The American Dilemma and How We Can Fix It

Posts tagged ‘Minimum wage’

HOW LOWERING THE MINIMUM WAGE COULD SAVE AMERICA

We’ve been inundated with the events of Ferguson, MO.  It’s gotten more attention than the earlier death of Trayvon Martin.  For whatever reason, apparently Michael Brown’s death evoked more emotion than Martin’s.  There were no riots that accompanied George Zimmerman’s “Not Guilty” verdict.  But we’re more than making up for that, not only in Missouri but nationwide.  There have been “riots” which in some cases have turned violent and in all cases disruptive.

Both of these cases are portrayed in the media as murders resulting from racism.  The facts are that both of the deceased were black males.  In the Zimmerman case, his ethnicity was mixed.  The police officer who killed Brown was white.  In both cases, the behavior and events which led the deceased to their demise has been mostly glossed over by the press.  The liberal media are exceptionally selective in what facts they choose to report – and then only after applying a fair amount of spin to their curve ball reporting.

In Martin’s case, as you may recall, the reason that he was out was that he was on his second or third suspension from school.  I’ve forgotten the exact number.  And he was out getting the ingredients for one of today’s more popular do-it-yourself drugs.  Had he not been suspended and was home cracking the books instead of looking forward to cracking the pipe, he would never have been shot and we would never have heard his name.

In Brown’s case there appears to be ample evidence that he had just strong armed a store clerk and stolen some cigarillos so that he could roll a nice tight joint.  He had a significant quantity of marijuana on him and his toxicology report indicated that he had the same substance in his system.  He also ignored the orders of Officer Wilson and then assaulted him while he was in his police car.  After that skirmish which Brown initiated, he subsequently again ignored the officer’s order to stop.  Though there is conflicting testimony as to what happened, at least three witnesses confirmed completely Wilson’s statement that Brown charged him and four additional witnesses confirmed the portions of Wilson’s testimony that they saw.  All of these witnesses were black – and if they were concerned about racist police officers and attitudes as has been alleged, it seems strange that they would be so supportive of the officer’s version of events – unless that is what they saw actually happen.

Facts can sometimes be inconvenient things.  Particularly if they don’t blend with a narrative that is woven for self-serving reasons.  No amount of evidence, testimony or anything else will convince those who in the Brown case decided long before the Grand Jury concluded its investigation that he was a victim of the ultimate in police brutality.  If somehow a video recording of the incident suddenly surfaced, confirming Wilson’s testimony it would do little or nothing to change those peoples’ minds.  We would suddenly start hearing that the video was manufactured or edited to exculpate the cop.

The liberal camp takes great pains to point out that only “deniers” reject the “facts” of “climate change.”  They regard people who inveigh against their position as being ignorant.  And, if the “facts” were seen by everyone as being that, I suggest that they would be correct.  While that same theory ought to apply to these two cases as well, they do not.  It is fair to wonder why that is.

Certainly a part of that can be attributed to emotion.  We are all held hostage to our feelings and if we make decisions based solely on them we often not only misinterpret the evidence but draw faulty conclusions based on those rather than empirical evidence.  The other part is ignorance.  An uneducated person is far more likely to rely on his or her emotions than facts because we all are born with emotions but we have to acquire facts whether through schooling, good parenting or personal observation.  And if everyone around is similarly poorly educated, it is likely that the reliance on emotion is further entrenched through the observations of how others around us act and conduct their lives.  This is the fundamental problem with living in a ghetto – of whatever description.

If you live in a community where a high percentage of your fellow residents don’t work and are receiving a monthly stipend and other government benefits, it becomes socially acceptable, perhaps even desirable, to fit in with what everyone else considers a normal way to go through life.  That is particularly true if you have limited skills and would at best be able to find a minimum wage job which offers little hope of advancement or upward social mobility.  And that is further underscored if you realize that the government benefits you are currently receiving are greater in value than that job and require no effort to receive.  The only American dream that you have to hold on to is that the benefits don’t go away and, in fact, increase.

There are fewer jobs that the undereducated can hope to hold.  Technology and automation have left little opportunity for work for residents of our inner cities.  Retail, fast food and cleaning are about the only venues that require unskilled labor.  The ditch diggers of old have been replaced by hydraulic equipment and the family farm with its labor intensive requirements have been replaced with corporate farming and robotics.  That there is little opportunity for those who do not attain at least a high school diploma can be seen in the extremely high unemployment rates among inner city black males – well more than twice the national average.

The riots in Ferguson are not about justice for Michael Brown or anyone else.  They are expressions of frustration over the realization that the participants’ future is bleak.  They are right in that perception.  In an economy in which college graduates are living at home in large numbers for lack of jobs, what hope does the high school dropout have?  Sadly, the answer is none.  Unfortunately, those they blame for their plight are not the responsible parties for it.

With fifty years of trying to socially engineer poverty out of existence under our belt, we are in worse shape as a nation than when we initiated the “War on Poverty.”  There is significantly more evidence to support that statement than there is to support the theory of global “Climate Change.”  Yet those who enthusiastically support the idea that our planet is in grave environmental danger are exactly the people who ignore a half century’s evidence and double down on failed policies by further escalating them.  Among those policies is increasing the minimum wage.

Adding further pressure to this equation is Obama’s recent granting five million illegal aliens the right to stay here, and more importantly, the right to work in the country legally.  These are people who come from countries where there are no social welfare programs and where the residents will take any job, no matter how difficult or physically dangerous at whatever wage is offered.  They have a work ethic which is lacking among those in our inner cities and find no job “beneath them.”

If there is any possibility of breaking the cycle of welfare dependency which is now generational in nature it is by getting those who are trapped in that system the opportunity to find work.  It is far more important to encourage the unemployed in Ferguson and throughout the country to find that first job than it is what that job will pay.  Sadly, the way our “welfare programs” are structured, finding employment translates into losing benefits.  This obviously discourages recipients from seeking any form of legal employment.  We perhaps could partially solve this by lowering the minimum wage for people who are in the marketplace for five years or less, during which time their welfare benefits would be unaffected by their earnings.

I remember receiving my first paycheck for a summer job.  When I came home with it and opened the envelope with my family at dinner I clearly recall the sense of pride I had looking at that nearly fifty dollar check (after a deduction for Social Security) which covered one week’s worth of work.  (The minimum wage was $1.25 per hour).  And I took a great deal of satisfaction in the fact  that the company had chosen me over the fifteen other kids who had applied for the job.  Perhaps it was the naiveté of adolescence but it helped me feel as though I had some worth as a person – and that was acknowledged both by my employer in hiring me and then further validated by their paying me for my effort.  That paycheck did great things for my self-esteem and it was with some sadness that I let go of it and deposited it in my savings account.

That is an experience that sadly I fear many kids in our inner cities will never share.  And the higher we generically increase the minimum wage, however well intentioned, the more likely we are  permanently to deny them the dignity of working for a living and perpetuate the cycle of hopelessness into which far too many in this country now have fallen  – and is the root cause of why Ferguson happened in the first place – and why the reaction to Michael Brown’s death was completely predictable.

Ferguson is a symptom of a disease – one which has been decades in the making.  Sadly, following our present path of providing “benefits” rather than real opportunity will only worsen the problem.  And one day the right mixture of ingredients will combine to spark an explosion that will make what happened in Missouri look like a Sunday School picnic.

That day may not be far off in coming.

THE MATHEMATICS OF POLITICS

I remember my first job as though it were yesterday.  I was probably ten or eleven years old when I got hired.  Now I have to admit that I had an “in” getting the position.  My father ran the company.

On many Saturdays my father would go in to his office and take me along with him.  I particularly enjoyed that on days when it was raining and the prospect of spending time in Central Park on the swings had little appeal.  (That was back in the day when a youngster like myself was freely allowed to swing on these wonderful contraptions, before we viewed this as a life threatening exercise and prior to the time when we considered parents who permitted this to be guilty of child abuse and neglect).  Incidentally, with the hundreds of times I played on the swings I never suffered any injury which exactly mirrored the experience of my friends and classmates who similarly played on them.

There we were at Dad’s office.  There was no hustle and bustle as on a normal workday.  At most there were four or five employees in the whole place.  Mr. Chen, who wired lamps, might come in if Dad had received an influx of orders resulting from one of the trade shows that occurred around the country on a monthly basis.  I adored Mr. Chen.  He taught me to count to ten in Cantonese and showed me how to wire a vase and turn it into a lamp.  Under his close supervision I probably made forty or fifty lamps over the years.

I also liked Carmine who was in charge of the shipping department.  He would let me follow him, watching him pick inventory from the metal shelves which housed it, placing each item on one of the carts used to transport the merchandise until the order was complete and ready to go to the packers.  After following him over the course of several Saturdays, it occurred to me that I could pull the inventory and asked him if he would let me fill a small order – just to prove that I could.  After a moment’s hesitation he agreed.

And so off I went with my order and my cart.  By this time I knew in which rows various of the items could be found.  My biggest challenge was reading the handwriting of some of Dad’s salespeople – who would have gotten extra attention from my grammar school teachers who still believed that “neatness counts.”  The other challenge was that the inventory racks were quite high – and one of the items was on the top shelf – way too high for me to reach safely – either for me or the vase.  So I filled the rest of the order and told Carmine that I had left the cart in front of the remaining item but couldn’t get it down.  He smiled at me, I think recognizing that I had been prudent, walked over to the rack and finished the order.  After that he allowed me to help him whenever I asked to do so.

But my favorite department was billing.  Generally, the department was quiet on Saturdays.  But I had gotten an education in how to use the billing machines during a school break from the woman who was in charge of the department.  Her name was Rachael.  She had gorgeous black hair and a beautiful smile and was one of the most warm and friendly people I had ever met.  I asked my father why she was never there on Saturdays.

Dad explained that she was a Sabra, born in what was then Palestine and was an Orthodox Jew.  My father explained that Saturday was the end of her weekly Sabbath and that she was not permitted to do any work on the Sabbath.  My father also explained that he let her go home earlier than usual on Fridays, particularly during the winter, so she could get home before the Sabbath began.

Rachael had fought in the Arab-Israeli War of 1948.  That explained the ugly scar that extended down from the left side of her neck to below her very conservative dress.  That wound had happened as a result of her being in the wrong place when one of the Palestinians used a flame thrower against her.  In that same attack her brother had been burned so badly that he died as a result of his wounds.  So I only got to see Rachael occasionally.  But when my father knew that he would be bringing me to the office, she always gathered a number of orders that were ready for billing so that I could keep myself occupied.

Saturdays at Dad’s office usually started at around eight in the morning and by noon he had caught up with his paperwork and was ready to call it a day.  That meant I was going to get paid for my efforts.  That compensation took the form of lunch at Vito’s, two doors down from our office.  Since I’m pretty sure that my father would have fed me anyway, I guessed that I was really working for free.  But that was okay with me since I felt that I was getting on the job training and was, in some indirect way, helping out and making the business more successful.

Vito’s was – well, it was a dump – but the food was terrific.  Vito had figured out that the truck drivers and office workers who worked in the neighborhood and patronized his restaurant were more interested in getting a good meal at a good price than they were in ambiance.  And there was no better food than one of Vito’s meatball sandwiches served in a crusty Italian roll and slathered with a generous helping of his homemade marinara sauce.  This was not food for the chic because there was no way to consume it without getting sauce on your chin and fingers.   Notwithstanding, I think even Emily Post would have approved of a meal at Vito’s.

I hadn’t really thought much about my first job experience until yesterday when I read that San Francisco had voted to phase in a minimum wage of $15.00 per hour over the next few years.  As I thought about it, my father probably violated Federal and NY state child labor laws not to mention the minimum wage laws which were in effect at the time.  While I was unaware of these back then, I am glad to report that despite this parental “abuse” I didn’t suffer any permanent psychological or other damage as a result.  I didn’t realize that my father was taking advantage of me.  I actually looked at the experience as providing me with an education in how business worked.  As it turned out, those Saturdays at my father’s office helped me in my own business many years later.

Now I realize there are divergent views on whether raising the minimum wage is a good or a bad thing.  Those who support increasing the minimum wage make arguments that include “paying a livable wage is a fundamental matter of equity” and often characterize those with a different view as being “cold, heartless people who put profits over people.”  Together with that assessment is the implied or stated view that these same people would be perfectly happy if all these minimum wage workers just died.  Of course, that  takes the issue beyond the boundaries of having a real debate on the merits or demerits of such a raise and turns it into a name-calling event.

Let’s set aside the counter-argument that any raise in the minimum wage will result in further automation of some of those positions, meaning that there will be fewer workers earning more – or, in fact, anything – and focus on the purported cupidity of businesses – interested in maximizing profits – even at the expense of personnel.  If we accept the credo that businesses are simply motivated by profit, we need to consider what the net cost of a wage increase does to the bottom line.

Wages are a fully deductible expense to a business – so any increase in the minimum wage would, to some extent, be offset by a reduction in state and federal income taxes that would be collected.  Perhaps more importantly, we hear anecdotal stories about minimum wage workers who are unable to make it on the income from their employment and who qualify for various welfare programs.  Wouldn’t raising their hourly rate potentially exclude some of them from being the continuing beneficiaries of these programs – thus saving not only their employing companies but all taxpayers from providing these benefits?  If that’s the case, the intelligent business person should eagerly embrace such a wage increase.

Perhaps the greatest flaw in the minimum wage argument is that it suggests by the mere act of guaranteeing a higher minimum wage, whatever that number might be, it will impel the country into a new age of prosperity.  If that were the case, we could eliminate world poverty by suggesting to the governments of Mexico, Sri Lanka and Liberia among others,  that they adopt an American style minimum wage for all their citizens.

The citizens of San Francisco voted in this minimum wage increase overwhelmingly.  They also returned Minority Leader Nancy Pelosi, a staunch advocate of the measure, to the House with 82.4% of the vote.  I wonder why she never thought of my simple solution to world poverty herself.

LESSONS FROM A CELEBRITY

“I’ve been rich and I’ve been poor.  Rich is better.”

– Sophie Tucker

 

Sophie Tucker had a tough life.  Born to a Ukrainian Jewish immigrant family she began singing in her parents’ restaurant in Connecticut for tips.  She appeared in The Ziegfeld Follies but her talent threatened some of her co-performers and they got her fired.  She went on to overcome these obstacles and became successful and famous.  And she earned the title, “The Last of the Red Hot Mamas.”

In 1927 when this recording of “Some of These Days” was made, there was no such thing as the minimum wage.  It would be eleven years until Franklin Delano Roosevelt pushed that proposal through Congress and it became illegal for any employer to pay an employee less than the magnanimous amount of twenty-five cents per hour.  A person working a full forty hour work week, fifty-two weeks a year could earn $512 per year.  Even by 1938 standards those were wages that insured a life of poverty or at the very best meager subsistence.

In 1964, two years before Tucker’s death, the Congress passed ‘The Civil Rights Act which officially prohibited discrimination based on race, color, religion, sex, or national origin.  Fortunately, Tucker had found a career in the one industry which had, at least, marginally, followed those principles before they became the law of the land – entertainment.  As prevalent and blatant as discrimination against blacks was in varying states and jurisdictions, Jews were frequently the subject of anti-Semitism – although it might have been more subtle than the hatred preached by the KKK and other groups.

This discrimination took the form of having “unofficial policies” in which Jews were regularly excluded from membership in private clubs and prevented them from living in certain areas which preferred an all-Gentile population, not unlike the redlining phenomenon that precluded blacks from home ownership in many communities.  And as with black Americans, there were any number of pejorative words and phrases coined to describe and demean Jews – although our more sensitive citizens usually waited until the person being so described left the room and then whispered it to his listener “sotto voce.”

Sonya Kalish which was Sophie Tucker’s birth name had obstacles to overcome.  So did everyone else in early 20th century America.  There were no governmentally inspired “safety nets” to which a person could look should they get in financial difficulty.  All that a person had was family, friends and their own drive, ability and ambition.  Fortunately, Tucker had a desire to succeed – and she did – enough to make her a national icon and a person who was well off financially.

I doubt that at any time, Sophie Tucker aspired to do just enough to make it through and get by.  She was someone who saw herself as a person whose aspirations were only as great as she believed them to be.  And perhaps it was exactly because we had no safety nets that she was impelled to succeed.  How much inspiration to do better do we have if we are given a minimal level which is assured if we do little or nothing?

Which brings us to the question of the minimum wage – an invitation to a life filled with need and poverty.

“If you’re against raising the minimum wage you’re a Tea Party Republican who hates people, wants them to starve, abhors the middle class and is only concerned about corporate profits.”  Perhaps you’ve heard that meme.  If not you don’t own a television or a computer which has access to current events.  If you believe that statement, you need to enroll in a remedial class in basic math.

We’ve had a Federal minimum wage law on the books for seventy-six years.  During that time, the percentage of Americans who are officially classified as living in poverty has increased as a percentage of the overall population.  Why should this be if a guaranteed minimum wage is intended to combat this phenomenon effectively and has been raised periodically during that time span?  Is there even the most ardent among those pushing for a forty percent increase who truly believes that should that be enacted it will lift those minimum wage earners out of their dire financial circumstances and suddenly move them into the middle class?  If you accept the government’s definition of what a middle class person earns you will find that the math simply doesn’t work.

Well let’s turn to the issue of greedy corporations looking to maximize their profits, all on the backs of their underpaid workers.  Most business owners would agree with the statement that the reason for going into business is to earn profits and to grow the business in order to increase the size of the profits.  The real disagreement with those on the left who would agree with that statement is that they then add on the final clause, “without regard to the working conditions or financial well-being of their employees.”   That statement can only be made by someone who is inexperienced in running their own business.

We all know that there are costs associated with hiring employees.  Those that are obvious include various taxes which are imposed and include FICA, FUTA, state unemployment contributions, paying state worker’s compensation premiums and providing health insurance.  Those are the legal, mandated additional costs that every employer incurs.  But there are indirect, less obvious costs that also impact an employer’s profitability.  One of the most important of those is productivity.

Most of us would agree that if two mechanics who were equally competent were available to repair our car and one charged twice the amount of the other, we would probably select the less expensive mechanic to do the job.  If we had two employees on our payroll and one was able to produce fifty widgets an hour and the other consistently only made twenty-five in an hour, wouldn’t that second employee only have half the value of his co-worker to our company and wouldn’t he be contributing only fifty percent the amount to our profitability?

This leads us to a simple question.  Is it fair to pay the more productive employee the same amount as his less efficient counterpart?  Or, more to the argument of those who believe everyone should get a guaranteed wage, would it be unfair to the less productive employee to pay him less than our second, more productive worker – even if that lesser amount conformed to the then prevalent minimum wage?

I suspect those with a “fairness” mindset would object to rewarding our more valuable employee because somehow they view that as an employer “demeaning” the other worker by paying him less, irrespective of the fact that he actually is less valuable to the company.  Unfortunately, the mantra, “Equal pay for equal work” disregards the fact that not all workers offer an equivalent amount of productivity for the time they spend in our offices or factories.

Those lobbying for an increased minimum wage believe that paying “less than a livable wage” is barbaric.  I would suggest that probably is true – and the individual who is willing to accept that wage and live under those conditions is not exhibiting the best judgment or acting in his own best self-interest.  Why then do people accept those sorts of positions?

The possible answers are that they are lazy and unwilling to work at a better paying, more demanding position; do not have the skills to qualify for a better paying position; or find that the particular minimum wage job satisfies their personal goals.  What other answer can there be to that question?  Despite the acrimonious debate over this subject, I have yet to hear that minimum wage-paying employers go out with shotguns, round up people and force them to work in their businesses, threatening them and their families with bodily harm if they fail to comply.

“Don’t let anybody tell you that it’s corporations and businesses that create jobs.”  That statement from no one other than non-Nobel prize winning economist, Hillary Clinton.  If we accept that statement, then it is government which is solely responsible for job creation – or lack of it.  In part I would agree with that concept – particularly the latter part because while insightful regulation is a positive thing, overregulation is a burden and a job destroyer.  If there is a dearth of jobs in this country and it is government who is the job creator, then obviously government is not doing very well in this regard.  Or are they?

We now have more people than in the country’s existence on some form of Federal dole, ranging from food stamps to telephones.  These are people whom the government has created and endowed with a job – to continue to vote for those who concocted these programs with promises that even better, more lucrative programs are in the works.  And people who are naïve and uneducated solidly endorse their own enslavement in election day after election day.  This Tuesday is unlikely to suggest that many of them have yet seen the light.

In 2008, half the country voted for “Hope and Change.”  We’ve gotten more than our fair share of the second part of the slogan.  I’m still optimistic that we will get a peek at the first part.  At least, I hope so.

 

CHIPOTLE MEXICAN GRILL

Perhaps I’m one of the few people in America who hasn’t eaten there but I haven’t.  My friends who frequent Chipotle regularly tell me it provides a far better dining experience than its competitors.  And while I enjoy Mexican food, I don’t go out of my way to get it.  Now open a great dim sum restaurant and we’re talking a whole other story.

The genesis for this story has nothing to do with the quality of food or the dining experience at Chipotle.  It has to do with the compensation of the company’s CEO, Steve Ells.  In an advisory vote, the majority of shareholders recommended that the Board not increase Mr. Ells annual compensation to approximately $25 Million.  Apparently, several unions and others who hold the stock in pension plans were responsible for the overwhelming “No” vote.  As shareholders, that is their right and that they exercised their voice is their responsibility.

This story, which has received more coverage on the Huffington Post than the scandal at the VA which apparently has now spread to include eleven separate facilities, also generated far more comments than the second story.  Most of those comments applauded the vote and went on to comment about how CEO’s are overpaid to the detriment of the poor schlub counting out twenties at your local bank or slinging guacamole at your local Chipotle.  I engaged in a conversation with one person who left such a comment.

In response to this individual, I asked, “If $25 million is too high, is $1 a year too low?  If so, what would you consider to be equitable and how would you determine what is fair?”  While I was waiting for him to get back to me, and I still am, I decided to try to look at this situation in as objective manner as I could.

The first thing that occurred to me is that many who have not been in the situation personally can only theorize, if they take the trouble, to understand what it is like first to conceive of a business and then to make that vision turn into a reality.  If they had done this themselves, they might have more respect for those CEO’s whom they denounce.

What if Mr. Ells had never had either the moxie or the good fortune or the work ethic to start this company which now employs 45,000 people?  Where would these individuals be going to work on a daily basis?  In this Obamaconomy where new business start ups are few and established companies are laying off and trimming the fat, would they even have a job or just join the ranks of the gainfully unemployed?

But then I thought, not that it’s my business since I’m not a Chipotle shareholder, what if the company reduced Mr. Ells’ compensation by 90% to $2.5 million a year and the $22.5 million difference was passed along to Chipotle workers in the way of pay increases.  How might that impact their lives?

Well, it would result in a $500 a year annual increase for each of the company’s other employees.  Of course, after they paid Federal income tax, FICA, Medicare Tax and in many cases state income tax, that pay increase would shrink to about $350 per year.  That works out to a little less than $7.00 per week or, based on a forty hour work week, seventeen cents per hour.

Now the people who man those fast food lines at their outlets earn more per hour than the typical fast food restaurant worker who makes minimum wage.  But if we were to apply their percentage increase in earnings attributable to stripping Mr. Ells of 90% of his income, we would not be talking about raising the $7.25 minimum Federal wage to $10.10 per hour but to $7.34 per hour.

There are two other points we should consider.

The first is that should the Board enact the hypothetical pay plan I created and Mr. Ells agreed to work for a 90% smaller salary, it might occur to him to put forth only 10% of the effort that he previously expended in his job.

Instead of opening 100 new outlets this year, he might decide only to go ahead with 10 of those – if any at all.  After all, the company is doing very well so why rock the boat?  Why go through all the trouble of doing site surveys, negotiating leases, overseeing construction, purchasing equipment, interviewing and hiring and training employees and management, negotiating contracts with new wholesale grocers, conducting on-site audits to make sure that these new facilities were meeting high corporate standards?  Why indeed?  That would leave approximately 2700 prospective employees who might have been hired for jobs in the 90 restaurants that were never opened sitting home collecting unemployment – if it hasn’t run out.

The second point is that no one is forced to work at any job they don’t like or want.  In our current Obamaconomy that is more theoretical than real since this administration has not only not encouraged the creation of new businesses, but has done everything possible to make starting a new venture difficult if not impossible.  If we had a vibrant economy, a worker who was dissatisfied with his job could find another one – or even accept a second job if he were so motivated

So if we want to have a debate over the minimum wage, we should focus our attention not on “greedy CEO’s that want their employees to suffer” but to a government which has made sure that they will.  This may be one of the few times that I agree with the president when he said, “You didn’t do that.  Someone else was responsible.”  He’s right – it’s him.

READER COMMENTS ON THE MINIMUM WAGE POST

Let me take a moment to express my gratitude to all of you who read this blog on a regular basis.  You are the fuel that keeps the fire going.  Furthermore, I personally believe that you are a cut above the herd (several cuts, actually) and I wish all of you served in elected office.  The country would be much further ahead if we had thinkers instead of talkers running the show.

I received several comments via email about the Minimum Wage post which I put up yesterday.  Of course, you realized that this was tongue in cheek humor – but I plead “nolo contendere” as I had just finished watching several Marx Brothers movies and their spirit of light-heartedness overcame me.

Several serious questions were raised in your emails which I want to address in this post.

Q:  If we raised the minimum hourly wage to $50.00 for all American workers, wouldn’t that require us to re-define our base for what constitutes the “poverty level?”

A:  This is an excellent and insightful observation.  If your lowest paid American were now earning $100,000 per year, that would become the new poverty-level baseline.  Instead of paying athletes $10 million a year, we would have to increase their salaries to at least $30 or $40 million a year – just so they could keep up.  That doesn’t seem like a bad thing – especially if we taxed them at, let’s say, 90% of their income just to keep the social programs we have designed running.  And that would certainly ease the consciences of a Bill Gates and Warren Buffett who believe that they and those in their asset class are under-taxed.

Q,  Wouldn’t raising the minimum wage to $50.00 per hour create inflation?

A.  Yes it would – and that, of course, is a good thing.  Just think of the benefit to our farmers for a moment.  If they are able to sell their tomatoes for eight dollars apiece, consider how much value that would add to the GDP.  Now you may say that if they’re selling tomatoes at eight bucks a pop, the consumer would pay at least thirty dollars each – and that is true.  But the fact of the matter is that Americans don’t eat a sufficient quantity of fruits and veggies now – so the impact of this price escalation should be minimal.

Then there is the matter of the National Debt – rapidly approaching $17 Billion.  There is no way that we can ever pay that off.  Furthermore, our debt is clearly the fault of foreigners – primarily the Chinese and Japanese who hold the bulk of it – who through their purchases have encouraged our economic malfeasance.  I mean, come on – we always give these Orientals credit for being smart and shrewd – but look at all this worthless paper they’re holding.  If that one fact alone doesn’t shoot a gaping hole in the theory of the superiority of the Oriental mind, I don’t know what will.

So if we merely inflate our way out of our debt, making it worth, let’s say, only a quarter of what it’s present nominal value is, then we can declare ourselves in default and only say that we wrote off about $4 Trillion and thus we will save about $13 Trillion worth of face.  That’s something our Oriental friends might actually admire.

Why we let our Japanese/American citizens out of our WWII interment camps is beyond my understanding.  And it’s truly a pity that we don’t need to import any more coolies – but all of our railroads have been built.

Q.  Where would we get all the money we need to pay everyone a $50.00 per hour minimum wage?

A.  (I referred this reader to an excellent book on 15th century Germany).  With the greatest invention of all time, the printing press, Guttenberg set central bankers free to do as they will with their currencies.  We simply print more as we need it.

Now being someone who is ecologically concerned, it occurs to me that the quantities of money that we would need would probably exceed the number of trees that exist on planet Earth.  While I would be willing to chain myself to an old growth redwood in our Pacific Northwest, I really don’t have that on my “to do” list.  So, instead of doing things the old-fashioned way, why don’t we have the government just issue credit cards – like the ones that they give to people on public aid and as part of the SNAP program?

It’s been years since we attempted having solar power, via Solyndra, get established as a reliable source of affordable, renewable energy.  We could develop credit card production facilities in Nevada and Arizona using this technology.  That would help us out in Nevada with the highest unemployment rate in the nation – and it might just cut down on the number of illegals selling drugs imported from our southern neighbors by offering them nine to five regular jobs.  Besides, I read where our star is entering the phase of its eleven year cycle in which it spews out the greatest amount of energy.  Think of all that sun power just going to waste.

Q.  If the Federal government implemented your suggestions, wouldn’t there be a great deal more waste than we already know exists?

A.  Well, in the first place, it’s hard to conceive that it is possible to have more waste than already exists.  And in the second, do you think we are Germans and efficient?  This is America and we’re mostly all Americans here.  Waste is good.  It creates jobs which then requires more people to repair the damage that was initially created.  Don’t you understand the concept of unionism?  Capitalist pig.

Well, dear readers, I’ve fielded the questions that were posed in response to my earlier post.  Of course, I welcome any further questions which you might entertain and will do my best to address your concerns.

Faithfully yours in economic conundrum,

juwannadoright

HOW TO SETTLE THE MINIMUM WAGE DEBATE – ONCE AND FOR ALL

In today’s press conference, President Obama said Republican opposition to Obamacare is mean-spirited and stems from the core of the Republican philosophy which willfully tries to deprive thirty million Americans of health insurance.  In other words, they are nasty people who are selfish and have only their own interests at heart.

In contrast, that would lead one to believe that liberals who hold a diametrically opposed opinion are just the opposite – warm, caring, loving people who want the best for all of us.  Well, let’s run with that theory and see how it impacts one discussion that is currently on our radar screen – the Federal minimum wage.

The recent strikes by McDonald’s workers over their wages and the statements that the company itself has made “that they don’t know how people can support a family at the minimum wage rate of pay” have fueled this discussion.  Certain of our concerned liberal friends have suggested raising the Federal minimum wage from the present $7.25 per hour to as much as $12.50.  I believe these people are missing the point entirely.

The Federal guidelines prepared by HHS show that a household of four, (in the old days they described these as a family of four), would need an income of greater than $23,550 per year in order to avoid being classified at poverty level standing.  An increase in the minimum wage to $12.50 would put the bread winner at an income of only $26,000 per year – assuming a forty hour work week.  That is just 11% over the poverty level.

Is this the American dream that our liberal friends have in mind for our minimum wage workers?

If we really want to inspire people to get to work and feel fulfilled in their chosen vocation, I believe we need a greater incentive than barely exceeding the poverty level to get people on board.  Therefore, I suggest that we raise the Federal minimum wage to no less than $50.00 per hour.  And if we really want to make an impact then we should make it retroactive say back to 2009 when the Chump in Charge first took office.

Consider the benefits we would gain by doing this.

First, we would give incentives to people who currently can enjoy unemployment benefits for 99 weeks to get off their duffs and go out and look for work.  The savings in reducing the number of unemployed people might just pay for this program in and of itself.

Second, those pesky foreigners who are willing to work at low pay, taking the jobs that Americans spurn as being beneath them, would be put out of the market and would probably go home.  This will save us countless hours of loud and cacophonous debate over immigration reform which will probably be too confusing to listen to anyway and just might interfere with our schedule of viewing reality television.

Third, (and I admit this is my favorite), there wouldn’t be a single fast food restaurant left open in America which just might cause us all to learn how to cook more nutritious food and, in the end, would save us from the self-inflicted diseases which our poor food choices bring upon us – thus bailing out our healthcare system.

Who says that conservatives don’t have a full supply of largesse running through our veins?

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