...many full-time workers qualify for food stamps or other government assistance. If the minimum wage were raised to a "living wage" we, the taxpayers, would not have to subsidize these corporations with government handouts. Yes, if wages were raised prices would go up to cover the employers' added costs. But isn't that really a reflection of the capitalistic system? ~ Excerpt from the article Minimum Wage Vs. Corporate Welfare by Jim Kinninger, RGJ.com 12/11/2013).
Conservative often complain about the "welfare state", arguing that we need to stop "subsidizing" poverty... but when it comes to welfare for the business community, it seems they completely FAIL to understand how labor should be priced. Libertarian blogger Rational Nation put forward the boiler plate argument against raising the minimum wage in a recent blog posting...
| rAtional nAtion: Labor unions, now clamoring for a ridiculously high minimum wage see no correlation between the effect of increased costs to the businesses and the effect it will have on the price of product or service to the consumer. (1/4/2014 AT 6:57pm). |
Not so, Mr. nAtion. I would say the problem is that business is clamoring for ridiculously lower wages and they see no correlation between the amount of money it takes a worker to live and the cost of their labor. If we were talking about a machine that needed a certain level of maintenance to function (and it was the only machine suited for the job... or other machines all needed the same level of maintenance), business would have no choice but to pay what the maintenance cost. Similarly, human workers require a minimum wage in order to provide the basic necessities of life. But with human workers business does not want to pay.
Sorry, but if you NEED workers you HAVE to pay what it costs to "maintain" them. If not the taxpayers will have to make up the difference in the form of welfare. The argument the rAtional oNe presents is one for corporate mooching. Nobody would suggest that taxpayers should foot the bill for the maintenance of machines owned by private businesses, so why the hell do Conservatives believe taxpayers should foot the bill when business won't pay to "maintain" their workers?
As for the effect paying a minimum wage would have on the price of product or service to the consumer... the effect will be that the price of the product or service will reflect REAL COST (plus a reasonable profit), and not a price subsidized by the taxpayer. And raising prices, as Conservatives always argue will most certainly be the result of a minimum wage hike, will NOT necessarily be the result (as stated by the author of the quote at the top of my article, with whom I disagree slightly... on this point).
First of all, it is the market that sets prices (or it plays a large role, at least). Charge more than people can afford, and your product won't sell or people won't pay for your service. But business has many other options they can consider before raising prices (which they may not even be able to do)... like paying management less, for example.
Surely in this era of record profits, that is an option that the big boys can consider. But, what about small business, the Conservative will ask? A higher minimum wage will drive them out of business, for sure (the Conservative will argue). But they (intentionally) fail to realize that the big employers (when the minimum wage is inapplicable) set the wage in any given industry. The big employers refuse to pay a decent wage, and the small businesses can't offer any more (or they will be unable to compete).
But, if the larger employers must pay more (a reasonable minimum wage that reflects the true cost of labor exists), then smaller employers can pay more as well and still be able to compete. The bottom line here is, that when the supply of labor is high (more people looking for employment than jobs exist) then the cost of labor will always drop to a sustenance level... or lower, when Conservatives enable business that want to mooch off the taxpayers by arguing against paying a minimum wage. Time to end the mooching, I say. Business should pay the true cost of their labor and STOP looking to the taxpayers to subsidize their costs.
7/4/2015 Update: During a 6/20/2015 discussion re WalMart on the blog rAtional nAtion uSA, the proprietor seemed to come out in favor of paying a minimum wage that is a living wage. Specifically RN said "the minimum annual wage is in any geographical area to keep an adult just above the poverty level. That it seems would constitute a living wage. What is necessary not all that is desired. That ought to be the standard for a minimum wage in each geographical area. At least in a society that understands Thomas Paine and the concept of general welfare". Then, when Jerry Critter said (in this same discussion) that "higher taxes may mean lower profits", RN agreed! Paying a higher minimum wage may also mean lower profits (and not increased prices for the consumer). Is this a reversal of the RN position as referred to above and thus a (lessening, at least) of the prior RN delusion? Was it RN who "sharpened his pencil"?
We, as a society, have decided that our citizens deserve a certain minimum standard of living. That minimum standard is met by a combination of wages and government assistance. Clearly, if wages are higher, the needed level of government assistance will be lower.
ReplyDeleteThe minimum wage should be high enough so that a person working full time makes enough money to support themselves without government assistance, and a typical family of 4 with two full time workers are also self sufficient.
If a business cannot survive under those circumstances, they do not deserve to be in business. Another more efficient business will come along and take their place. That is called free enterprise, and everyone will benefit.
Ever own, run a business wd? Thought not.
ReplyDeleteYour dream looks great on paper. Keep sharpening that pencil.
Carry on.
WD,what you and Jerry know about business could fit in a thimble with room to spare.You two are absolutely clueless.
ReplyDeleteWell, I got the title of the post correct, at least. RN and Rusty clearly both agree on that. According to them free enterprise would break down if the taxpayers didn't kick in and help pay for the labor costs of business. It would work the other way too... pay workers more and then they could afford it if prices went up a little... but the way we do it (subsidizing labor costs of business) is far more beneficial to the plutocrats. That is why handouts for those who don't need them is "good mooching" while assistance for people that do need it is "bad mooching". I do understand that much, Rusty.
ReplyDeleteTheir only reply is that we don't understand business. If all they can do is attack us, clearly we are on the right track.
ReplyDeleteI think the cost of maintaining good workers has best been described as nightmare reality by Huxley, Orwell and their ilk. Although the republican business model which has invariably resisted every incremental increase in the minimum wage(s), it does vary from state to state, may not be so draconian, I'm sure they are very happy with working mothers, employees riding the bus and living in cheap apartments, people with no money for vacations, crappy cars, screwed to the wall with credit card debt, foreclosures, you name it. About the only luxury they really seem to be pushing is cable TV, so the masses have to pony up $$ to watch their sports, news and mindless humdrum.
ReplyDeleteAsking a valid question, follwed by my perception (which I still believe is accurate), and making a suggestion is attacking?
ReplyDeleteI've seen much worse from progressives and in fairness conservatives as well Jerry.
It is all in the tone of you comment and your previous history of dealing with Dervish. But I do agree, I also have see worse from progressives and conservatives.
ReplyDeleteThe "keep sharpening that pencil" comment was clearly an implication that I'm stupid because I don't understand why business needs subsidies to pay their labor costs when low wage workers are employed. Jerry accurately described an attack (although the Rusty comment was worse). But Jerry and I are big boys and can handle it. No offense taken... primarily because I believe RN's "perception" is wrong.
DeleteBTW, RN, what "valid question" did you ask? "Ever run a business. I thought not" is a statement. You said you KNEW I never ran a business. There was no question. In any case, I actually do have a business I run out of my home (although I am the only employee).
And I ignored the "valid question" from RN before because I didn't take it as a question but an attack (otherwise RN would have left off the "I thought not" part, or at least stated it differently... i.e. "I suspect not").
DeleteIn any case, I asked a valid question, which was why do people opposed to the minimum wage believe the business shouldn't (or can't) pay the true cost of their labor. Instead of answering the question RN (and Rusty) say I can't possibly understand the reason because I've never run a business (they assume).
An attack via insult AND a dodge. I wonder if RN could actually answer the question. Perhaps he could come up with something that wasn't an attack, but I doubt he will.