$15 Minimum Wage?

From medillmoneymavens.com

Bill Moyers, the old grumpy liberal of the Lyndon Johnson era, was bemoaning the income gap between the rich and poor in America on Charlie Rose recently. Moyers was despondent enough to advocate the tired remedy of raising (actually doubling) the minimum wage in the U.S. to $15 per hour.

Although I think putting this into practice would be disastrous for working people and the economy, I am sympathetic to the distress in this country over the widening income disparity and a widespread hopelessness of people who look at Wal-Mart cashiers with envy.

College is no longer a pipeline to middle-class America. It isn’t even a guarantee of a Starbucks job. For a job at Wendy’s, it’s probably more important if you can pass a drug test and if you haven’t served time.

There is a strong feeling in the country that there is less opportunity today than my generation had. Sadly, the statistics bear that out.

If the do-gooder lefties like Moyers have no good ideas, I wonder if the smart folks who read my blog are hopeful for their children, grandchildren, and themselves. Or, have you all given up on 21st Century America?

Obamacare, when it finally is implemented, is a lot like the $15 minimum wage. It is a reaction to the insurance hole, where less productive workers reside. If businesses do not respect a worker’s skills enough to provide health insurance, the Federal government will force them into it with Obamacare.

In the past, we could grow our way through the productive work problem, but the cleverness of technology and the blowing away of trade barriers has changed the equation. The $15-per-hour worker will be replaced by a computer, a robot, or a Bangladeshi. Business people will videoconference instead of traveling, the hotdog vender at the Cubs game will no longer waddle through the aisles.

The routine answer to joblessness and the income gap, besides the $15 minimum wage, is “more education.” I believe this is shallow thinking. Employers have difficulty finding people with basic qualities such as attentiveness, honesty, reliability, and positivity. Today’s ideal employee can construct clear sentences, follow directions, and also question those directions if they don’t make sense. Do you learn those things in school — or at home? Do you get them off a computer program? I don’t think so. The sad thing in America today is that so many people who should be teaching the life lessons do not know the lessons themselves. Who steps up? A coach, a clergyman, a gifted therapist, grandma? Will the lost kids find their special role models — or drift though prison, welfare, and despair?

There is no easy alternative to the $15-per-hour free lunch–that actually is no lunch. Bill Moyers is naive, but he is not stupid. The America I see is drifting apart. The social contract that has long been implicit in the fabric of the country is thin and fraying. Government has few answers. Sadly, I don’t think the markets offer much, either. Change, if we ever see it, will come one person at a time. I wish I were a little more optimistic. You?

Question: Would a $15 minimum wage help Americans?

Lloyd Graff is owner and Chief Space Filler of Today’s Machining World and Graff-Pinkert & Co.

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33 thoughts on “$15 Minimum Wage?

  1. Steve

    $15 minimum wage would mean layoffs of people in that salary range, less competitive US companies and ultimately an acceleration of the downward spiral of our economy. While a small percentage would benefit, the negative overall impact would far surpass any gains.

     
    +1
  2. Matt Klecka

    If the minimum wage is set to $15/hr and you are only able to produce $7/hr worth of value, you won’t be hired. It’s as simple as that. Anyone producing less value than that $15/hr, would find themselves unemployed. You would never get hired for an entry-level position at a shop and given the opportunity to advance and transition from an unskilled position to a skilled position.

     
    +1
  3. Stephanie S.

    I agree with Steve. A $15.00 minimum wage would result in the actual employment of fewer folks, a potential reduction of benefits (employers would likely reduce these to the extent practicable in order to manage the increased wage) and would reek havoc with our internal wage structures. It seems to me that the more the government intervenes, the more it creates problems rather than viable solutions. I say, “Get.Out.Of.Our.Way!” Just my $0.02!

     
    +1
  4. Dean

    Look at Youtube for Milton Freedman he explains Minimum wage best. a “Living wage” was a term invented by Marx and all the commies. If government wanted to level out the income they would enforce the anti trust laws and make everyone sell at the same price. one price no discounts such as in shipping and healthcare. Next help small startups. Have you ever had the county come by and demand receipts for the disposal of Fluorescent Lamps? Or used motor oil? Why can he not take them? No No No you must transport and get receipts. We must punish small business. The Government likes big business that can hire Lawyers to fight the Government. Then they why is there no small business?? And they wonder why there is such a income devide.

     
  5. Scott @ GenSwiss

    If our government was a legitimate business it would be out of business due to bankruptcy. Therefore they have no business dictating to us how we can run a business.

     
    +1
  6. Josh

    Negative income tax sounds like a good idea in my opinion. Possibly combined with a flat tax. I advise everyone to look into it.

     
  7. Greg

    A friend by the name of Bill Law had the ultimate answer for this creeping inflation/undermining of competitiveness. Bill’s answer was to simply say ,”We should make the minimum wage $100,000 a year.”

    By moving peoples minds into that arena, it was amazing how liberal thinkers would have a little enlightened thinking. So my answer is lets shoot for $100,000 🙂

     
  8. Al C.

    I believe that a $15.00 an hr. wage for unskilled help will sink this country. I own a small machine shop. The average unskilled person can’t produce enough to pay his wage at $5.00 /hr. let allow make me a profit. Go back 200 yrs. to the guild system were you learned a trade and worked for free. Once you learned a trade you could earn a living wage!

     
  9. Ed Gnifkowski

    I guess I’m getting to be a card carrying cynic. Am I the only one to think that every person will be guranteed an income and government furnished health care regardless of emplyability?
    I feel we are a long way down the slippery slope of socialism.

     
  10. MD

    That would be a complete disaster. None of these people have a clue!. Lets fix washington shall we – crooks – living of our hard earned wages!

     
  11. Laker

    Higher wages for the lowest income levels = higher prices for everyone, because corporations know exactly how much capital is flowing through the economy. So, while unfortunate for those in that income group, it’s simply a reality of our corporate-owned nation.
    Want proof? Look at the price of gasoline. When the economy is (purportedly) doing well… gas is high. Economy slows… gas goes down. Remember oh so long ago, like 3 years, when everyone said gas will be $6.00+/gallon moving forward? Didn’t happen. Why? Not too little demand because of construction slowdown, etc, just simply not enough money in the economy for anyone to buy the amounts they had previously.
    If I was a minimum wage earner and my income doubled how long do you think it would take the price of gas to double (or thereabouts)? A week? A day?
    All of these BS stats about little or no inflation inevitably exclude “volatile items”, aka, the things we have to buy: food and fuel. If you give people more money to buy things, those items will go up first and quickly.

     
  12. Wendell Good

    Lloyd, you hit the nail on the head with your comments about education and the social contract. Fact is the financial, political, and business leadership of this country are morally bankrupt, and the government debt implosion as well as the moral and financial decline of the middle and lower classes are a direct result our leadership’s drive to enrich themselves at any cost. The morally bankrupt entertainment we feed our youths, the way we treat our workers like a commodity to be used and discarded for the lowest price possible, and the way most politicion’s and bankers are for sale to the highest bidder all point to a moral and social decline that is likely to end badly just like Rome and Bablylon did long ago.

     
  13. Chuck

    Lets see, most of the employees making minimum wage are high school/college kids or people retired.

    What does the average kid do, go to movies, fast food, etc….raising minimum wage will increase the cost of doing these activities, they will be making more but also paying more, they will be no better off. I am sorry but a person scanning groceries is not worth $15 hour.

    They need to go to trade school or college, the days of graduating from high school and walking into a good paying factory job are long gone…….The Constitution provides for the opportunity of life, liberty, and the pursuit of happiness, nowhere does it say that a person should have the right to be able to raise a family of four working as a cashier…..

     
  14. Dick Crosby

    Moyers must have studied The Communist Manifesto by Karl Marx wherever it was he went to school. Probably Ivy League, like our illustrious president. I catch Moyer on PBS out of Madison (Milwaukee feed) on WHA every once in a while. The liberal slant is so obvious. I find myself just sitting there and slowly shaking my head in disbelief.
    But then the socialist mindset just baffles me, when one must come to recognize and understand that every society in the last 6,000 years of recorded history that has gone down the socialist path, has gone down to extinction, with its citizens starving, and/or at war with themseles and/or their neighbors. Wilson and Roosevelt started it, and we were not smart enough to turn it around after that. We are/will reap the seeds that we have and are sowing. A lot of these libs are smart people. It must be me that’s nuts.
    Repeal Obamacare and start over slowly. Repeal Dodd/Frank. Get rid of the IRS. Zero the corporate tax. Zero the minimum wage. Clean up & out OSHA. Same for EPA. Fire Obama & that criminal at Justice. Get US out of UN. No more czars. What the hell does the cabinet do anymore? ALL teachers, and students must study and pass tests on Milt Friedman’s writings. Go back to teaching US history starting with Leif Erickson and Columbus, etc. Secure the borders. Take care of the military wounded. Shoot PROVEN terrorists with only military trials, and without delay. Fund the national parks like they meant something. Make Chicago, and certain of it’s immediate surrounding counties, a state, with suburbs Springfield, IL, and Washington, DC, until it cleans up its act. Then forgive it for its misdeeds and take it back into the union. (Sorry Abe!)
    There’s no end to what needs to be undone, before we can ever get things done, toward survival of what the founders had in mind. Where’s that shining light on the hill?

     
  15. Jim

    Wow, something that everyone agrees on. Minimum Wage should not be doubled. Now there’s a first. I am fairly liberal in many ways and quite conservative in others, but I have always felt that there should be no minimum wage, but some lower limit probably needs to be imposed. My gripe is not every person is working to support themselves, so not everyone needs to be protected. O the other hand, there has to be a way to compress some of the high end salaries too. Publically traded corporations should not be allowed to pay it’s top earners any more than 50 to 100 times what it pays it’s lowest workers. The rest should go anywhere but into the salaries to make the rich, richer. Shareholders, research, higher wages for the working class of the company. Our system of winner takes all is bad for the social fabric.

     
  16. Dallas Cook

    Of course this would be a disaster : If, as an employer, you wish me to pay you 15.00/hr then you must be worth (in productive profits to me) around 40.00/hr. Why you say? What about the cost of employing you that has to be added to the 15.00, such as insurance (yes it will quadruple, or perhaps I may pay the fine and dump cost that back on you! In which then you will wish you were back where you were!) and 1/2 your social security, etc, etc. Add to that, uniforms, facility upkeep, the monster rise in every cost I incur due to this min wage rule affecting my suppliers prices for raw materials and services (the cost of conducting business). I might even lose ground here if I dont get 40.00 worth of profit . In that case you may go to low hours as a part time employee. Not a pretty picture at all for feeding your family’s is it ? Not for me either !

     
  17. Rob Rich

    The moral bankruptcy of the nation started in 1963.
    Lack of morals leads to corruption.
    Corruption leads to a failed nation.

     
  18. Headsled

    If you ask an older person, they will tell you it’s harder now then it was “back then”.
    It’s not how much you make, A father could feed six kids and a wife if he worked!
    You would need to make $150,000 to cover it now. And watch your spending still.
    Every day worker wants more, boss needs to charge more for product.
    Don’t forget if you raise the wage, Uncle Sam does loads his pocket too! Surprise!

     
  19. Jim Goerges

    Well Lloyd, who voted for this happy horse apples, called hope and change, or forward? Now you get “bend over”, cause-you aint seen nothing yet. I still can’t believe you can say employers are at fault for health care reform, or hint at it seriously, you still drink the water from the socialist river on this?? Um, who’s zooming who?

     
  20. Ductiledan

    Let the sheep be the sheep and the lions be the lions…… Or all work and get paid the same…Either way I don’t care but if you don’t work you get put on the ice flowage and by the way polititions in this scenario get paid the same as machinsts tool makers and shop owners…I hate this mushy in the middle crap

     
  21. John "Jack" Frost

    $15.00 an hour is no myth. In many communities it is called “a living wage.” This is straight from Marx, both Karl and Groucho. The city council of Washington, DC conned Wal Mart to commit to building six stores in underserved areas of Washington, based on a minimum wage of $8.25 per which is one dollar above the national standard. Going ahead on that basis Wal Mart started building 3 of the stores with one to open shortly. This week the council passed the Wal Mart act that requires WalMart to pay minimum salaries of $15.25 per hour. It may, however. be vetoed by the mayor. The proposed law requires that all companies having a floor space of 75,000 sqft and doing one billion a year will pay the new living wage. All other retailers are exempt. THIS IS REDISTRIBUTING THE WEALTH BY OTHER MEANS. It recognizes that the American schools have not provided sufficient education that would increase skills and production and have decided that any source of new taxation will have to come from mandatory hourly rates. This certainly is the case in Washington which has the worst education system in the states. The lefties have given up hope on a new middle class based on new committment and incentives. The investment plan of the Obama whizkids is in disarray and the solution is to tax the wealth producer to make up the deficit.

     
  22. Somo

    Moyers argument was made in relation to providing an income so that someone can afford services and goods. He was addressing the demand side of the economy. An economy requires both demand and supply; and most of the above comments are equally one-sided to addressing the supply side (keeping supply costs low). This is not in favor of a higher minimum wage, but 100 years ago when Henry Ford doubled his worker’s minimum wage and cut the working hours, he was considered crazy. He later said that it was one of the best cost-cutting ideas that he ever had. The reason, of course, was that he was able to build a stable, more productive workforce.
    We have had to increase our entry level wages in order to attract the workers we needed. Yes it does increase our wage cost, but it was required. In talking to other business owners, many believe that there needs to be a workforce beholden to their business. Arguments above – get an education or learn a trade – are inadequate when college-educated students are hired for no-wage internships (look at the experience!) and trained welders are paid $12/hour, well below the minimum wage proposed by Moyers. Low level workers are ‘business-people’ too. They understand that it isn’t profitable to go to work when they barely make enough money to pay for gas to drive to work Forget about mass-transit, we all know that is unsustainable and the bus drivers all want paid too much money. Heck, they even want a retirement plan. To further the ‘business-people’ argument, anybody in business understands that a sound investment requires a payback and a stable future. Where is the payback and stability for someone who has to take out a college loan, or someone who gets skill-training knowing that if develop better skills, and hope to get better wages, they will easily be replaced by the new entry level worker from the next training class.
    It is also pretty easy to understand the illegal immigration problem. Why should I pay the local landscaping company (in business for 25 years in the community), when I can go down the street and hire an immigrant for $25 for the day. There should be no complaint, since they are illegal anyway. But it is not only me, look at the businesses that hire 100’s of illegals at low wages and without the need to give them health care benefits. No problems – they are easily replaced if one doesn’t show up for work the next day.
    Of course we could make people work even at low wages. They do have to eat. Stop the ability to get any type of government hand-out and food stamps – they will come back to work in droves.

     
  23. Val Zanchuk

    Our country is too large and diverse for more “one size fits all” policies. The market driven minimum wage in New York City is a lot different than the market driven minimum wage in a rural community. Arbitrarily setting a national minimum wage would disrupt the economic fabric of many communities, with many negative unintended consequences. This is not to say that some sort of minimum wage isn’t valuable, just that states and local communities are better suited for setting such guidelines.

     
    +2
  24. Griff

    A $15.00 minimum wage would help a lot more Americans than paying 15 million to a bunch of fat cat CEO’S. Everyone is crying about paying their people more, but nobody gives a rats a$$ that these power gluttons are raking in money faster than ever.

     
    +1
  25. Dean

    Ohhh Henry Ford well let me tell you about him he demanded only the best workers working their fastest every day. Trip to the water cooler,,, what water cooler? When my Mother was born it was a hard birth and the doctor ordered Grandma not to have any more children or she would die. Her husband stayed home 1 day. It was a unexcused day taken off. Good old Henry Ford personally docked him 1 Dollar per day for that unexcused day. Yes he got 4 Dollars per day after that day when everyone else got 5 Day.

     
  26. arpad

    Next time you see Bill Moyers ask him if he knows how many teenagers don’t have a job because of the minimum wage he so loves. More then likely he’ll tell you to eff off one way or the other.

    A lefty’s allegience is to their own conceits and they’re unconcerned with the damage that results when those conceits are enacted into law.

     
  27. Chad

    Like many, I too, believe a $15.00 minimum wage for unskilled workers would sink the country back (or further, if you don’t think we’re out) into a recession. My suggestion would be to create tiers, with minimum wages at each tier. It’s the lower-middle class and middle-middle class citizens that our country relies so heavily upon, why not make sure they’re getting paid for the skills that they have taken the time and effort to develop? Instead of throwing more money and benefits to the “less fortunate” lower class citizens. Certainly, living on $7.25 an hour alone would be difficult, but workers that are earning this rate are currently eligible for government aid such as medicare and WIC, among others, which undeniably increases the VALUE of their employment, whereas the middle class paying for these benefits (as well as student loans) on their own dollar, bringing their income down to near poverty rates, despite a majority of them having earned degrees through higher education.

     
  28. Maury Minerbi

    Excellent blog, Lloyd. I agree with each of the points you made.

    As a resident in the Washington, DC area this topic is particularly timely because just this month the DC City Council is trying to increase the minimum wage for Walmart employees who will work in the six planned stores in the District to a $12.50 an hour “living wage.” This increased new minimum, in contrast to the District’s current $8.25 minimum (vs. the 7.25 Federal) would apply to any non-union big box store of 75,000 square feet or more. Large grocery chains, such as Giant, would be exempt because they’re unionized.

    Walmart is fighting the Council’s demands, and has threatened to stop construction on the first three stores, which are currently under construction, and not build the remaining three. The upshot of this standoff will most likely be a compromise of some sort because Mayor Vincent Grey doesn’t want to lose the hundreds of new jobs resulting from these Walmart stores, and the tax revenues. One of Walmart’s arguments is that the living wage proposal was introduced well after Walmart agreed to build stores in DC. They had planned on wages of more than $8.25 per hour, to attract better employees, but significantly less than $12.50. It’s expected that the number of job applicants will outnumber the openings by a huge margin, regardless of whether the wage is $8.25, $12.50, or something in between.

    Interestingly, the Walmart stores would be built in neighborhoods where there’s a serious scarcity of retail stores. The Walmart stores would provide the residents with much better shopping options, and lower prices.

    Every reasonable person would like workers to earn a living wage, and more. The argument is really about the tradeoffs. If $12.50 is good, wouldn’t $16 or $22 be even better?

    You’re right that neither the free market nor social legislation offers a good answer to the pay for largely unskilled workers. Some problems have no good solutions, but the quest for perfection can sometimes undermine the implementation of a practical solution.

    The minimum wage issue, and the disagreement between Walmart and the DC Council is certainly multi-faceted, as it pits the liberal supporters of the notion of a “living wage” against those who believe that the benefits with more jobs, albeit low paying ones, trump the tradeoffs associated with the “living wage.” We’ve discussed this at length at a Men’s Discussion Group I belong to, and this is one of those arguments where those on each side, while perhaps conceding some points, remain adamant. Being Washington, it’s not surprising that the living wage advocates are in the majority.

    It’ll be interesting to see what happens in DC.

     
  29. Ed Wilson

    The problem is graduation rates these kids drop out of school collect welfare then they want for things and expect the min. wage to support them. The min. wage was designed to protect kids working after school or in the summer not to be lived on by an adult who was to lazy to work a little harder while in school and then they expect to make the same wage as a person who has earned an education thru hard work. Give me-give me and they have the ear of a few politions.

     
  30. Bill Moore

    What a buch of BS in these posts, simply put if minimum wage had kept up with inflation it would be over $20.00 dollars an hour, this isnj’t some “leftist ” scheme this is plain and simple fact. I hear alot of you crying because you can’t find quality help , well here is a hint pay more for to secure quality workers. If you want a quality product you pay more than for substandard Chinese crap, you do the math.

     

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