Friday, January 31, 2014

Minimum wage law hurts state's economic growth? Rubbish and nonsense (an opinion from the dry side).

The Tri City Herald's "Our Voice" claims: "Minimum wage law hurts state's economic growth," but I say, "Nonsense." 

The following article challenges the newspaper's assertions. Each question below is based upon a false assertion or wrong assumption that the newspaper made:

1. Will restaurants lay off employees if we raise minimum wages nationwide, as the TCH states?


Answer: Yes, and the sky is falling too.


In spite of the fact that Washington's minimum-wages are higher than minimum wages in much of the country, our restaurant industry is booming.


The health of our entertainment industry is enlightening. As poverty increases, it seems that people turn to less expensive substitutes such as books, movies, local music and eating out, all of which are mostly low-pay industries.


Restaurants do thrive with Washington's law: According to Trip Advisor, we have 396 restaurants in Tri Cities. (Chapala Express, Zinful Panini Grill & Wine Bar, Olive Garden and Bonefish Grill, just to name a few). On some occasions I have had to stand in line for fifteen minutes to get into some of our better restaurants, as they were packed.


Fast food? Ten McDonald’s restaurants, seven Burger Kings and numerous others in this small to mid-sized desert town. Obviously, Washington's high minimum wage has not stopped people from eating french fries! Even the more expensive restaurants are popular.


If the food industry is laying off, this certainly is not reflected on the job boards. Craigslist has about 200 food industry ads running in the help wanted section. 


2. Are minimum-wage laws driving Washington's higher employment rates as implied by the article?


Answer: No. King County unemployment in December 2013 was 4.7 percent. In Ferry County it was 11.5. Both counties have the same minimum-wage laws. Obviously there is more to unemployment than minimum-wage. Some of the biggest layoffs between November and December 2013 were in engineering jobs, not low wage jobs.


3. Are minimum-wage jobs held primarily by entry-level people as the article claims? (This requires two answers, due to an underlying false assumption.)


Answer One – No, in fact 88 percent of workers who would benefit from a higher minimum-wage are older than 20, and one third are over 40. (http://www.epi.org/publication/wage-workers-older-88-percent-workers-benefit/)


Answer Two: The underlying assumption is that entry-level jobs (menial jobs) should provide only substandard pay – the less pay the better. Such an approach fails to address the hypothesis.


4. What was the original purpose of minimum-wage laws?


Answer: According to the TCH, “Minimum wage jobs were never intended to be a career, but rather the beginning of a career path.”


Such a statement belies history: The intent of original minimum-wage laws was clearly to protect workers from rapacious industrialists.


Minimum wages were originally set in response to the despicable wage standards and deplorable conditions that industrialists accepted as acceptable, as the norm. 


Furthermore, it is highly unlikely that these same industrialists intended to ease people into higher paying careers as the TCH suggests. 


To get a higher paying job you must either be very lucky, very smart, or (more likely) both. Or, you may join an association or union. Or work for the government. 


On the other hand, you may vote for more fair and progressive laws, including fairer tax laws and (our old friend) better minimum wages.

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5. Are minimum-wage jobs “temporary” as the TCH editorial argues?

Answer: As we used to say in the military: “Everything is temporary until it becomes permanent.”


Is seasonal work the same thing as temporary work? Arguably it is not.


The Temporary Work” for the lower minimum wage argument is bogus at any rate: If a person gets a salary increase, however modest, he or she may no longer be counted as a minimum-wage worker. If the opponents get their way, all workers' pay will be based upon lower entry-level pay, and we all lose.


Against redistribution of wealth? How about the redistribution that is going on before our noses: Less and less money going to the bottom end, more and more wealth at the top. This is a formula for transforming U.S.A. into a very large, third-world nation. (And you thought these people were being patriotic?)


6. What is the hidden agenda behind the TCH position? (Whether TCH is aware of it or not.)


Answer: The real agenda of opponents to decent entry-level pay is this: to keep all wages lower. Including your wages.


One is tempted to say, “Since they can no longer own slaves, they are intent on keeping the work force as poor as slaves (and much more manageable).” They look to maintain the status-quo, which of course benefits a few and punishes the rest of us.


7. Will the economy collapse if everyone makes a living wage?


TCH claims: “In order to pay people more money, they have to pay fewer people” (hence, provide fewer jobs).


Answer: The TCH statement is false, or at least it is not necessarily true: 


Most or all American economists preach that businesses will always hire more people, if a market exists for what those people can produce. Put into a modern context, this means that, people may forego expensive vacations, but as long as they have a dime left they will pay, for fast food, groceries/agricultural products and other necessities provided by ordinary workers.

Of course, there may be a law of diminishing returns – you probably cannot raise wages definitely – but we are presently far from the top of the curve.


8. Is it okay and natural for millions of Americans to work full time for poverty-level pay?


Answer: The TCH article seems to assume the answer to the above is yes. But is it natural? I say, "No. What is natural is for all or most of us to earn a living, without artificial barriers such as unfair tax laws, slavery and legal abuse of the work force."


But is this impoverishment okay? Is it right to create a nation of peons serving only the ultra rich? This is the question that is being decided. How you vote, matters. I hope that you will vote against forced labor, against penury, and against the impoverishment of our nation.


9. Will the Tri City Herald stand up for workers, or will the company join forces with those attempting to beat us down even further?

Answer: I hope The TCH will rethink its official position, but I am not holding my breath.


The TCH wrote: “While we are sympathetic to those struggling to earn a living, we also are sympathetic to the business climate, especially the one of our home state.”


Fine, but isn't the TCH actually more sympathetic to business and industry, and aren't they callously indifferent toward the working class? I think that's a question that workers should be asking the newspaper. 


8. What does the fight over Boeings 777X project have to do with the minimum-wage controversy?

Answer: Absolutely nothing.


TCH attempted to tie the Boeing project to the minimum-wage discussion. Their point seems off-the-wall.


For one thing, Boeing's average salaries begin at $76,667 (for lower paid positions) and go from there up to something like $157,000. Boeing may be one of the highest paid companies in the world! How can the TCH bring those jobs into the same discussion as entry level wages at local restaurants? It's a farce.


9. Is our state interested in attracting businesses like Boeing?


The TCH claimed the following: “Our state seems uninterested in attracting more businesses or retaining the ones it has.” Is that really true?


Answer: Of course it is not true: Our state is very interested in keeping Boeing and other industries.


The TCH claim was blatantly false, and egregious, considering the article had just described the corporate welfare proffered by the state, which did, in fact, encourage Boeing to remain here.


Furthermore, government bribes to keep Boeing in the state have been described as “The biggest corporate tax subsidy in U.S. History.” So much for being uninterested in attracting big business (http://hereandnow.wbur.org/2013/12/09/states-compete-boeing )


10. Are Washington's minimum-wages so high as to deter good businesses from coming here?


Answer: I don't think so.


The TCH, in a final insult to wage earners, issued this dire waring: “If we don't have a strong business climate, we don't have jobs.” 


Implying, of course, that our over-paid, entry-level workforce is threatening to collapse our state's economy. This position seems absurd to me.


What the TCH is really saying is that it is the patriotic duty of our lowest paid workers to accept ever downward pressure on wages, salaries and benefits.


Rightly interpreted, they are saying in effect: “You must work more and more, for less and less pay and benefits, in an endless downward spiral. And if you don't, we will eliminate your job, your work, your livelihood and, ultimately, you.”


Well, it is nice to know who your friends are.


If these community leaders, including the TCH management, really want to create a “strong business climate” as they claim, they should be advocating for free and reduced-cost eduction, also for job training and re-training for all Washingtonians. Not railing on the poor. Not claiming that the lowest on the economic rung are derailing our economy. What nonsense.


The first two years of college or trade school should be offered for free, or nearly for free, for almost all State of Washington residents. All full time workers should earn a living wage, a wage that will pay the rent, buy clothing, provide transportation and ensure good medical care.


Elderly people also should be eligible for free education and job retraining. We need to remove the age-barrier for older workers.


If we really are short on employees, as business are fond of claiming, we should be extending the workers' health along with their work-life span, not laying off the oldsters, as we do now in order to cut costs. If we really are short of laborers, as often claimed, we should be welcoming immigrants with open arms and passing realistic immigration reforms with unanimous support.


Hearing aides, cochlear implants and all kinds of devices that enable the elderly should be provided by the state, potentially putting millions of oldsters back into the work force.


Of course, we are not really short of workers at all. We are short only of the will to extend the benefits of our industry downward.


(You may read The Tri City Herald article here: http://www.tri-cityherald.com/2014/01/05/2759773/our-voice-minimum-wage-law-hurts.html#storylink=cpy (but don't believe everything you read.)

#minimum_wage #minimumwage

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