The Pardu

The Pardu
Watchful eyes and ears feed the brain, thus nourishing the brain cells.

Monday, September 30, 2013

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

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.

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:
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:
They also tapped into other costs to cut:
manager reaction to higher labor cost survey
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. 

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

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

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