Class Warfare Blog

September 24, 2013

Hey, Rich People—

Since you have bribed our legislators to make sure that we, the middle class, pay most of the taxes (including some $6000 per family per year for corporate welfare), the simplest way to eliminate the annual deficit and national debt is to . . . raise our wages. Raise middle class wages; raise the minimum wage while you are at it and then we pay more taxes (more than you do) and “poof” the deficit is gone. Also, since we are middle class and living very close to the bone, we will spend every dime of our post tax income on something your blood sucking corporations are selling and you . . . will . . . make . . . even . . . more . . . money.

I call this theory “trickle up economics” and recommend it highly to you.

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17 Comments »

  1. Please provide an example of where the minimum wage has reduced poverty. Various nations have used the populist policy for century.

    Good luck.

    Like

    Comment by Henshaw — September 24, 2013 @ 1:23 pm | Reply

    • Henshaw, please explain how creating a minimum wage doesn’t prevent more people from falling deeper into poverty.

      Like

      Comment by lbwoodgate — September 24, 2013 @ 2:51 pm | Reply

      • The minimum wage reduces the number of low skilled jobs available to to low skilled workers. Less low skilled jobs means less low skilled workers acquiring new skills. Without the ability to acquire new skills a low skilled worker will be unable to find better employment.

        Like

        Comment by Henshaw — September 24, 2013 @ 4:28 pm | Reply

        • I don’t think this has any basis in fact Henshaw. How did you draw this conclusion?

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          Comment by lbwoodgate — September 24, 2013 @ 10:17 pm | Reply

          • This is a simple the Law of Demand. 30 years ago almost all economists agreed. Heck, in 1987 there was even an op-ed in the New York Times calling for no minimum wage. A majority of economists still believe the minimum wage is bad policy, but the Law of Demand has been under constant assault over the last fifteen years.

            The burden of proof is on anyone who thinks the minimum wage is good policy. About the best case from recent research is that raising the minimum doesn’t have noticeable effect on jobs. Even that claim is on shaky ground. There’s practically no evidence any where that the minimum wage is helpful policy.

            Like

            Comment by Henshaw — September 24, 2013 @ 10:52 pm | Reply

            • You should take it up with the City of San Francisco which has one of the highest min wages in the land, which it did voluntarily. One of the reasons your claims are unfounded is that for people on the min wage (used to be teenagers when I was a pup, but no longer) the government is propping up those salaruies with benefits for the working poor (consider Walmart workers, for example), the most prominent prop is the min wage worker pays no taxes. So, your studies are all well and good, but I’d wager than not one of them considered the externalities of the costs to the government(us) (including direct aid, emergency room services for the indigent, etc.). If conservatives are so damned hell bent to get people to pay their own way, then salaries have to be high enough for people to do so. To insist that people pay their own way and then demean their labor by paying them far less than is needed to do that for their fulltime work is cruel and demeaning. Currently we have large numbers of families working two or more full time jobs and are unable to “pay their own way.” Then the corporations insisting on this situation claim that they cannot possibly do business without government support: non-means tested agricultural subsidies, Big Oil subsidies, Big Coal subsides, Big Pharma subsidies. Why can’t they “pay their own way?”

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              Comment by stephenpruis — September 25, 2013 @ 9:27 am | Reply

              • Most the people on the minimum wage are young.

                Minimum wage workers tend to be young. Although workers under age 25 represented only about one-fifth of hourly-paid workers, they made up about half of those paid the Federal minimum wage or less. Among employed teenagers paid by the hour, about 23 percent earned the minimum wage or less, compared with about 3 percent of workers age 25 and over.

                Also, there’s just not that many people on minimum wage and the number is dropping.

                According to the Bureau of Labor Statistics, last year 1.566 million hourly workers earned the federal minimum of $7.25 an hour; nearly two million more earned less than that because they fell under one of several exemptions (tipped employees, full-time students, certain disabled workers and others), for a total of 3.55 million hourly workers at or below the federal minimum.

                That group represents 4.7% of the nation’s 75.3 million hourly-paid workers and 2.8% of all workers. In 1979, when the BLS began regularly studying minimum-wage workers, they represented 13.4% of hourly workers and 7.9% of all wage and salary workers..

                I actually agree with you about corporate subsidies, but for different reasons. The subsidies should be eliminated and the corporate tax rate should be adjusted to be in line with other countries. The U.S. corporate tax rate is around 40% and the European average is around 24%.

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                Comment by Henshaw — September 25, 2013 @ 9:57 am | Reply

            • Henshaw,

              have you talked to anyone who actually gets an increase in wages from something below the minimum wage? You seem to want to rely totally on the views of some economist. Economics is the weakest of the social sciences and the most inconsistent. But you’re a smart fellow. You knew that didn’t you?

              Like

              Comment by lbwoodgate — September 25, 2013 @ 3:20 pm | Reply

              • Just to chime in on this free-for-all, the State of California just raised its minimum wage (stepwise over a couple of years, but …) to $10. It is a start.

                Like

                Comment by stephenpruis — September 25, 2013 @ 7:52 pm | Reply

        • To say that the minimum wage reduces the number of low skilled jobs available to low skilled workers as though it is some sort of iron law of economics is dubious. A change to the minimum wage certainly would change the labor market, but efficiency is not the only question policy should consider – equity is important as well. Your comments regarding equity envision low skilled jobs as the bottom rungs on a ladder that leads upward. That’s a very naive view of the market for low skilled labor which just as often is a static pattern where people stay in the same job category with no prospect for learning new skills that translate to better jobs.

          Like

          Comment by Peter Walsh — September 25, 2013 @ 8:19 am | Reply

          • Having worked a minimum wage job when I was younger I have some experience discussing it. Most of the people who were making the same amount as I was making either found higher paying jobs or at the minimum a raise. Those that didn’t either were typically people who did a poor job or didn’t show up to work. To state that all low skilled workers are statically low skilled is a bit dismissing wouldn’t you say? You’re making the argument that all those dumb poor people will never acquire more skills so we should artificially raise wages.

            My first comment still remains unanswered. We have 100 years of data on this policy. It has never reduced poverty or helped with low skilled workers. To suggest otherwise isn’t just naive, it’s wishful thinking.

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            Comment by Henshaw — September 25, 2013 @ 8:52 am | Reply

            • Why are you so focussed on the min wage. I am suggesting all of our wages be raised.

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              Comment by stephenpruis — September 25, 2013 @ 9:16 am | Reply

            • So your “evidence” concerning low skilled work is anecdotal. I have similar experience and can point to peers who remained at the same low skilled work for over a decade. But anecdotal “evidence” is not proof of anything except that people’s experiences may vary.

              You wrote: “To state that all low skilled workers are statically low skilled is a bit dismissing wouldn’t you say?” You are repeating my comment disingenuously in self-serving fashion. I did not make so categorical a claim. I offered a counterpoint to your narrative of low skilled work leading to better jobs. Nowhere did I state that “all” low skilled workers were stuck in place; nor did I state or imply that people are limited by ignorance. That’s you arguing with your imagination.

              The response to your question can only be counterfactual speculation. What would the economy look like if we did not have a minimum wage for the past 100 years? That cannot be answered factually.

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              Comment by Peter Walsh — September 25, 2013 @ 9:24 am | Reply

    • Who is talking about reducing poverty. I am talking about paying taxes. Currently min wage workers don’t make enough to pay taxes.

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      Comment by stephenpruis — September 25, 2013 @ 8:21 am | Reply

  2. I suspect this will fall on deaf ears but you can’t be blamed for trying.

    Like

    Comment by lbwoodgate — September 24, 2013 @ 2:49 pm | Reply

  3. If wages and benefits reach the levels which are being demanded, does anyone really think these low skill jobs will continue to hire the same kinds of people they currently employ: low skill, low education, low experience? I seriously doubt it, not if they’re paying $15-20/hour, full-time, full benefits anyway. If they think they have it rough at minimum wage, just wait until they’re passed over for more experienced and educated workers. Now that it will cost more than 2 or 3 times as much to hire someone (when you include the benefits) the number of job positions will be greatly reduced. The employers can now be far more selective in their hiring, they won’t have to hire just anyone. There will be far fewer jobs available, and the candidate field will be exponentially more competitive.

    Consider this, fast food jobs (not to be confused with the people working them) aren’t worth $15 or more, they’re just not, which is why they aren’t paid a “living wage” (defined differently by everyone) to begin with. Entry level fast food service jobs aren’t intended to be sufficient to raise families. This isn’t to say people don’t try to support a family and household on minimum wage, they do. But it’s not the responsibility of the employer to pay you at a rate commensurate with your own personal expenses, they pay what the work is worth. The protesting workers have been fed a lie. They have been told — and they believe — that a person should have the freedom to choose any job (or whatever job they qualify for), and that job should just pay whatever they need to support their lifestyle. This is quite a lofty view of the world.

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    Comment by John Barron — September 25, 2013 @ 11:15 am | Reply

    • Re “They have been told — and they believe — that a person should have the freedom to choose any job (or whatever job they qualify for), and that job should just pay whatever they need to support their lifestyle. This is quite a lofty view of the world.” Lofty? You use the word “lofty?” You are basically saying “they made their beds, now they have to sleep in them.” You ignore all of the stores that are thriving and not competing on price (Whole Foods, etc.). Competing on price is a choice a business makes but some compete on quality and how they treat their workers (Starbucks, etc.) and seem to be doing quite well. You ask what will happen to the current fast-food workers if they get their $15/hr. wish? That they will be replaced by college grads looking for those good wages? Right. Every college grad I know is looking for a career at Burger King. Where is the moral high ground when your position is people should be paid as little as possible to maximize profits? I have even seen Macdonald’s owners talk about their costs and how they cannot afford to pay much more than they are doing now. Their analysis is correct, if you exclude prices going up in the entire industry and you exclude the fact that the parent company is squeezing every last cent they can out of their franchises and making huge profits. Have you noticed a large drop in sales of gasoline over the last three years while the price has gone up tremendously? No? Gas sales have declined or stabilized exactly as fuel economy statistics have said they should, therefore it is not all that price sensitive. Neither is a “dollar menu” at a buck fifty, find another name for the damned thing.

      Like

      Comment by stephenpruis — September 25, 2013 @ 11:48 am | Reply


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