Sep 29, 2014

The Minimum Wage and The Speech Givers

Although I consider myself a conservative, especially in fiscal matters, today I joined Lehigh Valley's State Representatives and candidates in endorsing the bill to increase the minimum wage from $7.25 to $10.10. The event was organized by Alan Jennings of Community Action, and held at the Second Harvest Food Bank. My position is simply that the fruits of person's labor should earn them more than one Happy Meal. Although the sparse audience was essentially the food Bank workers, one by one, the representatives gave essentially the same speech, some even quoting Roosevelt and Martin Luther King. To whom were they speaking? Although they were clearly preaching to the choir, they all rambled on. It's my pledge to work more and speak less than they do.


Anonymous said...


Allowing the government the license to set/raise a minimum wage creates a tyrant. The old adage, the road to Hell is paved with good intentions applies here. Low wage jobs are entry level positions meant for those just entering the labor force. Businesses should be allowed the latitude to decide what they can afford and those seeking employment have the free will to decide whether there is opportunity in taking the position. In these days of government entitlements we need not worry that anyone is going hungry.
By using the government as a venue for social improvement we have empowered it, over time, to control almost every aspect of our lives.
The government should be charged with the care of those who can't, for what ever reason, care for themselves and leave the rest of us to our own devices.

Scott Armstrong

michael molovinsky said...

scott@9:28, i understand ayn rand and i understand the ideology, but the current $7.25 has been dissipated by inflation. it doesn't appear that the wage increase bill will pass the republican state house, but neither will pension reform. harrisburg is broken, with neither party accomplishing anything for the people.

Anonymous said...

I prefer Thomas Payne to Ayn Rand.


Anonymous said...

Hopefully business will not react by simply increasing prices to maintain profit margins.

9:28s comment sounds like something from the 60's. Theory is not reality.

monkey momma said...

I understand your motivation her, but the unintended consequences of raising the minimum wage by almost 40% will include a very significant decrease in the hiring of new employees.

This will also affect existing employees who earn more than minimum wage. What about folks who worked to get to $10.10? Do they get raises, too?

If you raise the expense line of any business, you will need to either raise prices significantly, or you will need to cut expenses elsewhere. Expenses like 401K matching or upgraded health plans or vacation time or sick pay...all of those are areas businesses can and will cut if their payroll sees a huge spike.

And ultimately, the consumer pays. The same consumer that made minimum wage who now makes 10.10 will now need to spend 10.10 on the same happy meal that used to cost $7.25.

There needs to be an entry point for low skilled workers. Nobody stays at minimum wage forever. A 40% increase, in one fell swoop, will have devastating consequences for businesses AND workers.

Anonymous said...

7:21 -

Why would businesses want to maintain their profit margins? I'm sure they'll just take any government-forced increase in payroll and sell their products at a loss.

Of course they'll pass it along, and rightfully so.

What proponents of the minimum wage fail to consider is the effect that artificially raising prices will have on the price of the products sold, and the effect that will have on everyone else. Prices will go up, which means that customers will either buy less of that product or pay the increased price and have less money to spend elsewhere.

Sure, let's pay entry level workers $10 or $15 per hour. But why stop there? Why not mandate that all workers make $50 per hour or more. Why shouldn't those workers be well off, instead of just what politicians feel is enough to get by?

In the end, it's not Ayn Rand or theory. It's basic economics and common sense.

Anonymous said...

So, what happens WHEN businesses simply increase prices to maintain profit margins?

michael molovinsky said...

momma@8:20, 40% does sound drastic, but the cause is that the effort to raise the wage has been paralyzed for so long. btw, it's chances of passing now are incredibility slim. i believe that the proper projection is to imagine being paid only 7.25 an hour, or worse yet, imagine trying to live on it. nobody will enter the middle class at 10.10, but it remunerates their effort more. it may be the best and most effective arrow in the quiver against poverty. a social bargain compared to all the programs.

Anonymous said...

I dont think the Government should be subsizing a multi billion dollar corporations employees food, housing and healthcare. The cost of food, housing, energy have risen more than 40% and they raise their prices to meet the increase but not employees pay.

Anonymous said...

Entry Point wages for low skilled workers are supposed to be determined by the Business Owner(s)ability to justify the hiring. Looking to performance based raises created by increased profits.
This Minimum Wage debacle is Soft Socialism in action verses Capitalistic Principles....Wake up People!!....Retired Business Owner....PJF

michael molovinsky said...

PJF@10:18, as i'm sure you know, the wage act goes back to 1938. the current 7.25 is from july 09. we will see when an increase is passed, and for how much.

ironpigpen said...

A social baragin - how so?

It reportedly costs $ 9.00 for one 25-ounce can of Bud Light at the Pawlowski Palace of Sport --- which is more than a minimum wage employee ($ 7.25) makes now.

If the Phantoms are forced to raise the minimum wage to $ 10.10 an hour for the majority of the concessions staff --- the Phantoms will undoubtedly adjust the cost of the 25-ounce can of Bud Light to maintain whatever profit margins they originally planned to have in the first place.

So, in other words, the minimum wage guy who pays more for a 25-ounce can of Bud Light than he actually makes for an hour's worth of labor, will, in the end, still be paying more for his 25-ounce can of Bud Light than he actually makes for an hour's worth of labor.

Take out the Bud Light and Pawlowski Palace of Sport and substitute any other commodity from any other business establishment, a hamburger from McDonalds, for example --- the net result will NOT be the same for the person making minimum wage?

I just do NOT believe that minimum wage worker's "buying power" will actually increase at the end of the day.

I think this is "Smoke & Mirrors" at its finest and I know for a fact I am far from being all alone in reaching this conclusion.


Rolf Oeler

Anonymous said...

Wayne Woodman AllentownFewer than 2% of working adults earns the minimum wage. It will have no real effect other than to make self indulged elected officials feel like they have compassion for the working poor. Maybe it makes for good politics but it makes for bad policy. A fifty percent increase will definitely have a trickle up affect causing those making more than $10.10 an hour currently to demand commensurately more since they offer more value. In the least worst case this will lead to wage and price inflation negating the increase of the minimum. In the worst case, which is more likely, business owners, especially those in low margin businesses like restaurants, will have a greater incentive to invest in capital to streamline their services or, if possible, fully automate a position currently held by a low wage earner. To weak kneed politicians this is preferable to addressing the real problem. Failing schools are producing graduates, if they graduate at all, unqualified for all but the most minimal of tasks. Our economy is currently oversupplied with these workers and for many residents of inner cities, in particular, these minimum skill jobs are their only access to the first rung on the employment ladder. There is no doubt at all that having a job, even a low wage job, is better than remaining idle when it comes to producing a better future for ones self. This type of thing seems to always occur in election years as the equivalent of the tradition of the Roman Empire of providing bread and circuses to the mob upon the elevation of a new emperor. Once again what makes for good politics produces bad policy.

Anonymous said...

Wayne Woodman Allentown
Wayne Woodman Allentown

michael molovinsky said...

wayne@11:52, thank you for bringing the comment here from facebook. my reply there:

wayne, i'm not sure that there are any good politics. here in Pa. the wage bill most likely will go nowhere, but then again despite a republican governor and a state house controlled by republicans, the pension reform has also failed to pass. there has been minimum wages dictated by law since 1938. the real debate therefore shouldn't be IF, but when and how much.

Anonymous said...

"Soft Socialism" started it's slow "progressive" encroachment upon the U.S.A. back in 1913-1918. Becoming more invasive each decade. The 1938 Act is just one of many examples we have.
Most companies hire with just about all workers agreeing to the compensation,, and it is usually above this so called minimum wage....PJF

Anonymous said...

Economist's Walter Williams and Thomas Sowell have for the last few decades studied the effects of the minimum wage on minority groups, particularly African Americans, and young people. They have shown over and over that the minimum wage is the main barrier to employment by pricing certain groups out of the market place.

My daughter had been trying to find work since she turned 14. Almost everywhere she went the hiring age was 16. When I was 14 the minimum wage was about $5.25. Today at $7.25 the question must be asked if that is driving the age up denying our youth the opportunity to work and learn the value of work and money.

At $10.10 I believe we will see the minimum hiring age go up to about 18 years old, weekly hours drop, and see more automation and ordering kiosks. Businesses will respond to the increase by either raising prices, cutting hours, looking for more qualified and dependable workers, or by closing shop altogether.

A few questions: If government can mandate a minimum wage why not a minimum salary? or minimum weekly hours to guarantee a "livable" wage and health coverage? or maximum hours with a guaranteed minimum salary to allow workers to balance time between home and work?

The designs are endless but in the end more and more liberty will be lost.

-Steven Ramos

michael molovinsky said...

steven@2:33, my decision to support the minimum wage did not come easily. several of my supporters see this issue quite differently. however, there is no mechanism for minimum salary and there is no mechanism for hours or a "livable" wage. even at the 7:25 current base, we have the part timers with no benefits. there is a mechanism for the minimum wage, so in the absence of viable alternatives, it becomes the most practical vehicle of improving the low end worker's plight.

Anonymous said...

I just saw that average middle class wages have actually gone down in the 6 years that Obama has been President.

At that rate, you don't have to raise the minimum wage.

The President's policies are already closing the gap between the poor and the middle class.

doug_b said...

It doesn't matter if it is raised to $10/hr - it's still too little to live on. I'd say one needs a minimum of $15/hr ( $30k/yr ) To live without government subsdies.

Secondly, employers are finding ways of eliminating more and more jobs. Some chain resturants now have you order your food electronically at your table. Then a runner simply delivers your food. Presto - no more waiter.

Look at pay at the pump, self serve frozen yourgt, self check out at the super markets. Raising the minimum wage will just fuel more innovative ways to get rid of staff.

I can see self serve berger joints, where you assemble your own food... it's comming!

michael molovinsky said...

doug@12:24, what is law, and what is coming, is an increase in minimum wage. when it comes, and how much, will be negotiated. the partisan ideologues are upset that i took this position, they seem to prefer government paralysis.

michael molovinsky said...

yesterday i hosted numerous comments on the minimum wage. the minimum wage has been a regulation since 1938. the only relevant issue now is when will the new wage be enacted, and how much will it be? although partisans like to discuss the ideology 70 or so years later, such additional comments will not appear here.