Perry Glasser

MINIMUM WAGE LAWS: THE BIG BUCCANEER BIG LIE

In Business, Economics, Political Economy, Politics, Uncategorized on April 30, 2014 at 12:11 pm

Big Lie Propaganda embraces the idea that the more preposterous a lie and the more it is repeated, the more likely some fools will be bound to believe there is something to it.  After all, they can’t keep saying such bullshit unless it is at least partially true, right?

The current debate on minimum wage is a case study in Big Lie operation.

This Weasel is so terrified of exposure, it is disguises as a  mongoose.

This Weasel is so terrified of exposure, it is disguises as a mongoose.

THE WEASELS

Owes allegiance only to profit

Owes allegiance only to profit

Weasels, who only live to be re-elected, are running in small circles trying to figure out which way to go on the minimum wage issue. On the one hand, Buccaneers will be displeased should they vote or utter words that might displease their Masters; on the other, a LOT of people in the service economy–the same economy those Buccaneers created–get to vote.

What’s a poor Weasel to do?

Go for votes or go for the money?

Weaseldom is no easy life.

 

FACTS

As John Cassidy has eloquently shown in The New Yorker, there is no relationship between minimum wage and unemployment. None. Not a scintilla.

Nor is there any negative relationship between unemployment among teens and any rise in minimum wage: in fact, the opposite seems to be the case according to research conducted by John Spenser.

There will be lies often repeated. That just makes them Big Lies. It does not make them true.

LOGIC

Let’s suppose you won and run a Mom-and-Pop store in a strip mall, party goods, perhaps. You employ 4 local people kids at 30 hours each, a total of 120 hours each week of sales and service employees. You deploy them as you need them. Two of them are smart and honest enough that they operate the register when you do not.

You do not hire 3 full-time employees working 40 hour weeks. For one thing, if you do, the Fed is going to require you to offer benefits you cannot afford. For another, you are smart enough to know your employees come and go: they graduate from high school and go off to college or, if they are older, they want and take long vacations when the grandchildren are in town.  Anyone in the demographic middle is, as you know, looking for a 40-hour-week job, and will give notice in a heartbeat.

You wish them well, and you consider your cost of training a rolling cadre of new employees a cost of doing business.

So if the minimum wage rises, will you fire anyone?

Of course not. If you have the brains of a carrot, you are not employing anyone out of some charitable impulse. You are in business to make money, not employ people.  You run your business with as few people as possible.

Will you endure less profit to meet a new law?

No, you’ll raise prices here and there.

It won’t matter if you have competitors: they are in the same boat.

If you have huge competitors, they may be able to endure the new wage with less profit for a while longer than you, but ultimately they, too, will have to follow suit.  You cannot compete with Wal-Mart or Target on price, buy you can kick butt as a matter of service.

WHY THERE IS RESISTANCE

Buccaneers are aware that they own most Weasels, but that Weasels have to be re-elected, so they issue solemn warnings of ruin and destruction if the 16-year-olds at McDonald’s get a 25% raise. Most Buccaneers have trouble envisioning any time beyond the next quarter, anyway.

At issue is only how large a profit can be made without any raise in prices.

Do you know anyone who will pass on the fries if the price goes up a nickel? Me neither.

The Weasel-Buccaneer Dance will go forward, and wingnuts on the right will see the Death of Democracy in the debate.

Try to ignore that crap. It’s been decades since we saw a minimum raise hike.

It is time.

 

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