Income Disparity: Income, Wages and Profits

David Ruccio

A few words from David about his background:

“….Professor of Economics “at large” as well as a member of the Higgins Labor Studies Program and Faculty Fellow of the Joan B. Kroc Institute for International Peace Studies. I was the editor of the journal Rethinking Marxism from 1997 to 2009.”

More details about David Ruccio is available here: About. 

Minimum wages and profits

Posted: 8 July 2016 

David Howell is right: attempts to raise the federal minimum wage in the United States (from the current $7.25 to, say, $12 or $15 an hour) have been stymied by a no-job-losses rule—the idea (promoted by mainstream economists and employers alike) that the minimum wage should be set so that there are no job losses for anyone anywhere in the country.

Determining a suitable federal minimum wage based solely on a zero job loss rule is a public policy straightjacket that would effectively rule out any significant raise of the wage floor above that which already exists. Yet from a historical perspective, strict adherence to such policymaking criteria would have also made it impossible to ban child labor (job losses!), as well as many critical environmental and occupational health and safety regulations. It would also foreclose any consideration of policies like paid family leave, which exists in every other affluent country.

As Howell correctly explains, the possibility of some job losses—for some workers, in some places—as a result of significantly raising the minimum wage can be countered by a combination of “emergency relief” (like extended unemployment benefits) and creating new jobs (e.g., through expansionary fiscal policy and public works programs).

So, what stands in the way? Howell focuses on methodological problems (“because the identification of the wage at which there is expected to be zero job loss must be evidence-based, there is no way to establish the higher nationwide wage floors necessary for empirical tests”) and misplaced priorities (such as forgetting about “the moral, social, economic, and political benefits of a much higher standard of living from work for tens of millions of workers”).

Both are valid points. But I’d point to a third: profits. The fact is, if employers threaten to let workers go (or not hire additional workers) if the minimum wage is increased, they’re attempting to protect their bottom line. If they kept their existing workers, so the argument goes, their profits would fall; and if they wanted to maintain their current level of profits, they’d have to fire some of their workers and replace them with one or another form of automation. It’s all about pumping out profits from their employees.

Profits also enter the story in a second way. Private employers see the possibility of compensating for minimum-wage-induced job losses by offering workers public relief and by creating new jobs through public programs as a challenge to their existing control over workers, jobs, and ultimately profits. That’s the second reason they oppose an increase in minimum wage, because they know full well society has the means to make up for their willingness to eliminate jobs. But then their own role and the profits that come from that are called into question.

For both those reasons—the threat to fire workers and the threat to their monopoly as employers—profits are the real obstacle to raising the minimum wage.

There’s no getting around it. We have to challenge the sanctity of private profits, presumed and promoted by both employers and mainstream economists, in order to guarantee American workers a decent minimum wage

._______________________________________________

David publishes a “Chart of the Day” post on this blog. I highly encourage a visit to Davids blog, if you are a person who relishes basic talk words about the economy and issues related to the US economy.

Ruccio on income and income disparity.

Chart of the day

Posted: 8 July 2016 in Uncategorized
Tags: 1 percent, chart, inequality, United States

Here’s another of my charts—this one for the top 1 percent—from the latest data on inequality in the United States created and disseminated by Emmanuel Saez and Thomas Piketty.

This chart shows the overall growth of the share of income going to the top 1 percent as well as the income shares of various subgroups: the top .01% (one hundredth of one percent, P99.99-100), the rest of the top .1% (one tenth of one percent, P99.9-99.99), the rest of the top .5% (one half of one percent, P99.5-99.9), and the rest of the top 1% (the bottom half of the top one percent, P99-99.5). (Someone else will have to come up with some catchy names for these subgroups.)

So, for example, the share of income captured by the top .01%, which was already high (at 0.9 percent) in 1979, increased by a factor of almost four and a half (to 3.96 percent) by 2015. The shares of income captured by the other subgroups also increased over that period, although less dramatically.

I’ve included the actual data below.

The previous chart, for the entire distribution of income in the United States, is here. As always, readers should feel free to use this chart and reproduce it as they wish.

	P99-99.5	P99.5-99.9	P99.9-99.99	P99.99-100
1979	2.76	3.50	1.85	0.90
1980	2.79	3.59	1.89	0.87
1981	2.71	3.49	1.86	0.86
1982	2.79	3.68	2.15	1.13
1983	2.88	3.87	2.30	1.24
1984	2.84	3.92	2.48	1.38
1985	2.92	4.10	2.65	1.42
1986	3.16	5.09	2.96	1.94
1987	3.11	4.39	2.74	1.50
1988	3.35	5.20	3.71	2.39
1989	3.38	4.97	3.37	2.10
1990	3.35	5.06	3.32	2.08
1991	3.34	4.71	2.95	1.72
1992	3.45	5.11	3.47	2.20
1993	3.43	4.98	3.30	1.97
1994	3.47	4.99	3.24	1.93
1995	3.68	5.36	3.55	2.03
1996	3.81	5.68	3.93	2.41
1997	3.90	5.94	4.46	2.68
1998	3.97	6.14	4.67	2.92
1999	4.03	6.34	4.90	3.10
2000	4.02	6.50	5.35	3.44
2001	3.78	5.89	4.35	2.74
2002	3.80	5.55	3.98	2.58
2003	3.84	5.64	4.11	2.81
2004	3.94	6.03	4.67	3.47
2005	4.06	6.55	5.33	4.10
2006	4.12	6.82	5.57	4.36
2007	4.12	6.90	5.72	4.77
2008	4.04	6.41	5.03	4.10
2009	3.97	5.83	4.24	3.44
2010	4.04	6.15	4.71	3.93
2011	4.10	6.30	4.71	3.75
2012	4.25	6.86	5.59	4.53
2013	4.15	6.32	4.76	3.69
2014	4.25	6.61	5.14	4.02
2015	4.31	6.72	5.33	3.96

Your GOP: Kentucky Governor Shows His "Red" Colors (Cuts Minimum Wage and Blocks Voting Rights)

YOUR GOP!!!

Herein lies the problem with eh 2016 General Elections. 

Progressive and liberals and other common Democtrta voting blocs have a tendenchy to “stay home.’ They do so while effectrivelyh via their lack of voting inertai cast figurative votes for the GOP.

The people of Kentucky who earn minimum wage and wish to have free and open voting should now consdier their possible lack of casting a vote.

Bill Moyers & Company

Morning Reads: New Kentucky Gov. Rolls Back Voting Rights, Minimum Wage

A roundup of some of the stories we’re reading at BillMoyers.com HQ…

BY BILLMOYERS.COM STAFF | DECEMBER 24, 2015

Kentucky Governor Matt Bevin in 2014, while campaigning for senate. (Photo by Win McNamee/Getty Images)

Kentucky slide –> Newly elected Kentucky governor Matt Bevin, as his first act in office, issued a series of executive orders. Two — revoking voting rights for ex-felons and repealing a minimum wage increase for state employees — undo signature achievements of Bevin’s predecessor, Democrat Steve Beshear. Bevin also would change the wording of marriage liscenses so that county clerks, like Kim Davis, would not have to put their names on a document affirming gay marriage. Mike Wynn and Tom Loftus report for the LouisvilleCourier-Journal.

Both sides of his mouth –> Mike Allen at Politico: “In June, Ted Cruz promised on NPR that opposition to gay marriage would be ‘front and center’ in his 2016 campaign. In July, he said the Supreme Court’s decision allowing same-sex marriage was the ‘very definition of tyranny’ and urged states to ignore the ruling. But in December, behind closed doors at a big-dollar Manhattan fundraiser, the quickly ascending presidential candidate assured a Republican gay-rights supporter that a Cruz administration would not make fighting same-sex marriage a top priority.”

Ask questions later –> In Georgia, CNN security guard Bobby Daniels got word that has son “was having an emotional breakdown, he had a gun and had just been holding a hostage,” Wesley Lowery reports for The Washington Post. “Bobby Daniels beat the deputies there, and according to family members talked his despondent son into putting the weapon down on the hood of a car. Moments later, the father of five was shot twice — not by his son, but by a Douglas County sheriff’s deputy…

“Daniels’ death is one of more than 960 fatal police shootings by on-duty police officers in 2015, according to a Washington Post database, and the 246th black person to be fatally shot by the police this year.”

Taking a stand –> The LA Times has an in-depth look at pushback from staff at the Las Vegas Review-Journal, recently purchased by billionaire political donor and casino magnate Sheldon Adelson in “one of the most bizarre chapters in U.S. journalism in years.” Among the interesting tidbits: Editor-in-chief Michael Hengel learned he had accepted a “voluntary” buyout from an editorial published by the new owner.

Sanders’ turn –> At Bloomberg News and The New York Times, Hillary Clinton has published op-eds on how she says she’ll rein in Wall Street. Now, in his own Times op-ed, Bernie Sanders writes about his plan.

The dark forces coalesce –> “In 2015 it became clear, obvious even, that various reactionary forces have coalesced into a larger, coherent counterculture… that exists not just in opposition to racial diversity in politics and culture, but in order to advance its own agenda, which across a variety of fronts seeks to preserve and promote the cultural and political preeminence of white guys,” writes Joseph Bernstein at Buzzfeed. The “racist, reactionary, offense-embracing, meme-savvy internet is not simply a disparate collection of ravings from immature and bitter young men with too much time on their hands. Rather it is a flourishing protest culture, indeed a coherent counterculture, created in response to the growing ethnic and gender diversity of contemporary media and pop culture and to the incursion of identity groups into previously homogenous digital spaces.”

On the other hand –> “There is a backlash against the liberalism of the Obama era. But it is louder than it is strong,” argues Peter Beinart at The Atlantic. “Instead of turning right, the country as a whole is still moving to the left.”

Big disconnect –> “A majority of U.S. Republicans who had heard of the international climate deal in Paris said they support working with other countries to curb global warming and were willing to take steps to do so, according to a Reuters/Ipsos poll on Tuesday. The desire for action is notable for an issue that has barely made a ripple on the campaign trail among 2016 Republican presidential candidates.” Reuters’ Megan Cassella reports.

Weird and getting weirder –> Amidst tempestuous weather across the nation, “Temperatures in New York City are predicted to be in the 70s, more than 30 degrees hotter than normal. Tourists and residents alike seemed unnerved by the unseasonable weather,” writes Jonah Bromwich at The New York Times. “The warm temperatures are not the only unusual atmospheric phenomenon taking place over the holiday. An asteroid will pass close to the earth on Thursday, and a full moon will be visible on Christmas for the first time since 1977. A Christmas moon will not return until 2034, when, scientists say, the planet will be significantly warmer.”

Happy holidays, we’ll see you next year –> We’ll be taking the the next several days off. We hope you’ll get some time with family and friends, away from the headlines, too. Thanks for reading this year, and see you in January.

Morning Reads is compiled by John Light and edited by Michael Winship.

GOP Doomsday Predictions! Another Flop.. Increasing The Minimum Wage Has Not Killed Jobs

 We have the privilege of posting a piece from Addictinginfo’s Stephen Foster. 

John Boehner’s number one on-camera talking point is: raising the minimum wage “kills jobs.”

How pathetic? The Representative to Boehner;s right actually found a bit of humor in his remarks.  How can elected officials be so wrong about matters of state?

The following Addictinginfo piece address minimum wage and killing jobs while showing the sadness and uncaring inner crew of the GOP.

Addictinginfo___________

GOP Doomsday Predictions Proved Wrong As States That Raised Minimum Wage See Faster Job Creation

AUTHOR: STEPHEN D. FOSTER JR. JULY 7, 2014 9:54 PM 

Graphic via Good Jobs Now http://action.goodjobsnow.org/page/s/raise-the-minimum-wage

Once again, conservative claims that the economy would take a swan dive if the minimum wage were to be raised were absolutely wrong.

As it turns out, raising the minimum wage is the real job creator, not greedy corporate CEOs as Republicans would have us believe. And here’s the proof.

13 states, including Arizona, Connecticut, Colorado, Florida, Missouri, Montana, New Jersey, New York, Ohio, Oregon, Rhode Island, Vermont, and Washington, raised their minimum wage in January. Out of all of these states, only New Jersey saw a decrease in employment over the first five months of the year. The other 12 saw speedier job growth in the first half of 2014 compared to 2013 than states that didn’t raise their wages. That’s what a new report from the Center for Economic and Policy Research says.

According to the CEPR report released on June 30th:

“The average change in employment for the 13 states that increased their minimum wage is +0.99% while the remaining states have an average employment change of +0.68%. “

Here’s a handy-dandy chart via the Center for Economic Policy and Research for those of you who enjoy visual evidence.

Clearly, Republican predictions on raising the minimum wage are incorrect. As the CEPR report states:

“While this kind of simple exercise can’t establish causality, it does provide evidence against theoretical negative employment effects of minimum-wage increases.”

It gets even worse for the GOP when you consider that 9 out of the 12 states seeing faster growth are those that set their minimum wages to rise with inflation. As you’ll recall, Republicans in the House and Senate are dead set against raising the minimum wage and they definitely don’t want to tie it to inflation. That would mean automatic increases to the minimum wage across the country. And no Republican wants to see a hard working American get a wage increase. That’s why they blocked the bill that would have done just that.

Even though congressional Republicans are blocking President Obama’s effort to raise the minimum wage to $10.10 an hour, that hasn’t stopped multiple states from taking matters into their own hands. Hawaii, Maryland, and Connecticut each raised their wages to that exact amount. Vermont raised its wage to $10.50. Massachusetts then raised its minimum wage to $11 even. But cities have made the biggest strides thus far, with Seattle leading the way by recently passing a minimum wage of $15. When it comes to raising the minimum wage, many states seem to be competing to see who can raise theirs the highest, which must make workers in those states very happy indeed.

Combined with the latest June jobs report that saw 288,000 jobs added and a drop in unemployment to 6.1 percent, this minimum wage news is fantastic for the nation and the economy.  If Republicans would just quit being stubborn Obama-haters and pass a $10.10 minimum wage tied with inflation for the whole country, other states could start seeing increased growth as well. It doesn’t even have to be Republican in Congress. State level legislatures and governors could also do this very thing to help their state economies and their workers at the same time.

The minimum wage is vital to the financial security of all American workers. We already work longer and harder than workers in any other country. It’s only fair that we get paid more. The cost of living continues to go up and a majority of minimum wage workers have families, including children, to support. Having a higher minimum wage chained to inflation will not only make living easier, it will make workers happier and more productive and will ensure that the minimum wage never falls behind again as it had been doing for decades. The more money American workers have in their pockets, the more businesses and the overall economy will flourish.

Pay Equity And Women In Lowest Level Jobs; Minimum Wage And The GOP

Pay Equity, Minimum Wage and the woman worker…… John F. Kennedy had foresight on inequity for women in the workplace.

“[W]e have by no means done enough to strengthen family life and at the same time encourage women to make their full contribution as citizens. If our nation is to be successful in the critical period ahead, we must rely upon the skills and devotion of all our people. … It is appropriate at this time … to review recent accomplishments, and to acknowledge frankly the further steps that must be taken. This is a task for the entire nation.”

504 – Statement by the President on the Establishment of the President’s Commission on the Status of Women.
December 14, 1961
_________________________

Ah, the beauty of reflection to a time when ideology and working towards a great future was like a rose budding to blossom and casting a “hopeful” shadow across the nation. Hopeful regarding…..

The Status of Women
    Civil Rights: “Out of Jim Crow”
       Concern for the poor and underprivileged
           The hope of Fair Pay for women and minorities
               Eventual War that would unleash a societal evolution
                   Booming manufacturing
                        Off-shoring jobs wasn’t on the radar screen
                             The Kochs did not have a grip on the GOP

And, all before the nation turned to Richard Nixon and the new GOP and 1970s neo-conservative ideology. The beautiful blossoming rose prematurely withered with the eventual election of Ronald Reagan. The Father of Modern Conservatism administered with regressive conservative ideology and policy to reverse growing social change. Reagan and his party initiated federal policy that led to (protective) moats for US industrialist. Ultimately, his economic policies fueled development of a US “income caste system.”

Since the Reagan Era, the nation has experienced Civil and Human Rights paradigms akin to that of pre-1960s social Dark Ages. Paradigms that have metastasized with the election of Barack Obama to a social phenomenon one can only call a rebirth of unabashed racism. Racism actually practiced and broadcast by well-viewed media (Fox News) and manifest like a completely soaked sponge around the fringe of the GOP (and the libertarian movement). The socially deprived seem to use media (eg., talk radio and Fox News) to feed from the sponge as social oppression permeates to the core of US conservative ideology. The permeating sponge represents the growth of “isms” that at one time was moved to the “back-40” of the US social landscape. Did I mention pay equity, the Minimum Wage and women?

People who practice or perpetrate “isms” carry then around in bundles. You will not find a racist who is free of homophobia. You will only rarely find a person suffering from homophobia who is free of the ravages of sexism. I further posit, you will not find a person infested with sexism who will rally around or champion fair and equal pay for women. Maybe less pronounced, but women who live in such environments know it is a reality.

Sexism has become such a worldwide norm women’s pay equity issues in industrialized nations are completely ignored. In the United States, millions ignore the male to female pay ratio of women earning $.77 for every dollar earned by her male cohorts. Women are also guilty complacency in acceptance of pay inequity.  When women in the millions do themselves great harm when they vote for a party that cares as much about pay-equity as it cares about climate issues. Indifferent women literally enable one of US societies’ most virulent “isms.” Pay inequality with women occupying the majority of lower level jobs, and receiving the lowest levels of pay, is the epitome of sexism.

Read more after the break below

How is it possible the following is so easy to ignore? Let’s start with the perfect high-end example: the woman Chief Executive Officer (CEO). In the summer of 2013, Bloomberg reviewed the S&P 500 top executives and found a 17% disparity in women CEO Pay and average CEO pay.  The following table shows a mixed bag, but the message is clear. 

If industrialist and Wall Street executives pay women at the highest levels moderately less than her male counterparts, do you think those power-brokers have concern for lower end employees?  The question is rhetorical, we know what they do and the evidence is easy to locate.

First, know that women occupy the majority of lower paid jobs.  A look back 50 years.

Women comprise 53% of the workforce. Seventy per cent of mothers work to support a family.   Since the mid 1960s, the income disparity (gap) has kept pace with increases in pay among various race and gender demographic groups. Progress in reducing the gap doe snot exist; actually the gap has every so slightly widened. The following chart unfortunately ends in 2008, but we have major suspicion the trend lines continue as delineated in the chart. Fabulous Broke Dot Com 

Last summer the White House published a report from a National Equal Pay Task Force. 

The LA Times June 13, 2013

The conclusion? The top professions among women haven’t changed all that much over the last half century. Women are still more likely than men to work minimum-wage or low-pay service jobs. 

In 1960, the top five leading occupations for women were private household workers, secretaries, sales clerks, elementary school teachers and bookkeepers. 

In 2010, the leading categories haven’t changed much. The top five are secretaries, nurses, elementary and high school teachers, cashiers and retail clerks. 

The report found male-dominated jobs that do not require higher education still often pay more than the kinds of jobs mostly taken up by women.

A National Equal Pay Task Force table shows clear evidence of job level regression (over the past 30 years) and it shows women occupy many lower paying jobs.

The Obama Administration has nudged pay disparity among men and actual women closer to equity, but a stubborn gap remains.

The Society of Human Resources Management June 13, 2013

Women’s Pay Still Lags Behind Men’s Excerpt The day the Equal Pay Act was signed into law, women earned, on average, 59 cents for every dollar a man earned. “Today it’s about 77 cents,” President Obama said on June 10, 2013, in the East Room of the White House. “So, it was 59 and now it’s 77 cents. It’s even less, by the way, if you’re an African-American or a Latina.”  The president pressed for Congress to “step up and pass the Paycheck Fairness Act, so women have better tools to fight for equal pay for equal work.”  Occupational Segregation The pay disparity is due, in part, to women continuing to fill lower-paying jobs because of “occupational segregation.” The report listed the top 10 occupations women fill:  Secretaries and administrative assistants. Professional nurses. Elementary- and middle-school teachers. Cashiers. Retail salespersons. Nursing, psychiatric and home health aides. Waitresses. First-line supervisors and managers of retail salespersons. Customer-service representatives. Maids.  Male-dominated professions requiring a high school diploma or a bachelor’s degree or higher continue to pay more than fields with a high concentration of women.  For example, the three most common male-dominated jobs requiring a high school diploma—brick mason, tool and die maker, and plumber—provide average salaries of $45,410, $39,910 and $46,660, respectively. By contrast, the top three female-dominated jobs requiring a high school diploma—secretary, child care worker and hairdresser—offer average salaries of $34,660, $19,300 and $22,500, respectively.  Occupations are segregated by gender in professions requiring a bachelor’s degree or higher, the report added, and the male-dominated jobs are paid more.  The three most common male-dominated jobs requiring a higher-education degree—mechanical engineer, computer-control programmer and operator, and aerospace engineer—provide average salaries of $78,160, $71,380 and $97,480, respectively.  The top female-dominated professions requiring a higher-education degree—speech-language pathologist, occupational therapist and dietitian—provide average salaries of $66,920, $72,320 and $53,250, respectively.  Read more linked above

Since women occupy more lower paying jobs than men, even when the male has less education, isn’t that a form of disparate impact? Disparate impact is against federal Fair Employment Law. Raising the Minimum wage could seriously offset the $.77 to $1.00 female/male pay ratio.

If the GOP is against raising the Minimum Wage, the GOP accepts unequal pay with the reality of disparate impact on women. Some prefer use of softer language, but we call that a “War on Women.”

The war is also perpetrated against you and me. 

We shouldn’t be forced to live and experience the reality of the graphic just above. Your daughter, wife, aunt or Grandmother shouldn’t have to labor in lowering paying jobs while being paid a wage below the poverty level. They work in jobs with male co-workers possibly earning more for doing the same job. Many women work more than one job to simply help make ends meet.   

If 70 plus percent of survey respondents believe the Minimum Wage should be higher than $7.25 per hour and we are faced with what you have just read, how can anyone in the GOP say there is no “war on women” from the Right. 

Why is the party on the Right so out of touch with the wishes of the American people. 

The Daily GOP Ignominious: Kevin Madden Perfect GOP Surrogate Robot!

We offer a two minute segment of Madden’s horrific comments.   He exhibits corporatist elitism that doesn’t even work as a sophism!

http://youtu.be/foAr27N4N7A?t=2m

The full segment.

It should be noted Madden was added to the Romney campaign shortly after another long-term Romney adviser made the now famous, “Etch-A-Sketch.” comment.  

Let’s look a bit closer via Brandon Gaille’s web page.

10 States with Highest Minimum Wage

1. Washington – $9.19
2. Oregon – $8.95
3. Vermont – $8.60
4. Nevada – $8.25
5. Connecticut – $8.25
6. District of Columbia – $8.25
7. Illinois – $8.25
8. California – $8.00
9. Massachusetts – $8.00
10. Ohio – $7.85

10 States with Lowest Minimum Wage (Southern States the Republican geographic strongholdern reception for Minnesota~The Pardu)

1. Alabama – No Minimum Wage
2. Louisiana – No Minimum Wage
3. South Carolina – No Minimum Wage
4. Mississippi – No Minimum Wage
5. Tennessee – No Minimum Wage
6. Wyoming – $5.15
7. Georgia – $5.15
8. Minnesota – $6.16
9. Arkansas – $6.25
10. 22 States tied at $7.25

Madden made certain to do his “good soldiering.”  He made certain to take aim at the Obama Administration before his segment ending drivel.

Question?  Has the GOP ever recommended or proposed increasing the Minimum Wage?

…..AND RIGHT BAND PLAYS ON….

Raising The Minimum Wage Is A Job Killer! And, Sarah Palin Can See Russia From Her House!

www.huffingtonpost.com

Well, here I go. I should avoid reading information that points a finger at conservative paradigms as deleterious to the good of the greater society. 

The GOP as functionary operatives of “all things” business is as reliable as the 24 hour clock. Does it surprise anyone conservative leaders of the US House resists any consideration of raising the national minimum wage? If that surprises you, you should stop reading here and now; save the time.

We also shouldn’t be alarmed with House Leader Cantor’s personal mission as killer of Over-time Pay. Imagine a wealthy political leader as a proponent and driver of taking Over-Time Pay away from the American worker? As is typical Cantor reasons that the quality of family life has suffered from working mothers being outside the home. Really!!! He proposes supplanting pay for hours worked over 40 hours per week with “Comp-time” (compensatory time-off). Really!!! The proposal seems written by corporation in the American Legislative Exchange Council and handed off to the House Leader.  If the legislation originated in the Koch brothers sponsored ALEC, I cannot help be wonder if the instructions included behavioral suggestion like:

 “When you speak of this piece of legislation always appear empathetic to the family, have ample numbers of mothers standing nearby and do not use humor.”  

How crass and in-your face are GOP efforts to support their major constituents: Big business? 

The reoccurring kerfuffle surrounding the minimum wage since President Obama mentioned the need to increase the wage to $9.00 per hour has a led to conservative and GOP “derangement” second only to Obama 2008 election win. 

Raising the Minimum Wage is a jobs killer!

In February of this year, Adam Ozimek, writing for Forbes published a detailed piece about conservative visceral considerations regarding the minimum wage. 

Excerpt…  To start, let me use two very broad, definitely overly generalized views of the poor that nevertheless would loosely apply to many. Conservatives view poverty as a problem of the poor not working hard enough. Or perhaps they view them as having too high of a discount rate. In either case they think poverty at least in part reflects the choices of the poor to use lower effort than they could, and their low pay reflects a fair return on their effort.  Liberals in contrast view those in poverty as generally working hard, but having some combination of low marginal product and perhaps having their wages held down by monopsonists, or “too much” labor market competition, or something giving employers “too much” power. Or perhaps liberals recognize that some of poverty is because of low effort, but that low effort is endogenous to a lack of opportunities or resources at a young age, or perhaps facing too low of market rewards.  These different frameworks imply different optimal welfare policies. For liberals, the best policies are simply transfers. For conservatives, optimal welfare incentizes “better” behavior. While a liberal would be willing to give an unconditional weekly transfer as welfare, a conservative would prefer that the worker be incentivized to work harder and actually earn the transfer with more labor productivity.  So given that conservatives want the poor to work harder and earn their welfare, there are a few ways to achieve this. EITC provides higher marginal pay which incentives more hours of work. But surely for many workers it would be more optimal to “work harder” or “smarter” with hours of work unchanged. This is supported by the fact that for a given worker most of their lifetime increase in wages comes via higher productivity per hour rather than just more hours. Better to incentivize a form of earnings growth is sustainable over the long-run.

Basically, Adam Ozimek makes the case consideration of raising the minimum wage will always meet resistance from the GOP as it is against a basic paradigm.  In other words, why give a mass wage increase without corresponding effort in earning the increase (more productivity).  The conservative thought process will not reaching into a bank of information tat considers the plight of people who are consider poor,a s the poor are non contributors to the greater good. Such seems awful Ayn Rand, Paul Ryan’s non-economist super-hero.  

Does raising the Minimum Wage lead to job losses?

Walter Hickey, Business Insider, clearly and basically delineates the issue.

Excerpt…  The main confusion comes with the dissonance between what “should” happen to the labor market when the minimum wage goes up and what does historically happen.   In the abstract, increasing the price floor of labor should result in wage cuts. However, that hasn’t historically been the case. Historically managers will cut other expenses in order to compensate for an increase in the minimum labor cost and the increased minimum wage functions as a form of stimulus. Given the controversial nature of fluctuations in the minimum wage — billions of dollars hang in the balance for all parties involved — it’s going to be a very tough fight.   Read more

Hickey references a November 2011 study from Barry Hirsch and Bruce Kaufman of Georgia State University and Tetyana Zelenska, Innovations for Poverty Action, in making a case that increases in the minimum wage does not by matter of consistent and subsequent business strategy/practice lead to job losses. Company adjusts to the minimum wage increases. 

Data excerpts…. The group surveyed managers of fast food restaurants in Georgia and Alabama as they contended with three annual increases in the federal minimum wage between July 2007 and July 2009.   They asked the managers if they were taking any steps to offset increases labor costs.   Here is what managers did with regards to human resources: Minimum Wage Channels of Adjustment Notice that only 8 percent of managers surveyed thought that firing current employees was at all important to make up for lost wages.   Higher labor costs weren’t only offset from cuts to total labor cost, either. Management also took several steps to increase efficiency and productivity to compensate for the higher costs: Minimum Wage Channels of Adjustment They also tapped into other costs to cut: Minimum Wage Channels of Adjustment This far from settles the fight over raising the minimum wage, but does address concerns that a rise in the minimum wage would lead to across the board job losses.  Read more

GOP Minimum Wage mantra is unfounded. Many companies possibly adjusts to increased fixed costs Vs. enacting automatic job cuts.

The following graphic is a very popular discussion item for many bloggers and Op-Ed writers.  As with many pieces of data the reader can draw what he or she wishes from some depictions.  This particular chart, while a bit busy even for me, led Wes Williams  contributor to Addicting Info through a rather interesting and revealing analysis. 

Addicting Info

Excerpt…

What REALLY happens to the national unemployment rate when we raise the minimum wage? 

Sixty five years of data reveals that claims made about the effect of increasing the minimum wage on unemployment have no basis in fact. The best possible argument that opponents of the minimum wage can make is that it has no effect one way or another on unemployment. However, the historical data suggests that increases in the minimum wage may have a positive effect on unemployment, as low wage workers find themselves with more disposable income following a minimum wage hike — money which is largely put right back into the economy.

Read more Wes Williams

Over the past few months we have posted piece after piece with irrefutable evidence the GOP “lies.” We have found the party and all associated fissures lie so very much we have adopted a new lexicon item for GOP lying: “GOPing.”

Increasing the minimum wage will not result in ‘knee-jerk” mass job losses.  

We saw evidence of conservative plutocrats extorting and manipulating employees to vote for Mitt Romney under threat of job losses. Losses that not did not materialize; some of those plutocrats led in hiring.  

We heard refrains of doom associated with the Obama Administration Stimulus. The economic initiative was singularly responsible for saving  the nation from a second Great Depression. 

We heard the GOP say, Let Detroit go bankrupt. Today GM , Ford and Chrysler are again leading the world in automobile production. GM has the world’s most popular car the Chevrolet Impala. 

Data exists showing the Democrats as the party that performs best with condensation of our economic markets and actually administer with less negative impact on the nation’s debt/deficits. Yet, we still have people buying into GOP mantra about Democrat spending. 

Why should we believe GOP mantra and sloganeering regarding raising the minimum wage and job losses? 

Let’s end with a bit of deductive reasoning (syllogism). 

A. The GOP has major money-backers and industries  (Big business) that support their individual political candidates: Contributions. B. Big Business has no interest in enacting a minimum wage increase.   C. Then political contributions will and do buy actions from most politicians who accept the them.  D. The GOP and Blue Dog democrats will not actively support raising the Minimum Wage. And, they will avoid the issue like the plague to ensure job preservation.

How long are we going to continue to allow a party that is so far aligned with “corporatist” vs the will of the people, carry our elections districts?  It is time to stop following the party on the right as they go about, “GOPing.”  

Vote massively in 2014, remove House Leadership and replace them with representatives who actually care about the plight of the middle class and lower income strata.  

Additional source:
As Economic Sense
2011 Study report
The Job Loss Myth
Business Insider
Addicting Info