Posted by Tina
Governor Moonbeam has finally landed, right on the heads of small businesses all across the state of California. How did he accomplish this wild and crazy maneuver? Easy! He and California lawmakers colluded with unions:
The Los Angeles Times has reported that California lawmakers and union leaders have reached a tentative deal to raise the state’s minimum wage to $15 per hour over six years.
What do you suppose the unions offered Brown and his lawmakers in exchange for this “landmark deal?” How about money and votes.
Is this how our government should work? How many jobs will be lost and how many small businesses will cease to exist because of the crass, corrupt, self-interests of these lawmakers?
I had a minimum wage job in 1967. California minimum wage in 1967 was $1.30 per hour. According to
http://www.bls.gov/data/inflation_calculator.htm
a 1967 dollar is worth $7.10 today. That means my 1967 pay is equivalent to $9.23 per hour. California minimum wage today is $10.00. This agreement raises it to $15.00 per hour over 6 years. Assuming an inflation rate of 3% (roughly 3 times what it is) in 2022 my 1967 pay rate in 2022 dollars would be $11.02, not $15.00.
Lets compare it to 1968. In February, 1968 the California minimum wage was raised to $1.65 per hour. That would be $11.24 in today’s dollars. Based on this a raise might be in order. Again, assuming 3% inflation (again 3 times actual) per year in 2012 the equivalent wage would be $13.42 not $15.00.
Now to the real issue…
Everything above was just a math exercise. Technology keeps marching on and automation keeps replacing jobs. In 1967 service station attendants pumped your gas, ATMs didn’t exist, you couldn’t do self check out in the supermarket, etc., etc. Do you think raising the minimum wage will accelerate or decelerate technology replacing jobs?
Yes, making more money would make it easier to live for people on minimum wage. But making NO money makes it impossible. Minimum wage workers will have a better financial situation but there will be far fewer minimum wage job and far fewer minimum wage workers. “Here is the good news…. You got a raise. Now the bad news, you are fired!”
In 1967 I was 13. I worked in the Solano County fruit orchards from the time I was 8. I also mowed lawns, raked leaves, had a paper route, sold almost everything door to door, Today, kids younger than 16 can’t even work. They can’t even volunteer due to insurance issues. As a result, kids younger than 16 never get a chance to learn and understand what having a job means and how good it feels to earn your own money and be independent.
By the time I entered college at the age of 17 I had enough money saved to get me started in college. How many of today’s teens will be able to do that? Raising the minimum wage will even decrease the number of jobs available to them.
I spent 8 years in college receiving a degree in Physics, a degree in Mathematics, and a Masters degree in Computer Science. I would have been able to do it in less time if I hadn’t had to drop out twice because I ran out of money. Both times I went to work, scrimped and saved, and went back when I had saved enough to do so. During the time I was in college I held down one and sometimes 2 part time jobs, all at minimum wage. When I graduated in 1980 with my Masters Degree I had $0 student loan debt.
Today I would not have had the money to start college because I wouldn’t have been able to work before 16 and after 16 I wouldn’t have been able to find a job. Even if I could start college I wouldn’t be able to continue because it would be unlikely that I would be able to find a part time job to keep me going. The only path to college seems to be student loans resulting in crippling debt at graduation. Unpaid student debt is over a Trillion dollars.
How did we get so far off track?
All of this is as a result of what I call “One Dimensional Thinking”; simple cause and effect. Never mind that there is a ripple effect where the effect is the cause of other effects and so on. Liberalism seems to be built on One Dimensional Thinking. Let’s just focus on minimum wage. In this case the push for a minimum wage increase is easy to sell to the masses. They tell them it is hard to live on minimum wage, which is true. They don’t tell them that minimum wage was never meant to support a family. They tell them the solution is to raise the wage. No further analysis! When things don’t work out and jobs are lost they blame it on the greedy employer! They tell them that employers and corporations are their enemy. They increase public assistance to make up the difference because people on public assistance are now trapped in a situation that makes them their little political army. What a sad statement about liberal policies that not a single policy has improved the plight of the poor just as this policy will NOT help the plight of minimum wage workers. Well….. they can always use that well worn defense we hear over and over that they believe explains how they are doing a good job.: “It would have been far worse if it hadn’t been for us!”. Unfortunately their followers will never know that using that phrase in a job situation will probably get you fired because they will never have a job….. except maybe working for the government.
Thank you for sharing your experiences with us and KUDOS to you for your work ethic!
We need for all Americans to discover the value, the great satisfaction, of relying on their own wits and grit to make a life for themselves.
We also need government that will remove the barriers they’ve imposed, including the lousy job they’ve done in education, so more people can achieve.
The minimum wage does not stop Americans from “relying on their own wits and grit to make a life for themselves.” Do you think it stopped you from doing that?
I would expect a teacher to be better at discerning the inherent lesson.
The lesson to young people is clear. Raises come when the government intervenes on your behalf.
Your job is a nice example. As long as you continue to teach, you will not personally negotiate a higher wage with an employer according to your talents, achievements, dedication, or hard work. Your wages will go up, right along with less dedicated teachers, when your surrogate (Union) coerces a higher wage from the government (taxpayer paid).
What we’re talking about is a mindset that is weak, that dis-empowers people to pursue happiness by their own strengths and efforts. You’ve accepted it a the norm…others will too.
This country and it’s vast middle class did not happen because people sat around waiting for government to act. When I was starting out MOST PEOPLE IN AMERICA did not wait for government to bestow a higher wage.
Tina: “The lesson to young people is clear. Raises come when the government intervenes on your behalf.”
No, the lesson is that raises will come when people work together to make them come. No government is raising the minimum wage out of the goodness of its non-existent heart. Government is intervening in this issue because public pressure has become strong enough to make it happen.
“This country and it’s vast middle class did not happen because people sat around waiting for government to act.”
No one is saying it did, and no one is encouraging anyone to “sit around waiting for government to act.” Activists–many of them leftist activists–fought and died for the worker protections we have today. Child labor laws, the 8-hour work day, weekends, and, yes, the minimum wage–these were not accomplished by “sitting around and waiting,” they were accomplished through hard work, dedication, blood, sweat, and tears. People died for these things; that’s historical fact. They fought Big Business and Big Government, who were allied more often than not, to secure the respect and dignity they deserved.
You frequently tell me I don’t know my history, but you seem to have no awareness of the history of labor unions in building America’s middle class and giving us many of the labor protections we take for granted today. It’s insulting.
“When I was starting out MOST PEOPLE IN AMERICA did not wait for government to bestow a higher wage.”
When you were starting out, you HAD a higher wage than this generation of young workers, so what is your point?
And when you were starting out, there were plenty of people fighting–not “waiting”–to pressure government to raise the minimum wage. Martin Luther King, Jr. was one of them:
“There is nothing but a lack of social vision to prevent us from paying an adequate wage to every American citizen whether [she or] he be a hospital worker, laundry worker, maid, or day laborer…. There is nothing except shortsightedness to prevent us from guaranteeing an annual minimum and livable income for every American family.”
http://9to5.org/local-chapters/national-action-network/9to5-action-toolkits/national-day-of-action-on-martin-luther-king-jr-day/dr-kings-fight-for-economic-justice-raising-the-minimum-wage/
So this isn’t a generational thing. Acting as if calls for a minimum wage increase are just a selfish demand from spoiled kids who want to “wait” for raises–when actually, they’re working to achieve this noble goal, the same goal that has been fought for by some of America greatest heroes–is extremely insulting.
“Government is intervening in this issue because public pressure has become strong enough to make it happen.”
Bologna. This is activist agitator stuff, backed by George Soros, and designed to destroy small business. It will destroy more than that.
“…the lesson is that raises will come when people work together to make them come.”
What work? What did these people do to generate the profit that will cover the paychecks?
You do realize that people get paid for work, not just for showing up on payday or standing around with a sign yelling slogans?
“Activists–many of them leftist activists–fought and died for the worker protections we have today. ”
A lot of them busted a few heads of non-union workers in the process too. Later their greedy, unreasonable demands put companies like GM into debt, and more than once too. Taxpayers got stuck bailing them out last time.
The mindset is that there’s an endless supply of cash and workers have a right to take it.
“People died for these things; that’s historical fact. They fought Big Business and Big Government, who were allied more often than not, to secure the respect and dignity they deserved.”
Find me any worker that has anything close to those conditions today. You’re justifying this demand with ancient history. It doesn’t wash. What’s worse is it will hurt more than it helps and YOU DON”T CARE!
I respect the people who had something to complain about risking their lives and their families livelihoods to right wrongs. Businesses were treating workers very poorly and deserved a kick in the butt. Later on the big unions associated with the mafia…see Jimmy Hoffa. Unions were (and are) also associated with communist movements. The SEIU is a modern variety activist socialist union.
I have no respect for the modern labor movement; it’s a socialist political animal. It’s also a scam for the union bosses who use the workers to line their own pockets. Those salaries don’t include perks. I know one of these guys and a lot of his time is spent at home watching TV, for which he gets the big bucks while some hard working lineman is out risking his life.
“When you were starting out, you HAD a higher wage than this generation of young workers, so what is your point?
That’s a matter of opinion. People have higher expectations today. They’ve erased the concept of entry level work. Now entry level work is expected to support a family, something these jobs were never meant to do. Nobody in an entry level job ever had, or expected to have, something as expensive as an i-pad, i-phone, flat screen TV, or $150.00 shoes. People also didn’t eat out all of the time or spend on credit for things they couldn’t afford. They didn’t waste their paycheck on junk food, booze or drugs. The perception that these jobs don’t pay enough is based on a skewed perception without regard for those who have to come up with the added revenue to cover the costs.
“There is nothing except shortsightedness to prevent us from guaranteeing an annual minimum and livable income for every American family.” – MLK”
This was a lie then and it’s a lie now. There is something to prevent “guarantees” of that nature. This thinking assumes a one size fits all reality for both worker and business. It assumes that every business can generate what some uninterested, bureaucrat, far, far away decides the business can afford.
Automation will work for some small businesses as a solution to this business problem…it won’t work for all. It certainly won’t work for mine. At the current rate my business must generate about $130,000. 00 a year just to pay employees. (Not including owners). Add another $40 or $50K for overhead and then I can start purchasing parts to keep those workers busy. In my business there is no way to advertise to increase sales. How easy do you think it is to generate that kind of money year after year? Then imagine the government coming along and throwing a monkey wrench into the budget. This government has done that again and again. Now Brow, who admits this doesn’t work, is determined to buy votes again…to hell with the employers and to hell with the people who have fewer entry level options.
Do you have even a modicum of understanding about what this will do to millions of small business owners, most of whom rely on their businesses to feed their families? This isn’t big corporate America you are hurting. It’s middle America! And it’s the poor!
And please do not be mistaken. I think mass demand of higher wages is theft, pure and simple. I don’t think anyone should “wait around” for a raise. I think if we’re to remain free, every citizen should be taught that he needs to work and strive to get ahead and that getting a raise is incumbent upon him. He must acquire better skills, work his way up the ladder, start his own business, and always, always, act like a grown up and discuss raises with the person who pays him.
The government is forcing business owners to pay for inferior as well as superior work. Hard workers are getting screwed and the ones who are unreliable get a free ride. In the mean time, there will be fewer entry level jobs.
“…they’re working to achieve this noble goal, the same goal that has been fought for by some of America greatest heroes–is extremely insulting.”
Your romantic notion of the noble worker is insulting. The people standing on picket lines today are no Norma Rae! They are political animals paid to bring this issue into the main stream so Democrats can claim “will of the people.”
More Common Sense, you raise some good points.
That said, where are the peer reviewed studies showing that minimum wage increases hurt employment and small businesses? I’ve seen many that show minimum wage increases have little to no effect on employment, but the theory that raising the wage causes higher unemployment and hurts small businesses seems to be just that: a theory, with little real world support.
Little real world support? HA! Try the vast experience of thousands and thousands of small business owners who KNOW that if their employment costs go up they will not be able to hire as many workers and/or they will need to raise prices to the consumer to cover their added costs. And those costs are not limited to the dollar amount of the raise. Their cost also includes increased FICA and workers comp.
Oh, but those business owners don’t count; only egg head studies count.
But wait a minute…even egg head studies, including those made by the CBO, do support the notion that jobs are lost when wages are artificially raised by the government.
There is also the real world experience in Washington state:
Then there’s a little item in Forbes…quite enlightening…that shows the argument in favor is political and untrue:
Or how about this: Try a little common sense. Yeah, I mean actually think about it for a change! Especially since you claim to care about people:
Once again Chris, you’ve been duped by your party’s specious rhetoric.
Re : “Once again Chris, you’ve been duped by your party’s specious rhetoric.”
Once an indoctrinated puppet, always an indoctrinated puppet.
Tina, you complained about me relying on “egghead studies” instead of anecdotes from small business owners…
And then you went on to cite a number of “egghead studies.” But a small business owner once told me that raising the minimum wage would help her business, so according to you, I should listen to her and ignore all the evidence collected by those “egghead” economists. Right?
It really disappoints me when you engage in this anti-intellectual nonsense–you clearly don’t actually believe it, since you are more than willing to cite studies when they say what you want them to (or when you think they do), but immediately dismiss those that come to a different conclusion–and you rarely challenge the methodology used, just the conclusion. It’s hypocritical.
I’ll try and respond to the specific studies you cited tomorrow.
“And then you went on to cite a number of “egghead studies.”
Yes, after you dissed the idea of “real world experience.”
I wrote: “Oh, but those business owners don’t count; only egg head studies count.” And then I wrote: “But wait a minute…even egg head studies, including those made by the CBO…”
Keep it in context, please.
Chris: “a small business owner once told me that raising the minimum wage would help her business”
Unless you (Or she) can tell us how it would help her business this information is useless to the discussion.
Try telling me exactly how a business, forced to increase it’s employee expenses, can continue without making changes. Especially those small food and restaurant stores that survive on meager 2-3% profit margin.
Profit margins of the restaurant industry overall is a low-margin business that doesn’t have much spare cash in the till. The average profit margin for the whole industry is just 2.4%, according to Capital IQ, and that’s down from 3.2% in 2009, which is when the recession ended.
Three points: 1. I am not against relying on studies entirely and I’ve said in the past they have a role to play, 2. I am against dismissing entirely the experiences and knowledge of people who, in this case, actually meet payrolls and have a bottom line, and 3. I also cited the Seattle experience and an article in Forbes taking on the left political mythology. In terms of “the real world,” I think I covered the bases pretty well.
Tina, did you read the CBO report you linked to in full? It offers more support for raising the minimum wage than against it.
The report you linked to says:
Effects of the $10.10 Option on Employment and Income
Once fully implemented in the second half of 2016, the $10.10 option would reduce total employment by about 500,000 workers, or 0.3 percent, CBO projects (see the table below). As with any such estimates, however, the actual losses could be smaller or larger; in CBO’s assessment, there is about a two-thirds chance that the effect would be in the range between a very slight reduction in employment and a reduction in employment of 1.0 million workers.
Estimated Effects on Employment of an Increase in the Federal Minimum Wage, Second Half of 2016
Many more low-wage workers would see an increase in their earnings. Of those workers who will earn up to $10.10 under current law, most—about 16.5 million, according to CBO’s estimates—would have higher earnings during an average week in the second half of 2016 if the $10.10 option was implemented. Some of the people earning slightly more than $10.10 would also have higher earnings under that option, for reasons discussed below. Further, a few higher-wage workers would owe their jobs and increased earnings to the heightened demand for goods and services that would result from the minimum-wage increase.
So you’re talking about an unemployment effect of about 500,000 workers, while at the same time increasing incomes for 16 million workers. Those are acceptable numbers to me.
There will be costs and benefits of any policy, and there will be winners and losers. According to the CBO, raising the wage would produce far more winners. This would in turn help the economy by increasing demand, which has been low since 2008, ultimately creating more jobs for those unemployed.
I haven’t read through the other studies you linked to yet. Do they take into account the costs and benefits of raising the wage, or do they only discuss the employment effect? Without taking into account the benefits as well as the costs, simply pointing to (small) increases in unemployment isn’t very helpful. Especially since in today’s economy, with real unemployment at a five-year low, raising wages is what we should be focusing on rather than unemployment. It isn’t 2009 anymore, but conservatives seem to be stuck there; we’ve made huge strides in the employment rate, but the economy still isn’t doing great because those jobs aren’t paying what they used to.
A better question is, “Did you read it?”
Good heavens Chris, 500K to one million jobs is nothing to sneeze at for young people hoping to get an entry level job!
Increases in pay for 16 million is just as ify as the guestimate of 500k (which they said could be a million).
How many people who got raises said their hours were cut or they made too much with the raise to get food stamps so they preferred fewer hours? Or the revenue and jobs lost in Seattle when businesses simply pulled up stakes and moved out!
Changes have consequences. You don’t get to pick and choose the consequences to satisfy your need to help people. The ones who are hurt, including the businesses, matter too.
The best answer is a better economy and more good jobs. We won’t get there by imposing greater burdens on the small businesses that provide entry level workers with a “shot” to gain some experience and then move up the pay scale.
The Seattle City Council raised the minimum wage to $15 last year to the cheers of the unwashed. And about 3 months later, the Council was complaining that businesses were MOVING OUT of Seattle due to their action. OOPS!
Now you’d think that the departure ALREADY of so many businesses from Taxifornia (about 3000 per year) would at least be discussed by the minimum morons, but evidently not.
So go ahead and pat yourself on the back, Moonbeam, for driving even MORE businesses from Taxfornia! That rumbling sound you hear isn’t an earthquake – it’s the sound of moving vans . . . . .
J the most frustrating thing is that simple common sense should make this a no-brainer.
News this afternoon clarified this story. Apparently this was to be a referendum bill that the unions would get on the ballot. Old Moonbeam didn’t want the voters to decide. He and the legislators are attempting an end run on voters by getting this passed prior to the election.
I guess it’s a done deal with the Ca legislators voting along strict party lines ‘s:
Well as long as the unions (and the states and feds tax coffers) win, who cares what happens to the average small business, the minority entry level worker, the prices we pay for goods and services, and the economy in general. Coercion by any other name still stinks!
Jerry Brown just admitted that the minimum wage laws will hurt the economy and businesses but argued they are “morally” the right thing to do. If he really thinks that why doesn’t he just follow the ideal, seize all businesses and declare state control over the means of production and worker compensation?
What is being done is both morally wrong and economically stupid IF the Governor truly wants people to have opportunities to work. It is both morally wrong and economically stupid IF he gives a damn about freedom, individual effort, and a strong, vibrant, innovative populace.
Tina, I also am not in favor of dismissing the experience and opinions of small business owners.
Does it matter to you that most small business owners appear to disagree with you?
The survey of 1,000 business executives across the country was conducted by LuntzGlobal, the firm run by Republican pollster Frank Luntz, and obtained by a liberal watchdog group called the Center for Media and Democracy. (The slide deck is here, and the full questionnaire is here.) Among the most interesting findings: 80 percent of respondents said they supported raising their state’s minimum wage, while only eight percent opposed it.
https://www.washingtonpost.com/news/wonk/wp/2016/04/04/leaked-documents-show-strong-business-support-for-raising-the-minimum-wage/?tid=sm_tw
Two out of three small business owners (67%) support increasing the federal minimum wage and adjusting it yearly to keep up with the cost of living. The strong support for a minimum wage raise is particularly striking since the small business owners are predominately Republican. The poll was conducted March 4-10, 2013 by Greenberg Quinlan Rosner Research on behalf of Small Business Majority. The minimum wage, now $7.25 an hour, was last increased in 2009.
http://www.businessforafairminimumwage.org/news/00335/national-poll-small-businesses-support-increasing-minimum-wage
The federal minimum wage was last increased five years ago to $7.25 an hour in July 2009. This new nationwide telephone poll of small business owners with employees finds strong support for increasing the federal minimum wage to $10.10. A striking 61% of small business employers supports increasing the federal minimum wage in three stages over two and a half years, and then adjusting it annually to keep pace with the cost of living. This finding is higher than reported in previous small business polling, indicating growing support for a $10.10 federal minimum wage.
http://www.businessforafairminimumwage.org/sites/default/files/BFMW_ASBC_Minimum_Wage_Business_Poll_Report_July_2014.pdf
Do you think your position disrespects the opinions of the majority of small business owners, who support increasing the minimum wage?