Civil Discourse Now

Where the far left and far right overlap for fun and enlightenment

Abdul: to raise the minimum wage would benefit those who work; most wealthy heirs "game" the system.

   My friend Abdul-Hakim Shabazz blogged yesterday about poverty and economic mobility in the context of his experience as a tutor when he was an undergrad. The upshot was some people want the work done for them—they want the minimum wage raised and a social safety net in place for those unable to meet life’s basic needs.
   I understand Abdul’s belief that people should work hard and earn what they need. I agree there should not be an incentive for people—or other entities—to work the system. His focus should not be on those who seek to raise the minimum wage. People who work for minimum wage sometimes work more than one job to make ends meet. According to the United States Census Bureau, over half of all American workers make less than $550 per week. We have swapped out high-paying jobs for jobs that do not pay very much. Sixty percent of the jobs lost in the last recession were mid-wage jobs, while 58 percent of the jobs that were gained were low-wage jobs.
   The very rich can afford the luxury of lobbyists to protect the wealth of the very rich. They have enjoyed the years since Ronald Reagan was sworn into office, on January 20, 1981, and the gap of wealth began to skew ever more toward those already privileged. Loopholes in tax laws have been created. One class of business people we should eschew, hedge fund specialists, actually have tax benefits as they purchase and dismantle businesses. What the corporate-owned media came to call the “death tax”—i.e., the estate tax—a tax that left-wing commie President Theodore Roosevelt—oh, that’s right, he was a Republican—saw as a means of providing greater equality, was eliminated. Most people do not have to worry about estate taxes, as they possess far less than the one-time exclusion of $625,000.00.
   An increase in the minimum wage is one means by which we reward those who work. As President Obama said a short time back, a person who works full-time should not live in poverty. Abdul characterizes the argument for a raise in the minimum wage as advocating “someone who flips a burger should be paid the same as someone who built the franchise.” That is not what I believe—or anyone with whom I have spoken about raising the minimum wage.  On the other hand, I do not believe we should structure tax codes in order to protect inherited wealth so that fourth- , fifth- and sixth-generation heirs of people who built a successful enterprise need not worry about work. I have been to parties in Lake Forest. Conversation usually was not about how to start great enterprises or how to improve the human low.
   The notion that a raise in the minimum wage will cost jobs is not true. According to the Center for Economic Policy Research, 13 States raised the minimum wage last year, and all but one saw jobs increase at a rate greater than the national average. This is consistent with a 2013 report from Goldman Sachs. These jobs are not necessarily low-wage jobs. Washington State saw an increase in jobs from small business.
   A great many corporations pay no income tax. Those people who flip burgers pay withholding taxes. Sometimes the people on the grill or the counter get refunds on their taxes. Those people spend that money in the local economy. The people who own shares of the corporations can afford to hire lobbyists to write laws to minimize the repercussions of taxes. That money gets invested, often in corporations overseas. At the same time, those corporations use the infrastructure built by the working poor and the fast-fading middle class to increase profits. The shareholders complain that those who want more money are simply whiners—as the shareholders push for more laws to benefit themselves at the expense of the greater percentage of Americans.
   My sincere fear about a surplus in an Indianapolis budget is the people who believe themselves entitled will swoop in and take any spare penny. I do not mean people who seek an increase in the minimum wage. Those folks are too busy earning a living to attend city-County Council meetings. My fear is of the Irsays, the Simons, and now whatever family names own the Indianapolis Motor Speedway, nailing, like hawks on field mice, any spare dollar soon-to-be former Mayor Greg Ballard manages to obtain as a “surplus.” For years, IMS took a pass on public dollars. Then the whole CART-IMS split took place. The stands were not filled. The Hulman-George legatees probably saw what the Irsays and the Simons have done and said, “Why not us, too?” I believe Ryan Vaughn moved from the Mayor’s office over to the Sports Corporation right as the Sports Corp’s head moved over to—IMS.
   So, Abdul, I would say to those rich people who want their inheritances guaranteed—the main reason for the last big City bonus to the Pacers—and who do not want to put forth the effort of work: get a job. Maybe if Jim Irsay flipped burgers, he would have been too busy to pop so many pills. He certainly would have had a greater appreciation for what it means to work.
   As one final note, I never have flipped burgers. I mucked out barns.  I dug ditches. I baled hay in heat near one hundred degrees. I crawled through air ducts in a factory that manufactured brake pads made from asbestos. I also waited tables, for a short time before law school, in Castleton. The air ducts and the asbestos were easier to handle than a table of people from Carmel whose orders never could be correct, who all wanted separate checks, and had no idea a server paid taxes as though the server’s tips were eight percent (8%) of the server’s total sales so stiffing that server—who was paid $2.01 per hour otherwise—really meant the server paid a penalty for the pleasure of waiting on those tables occupied by people who really feel entitled.

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Comment by Paul K. Ogden on September 19, 2014 at 7:49am

"The notion that a raise in the minimum wage will cost jobs is not true. According to the Center for Economic Policy Research, 13 States raised the minimum wage last year, and all but one saw jobs increase at a rate greater than the national average."

Did they teach Economics at DePauw or Wabash or wherever you went?  First, you're looking at ALL the jobs in the state when you say it's not costing jobs.  You have to look at the lower end jobs that are affected by the increase in the minimum wage.  Did they increase or decrease?   Second, just because overall jobs increase doesn't mean that the increase in the minimum wage didn't cost jobs.  When we are in a period of job growth, increase in the minimum wage may not stop that job growth.  It doesn't mean though the number of jobs wouldn't have been more without the minimum wage. Third, let's talk basic economics, Mark.  So raising the minimum wage from $7.35  an hour to $9 won't cost jobs?  How about $10, $15, $20, $25.  Heck there was no limit on your let's make the minimum wage $50 an hour or a $100.  You said it wouldn't cost jobs.  But at some point, even you would admit that, yes, raising the minimum wage does cost jobs.

Basic economics says that if you raise the price of something, you get less of it.  You really think that employers aren't going to automate fast food restaurants as they have in Europe?  You think an employer will automatically pay employees at the bottom of the scale more money even though their skills and work habits are so poor that they barely justify being paid the minimum wage.?  You don't think those employees will lose their jobs and/or have their hours cut?


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