Minimum wage, maximum damage

Raising entry-level workers' pay would spur economic death spiral

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Do you like self-service kiosks?

Enjoy speaking to automated voice systems?

Rather interact with a touchscreen instead of a friendly face?

If so, call your elected representatives today and urge them to increase the nation’s minimum wage from $7.25 to $10.10.

That way, you can help accelerate the pace at which entry-level workers – those people most likely earning minimum wage – are replaced by machines.

As a bonus, you’ll also help class-warfare-waging Democratic politicians and their special interest groups achieve a symbolic but meaningless “victory.”

To envision what higher minimum wages would look like in the United States, take a gander at the slow-growth, high-unemployment European nations where labor markets have been overregulated for decades.

In France, for example, where the jobless rate exceeds 10 percent and the minimum wage equates to about $12.22 in U.S. dollars, McDonald’s operators have resorted to installing self-serve kiosks in all locations to cut labor costs.

France’s more prosperous neighbor to the east, Switzerland, apparently has had enough of artificial wage manipulations. An overwhelming majority of Swiss voters recently voted down a proposal to raise its minimum wage to about $17.60 in U.S. dollars.

The overwhelming rejection – the vote was 76 percent to 24 percent – indicates the Swiss do not view low wages as a problem, or at least not a problem for the government to solve.

“A fixed salary has never been a good way to fight the problem,” Swiss Economic Minister Johann Schneider-Ammann said. “If the initiative had been accepted, it would have led to workplace losses ... . The best remedy against poverty is work.”

Instead of taking a cue from the been-there, done-that socialist nations and implementing proven but less-populist measures to generate real growth in wages and employment, America’s leading liberals are pandering to low-income voters and labor unions with policies that eventually will drive the lowest-skilled workers to government assistance.

Then the death spiral begins as the formerly productive become dependent on the state and continue voting for wasteful policies until the entire system crashes, as it has at a municipal level in cities such as Detroit.

Seeing the writing on the wall, and perhaps not wanting to draw the attention of President Obama’s regulatory bureaucrats, some major U.S. companies have stopped fighting the minimum-wage hike and are shifting resources labor-saving technologies that reduce the need for low-skilled workers.

Restaurants such as Applebee’s and Buffalo Wild Wings are rolling out programs that let customers order and pay with a tablet. McDonald’s is testing a tablet program that would let customers customize their burger toppings.

“If the minimum wage goes up for everybody, it becomes a form of inflation for the entire industry,” acknowledged Panera Bread CEO Rob Shaich, who recently announced his 1,700-store chain is replacing cashiers with computers.

Smaller companies unable to absorb higher labor costs or make investments in technology could go out of business. The higher barriers to entry would discourage the formation of new businesses, reducing competition.

“With increases to health-care costs, higher taxes, more costly regulations, and now a dramatic minimum-wage increase, small-business owners simply can’t afford another excessive government mandate,” the National Federation of Independent Businesses’ Ashley Fingarson said.

The natural laws of economics have proved time and again that the key to boosting employee earnings is through increased productivity, not artificial wage manipulations.

Of course, if we want to go the artificial route, we also should be prepared to communicate with more artificial employees.

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bubbasauce
20689
Points
bubbasauce 05/23/14 - 01:32 am
8
5
Paying someone $15.00 an hour

Paying someone $15.00 an hour to flip burgers? Priceless!

Riverman1
84063
Points
Riverman1 05/23/14 - 04:36 am
11
1
Brown Bagging

A fried baloney sammich, slice of tomato with lots of mayo on toasted bread may not offer the social status of eating at McDonalds, but what the heck, the person who makes it, that being me, wasn't paid 90 bucks an hour or whatever it is.

ymnbde
9745
Points
ymnbde 05/23/14 - 06:14 am
8
3
it's really a tax on business owners

to make up for the government's incompetence at education
minimum wage jobs are for their victims
a good education is the civil rights issue of our time
and the government fills the role of jim crow and the kkk
robots do most of the work in making cars, cell phones
and at least some of the work in almost every product made today
the machines mentioned in this editorial have already been designed and tested
they work
and they will be implemented soon
and the government will denounce everyone involved
except the government- the cause of every calamity facing young black kids today
every time the minimum wage is raised, a black kid loses their job
go democrats! you have the soul of JB Stoner
and the charisma of John Kennedy... you would make Bull Connor proud

karradur
2854
Points
karradur 05/23/14 - 06:18 am
8
8
...

"The natural laws of economics have proved time and again that the key to boosting employee earnings is through increased productivity, not artificial wage manipulations."

Whoever wrote this editorial literally just made that up.

If the minimum wage was tied to worker productivity, it would actually be, at the very least, $16.54 an hour, and at the very most, $21.72 an hour.

But don't let that stop you.

http://www.cepr.net/index.php/blogs/cepr-blog/the-minimum-wage-and-econo...

http://www.epi.org/publication/lagging-minimum-wage-reason-americans-wages/

http://www.cepr.net/documents/publications/min-wage1-2012-03.pdf

ymnbde
9745
Points
ymnbde 05/23/14 - 07:10 am
8
4
karradur, it isn't rocket science, it's political science

only a few economists predicted the housing crisis (they're extremely wealthy now)
if you add burdens or costs to a system, any system
and don't get a corresponding increase in output
that system will fail
that isn't rocket science
big government has harmed and killed more people in the last hundred years than any group of people in history
and like muslim terrorists hide in mosques to prevent their enemies (us) from killing them
democrats hide behind the poor uneducated (democrats made them poor and uneducated) black kids who just want to work
the policies of democrats harm all people, but young black people more
any defense or complicity with that is reprehensible
and you are defending and complicit in that
ignorance is no excuse

karradur
2854
Points
karradur 05/23/14 - 07:13 am
6
7
@ymnbde

Your posts never make any sense.

gaflyboy
4830
Points
gaflyboy 05/23/14 - 07:57 am
8
4
We often hear ...

that minimum wage increases will cost jobs and that's true.

What we don't often hear is that a minimum wage increase drives up the cost of living. Businesses paying artificially more for labor have to increase prices to stay in business. This negates the "raises" that low income people earned and lowers the standard of living for all those who had already worked their way up.

Phony manipulation yields phony results.

KSL
129740
Points
KSL 05/23/14 - 07:58 am
8
5
They do to the reader who has

They do to the reader who has sense.

Little Lamb
46022
Points
Little Lamb 05/23/14 - 08:00 am
8
4
Thin Air

karradur posted:

If the minimum wage was tied to worker productivity, it would actually be, at the very least, $16.54 an hour, and at the very most, $21.72 an hour.

No one, anywhere, ever posited that the minimum wage is or should be tied to worker productivity. The minimum wage is a strictly political idea, and a bad one at that.

Do away with it altogether.

ymnbde
9745
Points
ymnbde 05/23/14 - 08:11 am
8
5
karradur, when a child puts away childish things

and becomes an adult, the world makes sense
anyone can paste democrat talking points
it takes a certain level, a minimum level, of cognitive ability
to see the relation between input costs and output benefits
you pasted things that make sense to children
every time the minimum wage has been increased, the unemployment rate for young black people has also increased
you are being manipulated by racists
and you make it easy for them
and there is, actually, something wrong with that

ymnbde
9745
Points
ymnbde 05/23/14 - 08:12 am
8
3
but you can read Basic Economics

by Thomas Sowell, (my goodness and he's black just like O)
and it will all make sense...

Bizkit
31475
Points
Bizkit 05/23/14 - 08:45 am
6
3
Wow Karradur those articles

Wow Karradur those articles state minimum wage should be between 16-18$/hour so lets see 40 hour work week, 52 weeks, which is 33K-37,000 a year salary-dang pretty good for minimum wage. If they raise the minimum wage there will be a huge disparity for those who are now working with college degrees and making that income-so a kid out of high school making minimum wage would equate to college degree educated adult in a crappy low paying teaching job, business, etc. The national average income is 37K. I've heard the average starting salary for faculty at Paine is in that range-and now they are being furloughed making even less. Why stop with the minimum wage and demand a raise for everyone so everyones salary will be more fair?

ruleoflaw
209
Points
ruleoflaw 05/23/14 - 08:43 am
8
3
Minimum wage is for unskilled labor

At least six things will happen with a forced increase in minimum wage:

1. Increased competition for those minimum wage jobs from the skilled labor force, resulting in increased unemployment for unskilled workers, particularly young black males. Employers who want to hire them often can't, since the minimum wage forces YBMs into competition with higher skilled workers. Elimination of the minimum wage would provide incentive to hire them and allows them to develop the work skills and OTJ training, making them more competitive in the job market.

2. Increases likelihood of outsourcing to other countries, where wages are more advantageous.

3. Reduction in workforce through automation. Increased wages make automation and machinery more competitive and decrease the time to pay back the capital investment in these technologies.

4. Businesses will move more full-time jobs to part-time jobs to compensate for increased wage costs which will allow them to reduce benefits like health care and 401K matching. i.e. the employees will pay the costs.

5. Labor with wages set to minimum wage indexes, like unions, will see a corresponding increase in their wages, increasing costs for employers which will drive up final prices for consumers, or accelerate offshoring of production and jobs.

6. Reduction in the dynamic nature of the minimum wage workforce. Minimum wage is meant to be a starting wage to allow development of experience and training, which allow upward mobility of the worker. Increase minimum wage increases the time a worker will spend in the job, which reduces chances of unemployed workers to enter the market.

Businesses will not bear the cost of this regardless of how we legislate minimum wage. Costs will be passed on to the workers, or to the consumers.

I could go on and on about this, but the big irony is that the ones the proponents of this increase say they are concerned about are the very ones this will hurt. YBMs and other disadvantaged people need an opportunity to show their value, develop job skills, and be trained to succeed. Increased minimum wage will price them out of the market...

ruleoflaw
209
Points
ruleoflaw 05/23/14 - 08:48 am
6
2
LL, I agree completely

The nature in business is to get more value for something than it costs. In the case of labor, a business wants to make its workers more productive at the same costs, which increases their profitability. This is why when either machinery costs go down, or wages go up, businesses are incentivised to look to automation as a means of increasing productivity, which reduces unskilled labor and creates skilled labor needs in order to maintain systems and equipment.

Bizkit
31475
Points
Bizkit 05/23/14 - 08:56 am
7
2
Maybe raising the minimum

Maybe raising the minimum wage would be good because low skill low education labor can just stay in that position with no need for college or upward mobility. Why waste your time with the American dream? This will save a lot of parents the huge cost of educating their dummy kids only for them to not find a job or find one at 33-37K a year (and can't pay back their student loans). This will eliminate the pressure for skills and an education in our youth. I think they should raise to $16/hour for one year as a pilot study to see how it plays out in our society.Everyone makes predictions one way or the other but the only way to really find out is to try it-my bet it will frustrate educated skilled workers with low pay, employers will either raise the price of their products or hire fewer staff, and it will increase the wealth disparity of the nation (yeah you'd think the opposite).

Bodhisattva
6214
Points
Bodhisattva 05/23/14 - 08:50 am
6
8
"No one, anywhere, ever

"No one, anywhere, ever posited that the minimum wage is or should be tied to worker productivity."
No, we should just return to slavery. A much more economic friendly system, for the slave owner. We should expect workers to more than double their productivity (do the work of more than two people), be faced with inflation (if the minimum wage had kept up since 1968, it would be $10.90, BUT the inflation rate was changed by Greenspan and Newt in the 1990's. They pulled tricks like, in figuring the "basket of goods", substituting hamburger for steak, counting a package of coffee the same even though it shrunk from a pound to 13 ounces, and statrted counting that people would buy store brands instead of name brands to fudge inflation numbers and cheat the dickens out of people on Social Security. Thanks again GOP for caring for our elderly) SO, really, the minimum wage has nowhere near kept up with inflation. Meanwhile profits, stock prices, and CE) salaries keep hitting new records. Make a law where everyone has to work at minimum wage. No pulling from savings. That's all you get. The jerks who act like these folks are living large will shut their mouths in a heartbeat. Mainly because they won't have any food to put into it. They also won't be able to afford a place to live or transportation. A bunch of disgusting jackasses who think it's fine and dandy to have people who are willing to work their rear ends off in this country and not be able to earn enough to live. You whine about people not working and when people do you want them to work for slave wages. Sickening.

myfather15
55706
Points
myfather15 05/23/14 - 08:56 am
8
6
karradur

His posts make sense to anyone who used common sense!! But, if you're always looking at the world through the eyes of liberal ideology, of course they wouldn't make sense!!

Bottom line is, you pay burger flippers $15.00/hr and cost is going up everywhere!! People won't be able to afford a fast food burger!! The ONLY way to do that, is for GOVERNMENT to force the OWNER of the business to take the loss of profit on his chin!! FORCING him/her to NOT raise prices but to accept the extra cost, and loss of profit!! Of course, this is EXACTLY what liberals want; a more and complete controling government. But anyone with common sense and ACCURATE knowledge of history, knows this will result in disaster!! We DO NOT need more government control in ANYTHING!!!

nofanofobama
6825
Points
nofanofobama 05/23/14 - 08:59 am
10
3
less than 2 per cent make

less than 2 per cent make min. wage...by design these are marginial starter jobs with the most basic skills..like showing up on time...they are not and never intended to support families...but you can thank obumler if these are the jobs that only are available now... but go to n. dakota..the oil boom is raising all wages...but obumler hates fossil fuels and would rather keep people off good paying jobs and dependant on the govt..and to be honest if you are trying to raise a family on min. wage...look in the mirror, thats where the problem is..you need to raise your own skills and , perhaps re-locate to where jobs are and not worry about what others make..

myfather15
55706
Points
myfather15 05/23/14 - 09:05 am
8
3
Bodhisattva

What part of ENTRY LEVEL PAY, do you not understand about "minimum wage"?

Nobody, worth a darn; stays on minimum wage for even a year!!

But, I do agree with you about the deceit in the WORLD, not just this Country!!

Yes, it's going on and the Bible speaks of it.

Amos 8:5 "Saying, When will the new moon be gone, that we may sell corn? and the sabbath, that we may set forth wheat, making the ephah small, and the shekel great, and falsifying the balances by deceit?"

This verse is specifically talking about people being more concerned with massive PROFIT, than doing what's right!! Making the EPHAH, which is the portion of goods, smaller and the SHEKEL, the money paid for it, great!! GREED, is destroying this Country AND the WORLD!! It isn't just an America problem. But GOVERNMENT certainly is NOT the answer!! You want to replace greedy capitalists, with greedy government officials??? Seriously??

Actually, the verse right before that one says "Hear this, O ye that swallow up the needy, even to make the poor of the land to fail,"

And the verse right after says "That we may buy the poor for silver, and the needy for a pair of shoes; yea, and sell the refuse of the wheat?"

The refuse of the wheat is the worthless part, the part that should be discarded and NOT sold. But, when someone can make a profit, they will sell ANYTHING to do so!! Yes, greed is destroying this world, but there is only one answer and it's not to replace greedy men, with other greedy men!!

Bizkit
31475
Points
Bizkit 05/23/14 - 09:34 am
7
2
Raise the minimum wage as

Raise the minimum wage as Obama demands-if it goes well give him credit if it goes poorly impeach him. Simple enough. So now the govt is going to bail out the insurance companies because the ACA has screwed them-that's just choice isn't it. Wow all the savings from the ACA=hey who is going to pay this bailout-oh us. The cost of health care is suppose to rise for the next five years till everyone signs up-so for the next five years are they going to be bailed out?

nocnoc
42679
Points
nocnoc 05/23/14 - 09:42 am
8
0
Basic Economics

The Price of Goods sold is based on cost of Materials, Labor, Store Overhead and taxes.

There is no way for a business to stay in business without raising the price of the sold item, when ANY the above cost increase.

So if you increase or double the Labor costs everything in the economy cascades up in price, from Food to Rent.

So any Labor increase is quickly absorbed and Labors buying power is right back where they started, Demanding another increase.

This Social Democrat push for increased Minimum Wage, is nothing more that Nov election lead up to yank about something.

Minimum Wage is an entry level pay

If you want more in life learn a trade, skill, or get some brains.

All which come from EDUCATION.

edcushman
7930
Points
edcushman 05/23/14 - 10:02 am
6
3
"No, we should just return to
Unpublished

"No, we should just return to slavery."
bod, we already have slavery and adding more every day. We have able bodied people that are slaves to gov't for the handouts.

Free at last 2015
62
Points
Free at last 2015 05/23/14 - 10:16 am
4
10
Raising minimum wage will be

Raising minimum wage will be reality come November 4, when working voters go to the poll and put Democrats in charge of Congress. It's the right thing to do for working class people not everybody was born with a silver spoon in there mouth or on a wealthy plantation. Every little bit count so this country is way behind and far far past over due for a increase in (minimum)wages .

itsanotherday1
43265
Points
itsanotherday1 05/23/14 - 10:27 am
6
1
What do you call it when you

What do you call it when you have the ruling elite who want to make all of the underlings equal, forcing them to share equally the fruits of their labor, without regard to the unequal effort and education from the underlings?

dahreese
4717
Points
dahreese 05/23/14 - 10:38 am
0
0
The AC editorial staff should
Unpublished

The AC editorial staff should lead the way for minimum wage by cutting its own salary.

I doubt its ever occurred to the "staff" that when writing these kinds of misleading, intentionally propagandized editorials, it is shooting itself in the foot as well as the foot of the intended target of its editorials.

You don't have to be a blind conservative not to see it, just an ignorant one to deny it.
--------------------------------
P.S. to the editorial staff;

I am well aware that the readers do not see my comments. In fact, I would not be at all surprised that they are blocked from you as well.

After all, the truth hurts and you folks need to protect your jobs, right?

Bizkit
31475
Points
Bizkit 05/23/14 - 11:00 am
6
1
Progressive Dems are so lost

Progressive Dems are so lost in ideology (which given it often seems like good intentions) without any thought of how to pay for it. Like the ACA and setting minimum standards for all health insurance seems great, but you can't get more without paying more so the costs of health insurance is and will go up-it suppose to be paid for with new taxes implemented the next five years for all tax payers but now because of logistics they will likely have to bail out the insurance industry-which basically ends up being a double tax cause the tax payer will foot the bill. The ACA almost qualifies as a Ponzi scheme:"A key source of the ACA’s projected savings, the CLASS entitlement designed to provide unlimited, lifetime benefits for long-term care, was quickly abandoned. Recognizing that its premiums, $86 billion by 2021, would finance the rest of ObamaCare instead of its own costs, Sen. Kent Conrad (D-N.D.) called CLASS “a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of,” and vowed to block its inclusion in the Senate bill. Medicare Chief Actuary Richard Foster calculated the program needed to enroll more than 230 million— more than the entire nation’s workforce — to be financially feasible. HHS Secretary Kathleen Sebelius was forced to admit last October that the plan simply wouldn’t work, even backpedaling to Congress that “my comment was that it was unsustainable as the legislation was crafted.” CBO Director Douglas Elmendorf noted that month that the “CBO would have estimated that the Repeal the CLASS Entitlement Act would increase federal budget deficits by $83 billion over the 2012– 2021 period, relative to the March 2011 baseline,” thereby eliminating 40 percent of the CBO’s previous budgetary savings of the ACA."
Now they dropped the CLASS but that should have been a clear sign to abandon the whole ship-it's sinking.

edcushman
7930
Points
edcushman 05/23/14 - 11:02 am
10
1
"Raising minimum wage will be
Unpublished

"Raising minimum wage will be reality come November 4, when working voters go to the poll and put Democrats in charge of Congress."
Free, if the democrats are put in charge of Congress in Nov it won't be the 'working voters' it will be the dummies, deadbeats and freeloaders.

KSL
129740
Points
KSL 05/23/14 - 11:27 am
4
1
And more fraudulent votes.

And more fraudulent votes.

Bizkit
31475
Points
Bizkit 05/23/14 - 11:28 am
5
0
Didn't a recent poll find

Didn't a recent poll find that over 50% of the population could care less who is in control of Congress-Dem or Rep. Boy that says it all doesn't it.

KasparHauser
364
Points
KasparHauser 05/23/14 - 11:38 am
0
0
Is there a REAL Economist out there?
Unpublished

So, with all the posturing and blow-harding by the AC, can someone post figures on the last 30 years worth of productivity improvement vs. increases in the median wage vs. inflationary increases?

Never seem to see any real figures here, just recitations of Greed is Good Talking Points.

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