Customers With More Money = Good For Business
The Chamber of Commerce, and most elected officials from either party don’t get it. Raising the minimum wage makes good economic sense, and it makes good political sense. No matter. “OMGZ! Think of the billionaires!! Won’t anyone think of the billionaires!!?!?!” You can almost see the wheels turning in John Boehner’s head.
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I read the speech about 5 minutes before Obama gave it. The big actual news was the support for the minimum wage hike. The big interesting part of that was the plan to index it to inflation in law.This is one of those issues where Dem politicians are generally incompetent. Raising the minimum wage is popular. It drives voter turnout if you put it on ballot initiatives. There are a lot of popular and good things Dems fail to support sufficiently. We can discuss why. There are a variety of reasons, some rational, some not.
This is pure economic ignorance from those who hate low-skill laborers.
Enlighten yourself:
http://steshaw.org/economics-in-one-lesson/chap19p1.html
Your econ 101 class never got to imperfect markets, I guess. Try again after you finish the readings for week 2.
You suffer from delusions if you believe that there is any type of market other than an imperfect market.
Andrew Sullivan provides a good response to the effects of increasing minimum wages complete with references to serious studies. Worth a look.
I don’t think employers care if their customers have more money. Business is doing just fine and is more interested in lower labor costs than in selling more product.
Selling more product and paying workers more = lower margins. Wall Street hates that.
This is the outcome of 12 years (and counting) of Bush investment tax policy, which has institutionalized short-term thinking and profit-seeking at the expense of building a long-term future.
9 dollars an hour still isn’t enough to live on. 18k a year for full time before taxes…… I mean, it’s a start of course and I would support the move, but think about how businesses, who don’t care about their employees and only care about making money, would handle it.
First, fire as many people as possible while keeping as many people as possible under 30/h week. Next, slash any and all benefits down to the least allowed by law. Then, no raises (or bullshit .10/hour raises) for their “shift managers” (if it is retail) Now you still have single mothers or fathers working 2 jobs and 50+ hours a week with no benefits or acceptable health insurance, only now they run the risk of making too much to qualify for assistance.
I am ALL FOR forcing businesses to be ethical. Lord knows they won’t do it on their own…. in fact, then will exploit every loop hole they can to be Unethical. If you’re going to do it, you have to make sure all the basis are covered.
Thanks for that link Cassandra. This was interesting:
@Jason, Another example of how Republican talking points are not linked to reality. The unemployment rate has little to do with tax policy, environmental policy, minimum wage, etc.
Plenty of countries around the globe have higher taxes, stricter regulations and higher minimum wage, yet still manage to compete on the global stage. Ex: Germany. Of course in Germany, business’, workers and gov’t sit down and hash out agreements and plans.
Where there’s a demand, there will be a business. And a higher wage creates demand. I am pretty sure business’ want everyone of their customers to make more money to spend on their business, they just don’t want to pay THEIR employees more.
Perhaps Delaware will have more success raising the minimum wage in this state.
Interestingly, Germany’s unemployment rate hangs around 5-6% even during the economic recession in 2008 and their economy continues to remain strong. Raising minimum wage to $9.00 is a start but try living on $1200.00/month and miss qualifying for Medicaid and SNAP (food stamps). Germany encourages union building and negotiation power (collective bargaining) which reduce economic inequality. Proof of this is the fact that the top 1% of German households earns 11% of all income, virtually unchanged since 1970. However, in the US the top 1% makes more than 20% of all income, up from 9% in 1970. Germany also has the tightest market regulation of banks in Europe which protected them when the European Union collapsed.
See: http://www.remappingdebate.org/article/tale-two-systems?page=0,1
Thanks Norinda. So to achieve a fine tuned system that works, we need to figure out what 1% of total income is for the USA and then take nine times that amount out of the hands of the top 1%…
Sounds plausable..
The German Example — not quite as simple as Norinda indicates here, but here is another view of the German unemployment support.
The other thing about Germany that plays into this is the fact that they have universal healthcare. I maintain that if we had a way for people to have health coverage at a reasonable rate (or tax rate) small business would explode and make this economy hum.
I think of all the 30-somethings that have a great idea and a real job, but cannot transition from one to the other because they have to make sure their kids can see the doctor if they are sick. we need to give those pre-entrepreneurs a path to success.
Good point, lg. In this last recession, Germany also funded a short- time working program, which kept workers on payrolls (working fewer hours) getting maybe 80% of their normal wages.