Opinion Piece By Samuel Strait – December 17, 2016 – The minimum wage is but one of many problems for states like California.
Corporate tax, Federal and State, plus ever increasing regulation both Federal and State, rules and tax rates based on Urban problems and populations, the list goes on and on. The State puts up a good front, but it has for years been bleeding businesses and population. That coupled with the inability to keep up with the increased cost of social programs, “state public education” and years of nonsense passed through various propositions, I suspect that we no longer have the “will” to do anything meaningful.
When you look at the voting map of the US in the last election, it should be clear to everyone that Urban problem solving doesn’t do anything for rural populations. It requires two distinct and different forms of governing, although what is currently being practiced serves neither population very well. Until people and governments can get over the idea that being successful shouldn’t put a government target on your back, there will be no successes.
I never met a poor man that was a benefit to an economy. Crony capitalism, which is being practiced wholesale is not an answer. Governments cannot truly regulate a functional economy. Sad to say, but they must have a little faith in the entrepreneur and give him some freedom to prosper. Hopefully he will also have a sense of responsibility along with that freedom.
Actually, the minimum wage will be $11.00 on January 1,2017 and $1.00 increase for the next four years. Even though government refuses to acknowledge it, States and Municipalities who are practicing the greater minimum wage are already experiencing job loss to automation and significant inflation, which has the negative effect of negating any wage increases. States like Oregon are trying the multilevel minimum wage bit and it doesn’t seem to do any better than with the problems revealed when Seattle tried the old $15.00 per hour minimum cold turkey. Of course, progressive governments will never admit it is a bad idea until they have ruined the whole economic system. Quite frankly some people are not worth $15.00/hour.
I think most smart businesses will say the minimum wage hike was a factor, but it pales in comparison to the costs of State and Federal regulation. Corporate tax, which corporations pass on to their customers, is another big thing. The final straw is not necessarily the wage hike itself, but all the other regulated costs to the employer that must be paid. Not a pretty picture for any incoming administration to overcome. A local business with say ten employees, will be faced with coming up with $200,000 to $300,000 more in 2017, just to keep those ten employees, employed. I shudder to think how it will effect some business owner who quite rightly expects to turn a profit on his or her investment. If you can find some crack pot economist who thinks that raising the minimum wage is a good thing, I’ve got a bridge for sale…….. History just simply does not support raising the minimum wage as a good thing.
As far as our municipality creating our own sliding scale minimum wage, not with the current State law in place. State law would open our town up to any number of lawsuits. Maybe the creation of a State sanctioned enterprise zone is the only thing I can think of, but do our elected officials have the will? They would have to seek some kind of zone that makes it better to engage in private sector business here rather than twenty miles up the road. It would mean giving some kind of tax and regulatory holiday which I don’t see the City or the County being able to swallow in their current financial condition, particularly the City. Honestly, I’ve had this in the back of my mind ever since all three of my children had to bolt California for greener pastures. Taking the minimum wage back down would only be a very small part of the solution. It is not going to be a task for the faint hearted.
6 thoughts on “The problems with increasing the minimum wage”
My first job after high school was in a machine shop and started at six dollars an hour. The minimum wage was $4.25 (1996). I took night shop classes at the local community college while still in high school in order to earn this wage premium. After two years I was paid nine dollars an hour by the same shop. The minimum wage had increased to $5.75. At the time there was a push for a ten dollar minimum wage. The shop ran on thin profit margins to stay competitive with foreign trade and the boss paid me as much as possible to retain my talent and stay in business. If forced to pay ten dollars to a lower skilled worker then he would never have been able to hire a new machinist for training and advancement. There is a place for low paying jobs and they are not meant to provide a living as much as to provide experience. As an employer today, if I had minimum wage earners facing a mandated increase, I would say ‘The state has declared you to be 10% more productive each year; you must rise up or I can’t afford to employ you.’
Samuel, Your disertation on minimum wage increases is as usual~ flowery language & false facts. You must have exceled in English & not too well in demographics, economics & science California is not “bleeding population or business” as you contend. Cal is on the forefront of carbon control & innovate methods of water shortage solutions. Ever hear of Elon Musk or the Silicon Valley? You should consider a little research before writing one of your pieces of wisdom. As to personal insults to my reading & writing abilities~they are fair enough to have been employed with an international musician’s newspaper in SF, acquire 270 major university credits, study law w/ a Federal Administrative Law Judge. Plus a few other things. Sorry to be nosey, but what credentials do you have to exhibit such authoritarian ideas? Other than being a DJ at KFUG, of course. Any statistics on listener #s?
Lin, I must admit that your recent effort at critique was most amusing. Dissertation huh? I haven’t heard that word in awhile. Flowery language and false facts, I am not sure very many people would agree with you on either assertion. As far as the excelled in English bit, not very likely. I am quite sure that a few of my former professors might just have a bit of an issue with that characterization.
I can help you out a bit with the “bleeding businesses and population” by directing you to California’s very own government web site. After that you can do the same kind of data mining that I did and will likely see that California has a problem that will only get worse following the full implementation of the minimum wage hike. I can guarantee that it will do no private business in Del Norte County any favors or the wage recipients.
From there on you seemed to have jumped the rails. The demographics are the State’s own, valid or not, I’m just repeating them. and economics are not rocket science. When you throw in a little history, even limiting it to the United States, the economics by the government of arbitrarily raising the minimum wage hasn’t worked out all that well for us “great unwashed”. The only people that make out are those that already own their own homes and aren’t troubled at all by inflation.
I am not sure if you do not understand that California’s love affair with carbon control is not a good thing for most of its citizens. If the technology existed right now(the important part), AND COULD BE HAD ECONOMICALLY, you would have a very good argument. But, the technology that can be reproduced right now is very expensive and it will be for sometime. Raising the minimum wage will only delay that technological advancement by reducing capital investment for research and development. Neither carbon control nor innovative methods for water shortages, which California doesn’t seem to be making much head way on solutions, will be aided by a minimum wage hike.
Yes, I am acquainted with Elon Musk and Silicon Valley. In fact, I have a nephew who works for Mr. Musk at SpaceX in Texas, by the way. I fail to see just how this makes anything in my opinion piece false or is even related to this topic. His science and innovation may be cutting edge, but he is a ways from producing anything that will help the minimum wage earner.
My background is most certainly not in journalism or English. Try Physics, Mathematics and a few other assorted sciences, with a little dabble in the History of Sciences, actually a fairly big dabble.
During that time period, I was faced with numerous pronouncements about my writings which you would find highly offensive. The comments that I have made regarding your efforts pale by comparison. For me it was a matter of restraint and learning from my mistakes. I once had a professor who did not work in my department but made a comment about academia that went something like this. “I have no respect for the academic pedigree of a person until they set forth in the world and truly make a mark”. Trotting out your academic pedigree in even the most obscure fashion never worked for me, as there was always someone that had an even more impressive pedigree. This may come as a surprise to you, but I may just be such a person.
If you have the courage of your convictions, you will be my guest and come on my radio program, Sunday’s 3 to 4pm at the KFUG’s studio and you may satisfy your curiosity about my credentials sometime in January. I actually do not play music and generally have very polite and civil conversations with my guests even if I do not necessarily agree with them. In most cases it is a learning experience for both myself and my guest and controversy is not my object. My goal is to create discourse in order to find workable solutions for our local issues. The minimum wage hike is just such an issue, which will not help in this County. This is primarily why I have invested the time and extensive reading into this topic. I was, in the dim recesses of my past, a halfway decent researcher, both in the United States and abroad. If only there was a marketable job in the rather obscure area of which I have a more than passing knowledge.
Finally if you must feel offended by my comments, I humbly apologize. It is not my intent to demean, merely to offer another view. I trust you will continue to offer comments on the CCTimes website and might be emboldened to offer your own opinion piece for publication in the future. Best wishes on any of your future endeavors, and hope you will take the opportunity to satisfy your curiosity some Sunday afternoon.
If I had a magic formula to solve America’s financial problems, it would likely include the following:
– Ensure all students get the best possible education with all materials and supplies included, at no cost to parents.
– Change the criminal justice system to focus on treatment options, rehab programs and alternative sentencing options which would alleviate the burden on taxpayers for housing inmates.
– All students be offered opportunities to enter a work apprenticeship program as soon as they are able, with incentives for employers to participate in this programs. (This is how I found my first job that lasted 2 years in a fiber optical company)
– All cities in America would have subsidized transportation services for all Americans, through city operated transit systems. Everyone needs to be able to move around easily.
– Mandate suitable access to internet be available everywhere in America, a baseline service “basic access” free of charge. Much of rural America still is on dialup and slow DSL speeds, if they even have it.
– Create programs for vocational training, designed at regional levels for local industries, cost-free to those seeking work, so they can get get the proper training for the jobs in their area.
– Put tight controls on housing rentals where applicable (cost of rent far exceeds income levels in much of California, New York, et cetera
– Mandate that unused property belonging to cities that are unmaintained or abandoned be converted to temporarily safe locations for homeless populations, bringing in basic services and shelter options whenever possible. Every human being needs their basic needs met: Food, shelter, showers, laundry facilities, et cetera.
– Bring back the notion of Made in America. We really need to push this again.
– Pull out all of our troops in every country, effective immediately. (We only go into defense mode, never meddling with other countries again unless we have to.
– Stop trying to fix every other country’s problems. We have enough problems right here in America.
– Provide extensive disaster and other emergency preparedness training to all americans.
– Shut down all television networks and put everyone in jail who makes “Reality TV shows”.
There is much more I would do, but this is just a few things. I believe this would change our entire economy in just a few short years, for the better.
It is more of a necessity to reduce mortgages making home & property available to all citizens. Instead of saying, it can’t be done or this is the way it is….help to address it practically, diplomatically & as a human necessity. Thank you…then include ecology & finally if necessary the economy.
Are you serious? What kind of person believes that raising the minimum wage has any thing to do with reducing mortgages, or making a home or property available to all citizens. Inorder to have property or a home you must save what money you earn and when you have enough, you make a down payment, take out a loan and only then are you a home owner. Raising the minimum wage does not do that for you, you must have the discipline to save, and the sense of responsibility to follow through! Raising the minimum wage only hinders, or makes it more difficult for people to own their own homes, because inflation is the inevitable result of such practices. I fail to see just how addressing this practically, diplomatically, or as a human necessity has any thing to do with raising the minimum wage! Finally what has ecology have to do with this? As far as economics, it is the most necessary element in this whole conversation, for without one the minimum wage is just two meaningless words. In an economy that is functional, wage determinization is a product of the worth of the employee, not an arbitrary standard set by a feel good government. Government wage manipulation is a sure way to make things more costly, not more valuable. Please think before you respond, because you clearly do not understand what a minimum wage dynamic does in a sound economy.