The Benevolent Dictator

obamas hopeI was watching the president’s weekly address, in which he is discussing raising the minimum wage. I’ve already posted about minimum wage once, you can read it here. To sum up, there’s two sides to every argument. Yes, it will help some people by raising their income. However, it will cost some people their jobs, no denying that. It will cost some small businesses in terms of profitability, or perhaps in some cases, even their ability to stay in business. Either way you go, somebody’s getting screwed. I’m certainly no expert, but I’ve done enough reading to know that you can find enough experts to defend your position on either side.  So, if you disagree with that summation, it’s either because you don’t know anything about it, or you’re so buried in your own political dogma you refuse to concede that there’s two sides to the issue.

Anyway, that’s not what I want to talk about. I want to talk about the President’s message. He starts out with the statement “Restoring the idea of opportunity for all, requires a year of action from all of us.”  I disagree with the premise of the statement. Who said “opportunity for all” needed restoring? If it does, you’re the one who’s been in charge for a bit, maybe you should have been thinking of that already, maybe you should have been thinking about the jobs your administration has cost the country.  And how does minimum wage restore opportunity? It does not. If it was just political rhetoric it wouldn’t be so bad. However, I think he may actually believe his own hype.  “Opportunity for all” is built into the system.  The “land of opportunity” and all that.

He goes on to refer to the Gap’s decision to raise their minimum wage, stating “It’s good business, and it’s good for our economy. It reduces turnover, and boosts productivity, and it gives folks some more money to spend at local businesses.”

Well, this is just ignorant. I’m sorry that he’s using these selling points. First, in terms of reducing turnover and boosting productivity, while this may be true in the immediate short-term, long term it’s just not true. In the long run, if you’re flipping burgers or cleaning a building, a raise may make you feel better for a little while, but 2 months from now, you’re still flipping burgers or cleaning a building. This is a basic theory, Herzbergs’ two factor theory, that motivation comes from intrinsic factors, like recognition, achievement and personal growth. Hygiene factors, like physical working conditions and money, prevent dissatisfaction, but do not inherently provide motivation. It’s old and just a theory, but if you apply it practically, it makes sense. Anyone that’s worked a personally satisfying job can attest that “it’s not about the money.” There’s supposed to be a reason to aspire to do more. Ok, so we’ll just excuse that one to political rhetoric.

But, here’s another one that gets me. He goes on, later, to talk about how many Americans will get higher wages, and states that this can happen without “…requiring a single dollar in new taxes, or spending.”

I just don’t get the connection. Why, exactly, did he invoke taxes and spending? Why would this be part of the minimum wage discussion? Well, apparently it’s because he believes he can raise taxes, and wants you to know that this won’t involve raising taxes. It’s the basic problem I have with democrats in general and liberals in particular. They’re always wanting to tell you what’s good for everybody.

I’m reminded of a quote by C.S Lewis.

Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.
— C. S. Lewis

When people want to do things to you for your own good, they do so without respect to logic, common sense, or any ideas about basic human dignity.

People made fun of George W. Bush because he had a common, often mistake-ridden way of speaking. But he never talked down to people, as if they weren’t as smart as he was. I preferred that.

Mr. President, you’re not as smart as you, or your supporters, think.

A benevolent dictator is still a dictator.

http://www.whitehouse.gov/

Minimum wage? Table for three…

monopoly

In President Obama’s state of the union address, he called for the minimum wage to be raised.

Specifically, he said

“To every mayor, governor, state legislator in America, I say, you don’t have to wait for Congress to act; Americans will support you if you take this on. And as a chief executive, I intend to lead by example. Profitable corporations like Costco see higher wages as the smart way to boost productivity and reduce turnover. We should too. In the coming weeks I will issue an executive order requiring federal contractors to pay their federally-funded employees a fair wage of at least $10.10 an hour because if you cook — (cheers, applause) — our troops’ meals or wash their dishes, you should not have to live in poverty. (Sustained applause.)

I left the applause insertions in the speech just for the comedic effect.

So, I’ve been reading up on it, and I’ve discovered the same thing here that I’ve discovered on a few other subjects; you can find experts that defend both sides of the argument. I’m no smarter than a bevy of experts, so there you go.

The minimum wage is $7.25. Less than 5% of American workers earn minimum wage.  At $7.25 an hour, a full-time worker would make $15,000. A minimum wage of $10.10 would mean earning about $21,000 per year.  The following table comes from the Department of Health and Human Services, and are the poverty guidelines for the continental U.S.

2014 POVERTY GUIDELINES FOR THE 48 CONTIGUOUS STATES
AND THE DISTRICT OF COLUMBIA

Persons in family/household

Poverty guideline

For   families/households with more than 8 persons, add $4,060 for each additional   person.
1 $11,670
2 15,730
3 19,790
4 23,850
5 27,910
6 31,970
7 36,030
8 40,090

So, establishing a new minimum wage would lift families of 3 above the poverty line. If you’re a family of 4, I guess you’re still out of luck. Maybe it should be established based on family size? Why exclude families of 4? That’s not embracing diversity.

Why stop at 10.10? Why not raise it to $15? That’s what labor leaders in California are trying to do for hotel workers. Why not raise it to $20?

Raising the minimum wage would increase a worker’s pay by $6,000 a year. But there’s another perspective as well that I never hear about. If I run a small business, and let’s say I have 3 minimum wage workers, if the minimum wage was raised to the proposed number, it would increase my payroll by $18,000. I know at least one person who runs a small business who said he’d have to let someone go. That helps. I’m sure the counter argument is that it’s mostly big business that pays minimum wage, but there is another side of the fence.

Here’s an excerpt from Facebook, posted by a friend who owns a small business after he watched the SOTU:

I’d love to raise minimum wage. It’s only feasible for small business when one cuts taxes and increases TN care and Medicaid reimbursement though. Otherwise, true small business is out of business. Real talk. Common sense. What Washington lacks!!! And go ahead, lengthen true unemployment benefits, only if you cut those who use it for entitlement instead of getting a job

A recent Pew Research revealed this about America’s ideas about hard work.

Meanwhile, Republicans are far more likely than Democrats to say that hard work and determination lead to success for most people. Fully 76% of Republicans say most people can get ahead if they are willing to work hard; just 20% say that hard work is no guarantee of success. Democrats are evenly divided: 49% say most can get ahead through hard work, but 48% say hard work is no guarantee of success.

Now, I agree, hard work alone is no guarantee of success. You can work as hard as you’d like, and if you’re dumb as a stone, doesn’t mean you’re getting anywhere. But I see the question more about work ethic, how you think about becoming successful. I wonder about the alternative to any question like this. For example, if you don’t think you can be successful by hard work, how do you think one can be successful? Maybe you think people can’t improve their situation? Well, there are about a million stories in America that will prove you wrong. Maybe you just think people get ahead by the government giving them things.

While writing this I saw a protest with a guy holding a sign that said “Can’t survive on 7.25.” I don’t know, maybe you can, depends on your life style. I couldn’t. That’s why I went to night school for 8 years to get my masters. Anyway, it’s called minimum wage, not living wage. I guess we should either change the name or raise the rate.

I’m all for raising the minimum wage. It is, however, incredibly unfair to those who run businesses to raise it by almost 3 bucks an hour all at once.

http://aspe.hhs.gov/poverty/13poverty.cfm

http://www.pewresearch.org/fact-tank/2014/01/29/inequality-poverty-divide-republicans-more-than-democrats/#utm_source=rss&utm_medium=rss&utm_campaign=inequality-poverty-divide-republicans-more-than-democrats

http://www.latimes.com/nation/politics/politicsnow/la-pn-democratic-women-push-minimum-wage-20140130,0,6513957.story#axzz2rz5hAmMi

http://www.dallasnews.com/business/headlines/20140129-everything-you-want-to-know-about-the-federal-minimum-wage-proposal.ece