Posts Tagged ‘Minimum wage’

Money Doesn’t Grow on Trees

February 3, 2015

Growing up, you might have heard your mother or father saying something like that when you wanted some expensive toy. Maybe you listened to them and learned something about where money does come from. The progressives who are pushing for minimum wage increases do not seem to have listened to their parents. At least it doesn’t seem to occur to them that if the government creates an increase in the cost of business, such as raising taxes or requiring higher wages, the money to pay for the increased costs has to come from somewhere. Either a business must pass on the increased cost to its customers by increasing prices, adjust its practices to reduce impact of the higher costs, perhaps by employing fewer workers, or accept a reduction in profits. For many of the unthinking, the last option is the most desirable, since it is all too commonly believed that profits are somehow selfish and evil. They do not realize that a business’s profit is what the owners of that business get to meet their own expenses and is the repayment for the expenses and risks of starting and running the business. This is especially true for the small business person who is the sole owner of his business, but it is also true for the stock holders of a major corporation. It a business cannot make a profit it must eventually cease to operate and close its doors. It really doesn’t require a PhD in economics or business administration to understand all of this, only the ability to think things through, an ability sadly lacking in all too many. Consider this example, brought by ABC News, of a bookstore in San Francisco, closing due to an increase in the city’s minimum wage.

Independent bookstores have faced tough times for quite a while. In San Francisco, neighborhood businesses have been passionately protected, so it’s hard to believe that an initiative passed by voters to raise the minimum wage is driving a Mission District bookstore out of business.

San Francisco’s minimum wage is currently $11.05 an hour. By July of 2018, the minimum wage in San Francisco will be $15 an hour. That increase is forcing Borderlands Bookstore to write its last chapter now.

When actor Scott Cox took a job at Borderlands Books he didn’t do it for the money.

“I’ve been a longtime customer of the store,” he said. “I love the people, I love the books.”

The work let him squeak by while nourishing his passion for sci-fi and fantasy.

“Everyone who works here does this because they love books, they love stories, and they love being booksellers,” said book store owner Alan Beatts.

That’s why store owner Beatts found it so tough to post a sign in the front window that the store is closing. “We’re going to be closing by the end of March,” he said.

Borderlands was turning a small profit, about $3,000 last year. Then voters approved a hike in the minimum wage, a gradual rise from $10.75 up to $15 an hour.

“And by 2018 we’ll be losing about $25,000 a year,” he said.

Money doesn’t grow on trees. Alan Beatts cannot simply go to his money tree and shake off a few extra bills. He must come up with the money to pay the higher wages somehow. He cannot increase his prices. Small, independent book stores have long been squeezed by large chains such as Barnes & Nobles who are now being squeezed by Amazon, so any increase in prices will simply drive customers away. I doubt it his bookstore is so overstaffed that he can afford to let many employees go. He cannot continue to run his bookstore if it loses money, so the bookstore must close.

This doesn't really exist.

This doesn’t really exist.

The next part of this article is priceless.

It’s an unexpected plot twist for loyal customers.

“You know, I voted for the measure as well, the minimum wage measure,” customer Edward Vallecillo said. “It’s not something that I thought would affect certain specific small businesses. I feel sad.”

I would say that Mr. Vallecillo wasn’t thinking at all, but then neither were the people in San Francisco’s Board of Supervisors when they decided to let people vote on increasing the minimum wage.

Though it’s caught a lot of people off guard, one group that wasn’t completely surprised was the Board of Supervisors. In fact, they say they debated this very topic before sending the minimum wage to the voters.

“I know that bookstores are in a tough position, and this did come up in the discussions on minimum wage,” San Francisco supervisor Scott Wiener said.

Wiener knows a lot of merchants will pass the wage increases on to their customers, but not bookstores.

“I can’t increase the prices of my products because books, unlike many other things, have a price printed on them,”

Wiener says it’s the will of the voters. Seventy-seven percent of them voted for this latest wage hike.

“Borderlands Books is an phenomenal bookstore, I was just in it yesterday,” Wiener said. “I hope they don’t close. It’s an amazing resource.”

But Alan Beatts said he can’t see a way to avoid it.

Mr. Wiener should have thought of that before, unless they repeal the increase in the minimum wage, Borderlands Books will have to close. The voters voted for the increase. Now, they will have to deal with the consequences.

Business owners don't really have money bins.

Business owners don’t really have money bins.

 

Ignorance is Bliss

July 10, 2014

Two recent e-mails I have received prove this old saying true. First there is one from Moveon.org.

Dear MoveOn member,

If you thought House Republicans couldn’t get worse, I’ve got bad news. Speaker John Boehner is now threatening to sue President Obama because House Republicans are mad that President Obama is using his executive authority to get things done where Congress won’t act.1

Such a ridiculous lawsuit would be a wasteful and inappropriate use of taxpayer dollars for political purposes, and we’ve hatched a plan to fight back.

Our legal team is investigating options to hold Speaker Boehner accountable if he moves forward—from launching a lawsuit of our own, to filing a formal complaint in Congress, to other responses. And we are planning protests outside of Republicans’ district offices and other tactics that can break into the news. Together, we can help expose the lawsuit for the cynical political ploy that it is and generate press coverage that holds Republicans accountable as the November elections loom.

Because MoveOn is its members, we want to know what you think before we decide whether to proceed. Do you think we should move forward—or do you want us focused on other things? Click to let us know:

Yes, MoveOn should fight to hold Speaker Boehner and House Republicans accountable if they use taxpayer dollars to sue President Obama.

No, I’d prefer for MoveOn to focus on other things (and tell us which other things).

Thanks for all you do.

–Anna, Bobby, Matt, Amy, and the rest of the team

Checks and balances? What’s that. As it happens, I don’t think Speaker of the House Boehner should sue the president either. There are other options Congress can use to rein in an over bearing president. The House of Representatives, in particular, has the power of the purse. I think it would be better if John Boehner worked as hard as he could to get as many Republicans elected as possible. With a majority in both houses of Congress, they have a much better chance of stopping Obama. Suing him will only fire up the liberal base. I could say something similar about calling for impeachment. The Republicans have a good chance of winning big this year, but both of these tactics could ruin things.

I wish, though, that the people at Moveon.org, and elsewhere, would think very carefully about the statement that the President must act by executive authority because Congress won’t. What exactly do we have a Congress for? If the only legitimate role of Congress is to rubber stamp everything the president decrees,than why bother to have a Congress at all? Why not just make the President a dictator who we elect every four years? They seem to think we should have a system like the old Soviet Union or some banana republic in which there is a phony legislature that pretends to be passing the laws while the Leader is calling all the shots. Haven’t any of these people stopped to think that there may come a time when someone they thoroughly detest becomes president and enacts policies they oppose over the will of Congress, maybe we might even get another Republican as president? When that time comes, they may wish we still had the checks and balances they worked so hard to eviscerate.

The other e-mail is from Organizing for Action.

Friend —

Big news in the fight to raise the minimum wage:

In the last few months, four states have passed laws to raise the wage, and several cities and local governments are following suit.

That’s how we make progress, even if a minority in Congress is blocking it.

OFA’s petition to lawmakers already has nearly half a million signatures on it — yours belongs on it, too. Add your name to the petition today.

A higher minimum wage isn’t just good for workers, it’s the right idea for our economy.

More money in minimum wage earners’ pockets means more money to spend at area businesses.

That’s why governors and legislators on both sides of the aisle are working to raise the wage. Just since May, we’ve seen Maryland, Michigan, Hawaii, and Massachusetts pass higher state minimum wage laws.

This fight is also happening on the local level. Seattle, Philadelphia, and Richmond, California, have all taken steps forward to raise the wage for thousands of workers in their cities.

In Las Cruces, New Mexico, supporters delivered more than 6,000 petition signatures to put a minimum wage increase measure on the ballot this fall.

That’s grassroots energy, and it’s proof that when we make our voices heard, progress is possible — with or without Congress.

This petition is how we’re going to send a message that the other side can’t ignore. We’ve got hundreds of thousands of signatures.

Right now, it looks like your name is missing, but that’s alright.

You can add your voice today, and tell lawmakers it’s time to raise the minimum wage:

http://my.barackobama.com/Raise-the-Wage-Petition

Thanks,

Lindsay

Lindsay Siler
National Director of Issue Campaigns
Organizing for Action

Raising the minimum wage helps the economy because people have more money to spend in area businesses. There is something that doesn’t add up here. I have dealt some of the problems with raising the minimum wage before. Yes, the people who work at or slightly above minimum wage will have more money to spend at area businesses. But the increase in labor costs caused by the mandated increased in wages will mean that the area businesses will have a lower profit. You might think, “So what. The greedy capitalists shouldn’t be making such a large profit”. Remember that for a small business owner, that profit is their wage. That is what they are trying to live on. Even for a large corporation that profit is what they use to expand their business and pay put dividends to their stockholders. In order to maintain their profits in the face of rising labor costs, businesses, both small and large, will be forced to consider ways of cutting costs, making do with fewer employees, and increasing income, raising prices. In terms of purchasing power, many of those people who received a raise will eventually find themselves back where they were before.

It must be nice not to have to think things through, to just go with whatever feels good at the moment. You can support all sorts of foolish policies that may ultimately harm the people you intend to help, but if you never stop to consider the unintended consequences of such policies that  thought will never cross your mind. Ignorance is bliss.

 

Raising the Minimum

August 8, 2013

Organizing for Action wants to raise the minimum wage.

David —

Let’s do something about this:

Even though our economy is on its way back, millions of Americans — people who work full time — are still living well below the poverty line.

That’s because they earn the minimum wage — something designed to help make sure that any American willing to work hard and play by the rules has enough to make ends meet. That’s not the reality right now for way too many people.

If a living wage is something you can get behind, then you should join the fight to raise the minimum wage.

President Obama is helping to lead on this issue — and dozens of allied organizations have been working hard to get a minimum wage increase passed by Congress.

There’s a lot to do, and OFA supporters are going to play a big role in making this happen.

If this is something that matters to you, add your name today and help fight for a better bargain for working Americans:

http://my.barackobama.com/Raise-the-Minimum-Wage

Thanks — more soon,

Jon

Jon Carson
Executive Director
Organizing for Action

Actually, thanks to the president’s signature piece of legislation, Obamacare, a lot of people have had to be content with part time work. But I think raising the minimum wage is a terrific idea. Why not increase the cost of labor so that companies have to raise prices or hire fewer people? Maybe we can get unemployment back above 8% again. Maybe, if we raise it enough, we can have another recession. Many people on minimum wage are young people just entering the job market. If we make it harder for them to find jobs, they can live at home with their parents. We could offer them unlimited unemployment benefits and get an entire generation dependent on the government for survival. Sounds like a plan.

What I am going to say now may seem mean. I hope not, since that is not my intention. I think that if you are living on minimum wage and are not just entering the work force, then something is wrong. You should take stock of yourself and consider what skills and experience you may have that will get you a job that pays better than minimum wage. If you do not have such skills or experience, then you need to find out how to get them. You should also take a look at your work ethic. Do you show up for work on time? Do you perform the duties of your job, and maybe a little more? Are you someone your boss can depend upon? If not, than you must become the sort of person that people can rely on. Whatever you do, I think that you can do better than minimum wage.

This is the difference between Jon Carson’s outlook and mine. People like him want you to work for minimum wage and look to the government for any improvement in your pitiful life. I think you can do better than that. I think that if you apply yourself, you can earn a living wage.

 

Senator Warren and the Minimum Wage

March 19, 2013

May God protect us from politicians who are completely ignorant of economics. Here is video from Foxnews in which Senator Warren wonders why the increase in worker productivity since 1960 hasn’t translated to a corresponding increase in the  minimum wage to $22 per hour.

She actually has a point, however you have to consider that a lot of that increase in productivity has been the result of increasing automation. We simply do not require as many people, whether on a factory floor or in an office, to get a job done. This allows resources,  including human resources to be allocated more efficiently but it doesn’t necessarily mean that each person’s labor is worth more and thus deserving of a higher wage. The other point to consider is beyond the actual numerical amount of a person’s salary is what that salary can actually purchase. A person making minimum wage today is, in many ways, far more prosperous than a comparable person in 1960 if you consider the advances in technology, etc. Consider that the laptop that I am writing this on costs about $300, an amount that is affordable enough to anyone who is in the middle class and even many people considered poor. How much would a computer have cost in 1960? A computer in 1960 was a device that filled a room and cost thousands of dollars. What about televisions? Even someone making minimum wage probably has a color television. I don’t think they even make black and white televisions anymore. Yet, that was all they had in 1960. A television in 2013 is of better quality in almost any way conceivable and yet is cheaper in terms of cost measured by the work needed to earn the amount to buy it (I know there is an economic term for this but I forgot what it is.) compared to a television in 1960. I could go on and on but you get the point.

So, what would happen if we did raise the minimum wage to $22 per hour. To start with, it wouldn’t be only people on minimum wage who would be getting an increase in pay. Normally when the minimum wage is increased, it doesn’t have much of an affect, as the one man noted, simply because not that many people actually make minimum wage. Even so there is a sort of rippling effect on wage scales, especially in unionized labor, which is why unions generally support increasing the minimum wage, even though their members may earn far more than that wage. An increase to $22 per hour would set the minimum wage above that of most hourly workers and the effects of such an increase would be more obvious and profound.

What are the effects of raising the minimum wage? Any increase in wages, whether voluntary or not, is an increase in the cost of labor. the money to pay for that increase has to come from somewhere. Either employers must increase the price of their products, or they may choose to make do with fewer employees, either letting some workers go, or simply not hiring. Either way, the long term result is an increase in prices or unemployment, or both.

As I said, since not many people actually work for minimum wage, these effects may not be noticeable, except perhaps in long term trends. Still, the people most likely to be affected are unskilled laborers and young people just entering the job market. By making their labor more expensive and thus less attractive, any minimum wage tends to increase unemployment among precisely those people it is intended to help. An increase in the minimum wage to $22 per hour would probably increase unemployment to depression levels, and cause a temporary surge in inflation.

I hope that answers Senator Warren’s questions, not that she is ever likely to read this, or pay attention to anything I have to say, even if by chance she stumbles across this blog. I wonder if it would be possible to amend the constitution to require that every member of Congress be required to take Economics 101. But then, no Democrat could ever be elected to Congress.


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