Monday, December 30, 2013

It's the chicken and egg thing, all over again....

Which came first, the chicken or the egg?  Now we have the 2014 version of that question:  Which came first, a higher minimum wage or increased consumer demand?

The papers this morning say that 21 states have now raised their minimum hourly wage to a level above the federally mandated $7.25.  This campaign, they say, will be the Democrats rallying cry during the 2014 mid-term congressional elections.

Republicans say there's no way businesses can justify hiring more people and pay skilled labor wages to workers who can do little more than sweep floors or flip burgers.  Raising the minimum wage will be a job killer.

Democrats say they're concerned about the disproportionate spread of low-wage jobs, creating millions of financially strained workers and putting too little money in consumers' pockets to spur faster economic growth.

No doubt, there are millions of minimum wage workers who would like to buy more "stuff" for their families, but can't afford to.  With higher pay they could, which would spur more production, AND HIRING.

Chicken....or egg?

Democrats seem to have the momentum here.  Polls show 70% of "moderate" voters, 64% of Independent voters, and even 57% of Republicans agree with the idea of raising the minimum wage.  

Looks to me like the Republicans better get on board.  An increase of $1-$2 probably wouldn't sink the ship.  That $15 an hour wage that Walmart workers (among others) are demanding likely will.

Remember the old "This is your brain...this is your brain on drugs" ad from the '70's?  Maybe they need to update that:

This could be your life.

This will be your life with no skills.



  1. There is a point where raising the MW will slow job creation and hurt the economy. There is a point in a robust economy where MW is raised simply by supply and demand rules not gov't laws. If MW is raised too high prices may also be raised. Raising MW is not always productive or even good for low wage workers, the question always is, what is that point. In my part of the country most entry level jobs are still above the Fed MW so it is not much of an issue. Regardless of where the number falls, MW workers should probably not expect to move above the poverty level, the poverty level will simply rise along with the MW.

    Interestingly enough some firms like Costco pay above MW + benifits for MW jobs, and they find they gain from that policy by low turnover, loyalty, less employee theft, and higher productivity. Works for Costco, probably not so much for the teenager who sweeps the barber shop floor.

  2. Between the ADA and federal pressure to give preferences to the incompetent, I don't see how much of any business has a chance in the US any more.

  3. I'm not very knowledgeable about this but I do think the minimum wage should be more than $7.25. I don't buy too much fast food but I'm noticing lately that the young people have been replaced by women in their mid thirties. People working ten hour shifts five or six days a week should not need food stamps, as is the current case.

  4. I won't comment on the minimum wage argument, but I will say with certainty the chicken came first. An egg, on it's own, will not hatch. It needs a chicken to sit on it. Therefore, ergo, cogitum sum diplodicus, and other things in a dead language that maybe will fool one of two into thinking I'm smarter than I am.

  5. From what I understand (and I admit my knowledge is limited in this area), minimum wage would have to be around $12/hour to have the same buying power as it did in the 1960's and 1970's. I'm not saying it should be raised to this level, but I think we need to examine carefully why someone working a full-time job (or more) can't make ends meet. It's also not fair to the rest of many employees working those minimum McJobs are on public assistance?