Support the Minimum wage increase



#1 Dan Daily on 09.30.14 at 8:19 am

Looks like you can tell what you’re voting for. The city attorney can’t manipulate the ballot language. I don’t see Events Center, Indoor Olympic Pool, Indoor Tennis, or any sort of indoor temples subject.

It’s safe to go to the polling place again. Careful, you may get citations and 20 years harassment.

#2 Sy on 09.30.14 at 11:01 am

I bet many of you would like to see the wage even higher, say $20 an hour or $40K a year. Then everyone could afford to live, eat, drive, play etc. Sounds enticing right?

Well, the last time our Government raised the minimum wage was from ’07 to ’09 eventually landing at the $7.25 federal minimum it is today. Moreover, they also decided it was time to include territories like American Samoa, where up until that point the tiny island had an average wage of $3.26 per hour in one of it’s primary industries: Tuna canning. The average Samoan worker made about $12K a year. Their economy is very communal and very reliant on the few industries they had. The mandated bump would be equivalent to a $20 an hour min. wage in the continental US.

What happened was the laws of economics kicked in, mainly that increasing prices on anything, including labor reduces demand. Starkist laid off workers, cut hours and benefits, and froze hiring. Chicken of the Sea shut down completely by 2009 and those were the two major players in the industry. Unemployment went from 5% to 35%. Inflation adjusted incomes fell 11%. Their economy was essentially decimated, as the Governor of the Island testified the following before Congress:

“We are watching our economy burn down. We know what to do to stop it. We need to bring the aggressive wage costs decreed by the Federal Government under control. But we are ordered not to interfere …Our job market is being torched. Our businesses are being depressed. Our hope for growth has been driven away…Our question is this: How much does our government expect us to suffer, until we have to stand up for our survival?”

There are a lot of tools in the toolbox to help out the working poor, many of which could have strong bi-partisan support if they could only see the light of day. Arbitrarily inducing costs on employers has been proven time and again to have the reverse consequences as to what it’s being pitched as “fairness” or “leveling the playing field” when in reality it drives job creators & investment capital elsewhere. One last point, the new Forbes 400 is out, you now have to be worth $1.4 billion to make the cut & their cumulative wealth has climbed to $2.3 trillion. Tax revenues to the Treasury are at an all time high of $2.7 trillion, yet income for the bulk of the country are stagnant and unemployment is down, but still above 6% and U6 (the real number) is still above 14%. The current policies of this Administration have been in place for 6 years and as predicted only those with the ability to move their assets around are doing well, much of it still buoyed by artificially low interest rates and Quantitative Easing 1, 2 & 3. Japan tried this same approach and it eventually cost them an entire decade of growth. Like the minimum wage debate, it may look and sound good reading the label, but when you open up the can it tends to stink like old tuna.

#3 l3wis on 09.30.14 at 12:48 pm

Comparing the entire diverse economy of SD to the tiny island of Samoa is silly. You should know better. While I do agree, some businesses will have to cut employees. But I think the only effect it will have on is the crappier restaurants in town will close, and that is not such a bad thing. Capitalism works best in a competitive market, and if some businesses can’t figure out how to pay a better wage and still make a profit, then they fail. That isn’t such a bad thing.

#4 Sy on 09.30.14 at 1:19 pm

Okay then L3wis, please cite for me the positive economic impact the last (or any) minimum wage increase has had in the on both employment & incomes in this Country & State. If it’s there it should be quite easy to find, should it not?

The point is the size and scope of the economy your trying to boost doesn’t matter. When employers see costs rise with no associated increase in worker productivity, they hire less and furthermore they tend to hire more skilled vs. new workers so it acts as a disincentive to hire a kid with no skills. That means more kids living in their parent’s basements, sucking their income vs. moving out and giving it a go on their own. This isn’t theory, it’s been proven time & again. When forced with this situation, the politician always assumes the market (ie businesses) won’t react the way any business has to: raise prices, which means your beer or burger costs more..and even if that’s across the boards it will still mean less people deciding to buy a burger or beer at a restaurant vs. eating & drinking at home. Yes that might mean the mom & pop diner will go under vs. Minerva’s, but when that happens it not only pushes those workers into unemployment, but it also means less competition overall which to your point means capitalism isn’t working best. It’s a vicious downward cycle that doesn’t have to happen if not for one party pushing the idea that a $10.10 or whatever minimum wage here and now will actually work as intended vs. what’s happened time & again, here and abroad when it’s been tried. Your not giving America a raise, your giving the American worker the shaft.

#5 rufusx on 09.30.14 at 5:26 pm

Sy – go check into what’s happened in SeaTac, WA – which raised its minimum wage to $15/hr. The same dire predictions you’re making were made in opposition in that community. There are reports that cite SPECIFIC business owners that claimed they’d be having to lay off 20-25% of their employees – and the ACTUAL results? Those same business owners have actually had to more MORE employees and EXPAND their businesses in response the to tremendous increases in DEMAND coming from so many people having so much more money to spend.

There you go – there’s your example.

#6 rufusx on 09.30.14 at 5:33 pm

Sy, here’s another ACTUAL macro-economic study of the historical impacts on employment resulting from minimum wage increases. Turns out the over all impact – vs. your single case and a LOT of unsubstantiated rhetoric – is pretty much NOTHING. I.E. -has NO EFFECT on employment/unemployment.

Fact based scientific conclusions – not rhetorical assertions. Truth – not “truthiness”.

#7 rufusx on 09.30.14 at 5:34 pm

Oops – forgot the link – here you go:

#8 rufusx on 09.30.14 at 5:36 pm

Here’s another ACTUAL scientific study:

I could post dozens more peer reviewed scientific studies – but I think it’s time you put up your own.

BTW – good luck with that.

#9 Sy on 10.01.14 at 8:59 am

Ruf, the SeaTac example is an even worse example than Samoa, which btw was examined over several years of the wage kicking in, not 8 months. The article itself states that it only impacted 1600 employees (he’s also lying when he says it didn’t impact the unions) and Milbank is gauging it’s success on construction projects and restaurant expansion plans that have had to been in the works prior to the wage increase being voted in. What he didn’t do was seek out (or he probably ignored) is the same demographic L3wis pointed out would get hurt, Mom & pop operations. As for Weyerhuaser, I’m sure none or very few of their 800 employees at the corporate HQ make the minimum to begin with and most likely Seattle lured them in with incentives and tax breaks that were much more significant. Historically, the growth of the Economy is when Mom & Pop step it up a few notches and start hiring a couple more employees and even though a national increase hits everyone what it doesn’t do is give mom & pop many options on how to mitigate the hit to their margins. They either eat it or they raise their prices, one reduces their take home income and the other is inflationary and causes a drop in business.

Also, if you look at the link above you’ll see scientific research along with the real world example of the Samoan economy that was cited before Congress so knock yourself out.

#10 rufusx on 10.01.14 at 8:55 pm

My anecdote is every bit as valid as yours.

THAT is why I posted the links to the macro analysis of hundreds of studies of minimum wage increases – which demonstrates- based on actual scientific analysis – that their real over all effect on unemployment is ZERO – NOTHING – ZIPPO, NADA.