By Doug Porter
Today’s UT-San Diego editorial represents the height of hypocrisy.
Titled ‘Minimum wage hikes deliver maximum pain to the poor’, it goes on to tell us in no uncertain terms about the terrible things that will follow should Congress act on a bill introduced on Tuesday by Democratic Senators Tom Harkin of Iowa and George Miller of California that would raise the hourly minimum wage from $7.25 to $10.10 — and add an annual adjustment to keep pace with the cost-of-living index. Here’s the money quote:
Low-income families have the most to lose in the game of political poker that is being played this year by Democrats in Washington, D.C.
They go through the usual balderdash citing the “preponderance of evidence” that workers should live in fear of unemployment and starvation if minimum wages go up.
We’re then told:
Direct aid to low-income families, such as food stamps and the Earned Income Tax Credit, is far more effective.
That sounds suspiciously like a government subsidy to me. A 2004 UC Berkeley report found Wal-Mart workers’ dependence on public programs in California, such as Medi-Cal and food stamps, cost taxpayers about $86 million annually. Nationwide, it estimated the cost of public assistance to Wal-Mart workers could be as much as $2 billion annually.
I suppose the fine editorial writers at the UT would like to have these programs funded by sales taxes so their wealthy benefactors are not saddled with a proportional share of the cost of these subsidies.
The real capper in the UT-SD editorial is the close, where Henry Ford is credited with raising auto workers daily wages because the ‘market demanded’ it.
The fact is that Ford didn’t raise the daily wage; he offered a bonus for those who lived ‘The American Way’, and yes, Ford did send people (50 Social Department investigators) around to check. So he got to impose his moral values, which for most of his life included raving anti-Semitism.
I can’t help but notice that WalMart, everybodys favorite punching bag when it comes to crappy pay, is getting their butt kicked by competitor Costco, a company that offers significantly better pay and benefits. Costco CEO Craig Jelinek has come out in support of raising the minimum wage, telling the media:
“Instead of minimizing wages, we know it’s a lot more profitable in the long term to minimize employee turnover and maximize employee productivity, commitment and loyalty.”
Costco averages $814 in sales per square foot, while WalMart’s Sams Club makes just $586 per square foot. And WalMart sales are down. Seriously down. Gosh, I wonder if all the bad publicity about how they mistreat their employees has anything to do with that?
At the heart of the issue over wages is a business model that relies upon ‘corporate welfare’ either through tax breaks or subsidies (including their labor costs). Aside from the fact that it’s remarkably short-sighted, such a business philosophy also leads to increases in wealth differential. They get richer, everybody else gets poorer. And that’s exactly what’s happening in the US today.
That’s what the UT-San Diego is really advocating. All you need to do is look at their coverage, oozing with photos portraying bejeweled paramours living the good life alongside their well-heeled benefactors. It certainly has nothing to do with the welfare of the ‘poor’.
Implementing ‘Interview Controls’ at San Diego Unified
The school district’s CFO got into some hot water last month via an interview published in Voice of San Diego. Let’s just say it was embarrassing, politically unwise and inaccurate. SDUSD teachers were especially incensed over claims of hundred of employees just lying around and a wildly mistaken claim about pay.
Yesterday, a letter written by Stan “Data” Dobbs apologizing to district teachers was released. He did due diligence and mea culpa-ed meaningfully.
But there’s one part that left me curious. He wrote that he has “put interview controls in place to ensure no such issues occur again.” What would they be? Duct tape, maybe?
Reforming School Reform
Diane Ravitch has made a name for herself in the field of public education. Starting out as a ‘reformer’ who supported No Child Left Behind and charter schools as part of the Bush administration, Ravitch later became ‘disillusioned’.
With publication of The Death and Life of the Great American School System: How Testing and Choice Undermine Education (2010), she officially broke ranks with her former peers, critiquing the punitive uses of accountability to fire teachers and close schools, as well as replacing public schools with charter schools and relying on superstar teachers.
Today Ravitch announced the launch of a new organization, aimed at connecting supporters of public education across the country. She pledged to create ‘a huge social network of parents, students, teachers, administrators, school board members, and all others who believe in public education and sane educational policy that focuses on a full and rich education for all children.’ Here is the mission statement of theNetwork for Public Education:
The Network for Public Education is an advocacy group whose goal is to fight to protect, preserve and strengthen our public school system, an essential institution in a democratic society. Our mission is to protect, preserve, promote, and strengthen public schools and the education of current and future generations of students. We will accomplish this by networking groups and organizations focused on similar goals in states and districts throughout the nation, share information about what works and what doesn’t work in public education, and endorse and rate candidates for office based on our principles and goals. More specifically, we will support candidates who oppose high-stakes testing, mass school closures, the privatization of our public schools and the outsourcing of its core functions to for-profit corporations, and we will support candidates who work for evidence-based reforms that will improve our schools and the education of our nation’s children.
WalMart Selling Obamacare?
The Los Angeles Times has a story up today about mounting tension between sate officials and union leaders over plans to let retail giant Wal-Mart enroll shoppers in President Obama’s healthcare expansion.
As part of the State’s efforts reach out to 5 million Californians eligible for new coverage starting in January, Wal-Mart and other retailers will be paid by the government to help consumers learn about their options and assist them in buying federally subsidized private insurance. From the Times:
Labor unions as well as some consumer advocates protest the idea of government officials partnering with Wal-Mart and paying for its help. They contend that the nation’s largest retailer has no place advising others on health coverage when so many of its workers don’t qualify for company benefits and end up in taxpayer-funded programs such as Medi-Cal.
Labor unions and other policy experts have long criticized Wal-Mart for failing to provide better health benefits to its hourly workers and their families. By doing so, they say, Wal-Mart shifts some of those employee healthcare costs onto public programs such as Medicaid.
“Wal-Mart is one of the problems health reform is trying to fix,” said Sara Flocks, public policy coordinator at the California Labor Federation. “Wal-Mart is the driving force behind taking insurance away from Californians.”
Why We Call Them Teahadists:
Black Socialist Pope to Follow Black Socialist President?
That’s the headline over at ultra-conserv Accuracy in Media, where director Cliff Kincaid yesterday warned that allies of George Soros and President Obama are plotting to pick the next pope. Kincaid warns that a “group of radicals” in the “left-wing lobby in the U.S.” are trying to engineer the selection of Ghanaian Cardinal Peter Turkson as Pope.
Kincaid’s argument boils down to the fact that Turkson introduced a document on global financial policy which was endorsed by Stephen Schneck of Catholic University (along with Pope Benedict XVI) and attended one of Schneck’s conferences in 2011.
Since Schneck supported Obama’s reelection and is tied to the group Catholics in Alliance for the Common Good, naturally Kincaid has arrived at the conclusion that Soros is plotting to pick the next pope in order to “use the Vatican in a global campaign against capitalism.”
Tweets of the Day:
I’d be remiss if I didn’t include something about Sen. Rand Paul’s actual filibuster yesterday where he actually talked about the possibility of drones being used domestically for killing would-be terrorists. I’d be inclined to agree with him that such actions would be contradictory to the intentions of our founding fathers, but I’m afraid that horse is already out of the barn.
Yo Rand Paul, if you are against executing Americans without a fair trial, the best place to complain would be Rick Perry’s office.
— John (@linnyitssn) March 7, 2013
Anyone got a link to one of GOP’s talking filibusters that took place while Bush was taking away our civil liberties? #thereweresomeright?
— The Daily Edge (@TheDailyEdge) March 7, 2013
On This Day: 1908 – Cincinnati’s mayor, Mark Breith announced before the city council that, “Women are not physically fit to operate automobiles.” 1933 – The board game Monopoly was invented. 1994 – The Supreme Court ruled that parodies that poke fun at an original work can be considered “fair use” that does not require permission from the copyright holder.
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William Johnston says
The Original Intent of the Minimum Wage
When governments pass laws establishing a “minimum wage,” sometimes called a “living wage,” they create major unemployment at the unskilled labor end of the labor market.(“Minimum Wage Hikes Maximize Pain,” U-T, March 7 ) Over time, the unemployment problem is reflected upward in the labor market. What the public needs to understand is that this should not come as a surprise because unemployment is exactly what the minimum wage laws were originally intended to create.
Thomas C. Leonard, in his article, “Retrospectives: Eugenics and Economics in the Progressive Era”, appearing in the Journal of Economic Perspectives, Volume 19, No. 4, Fall 2005, pp. 207-214) said, “Progressive economists…believed that binding minimum wages would cause job losses. However, the progressive economists also believed that the job loss induced by minimum wages was a social benefit, as it performed the eugenic service of ridding the labor force of the ‘unemployable.’”
They saw it this way: “…minimum wage…operate[s] eugenically…by deterring prospective immigrants [intending to enter the U.S. legally] and also by removing from employment the ‘unemployable,’ who, thus identified, could be, for example, segregated in rural communities or sterilized.”
But, governments can’t let the unemployables they created by the laws starve. The fix for that is some form of payment, comprising capital expropriated from the private sector. And, the more capital that is removed from the private sector, the higher unemployment goes.
If you don’t believe the last sentence, then explain how government stimulus packages designed to “pump capital into the economy to create jobs” work. If it is true that jobs are created in areas where capital is pumped in, it must also be true that where capital is removed, jobs are destroyed. If any further proof is needed, it is easily observable that businesses and the jobs they represent will move from areas of high-tax to areas of lower-tax.)
So, what does all of this mean? The answer: Governments know that the minimum wage causes unemployment; they just hope the American public doesn’t find out that the penalties paid by taxpayers for these government generated societal unemployables are higher taxes and more unemployables. It’s a vicious circle. And, minimum wage laws are the progenitors of the problem. In addition, the minimum wage leads to illegal immigration because it provides an incentive for illegals to come over the border and fill (off-book) the “unskilled” jobs that are left unfilled.
William – the thing is, most businesses are going to hire the minimum number of people they can to get the job done, regardless of what the minimum wage is. People at the lower end of the economic spectrum tend to spend the little they have, so if they have a little more, they might buy an extra pair of jeans for their kid, whatever. In other words, they will be creating more demand, and the businesses will need to hire more people to do the extra work created by the extra business.
So William – we may both occupy the same space; the same nation. But we are not in this together – you see conflict as the productive solution. Pitting the greedy against the starving – this is your idea of a healthy society? You seem to care enough to spend the time to write out your vision. Do you care enough to acknowledge misstakes in your thinking? “Minimum wage laws are the progenitors of the problem” a more baseless claim I’ve not read in some time. All evidence of actual experience is to the contrary. Even the fasicst Henry Ford saw the value in paying his workers enough to afford to purchase his products. It is the foundation of the consumer based economy. Now if you’d like to talk about killing off the consumer based economy for something else – say a feudal overlord – then enslavement might fit your vision.
Andy Cohen says
First of all, William, your citation of Eugenics studies removes any and all credibility you may have had when your mouse first clicked onto our site. The entire premise of Eugenics is that non-whites are inferior beings, and so any “research” conducted under the auspices of Eugenics are by their very nature entirely invalid.
Second, every credible piece of economic research has completely refuted your assertion that a minimum wage is detrimental to the economy. In fact, every credible study by any credible economist has concluded exactly the opposite: When you pay people a decent wage, the entire economy gets buoyed by it.
By your estimation, paying people unemployment benefits hurts the economy while offering massive tax cuts to businesses is the best way to spur economic growth. The fact is that the CBO concluded that paying out unemployment insurance is the single BEST way to create economic growth, particularly during a recession, and tax cuts are the LEAST effective way to do it.
The same arguments you present here were made about San Diego’s Living Wage Ordinance in 2005 by Conservatives and many in the business community who did business with the City. They said the increased burden on their payrolls would either put them out of business or force them to leave San Diego. Neither has happened, and in fact those same businesses that complained are now thriving.
By your assessment, businesses should be allowed to pay their employees however little they want. They could pay $2 per hour if they wanted. Not exactly subsistence wages in this country, and actually does more harm to the overall economy than good. And by paying people more it actually INCREASES employment, not decreases it, because those wage earners are more likely to take the money they earn and put it directly back into the local economy, stoking demand, creating the need for MORE jobs, not fewer.
So please, take your racist tripe to another, more suitable publication.
Doug Porter says
I’m not going to turn this into an exercise in economic data slinging. Please see John Schmitt’s February 2013 Center for Economic and Policy Research study about the impact of minimum wage.
The economic theory that you’re espousing has been repeatedly debunked, unless of course, you’re living in a cocoon of Austrian Economists stashed in a ivory tower somewhere.
By the way, Bush’s economist James Glassman (the guy who predicted GWB’s economic policies would lead the Dow to break 36,000) has re-appeared on the pages of Bloomberg Weekly. This time he’s saying Paul Rand’s budget will push the Dow over 36,000 ‘fairly quickly’. Riiight….
Andy Cohen says
Riiiiggghtt…….and two unfunded wars and an unfunded prescription drug bill are both GREAT for the national economy……
JB Smith says
Prices are going up at an extraordinary rate, outpacing minimum wage hikes in ever larger percentages.
Arguing that the poor should do more with less is beyond disgusting, it is obscene.
Arguing that a minimum wage hike will cause unemployment, attempts to manipulate the poor and middle class into defending this ridiculous position, which is not remotely in their best interest.
The U-T is grossly biased in their editorial, and have shown their stripes in a rather obtuse fashion.