Did Anyone Else Hear This Drivel?
On the way into work this AM I heard a Republican DE lawmaker Joe Fitzgerald of the NCC Chamber making some point about how unfair it was to business owners to raise the minimum wage. The quote was something like ‘Let’s face it, the price of everything is going up these days and some of the business owners aren’t going to keep the doors open if they have to pay an extra $0.50 an hour.’
So here is Joe’s that legislator’s statement in real English: Prices for everything are going up. The people that should suffer for that are the people that make the least amount of money in our economy. People working for minimum wage should just have to suffer along, because their food costs are rising, their fuel prices are rising, their energy costs are rising, their rent is rising, but their pay should stay the same, so that the business owner can still make his profit.
Look, if you have an employee that makes minimum wage, $0.50/hour is $20 a week. Give me a break. If all of your competition is in the same boat, you’ll be fine forking out another $100 a week for your 5 employees. Does anyone know who the quote was from this morning? Thanks, Anon.
Tags: The Economy
What he’s saying is commodity inflation is OK but wage inflation is not. He is echoing the Bush/Greenspan policy of hard money/cheap labor. This is just one of the many engines for upward transfer of wealth.
But Bernanke is now deliberately allowing inflation to happen, so the overhang of long-term debt can be written down with cheaper dollars. This is a good thing for consumers as long as it doesn’t get out of hand.
But it won’t start working until employers’ resistance to wage inflation is broken.
Geek,
how can you expect a politician to be FOR distribution of weatlh? come on!
you got too much sun in Az my friend
Joe Fitzgerald, NCC Chamber of Commerce:
http://wdel.com/video/vidclips.asx?v=minwagesenate.wmv
How do you expect business owners will recoup that additional cost?
I don’t care if they recoup it or not. Recouping your payroll is not a Constitutional right.
If they can’t figure out how to recoup it then they can go out of business and a new more competitive business will emerge to employ their workers and sell them goods.
Agreed, anon. Look, for most small businesses, this is a level playing field. Their competitors are in the same boat. If it means that your pizza goes up a nickle a slice, that’s what happens. They raise the price of coffe when the cost of beans goes up, why not when it costs more to have your employees drive to work?
Yes, I see the inflationary implications of this, but the alternative is to grease the wheels of business with the blood and sweat of the low-wage employees.
I love the imagery this portrays too. Like Ma and Pa Dukes standing behind the General Store counter in the old west. They both have their aprons on and little Suzy is hanging on to her mother’s sunday dress while she leans over the pickel barrels and gets her months worth of flower.
Awwwwww, how sweet. I just hate to see Ma and Pa Dukes have to pay Mr. Brown that additional $1 a day to sweep their floors.
“Mr. Brown?”
“yesum? Mrs Duke’s Ma’am.”
“Be a nice colored and help Mrs. Cracker take her flour out to her carriage, boy”
“Yessum, Mrs. Dukes. I be right on it Ma’am.”
That greedy Mr. Brown! Who does he think he is wanting an extra $1 a day. How are those poor shop owners supposed to make a living with you living off of thier charity (aka providing you with employment)
The end
“They raise the price of coffee when the cost of beans goes up, why not when it costs more to have your employees drive to work?”
What really worries me is that the price of beer is going up due to a shortage of hops in the commodities market. It seems that bad weather in Europe combined with farmers in the US switching to corn for ethanol to create a condition of scarcity.
The big guys like Bud and Miller are protected by virtue of having futures contracts, but craft brewers are going to take a big hit. Enough with this ethanol crap, dammit, I want my freakin’ Dogfish Head! This is why we have to drill in Anwar!!!
Everytime Bernacke lowers the interest rate….everything we buy goes higher. Seems Mr. Bernacke is the same boat, his DC house is now worth $200,000 less than he paid for it? Chickens are coming home to roost!
This is an extremely serious problem.
Joe forgets whence he came from.
The State Chamber of Commerce, Public Enemy #1. They control every element of human life in some form or fashion. Delaware Public Policy Insitute are overruling the citizens for the sake of business owners large or small.
When the business’s begin to wake up from the fog, they will understand these corporate movers and shakers are really shaking them down.
Small business’s are taking the horrific insurance that covers nothing for the employee, $1500 deductibles, hi co pays, and the cost is $900 – $1800 a month. Employees are being forced to pay all or more of the monthly premium.
When these small business’s discover that Single Payer universal gets them out from under these draconian forced premium fees increasing every month…only then, will the employees get raises. The employers will give not a dime as long as they are paying these hi insurance premiums.
Energy, wind power…they have a stake in that as well.
It is clear republicans are ONLY looking out for business, while they shake them down on insurance, and to hell with the working man.
There are some Republicans who have NEVER seen an increase in the minimum wage they liked. They have never spoke in favor of one and have always spoken against them. Yet they say they support the minimum wage.
If they really don’t like minimum wage laws (like some Libertarians), why don’t they just say so?
The only thing I can figure is because that would cause many within their rank & file not to vote for them.
Easy answer is to allow truly small businesses (‘mom and pop’) to not be constrained by government wage-fixing such as the minimum wage. Meanwhile make sure you ensnare the evil corporate minimum slave-wage employers abounding in our state.
Set a floor by a threshold calculation of the number of employees, the true number of owners-in-interest relative to # of employees, the true individual net profits of the owners relative to employees….
Oh shit, that’s no easy answer. Just raise the minimum wage to subsistence level.
We all know the cost of a higher minimum wage will inevitably be passed on to the wealthy who so patronize all those businesses employing minimum wage workers.
Right?
There has to be a better way.
Here’s an idea, let’s provide everyone with healthcare and take that burden off of employers. Liz is right (brb… I just threw up a little in the back of my mouth), let’s save these small business by removing a major obstacle to profitability.
Amen on health care as a part of the fix, check out Delacare. We were the first campaign to offer a truly universal plan.
As for wages, to say they are not very important even in a small way is crazy. When the airlines were struggling badly, pilots like me lost 38% of our pay and all of our pensions. We are on 1984 wage rates. Yes, pay does matter to the bottom line and every business small, medium and large has to be wary of government mandated increases of any nature.
If increasing the min wage is a socially agreeable thing then do not put the cost of that cause directly on the backs of business owners. You must allow them compensatory breaks also.
Look, Mike, there is a difference between an airline pilot making $120,000 and a pizza-delivery guy making $7/hour. I can get a whole lot of pizza guys for the price of a single pilot. Hell, companies are charging a fuel surcharge because fuel costs have risen so much. Should these workers be able to get that surcharge to off-set their costs?
“Easy answer is to allow truly small businesses (’mom and pop’) to not be constrained by government wage-fixing such as the minimum wage. Meanwhile make sure you ensnare the evil corporate minimum slave-wage employers abounding in our state.”
Tyler,
Although I have an in-principle issue w/ your thought-experiment, I’m intrigued w/ it as an idea.
Just so I understand it better, let me ask how it would work w/, say , a McDonald’s franchise? Would that qualify under the “mom & pop” qualification (depending on the other conditions you posited) since the franchise is locally owned by an individual?
Interesting thought, Tyler. Iowa exempts all businesses under $300,000 in sales.
Also, Washington allows employers to pay 75% of the minimum wage to anyone under 18.
Now that we will have the highest minimum wage in America, we may want to start thinking along those lines.
Easy answer is to allow truly small businesses (’mom and pop’) to not be constrained by government wage-fixing such as the minimum wage.
This would work for me, if these truly small businesses would also give up their tax privileges (depreciation or investment exemptions and the like) in return.
“Just so I understand it better, let me ask how it would work w/, say , a McDonald’s franchise?”
No because the true “owners-in-interest” (in addition to the legal owners) are the McDonald’s Corp and its shareholders. You can’t run a McD’s franchise without their imprimatur and their products etc etc, plus they are making profits from the operation, whether directly or indirectly.
Again it depends on whose profiting and to what tune, relative to the employee pool. I would suggest thresholds like the total # of owners and employees yielding an employee/owner ratio, and the minimum allowable % of net (average) hourly profits that employees can be paid as a portion of that. So if a 2-owner business is only making $20/hour net profit it would seem crazy to force the owners to pay employees $10 / hour. Something like that, I am just brainstorming now…
If two guys own a business start-up and are operating at a loss but have two hourly wage employees to pay perhaps they should be able to hire as cheaply as the market will bear. You would have to tweak the numbers to get it to a fair mark, but it would certainly be a lot less arbitrary than simply fixing an across-the-board minimum wage in all cases.
I floated this idea about exempting truly small businesses from wage-fixing back in ’06 in the Senate race, I believe.
Cassandra – I don’t see how it helps anyone to put many marginal small businesses out of business by forcing them to give up a righteous and worthwhile ability to offset their tax liability as their capital assets depreciate. Then the hourly wage from these businesses becomes $ 0 for the labor force.
Also, you could take care of the corporate thing by allowing it only with S Corps or closely-held corps or corps with a maximum # of shareholders…again, something like that.
Generally speaking, market reality will make such a system only an option and probably rarely available in practice. The mere ability to pay less than minimum wage hardly means you can find anyone (legal) actually willing to work for such sub-minimum wage.
At the lowest end of the wage scale you are unlikely to find employees dying to work for any particular company over another even if it means significantly less per hour than they can get from other minimum wage constrained (larger) employers. It all depends on the job market.
You would likely see this option used where there is plenty of labor available (i,e. a depressed job market), which would be a good thing since it could mean small businesses hiring people they might not otherwise have been able to afford (if forced to pay minimum wage) and people getting work they might not otherwise have gotten at all because of such a competitive labor market.
I guess it would come into play around the basic idea that “in tough times, half a loaf is better than none”.
Let’s put this in perspective. In 2006, last year I could find data for, there were only 1000 poor bastards making minimum wage in Delaware. And 5000 making less than minimum (restaurant employees, presumably).
Now, if the minimum wage caused job loss as conservatives predict, we’d have high unemployment. But we don’t. And when unemployment does come to Delaware it will be due to loss of high-income jobs, not minimum wage jobs.
So in Delaware, lowering minimum wage would only bring down the average wage without bringing any benefits to working people.
Hey, maybe that’s what Joe Fitzgerald wants – d’ya think?
The myth of minimum wage causing job loss is bullshit, except maybe in the case of a true economic hardship.
If we were in a high-unemployment recession, where the rich were taking hits alongside the working class, then maybe workers would be willing to forgo an increase in exchange for job security. But in that case I don’t think a minimum wage increase would even be considered in a legislature much less pass.
Then the hourly wage from these businesses becomes $ 0 for the labor force.
To be taken up by other businesses that are able to compete without taxpayer support, yes? Asking some taxpayers to live by their bootstraps while handing over taxpayer supporting funds to businesses seems to mean that somebody here was not created equal.
Plus anon has a great point — the number of people who are affected by the minimum wage is small and the overall dollars involved are minimal. As much as folks scream about this, the markets typically don’t hiccup much when wages change either at the state or fed level. On a business by business level there certainly may be some that have to make other decisions based upon increased wages, but whether they can stay in business is a function of that firm’s business model — whether they can make the business decisions to continue to compete with other firms (who now have to pay the same wages too).
“To be taken up by other businesses that are able to compete without taxpayer support, yes?”
Since when do these other businesses not have the same capital depreciation deductions as the ones that you think should give them up in exchange for paying wages they can afford to pay…or otherwise employ no one?
Just as a big picture thing, I have to laugh at how keeping more of your own money in the first place is now “taxpayer support”. What’s a tax refund now….welfare?
I guess at times I forget this is Delaware liberal.
I have to laugh at how keeping more of your own money in the first place is now “taxpayer support”.
Um, what do you call it when the working poor are on food stamps and housing subsidies and heating subsidies and Medicaid and go to the emergency room for health care?
I have to laugh at how keeping more of your own money in the first place is now “taxpayer support”
Which would mean they could afford to pay minimum wages to their employees, I imagine.
Since when do these other businesses not have the same capital depreciation deductions as the ones that you think should give them up
So now you are arguing that everyone should have the same rules? No exemptions for wage floors?
The thing is that the minimum wage issue doesn’t have wide ranging consequences. No McDonald’s go out of business as a result certainly. If you are a local landscaper you know you aren’t competing on labor rates since all of the other landscapers have to pay the same thing, at least. Your opportunity to make money comes, then, in your productivity. And if you know how to get that, you are golden. If not, you are working for someone else.
And tax refunds? They just aren’t smart — you should adjust your withholding so that the government doesn’t get the use of your funds interest-free.
“Which would mean they could afford to pay minimum wages to their employees, I imagine.”
Oh of course…merely having capital assets means a business can afford anything, right?
On a small business scale especially, capital depreciation is one way these businesses, often with very thin margins, might actually be able to grow and thus create more jobs…or eventually afford government-fixed wage minimums (under our scenario). Your orientation on this is clearly government-centric and counterproductive.
It amazes me how we are talking about small business owners who take immense risks with their only resources with no surety of anything, and yet some people think they should simply be dealt with the same way as some multi-national with billions in assets and 1000’s of workers.
BTW, withholding should be ended. It is a scam for the exact reason you state.
anon – I believe it’s called the welfare state.
Is a small business owner with everything invested in their business who only breaks even every year considered working poor? Or do you have to depend on someone else’s risk to be paid?
I believe it’s called the welfare state.
Very astute! are you done laughing now about how employer payrolls are subsidized by the taxpayer?
LOL. Employer payrolls subsidized by the taxpayer? Damn you REALLY have a government-centric view of the world. Everything is a function of the government’s role, right? Wages aren’t earned income, they are just the money the government lets you keep at the end of the day right? Oy vay.
Like I said, why isn’t a break-even small business owner considered working poor and given subsidy for their business?
Well, if you don’t think low-wage employment is subsidized, then let that Medicaid and housing subsidy and emergency room visits lapse, and see how long your minimum- wage employee is able to keep showing up for work.
why isn’t a break-even small business owner considered working poor and given subsidy for their business?
As far as I know there is nothing stopping a small business owner from applying for and receiving any benefit such as Medicaid, housing/ heating subsidy, food stamps, etc as long as they meet the means tests.
Is a small business owner with everything invested in their business who only breaks even every year considered working poor?
Apparently not.
If you want to immediately give a cash subsidy to minimum wage workers how about you start with ending all FICA withholding for hourly wage-earners for whom a 40 hr/week annualized would still leave them at poverty level or even at just their actual subsistence earnings (housing, food, clothing, debt if any)?
Why is the government collecting cash from the mouths of the working poor before they ever see their paycheck?
I’m OK with that, Tyler. Make it so.
OK, cancel their FICA, but make it revenue-neutral. Hint: You will have to raise the cap.
While we are at it let’s also cancel Reagan’s tax on Social Security and unemployment benefits.
Your orientation on this is clearly government-centric and counterproductive.
Hm. Since I am not the one here defending government subsidies or preferences or protections to businesses small or large, I’m thinking that you’ve a special definition of “government centric”. And I do suppose that for someone who looks at government as mostly an objective bad thing to actually have to defend preferential government treatment probably does look counterproductive.
And I’m AOK with your FICA cancellation idea too — but like anon notes, you need to make it revenue neutral. Also note that canceling FICA on lower income folks wipes out the bit of FICA windfall that is currently being collected from illegal immigrants with fake SS#s or with those crazy Tax IDs from the IRS. I wouldn’t include that as part of the revenue to be replaced, though.
“OK, cancel their FICA, but make it revenue-neutral. Hint: You will have to raise the cap.
While we are at it let’s also cancel Reagan’s tax on Social Security and unemployment benefits.”
If we take the revenue from existing streams outside of taxation (gas taxes, alcohol taxes, import/export duties, etc) it leaves us with a budget that is equivalent to ten years ago during the Clinton years- and it could be accomplished while ending all payroll and income taxes….hmmm….not a bad idea?
Sounds like we are making progress here (in theory)!
anon – there is a Congressman who has introduced legislation to repeal the 1993 tax increase on SS benefits.
http://thomas.loc.gov/cgi-bin/bdquery/D?d108:12:./temp/~bda8zQ::|/bss/d108query.html|
The same Congressman also proposed legislation to to repeal the 1986 inclusion of Social Security benefits in gross income .
http://thomas.loc.gov/cgi-bin/bdquery/D?d108:13:./temp/~bda8zQ:@@@T|/bss/d108query.html|
I dare not breath his name lest I be accused of being a racist…
If I were a legislator I would propose a complete exemption from taxes of anyone living at or below poverty level. This would include ALL taxes, fees, or other government assessments of any kind within Delaware for any jurisdiction…including property taxes. It would probably have to be a rebate system for many taxes, like the gas tax.
When you add up the impact of all taxes, fees, etc, many of which are hidden, the aggregate has a serious impact on struggling lower income people.
It is utterly ridiculous that the government takes from the working poor with one hand while doling out with the other. Let these people keep every dime, no exceptions. The state, counties, cities, towns etc will just have to deal with the revenue loss and tighten their own damn belts too.
To echo what I said before, the easiest and quickest way for government to help the working poor is to stop taking their damn money!
These links should work :
http://www.govtrack.us/congress/bill.xpd?bill=h110-191
http://www.govtrack.us/congress/bill.xpd?bill=h110-192
Apropos of Tyler’s last argument:
http://delawarelibertarian.blogspot.com/2008/03/minimum-wage-living-wage-and-state-as.html
You beat me to the punch, Steve. I was just about to link to your excellent breakdown, better stated than I have been trying to do here.