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Originally Posted by Ustwo
Sometimes I wish some of you were trying to run a small business.......I haven't seen anything that would make me think he was wrong, as the concept of a minium wage is economially stupid.
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The concept of ignoring the will and the wishes of the majority of your constituency certainly parallels your description of the concept of a minimum wage......
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http://news.ft.com/cms/s/96d703f4-42...00e2511c8.html
Christopher Caldwell: Social logic of a living wage
By Christopher Caldwell
Published: October 21 2005 20:33 | Last updated: October 21 2005 20:33
........The economic case for a higher minimum wage looks strong at first glance. In the US, it was last raised in 1998. The minimum now pays only one-third of the average salary, at a time of rising energy and healthcare prices. As Mr Kennedy noted, a year of minimum-wage work leaves a single mother with two children thousands of dollars below the poverty line.
In fact, the economic arguments for a higher minimum wage are weaker than they look. But the political arguments are strong enough for leaders to cross them at their peril. Mr Kennedy's dramatic statistics do not capture the social reality of the minimum wage. Among those who get it, single-income families are a distinct minority. Half of minimum wage earners are under 25, according to US Bureau of Labour statistics, and one-quarter are teenagers. Many people have to take minimum-wage jobs; it is less clear that many have to stay in them. A person who spends six months loading the dumpster at a superstore, showing up on time, being polite, acquires a record for reliability that is a marketable credential. Removing that first rung on the career ladder could certainly spur unemployment.
Not that attacks on the minimum wage are particularly impressive on economic grounds. Claims that modest hikes would cost jobs - such as were made in the US during the Clinton rise, and in the UK when the minimum was introduced in 1999 - have been overblown. There is something self-contradictory about the twin rationales of the minimum wage's opponents. They see the minimum-wage workforce as minuscule for the purposes of measuring the gains (money for poor people) and vast for the purposes of measuring the costs (bankruptcies and job losses).
There is a larger narrative about how people are compensated in today's economy. It is recounted in a fascinating way by Frank Levy and Richard J.?Murnane, the Massachusetts Institute of Technology economists, who have long studied the gap between the well and poorly paid. In The New Division of Labor, just out in paperback from Princeton University Press, they examine the role of computers in creating that gap. For Mr Levy and Mr Murnane, computers are best at carrying out "rules-based tasks". Computers enhance the value of those engaged in "expert thinking" (thinking outside the box) and "complex communication" (interpreting information). But <b>they drive down the demand for people engaged in the rules-based work that used to support much of the lower middle class.</b> The results are a "hollowing out" of income distribution and increasing inequality. Low-paying rules-based jobs - various secretarial, computational and manufacturing posts - are candidates for either automation or outsourcing.........
....The authors find John F.?Kennedy's remark that "a rising tide lifts all boats" inapplicable in today's economy. The same processes that increase demand for skilled workers reduce demand for unskilled ones. One possibly dangerous consequence, they fear, is that the "haves" of the new economy may use the political clout that money buys to accelerate these processes. But that could set off a destructive reaction. "Our market economy," Mr Levy and Mr Murnane write, "exists in a framework of institutions that requires the political consent of the governed. People doing well today have a strong interest in preserving this consent. If enough people come to see the US job market as stacked against them, the nation's institutions will be at great risk."
There is evidence of just such a perception of a stacked job market. America now has a strong grass-roots political movement that is claiming a level of compensation that cannot be justified by the laws of supply and demand. <b>Last November, a Florida referendum to raise the state's minimum wage to a dollar above the federal one got 71 per cent of the vote.</b> The Association of Community Organisations for Reform Now was instrumental in the initiative. The group, which many dismissed a decade ago as a remnant of 1970s progressivism, is once again a force after campaigns in dozens of cities and states to pass "living wage" laws. One-third of states now have minimum wages above the federal level.
<b>This is not an economic but a political victory. It does not mean that, say, wrapping hamburgers is worth a dollar an hour more than we thought it was. But it may mean that social peace is.</b>
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Wake the "eff" up, Ustwo. The perception of voters in Florida, a state where a constant stream of low income families from other states, migrates to in search of "a better life", was that Jeb Bush and his republican party controlled legislature did not represent them in their pursuit of one of their most important issues. These voters went around Bush & co., by an overwhelming majority.
The writer of the above article, Caldwell, senior editor of the Weekly Standard, is one of you, and he "gets it." The minimum wage is a political issue. So was the bankruptcy bill. It was understood that it's passage into law, if it ever was to pass, was that an increase in the minimum wage would be a "quid pro quo", in exchange for the support of democratic party affiliated legislators for passage of the bankruptcy bill.
The republicans, combined with democrats whose votes were influenced by the thousands of new (and older) lobbysists who have come to Washington in the last five years, were able to pass the bankruptcsy bill while resisting the passage of the minimum wage bill.
Short term, the political cost of not passing the bill will probably be felt by republicans in the mid-term election a year from now. Longer term, as Caldwell mentions at the end of his article, the next step will be via other referendums that mimic Florida voters "end run" around their governor and their own legislative representatives, and eventually, via disruption of "social peace".
The surest way to experience the loss of "social peace" in America, and the associated costs of the collateral damage that the lack of "peace" will cause, along with the cost of attempting to restore that social peace, is to oppose an increase in the minimum wage that attempts to accomplish the same goals that congress intends when it votes to increase it's own compensation. People support the "peace" only as long as they are convinced that they have something to lose by ending their support for maintaining it.