Cruelty – Part One: The Minimum Wage – Guest Post

April 8, 2009 by admncc

Here at The Constant Complainer, in addition to my posts, readers can submit Guest Posts on topics they would like to complain about.  Neo Con Don submitted the below-Guest Post.  I stopped publishing extreme liberal and conservative Guest Posts a while ago, but love him or hate him, Neo Con Don has presented the facts as close to the middle of the road as he’s going to get, so he’s back, and without further adieu, here’s Don…

As a conservative, I spend time focusing on the least among us.  It is one of the core principles of the conservative movement, and fits nicely with the spiritual side of my life.  I became very frustrated when I saw the politicians try to use gov’t to “help the poor” by raising the minimum wage. For a politician in a sound byte world it is very difficult to explain opposition to an increase in the minimum wage, and the liberal media would likely not tell the whole story so the reader gets a chance to decide.  Add that to the poor education we give our children, and it’s easy for voters to think that an increase in the minimum wage is a good thing for anybody.  The minimum wage increase from 2 years ago has once again proved to be yet another cruel action against the least among us, and another piece in the puzzle of liberal failure.

Let’s take off our do-gooder hats for a moment and put on our business hats.  Business owners are in business to make the largest profit they can.  They are not in the business of creating jobs or providing health care.  All of that is part of the bonus plan when there is a quality product or service that solves a problem for its customers.  That is a fact that has been removed from our schools and politics.

Taken on the surface, it’s easy to say that ‘raising the wages of the poorest people can’t be a bad thing.’  If the lowest paid workers get paid a little more, they can buy more and start to get ahead.  Unfortunately, the opposite it true. While the intentions of the act are noble,  the minimum wage laws adversely affect the same people that they are  intended to help. To understand why, we need to know who is earning the minimum wage. 

According to the Bureau of Labor Statistics, 1.7 million workers earned wages at or below the federal minimum wage in 2007 representing 2.3 percent of the hourly workforce. Nearly half of them were 25 years old or younger, and three fifths of all workers at or below the minimum wage were in the food service and drink industry where incomes are supplemented with tips. These people earn much more than the minimum wage.

So who really earns only the minimum wage?  The answer is those who bring the least amount of value to the job they perform.  In many cases, it’s the young that are on their first job that need to be trained and supervised by a higher paid employee.  Hiring a new worker is very expensive and usually costs the business more money than they yield in profit.  Other earners of the minimum wage are the mentally retarded and physically disabled.  It is very important for these people to have jobs so they can have a greater self worth, expand their skills, and be less dependent on taxpayers and their guardians.  If the people that claim to care about these people force the businesses that employ them to pay them more, the businesses are forced to eliminate their positions and hire someone with the skills to at least break even.  What would be better for one of these individuals…earning $4 per hour and having a job that earns a profit for the employer, or forcing that employer to pay him $6 per hour and the employer looses money?  If that employer can’t raise prices high enough to cover the cost of higher wages and payroll taxes, he must fire that employee and employ a more productive one.  That is a lose-lose situation, and typical liberal cruelty.

Finally, let’s look at the logic behind the minimum wage argument.  There are two reasons the gov’t would be in favor of raising minimum wage.  First, it helps with re-election. Second, it brings in more tax dollars.  While minimum wage earners likely won’t pay federal or state income taxes, they will be paying the payroll tax which is approximately 15% of total earnings.  But the reality is that the tax system doesn’t operate in a zero-sum fashion.  President Kennedy proved that by lowing tax rates, more tax dollar are collected because of an expanding economy, and that raising tax rates, less taxes are collected and the economy shrinks.  President Reagan and President Bush 43 proved it again.

The result of the increase in the minimum wage has increased unemployment over all, and has caused the teenage unemployment rate to be 150% higher than the national unemployment average.  Wage increases occur with experience, so this high unemployment rate among teen will yield lower wages for them when they finally enter the work force. 

If increasing the minimum wage prevented people from being poor, why not make the minimum wage $8, or $10, or $50?  Why not tell every nation in Africa and South America to make their minimum wage $20 per hour and they will no longer be a poor continent. It just doesn’t work that way.

Walter E. Williams, an economist at George Mason University says that there are 4 easy ways to not be poor:

  1. Graduate from High school.
  2. Get married before having children and then stay married.
  3. Work any type of job (even one that pays minimum wage.)
  4. Avoid engaging in criminal behavior.

Let’s educate our young people on these 4 behaviors and get gov’t out of their lives…they’ll make more money and have a better life.

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  1. Dan says:

    Hmmm. I think you are a little misinformed. But still was an interesting read. I find that in many places, the minimum wage earners are entry level manual laborers. But interestingly, they have critical positions at some companies. I can’t imagine looking for a job in 2009.

  2. Dan says:

    In rereading my post, I was trying to convey that sometimes the low earners are your most valuable. Not always but it does happen.

  3. Chris says:

    Wait. “Avoid” criminal activity. I thought the only poor people were the honest ones. Just kidding! 🙂

  4. Jane says:

    I don’t know what to say to political posts sometimes. You are a good writer and certainly opinionated. But I wouldn’t say that I agree with the four points you outlined for success, especially in this economy. I’d like to see the research to support what’s behind Williams’ arguments.

  5. Sugar says:

    The list of “4 behaviors” is ridiculous. It sounds more like a bad recipe.

  6. We don’t live in a market economy and haven’t since the late 1800s.

    I don’t disagree with the four ways to not be poor, although it lacks real-world perspective. You also need to add — Don’t get sick or injured or have an addiction, as health care costs will likely cause you to go deeply into debt and you will be unable to own a home or obtain meaningful employment.

    At least the current safety net that Williams opposes — social security and medicare — would prevent someone in this position from being completely without assistance of any kind.

    Williams also knows better regarding the effects of the minimum wage. The Council of Economic Advisors, in its report to the President, concluded that there is no increase in unemployment from modest increases in the minimum wage. This is because so little of the American workforce actually is affected by an increase. And polls since its introduction show that most small business owners support the minimum wage.

    It’s the world’s largest companies — the ones currently taking trillions in government handouts — that have lobbied against the wage.

  7. Nick Burns says:

    I think that your argument here Don should be that our country shouldn’t have a minimum wage at all. The reason for that is that if you have a minimum wage, it has to be increased every so often. You cannot keep minimum wage the same for years and years because it becomes useless with the rise of inflation. So, if there is a minimum wage, it must be raised to counteract inflation. If you don’t raise it ever, it’s doing absolutely no good whatsoever and it might as well not exist anyway.

    Then companies would be free to pay their employees any wage they liked, which very well could lead to lower wages for everyone. So with that thought in mind, is it better to have a minimum wage than to not? I think so…but then again if there is a minimum wage, it must be raised periodically for the reason I stated before.

    It in a way is like the NFL and the salary cap. Most people believe that the salary cap is only to keep a ceiling on the amount of money teams pay the players. However this isn’t true. It also puts a floor, or minimum salary, a team has to spend on it’s players. There is a possibility that there may not be a salary cap in the 2010 season. The players seem to be ecstatic about it, thinking they’ll be paid boat loads of money since there’s no ceiling, however they don’t realize that it also means that some teams may choose to pay the players next to nothing because they don’t have to. Teams will make all kinds of money in the short term doing this, but will eventually lose fan base and revenue. A no salary cap system would not lead to a competitive sport or business. Just a thought.

  8. Tristan says:

    The four guidelines there are no doubt statistically accurate. Of course people can follow them and still be poor, but that doesn’t mean it is bad advice.

    I think calling Social Security and Medicare a “safety net” is a cruel joke. They are already unfunded because Clinton needed padding for his alleged “surplus” and since then W and the majority of those in Congress have decimated our economy by spending and breeding corruption. Medicare was projected to show a surplus of something like $80 billion last year and instead it was under $20 billion. This is going to run out much sooner than expected, and as tax revenues evaporate this will accelerate.

    As for minimum wage, I have much more faith in the market than I do in politicians. If a job pays too little, no one is going to do it. If a job pays too much due to government meddling, then as Don says, the employer will suffer and take it out on employees accordingly. Generosity and charity are not something that one can force upon another.

  9. NeoConDon says:

    You’re right Nick. I would certainly argue against any minimum wage at all if it were worth my time because a minimum wage really defines a maximum wage…just ask any union person about that. If I were an employer, I would not recognize the minimum wage and my employee’s wages would be tied to their production. They would also not have a maximum wage. But there’s no point since it’s here to stay.

    I guess I’m looking to a few years down the road where things may look a lot different. Suppose there is a new American Revolution. The new conservative states would likely not have a minimum wage. Your NFL argument would be a perfect example as to why there should be no minimum wage because it can only create a maximum wage…and a maximum wage is anti-capitalism.

    Sugar, I did not create the list, a George Mason Economist did based on a Nobel Prize winning Economist, Milton Friedman. If that looks like a bad recipe, I hope I never sit down at your dinner table…

  10. Extreme John says:

    I typically stay away from commenting on stuff like this for the simple fact I am soooo over opinionated. I will say I do agree with Tristan’s approach to the topic.

  11. Tristan says:

    I don’t know, you sound like a reasonable man to me, John…

  12. Bushel Bob says:

    Neo-conned Don is on the right track when he gives his ear to the economists at George Mason University, such as Walter Williams. These are the economists who know the difference between being neo-conned and free market conservatism – a difference as wide as that between the Founding Fathers and their Tory masters in England. I also recommend Loyola College Professor of Economics Thomas J. DiLorenzo, whose June 1994 article “Economic Fascism” in the Freeman is archived at . DiLorenzo explains that “an economic policy component of fascism, known in Europe during the 1920s and ’30s as ‘corporatism’ . . . was in fact adopted in the United States in the 1930s and survives to this day”. Back in 1994, DiLorenzo said “We are also contemplating business-government ‘partnerships’ . . . in the spirit of the European corporatist schemes of the 1930s”. In conclusion, DiLorenzo cautions “The state and its academic apologists are so skilled at generating propaganda in support of such schemes that Americans are most unaware of the dire threat they pose for the future of freedom”.

  13. NeoConDon says:

    I’d lay off the kool-aid Bushel Bob.

  14. Jackie says:

    Ways not to be poor; Don’t leave the military without a degree. In fact don’t leave the military any time soon the job market sucks and you are making at least $40000 a year. Don’t be to proud to take a job that pays 3 times less than what you used to make before you got laid off.

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