum wage eliminates jobs and raises prices. This is the only effect it has on the economy.

The only people served by a minimum wage increase are the heads of major retail chains like WalMart, who see their smaller competition loose even more ground against the Made in China super centers.

[Skittles]

53. did the dittomasters tell you that?

:puke: For the same reasons, should the higher salaries be capped? I bet you vote a big fat no to THAT.

[zalinda]

54. Yes, especially for CEO's

The pay and bonuses for CEO's have become insane. If you are the sole owner of the company, I believe you should be able to make as much money as you want. But as soon as the company goes public, I believe caps and rules are necessary, and that is where our government is failing us.

zalinda

[SanCristobal]

58. Of course I would say no to capped salaries.

I can't see any benefit to it, and it would damage the economic incentives of hard work. As an American my goal is to get as rich as possible, why would I want to legislate away my chance of doing so?

[ProudDad]

59. How about removing the cap

on Social Security Taxes?

I'm guessing that you wouldn't like anything that limits your libertarian tendencies...

[SanCristobal]

65. I'm not sure what you mean.

I don't think people Social Security payments should be taxed, but I'm relatively sure that isn't what you're talking about. As for my Libertarian tendencies, here they are:

I don't support laws that violate the Bill of Rights.

I don't support drug prohibition.

I don't support price floors and ceilings.

Besides the last one, those are values that EVERYONE should be expected to support. There is nothing wrong with having crossover values with a political movement that supports many of the same social goals as your own.

The big difference I find between myself and most Libertarians is that I view most of these issues from a utilitarian perspective rather then a moral one. They are mostly concerned with preventing any perceived slight to freedom regardless of the social consequences and expenses, I'm more concerned with actions that provide the maximum benefit to society as a whole. This is the reason for my disdain of minimum wage laws. The basic laws of economics prove that price controls can only be harmful or unnoticeable. The minimum creates very little benefit and a great deal of harm, and time wasted on legislating it could be better spent enacting real change to help Americans < cough>fix health care<\cough>.

Many people have posted that this claim has been proven false, but no one has offered any evidence yet. If there is so much evidence someone should be able to post something, and if I'm shown to be wrong I will gladly admit it.

[Greyhound]

81. You do know that Horatio Alger was a fictional character, don't you?

Or that "The American Dream" is one of individual liberty, and not the mindless consumerism that the media has been implanted in the amerikan psyche?

[lumberjack_jeff]

71. Because in the meantime, while you're striving to get rich...

... the ones who already made it are exploiting you. Wake up.

Having a goal of "getting as rich as possible" is not a virtue, american or otherwise.

[TankLV]

62. That is a flat out proven LIE.

Increasing the minimum wage INCREASES jobs and does NOT raise prices.

If that were the case, the last ten year would have seen NO increase in prices.

Period.

STOP.
SPEWING.
REPUKE.
LIES!

[SanCristobal]

72. That is entirely untrue.

Prices went up during the last ten years for many reasons, there is an unimaginable number of factors that come together to determine this (for example, Bush's "conservative" fiscal policies). Some places (NY is one) actually did see their minimum wages rise during this time.

Here is my case against the minimum wage. Forgive me if it's somewhat cut and pasted from the other thread:

Wages are determined by supply and demand, and the minimum wage is just a price floor on the labor market. As long as the minimum is below the wage set by the market, it does nothing. If it is above the natural wage rate then it will result in either shortages of jobs, higher prices, or lowered profit margins. Considering the likelihood of corporations voluntarily cutting back their profits, the first two options can be assumed to be the more likely ones.

Even when businesses would like to cut back their profits to avoid job loss or price hikes, it is not always possible. I was working in a grocery store the last time NY raised its minimum. The store could not afford to cover the cost entirely from its own pockets, and couldn't afford to raise prices (as they were already failing to compete with WalMart). The only thing they could do was to stop hiring new people and cut employees hours.

While it didn't make a huge difference to current employees (loosing a few hours and gaining a few dollars made most break even), it did make a difference to customers (who now had less help and longer lines to face) and prospective employees (who now had to look for work elsewhere). While employees got to work a few less hours and still make the same money, the business as a whole suffered. The only real winner was the local WalMart, which could afford to absorb the shock of minimum wage much easier then our store.

I agree that people should make enough money to live off of, but the minimum wage is a completely ineffective way to do so. I'd much prefer to see government working to fix the countries health care system, protect and promote union activism, and ensure educational opportunities. All those things would do far more to help workers get a leg up then the minimum wage ever can.

[lumberjack_jeff]

73. Argument by anecdote

Wages are determined by supply and demand, and the minimum wage is just a price floor on the labor market. As long as the minimum is below the wage set by the market, it does nothing. If it is above the natural wage rate then it will result in either shortages of jobs, higher prices, or lowered profit margins. Considering the likelihood of corporations voluntarily cutting back their profits, the first two options can be assumed to be the more likely ones.

Even when businesses would like to cut back their profits to avoid job loss or price hikes, it is not always possible. I was working in a grocery store the last time NY raised its minimum. The store could not afford to cover the cost entirely from its own pockets, and couldn't afford to raise prices (as they were already failing to compete with WalMart). The only thing they could do was to stop hiring new people and cut employees hours.

First: The workers who got a raise now have more disposable income. More disposable income = increased demand for goods and services. More demand for goods = increased demand for labor. This increased demand may marginally increase prices.

Second: Profit margin IS the elasticity in the marketplace. Employers won't cut the hours of economically productive labor. If they're being paid $10 for a person's labor, they won't stop selling it if they can still profit - even if the profit margin is reduced. Conversely, if the business is unable to profit from a person's labor, they won't employ them - and a small increase in the minimum wage won't change that. To describe the businesses reaction of rationing the labor they sell to the public as shortsighted is a gross understatement. The business you worked for simply used the increase in the minimum wage as an excuse to get more efficient, while simultaneously promoting chamber of commerce dogma.

Third: The anecdote you describe explains the effect of big box stores, not the effect of the minimum wage. WalMart is affected to at least an equal degree by increases in the minimum wage than they affect small businesses.

Frankly, if a business can't afford to pay its employees the meager salary that WalMart pays - fuck 'em. Given the choice between enabling a business to survive and enabling a person to survive, I pick the person. I dislike WalMart, but they're profiting by undercutting the smaller retailers via slave labor. If the competitor can't even meet that low bar, then no amount of government wage suppression will help. Increasing the nationwide cost of labor improves the competitive position of smaller retailers.

[SanCristobal]

76. Thanks for the response,

this is the best reply I have gotten so far. However I have to continue to disagree with you.

Employers won't cut economically productive labor, but they will very quickly cut economically unproductive labor. A minimum wage above market equilibrium drives down the value of existing labor, and can potentially eliminate its profitability altogether.

I posted my story because it is much easier to relate to then supply and demand graphs and does a nice job illustrating my point; raising the minimum wage above its natural level has a harmful effect on the economy. It creates a slight benefit for those people who already have a minimum wage job at the expense of people looking for similar work and people who consume the product of that work. The overall effect is a decided negative.

The reality is that no one works for slave labor, even Walmart pays competitive wages for the type of labor its employees perform (at least at the floor level, I'm not sure about comparative management pay). People rarely take jobs that pay less then a certain expected amount. If they are being forced to do so it is more likely the fault of an improper education leaving them unmarketable. Helping to ensure quality education and health care would do far more to improve peoples lives then artificially increasing wages.

This really isn't a Republican issue any more then it is a Democratic one. Almost everyone I know supports the minimum wage, regardless of party affiliation. It's one of those things that people generally assume to be good because it has been drilled into their heads that way since elementary school (much like drug prohibition). I certainly fell into this category most of my life and was shocked the first time I heard people talking the way I am now, yet after looking into this I realized it was true. The basic laws of economics preclude the minimum wage from having any positive net effects on the economy.

The minimum wage is just a feel good law that harms those it is supposed to help. It's existence continues simply because people accept it without thinking about it (again, like drug prohibition). There are many things we could accomplish to help labor but this isn't one of them. The time spent legislating it is being wasted.

[ieoeja]

82. "Realized it was true"

You make an inexact statement. You did not "realize" it was true. You "concluded" it was true.

If it were true, then there would have been an increase in unemployment after every past minimum wage increase. Unfortunately for your conclusion history has not shown this to be the case.

I am your opposite. I used to be an economic Libertarian. And I still find no flaw in those theories. But I have also looked at economic history and find that those theories are directly contradicted by historical fact.

Fact: the United States of America DID operate under the Libertarian economic model for 150+ years prior to the New Deal.

Fact: the United States of America DID experience 7 or 8 (one is disputed) Economic Depressions during the 150+ years prior to the New Deal.

Fact: the United States of America has NOT experienced even a single Economic Depression in the 75 years since the New Deal.

I could come up with a lot of theories to explain the above. But it doesn't matter. The facts are facts. Reality is reality. Libertarian economics do not work.

[TankLV]

75. No, what you claim are LIES and is NOT TRUE.

What I stated is Precisely TRUE.

STOP

SPEWING

REPUKE

LIES!

[SanCristobal]

77. Read reply #73

It contains reasoned arguments and was obviously the result of some careful thought. While I don't agree with his conclusions, lumberjack_jeff's post is well thought out and polite. Frankly, he somewhat owned me.

Now read your post. There is no facts, logic or reason, just a loud claim that you are right. Switch the word "repuke" with "secular progessive" and the same line could be found in any given O'reilly Factor transcript.

Just something to think about.

[lumberjack_jeff]

70. So efficiency is..... bad. Is that right?

A hypothetical worker laid off because a business is more efficient will be better off if the pool of replacement jobs pay a new, higher, minimum wage.

A business strives for increased efficiency, minimum wage or no.

It's funny how increased efficiency becomes a bad thing, if it can be used as a jawbone to attack the minimum wage.

The local retail establishments I'm familiar with lose market share to the big box stores precisely because Wal-Mart pays their employees less. The local business is willing to pay more for than minimum wage for an excellent employee who is courteous and knows his/her stuff.

[gulliver]

50. Let's see the spreadsheet.

If one small business fails and 10,000,000 honest, hard-working people eat better, then that is fine with me. The problem with GOP arguments like the one you are making is that they intentionally shirk the math. I say, in economic matters, let's not hear about "death taxes" and unspecified vast losses to small business. Let's see the spreadsheet.

The GOP way leads to record fiscal and trade deficits while the Oval Office buffoon misdirects people with once-funny idiocies like "fuzzy math." The GOP has ruined business in this country by being on the take of big, crony-based corporations.

[appal_jack]

55. no mention of agriculture here, yet...

Since "farmer" is in my tag, I feel obliged to speak from that perspective.

Food in this country is ridiculously cheap. Much of that cheapness is carried on the backs of farmworkers, very few of whom are paid a living wage.

Let me make myself clear: I am absolutely in favor of increasing the minimum wage. I am happy to pay more for food that is fairly-produced.

However, raising wages for farmworkers will probably have two unfortunate impacts: job losses, and further erosion of small farm #'s. The explanation for the job losses is that even at present sub-living-wages, labor makes up a good bit of the cost of food. So, when farmers have to pay their workers more, they start eyeing machine purchases to replace those increasingly-expensive workers. You can't replace all farmworkers with machines, but you certainly can replace some of them. But as other posters have stated above, sub-living wage jobs perhaps should disappear.

Secondly, raising minimum wages for farmworkers will further eat-away at small farms. Why? Simply, that small farms already have a hard time selling their produce at any profit. Farmers usually buy at retail prices (i.e.,- they pay for tractors, tools, seed, etc.) yet often must sell at wholesale prices (i.e.- less than 50% of the cost of those organic vegetables you're buying at Whole Foods reaches the farmer, and Whole Foods is one of the better chains for farmers to work with.) {The nice exception to this is when farmers can sell at retail prices, by value-adding and direct-selling at farmers markets, CSA's, etc., but that is a whole 'nother story}.

These chains that buy farmers' produce do not raise the prices they pay every time a farmers' costs go up. Instead, farmers often must absorb the increased expenses (of labor, fuel, whatever) and continue selling at below-their-costs rates somehow. Farms that are on the edge already WILL fold if their labor costs rise while revenue stays flat.

I know many small farmers who do not count their own time at all (i.e.- they draw no wage for themselves) while paying their workers above minimum wage (still not a living wage, but often $8/ hr. or so). Often these farmers subsidize their farms via off-farm work (i.e.- a second job to pay for their farming habit). These are not armchair farmers, but rather folks who come home from their carpentry jobs and get to weeding their fields, often with a hired migrant or two.

Again, I adamantly do NOT believe that we should subsidize cheap food by underpaying farmworkers. Instead, I believe that farmworkers should earn a living wage, and we should all pay for the real costs of farming via higher food costs, plus ecosystem-services public subsidies to farmers (i.e.- expanded versions of the Conservation Reserve Program and the like that pay farmers directly for the work they do to protect water quality, prevent soil erosion, enhance wildife habitat on farm, sequester carbon in soils vi cover-cropping, etc. - again: a whole 'nother story).

-app

Edited to add the full-disclosure statement that I am a part-time farmer with no employees. I plant/weed/fertilize/harvest/package and sell what I grow myself, at a local farmers' market. Doing this, I manage to cover my costs, and earn a little. But there's no way I make close to a minimum wage yet, for all the time I put into farming. Fortunately, I have a good full-time job, which helps to support my farming habit.

[ProudDad]

60. I would be willing to pay more for my food

if I could be sure it goes to a living wage for farmers!

The U.S. economy has become a license for people to buy more sh*t they don't need at lower, lower prices for higher and higher profits for a few huge mega-corporations...

what a sh*tty way to allocate resources!!

[appal_jack]

66. Right On: Local Ag for Living Landscapes & Wages!

Right on ProudDad! Feeding your young'uns local foods will be another reason to feel proud! It will improve both their health, and the health of your community. Here are a few ways you can tell if your food dollars are reaching the farmers & farmworkers:

1) Try to shop at a farmers' market when you can. Ask around your community about which market(s) limits membership to actual farmers, and prohibits guys with trucks from just buying & reselling produce from who-knows where. A farmer direct-selling his/her own produce at a market is probably reaping best-case revenues from your food dollars.

2) Talk to the farmers at the market about their farms and lives. Go at a time when business is slow (our local market runs on Saturdays and Wednesdays from 7 AM to noon. Saturdays are too busy for conversations until afternoon clean-up-time, but Wednesdays are often slow enough that farmers enjoy long conversations with customers. Ask where they grow and how big of an operation it is. If you phrase the questions as curious/enthusiastic inquiries rather than interrogations, the farmer will likely open-up and share his/her story. Generally, family-owned farms where farmworkers have stayed with the business for multiple seasons are fair and resonably equitable toward their workers. Around me, the housing boom is still strong enough that any farm that jerks its workers around too much will lose them to a carpentry crew (or another farm).

3) Ask around to see if there are any CSA (Community Supported Ag) groups in your area. Generally, these are like a subscription to a farm's produce. You pay in the Spring (or in installments over the season) and you get regular deliveries of the harvest. Most CSA's are vegetable-based, but I have also seen grassfed meat CSA's, apple CSA's (a grower in my neighborhood has different apples coming in from late July through December: his CSA members get to taste them all!) and even honey CSA's. Just like the farmers' markets, CSA's allow the farmer to sell-direct and avoid expensive middlemen.

4)Support Farmland Protection in your community in any way you can!

peace,
-app

Edited to add that single-payer national healthcare would greatly improve prospects for famers and farmworkers both. The comments up-thread on healthcare as part of a living wage system are quite relevant to the survival of small farms.

[Javaman]

57. Each time the minimum wage is raised, this argument is trotted out

by the repukes and in each and every instance they have been shown to be overwhelmingly wrong.

More money in people pockets means more spending power, more spending power means more sales for companies and corporations, more sales for corps and co's, means they can raise the wages of their workers and hire more.

basic economics 101.

The only way this logic fails is when the companies and the corporations don't pass on the improved earnings on to the employees through raises and bonus's. Or they instead raise the prices on their cheap ass crap to line the pockets of the execs or the major stock holding investors which also are the execs.

But wait, isn't that what happened at Enron? Funny how that works, huh?

Read the last phrase in my tag line and everything becomes clear.

[TankLV]

61. Because that premise has been proven FALSE many times over.

Business THRIVE when the minimum wage is INCREASED. THAT's what ALL the evidence proves.

Look it up if you don't believe us...

Stop spewing repuke LIES...

If a "small business" can't afford to pay their workers the MINIUMUM wage, they don't deserve to be have employees in the first place...

[enough already]

63. Any small business owner paying under the table needs to jailed

There are millions of them doing that. Lock them up an throw away the key. I'd like to see the new Dem Congress make this a priority.

[EFerrari]

67. Because the premise is false. n/t

[bobbolink]

83. The people at the bottom of the wage scale don't make the decisions

that affect whether the business succeeds or fails.

It always chaps my butt that when a business goes under, those at the top take their golden parachute, and those at the bottom get the lumps of coal in their stockings.