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Robert J. Samuelson: Boosting minimum wage without repercussions may not be possible

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  • Fred44 Salt Lake City, Utah
    Jan. 19, 2014 8:14 p.m.

    Mike Richards,

    The garment industry is gone because of the lack of value and ethics in our business community. Paying children in third world countries a few pennies an hour in unsafe shops is what has caused the disappearance of the garment industry in America. We can defend big business all we want, but if we continue to create an economy where a growing number of people feel no hope and desperation we will reap the fruits of what sow in increased gang violence, crime, etc. When people have no hope, they also have no choices. We as a society will eventually pay for the lack of concern of the American worker, especially the those in poverty and on the verge of poverty.

  • mark Salt Lake City, UT
    Jan. 19, 2014 9:32 a.m.

    "When you buy gasoline, do you always buy the same brand, or do you stop at the station that has the lowest price? Why?"

    I NEVER look at the price of gasoline. (I need it so I buy it plus I drive an economical vehicle) I buy the same brand of gas almost always. What's your point?

    "If you are a business and you can pay workers $15 per hour when their real value is $5 per hour, are you going to bankrupt your company and pay an extra $20,000 per year for the same value?"

    Uh. . . Yes if the government tells me this is the miniumum I can pay a worker I will pay them no lower them that. Besides, employees are not hired based on cost they are hired based on need. If I need four employees for a job I WILL hire four employees. If I need three I WILL hire three. If I need a hundred I WILL hire a hundred. Hiring is driven by DEMAND nothing else. The cost of wages is the cost of doing business. It is NOT a factor in why businesses hire employees.

  • Thid Barker Victor, ID
    Jan. 19, 2014 8:49 a.m.

    If low productivity produced prosperity, then there would be no poverty! Minimum wage jobs at any pay rate will never produce prosperity! Minimum wage jobs are the lest productive jobs and are paid accordingly, regardless of any "laws" the government may enact. Productivity produces prosperity! If you want to become prosperous, become more productive: produce something in demand! Be creative, innovative and prosperity will follow! No one became prosperous by being trapped in minimum wage jobs! The reason N. Korea, Cuba and any other 3rd world country is not prosperous is because they produce little or nothing! Production=prosperity and there is no short cut, no exception and no minimum wage law that will change that!

  • Dr. Thom Long Beach, CA
    Jan. 18, 2014 9:20 p.m.

    Hey Kent,

    "Someone needs to remind corporations that, although they must stay profitable in order to exist, their primary purpose is not to make money.?"

    As someone with an MBA and PhD in business, (15 years as an economics professor) the primary purpose of a corporation such as McDonalds is to maximize the return on investment (ROI) for its shareholders which means holding down operational expenses such as payroll expenses. Any increase in operational expenses are usually or eventually passed on to the consumer in any number of ways such as increasing the cost of goods and services.

    In the end it will depend on how much consumers will be willing to pay for a double cheeseburger at McDonalds.

  • Commodore West Jordan, UT
    Jan. 18, 2014 6:39 p.m.

    It's incredible to me that the minimum wage in the 60's is equivalent to about $10 today and somehow businesses in the 60's made do paying their workers that wage. If the businesses in the 60's could afford to pay their workers $10 in today's money, certainly we can pay that much as well.....especially when you consider the large increases in productivity over the past 50 years.

  • Ultra Bob Cottonwood Heights, UT
    Jan. 18, 2014 6:05 p.m.

    The minimum wage should be the amount of wages needed to prove up on the promise of Life, Liberty and the Pursuit of Happiness. The government should hire all unemployed individuals, put them to work and pay them according to their needs for the promise. There should be no unemployed. There should be no need for workers unions, and no need for the voluntary slavery aspect of employment.

    If such were done, there would be a big bite out of Poverty. Even to the point of doing away with Welfare, charity for the poor, food stamps, and a host of other programs costing the taxpayer for their benefits and the cost of providing those benefits.

    The cost of the program would be covered by a tax on American business operations. Even now, business is paying for all welfare, and money given to the unemployed no mater if it is public or private welfare. If you eliminate the cost of welfare, maybe the tax would not be needed.

    Individual Americans, even employees, should be free. They should not be chained to their job by Health Insurance, Retirement preparation, and especially not by the threat of the hardship of unemployment.

  • atl134 Salt Lake City, UT
    Jan. 18, 2014 5:01 p.m.

    @NevadaCougar
    " Let's get rid of the WalMart's of the world that save us $100's every month."

    Exploiting cheap labor at home and abroad is not a particularly moral advocacy in my book.

  • Ultra Bob Cottonwood Heights, UT
    Jan. 18, 2014 2:13 p.m.

    The minimum wage should be the amount of wages needed to prove up on the promise of Life, Liberty and the Pursuit of Happiness. The government should hire all unemployed individuals, put them to work and pay them according to their needs for the promise. There should be no unemployed. There should be no need for workers unions, and no need for the voluntary slavery aspect of employment.

    If such were done, there would be a big bite out of Poverty. Even to the point of doing away with Welfare, charity for the poor, food stamps, and a host of other programs costing the taxpayer for their benefits and the cost of providing those benefits.

    The cost of the program would be covered by a tax on American business operations. Even now, business is paying for all welfare, and money given to the unemployed no mater if it is public or private welfare. If you eliminate the cost of welfare, maybe the tax would not be needed.

    Individual Americans, even employees, should be free. They should not be chained to their job by Health Insurance, Retirement preparation, and especially not by the threat of the hardship of unemployment.

  • The Real Maverick Orem, UT
    Jan. 18, 2014 12:05 p.m.

    Oh good!

    Another conservative opinion piece on Min Wage! It provides zero credible studies or views from respected economists. But boy, does it lay it on thick with the hyperbole.

  • bluecollar Kearns, UT
    Jan. 18, 2014 10:39 a.m.

    When free market forces ignore the needs of the citizens, the citizens work as a majority force and demand change. Basic stuff.
    When working-class middle-income Americans find their lowest-wage families and friends and neighbors can't make a livable wage and require public assistance to get by, they demand change. Sensible enough.
    If corporations and big businesses won't pay their lowest-wage employees a livable wage and they have no other recourse, the majority of Americans will demand a change by voting for laws that require employers to increase lowest wages. This uplifts us all.
    Minimum wages should be raised. With respect to small businesses a jump from $7.25 to $8.20 is a bit harsh. Wages should be raised slowly; in small increments over a period of time.

  • E Sam Provo, UT
    Jan. 18, 2014 1:57 a.m.

    In any dispute between ideology and data, I take the side of data. The minimum wage has been raised many times in this country, without negative consequences, and with modest stimulative effect. Raising it again is an easy call.

  • Rikitikitavi Cardston, Alberta
    Jan. 17, 2014 10:57 p.m.

    Every state or every sector of the nation is different. One size does not fit all. Feds must keep out of state jurisdiction.

  • The Real Maverick Orem, UT
    Jan. 17, 2014 10:09 p.m.

    Lets get rid of all min wage.

    Lets pay our workers as little as possible. Lets get rid of all child labor laws. Let kids begin immediately after leaving the womb to work. Get rid of all regulations. Drill baby drill. If you lose an arm or drink polluted water then it's your own fault. Move or find another job. Lets teach our kids that we were made for corporations and that if they ever want to amount to anything in life then they need to work. Let corporations do anything they want. Let them blackmail us, use us, abuse us. Heck, I have a better idea, lets get rid of all wages. That means that corporations will make even more money. We could have corporate masters who could provide us with meals and food. If we refuse to work, then can whip and hit us. That'll teach everyone to work hard.

    I love the corporate blackmail. Corporations are now wagging the dog. Unbelievable.

    How can anyone be a good Christian and support this mindless trickle down theory? It's a complete failure and only enriches those most evil and ruthless.

  • NevadaCougar Panaca, NV
    Jan. 17, 2014 6:19 p.m.

    Let's get rid of all jobs that pay under $10. Let's teach our kids not to work, because really all jobs should be to support a family. Businesses are evil so they should pay for it. Let's get rid of the WalMart's of the world that save us $100's every month. Maybe, if we are lucky, our youth will not learn to work at low paying jobs before getting an education, but they will just graduate from school and keep that $10/hr job until they retire. We all know in reality the American dream is dead. We should have no hope, except that we can get comfortable $10/hr jobs. Oprah, Bill Gates, Warren Buffet, and all those other self-made millionaires just got lucky. Oh, and they are greedy. We should destroy all of those greedy pensions that have invested in stocks like WalMart. All of those teachers that rely on those pensions for support are greedy too! We need to teach basic economics in k-12.

  • Noodlekaboodle Poplar Grove, UT
    Jan. 17, 2014 5:26 p.m.

    @Schnee
    I pretty much agree with what your saying, but garment workers would kill(literally) to get 5 bucks an hour. The people making your clothes in Bangladesh are lucky to make 10 bucks a week. Minimum wage for a Bangladeshi(per the Huffington Post) is $38 a month. We won't ever get those jobs back, and frankly for those wages do we even want them?
    @Anti-Liar
    Another good example of that is Costco. Their employees aren't getting wealth working there, but they actually get paid enough money to rent an apartment, pay for a car, and eat. Starting wage at the Costco is around 12 bucks an hour. I know that the people that work their generally seem happier, and I know they are more willing to help and know more about their jobs than say, someone who works a Wal Mart.

  • Schnee Salt Lake City, UT
    Jan. 17, 2014 4:41 p.m.

    Let's say we have a business. It has 10 employees, they work 30 hours a week at 8 dollars an hour. They make 240 a week each.

    Let's say the minimum wage goes to 10 dollars an hour. The employer decides they need to cut hours because they can't afford to pay a single additional cent in wages (I'm going to pick the most extreme scenario). Okay, what happens? 10 employees working 24 hours a week at 10 dollars an hour. They make 240 a week each.

    Perhaps the company can handle a 1 dollar increase in worker pay but not two dollars and thus pass half of it onto employees through cutting hours. Okay, so 10 employees working 27 hours a week at 10 dollars an hour. They're now making 270 a week each.

    @Mike Richards
    "The garment trade is gone because of demands for wages that were higher than the value given.
    "

    If we let a bunch of low wage 5 dollar an hour jobs be in place then that just means a lot of people will be left needing to work multiple jobs in order to scrape by. Doesn't really help anything.

  • anti-liar Salt Lake City, UT
    Jan. 17, 2014 4:27 p.m.

    In discussions like this the point that frequently gets left out is the issue of Greed. It seems that in the name of "free market," and "capitalism," anything goes as long as you are able to stay out of jail. There is no way everyone currently being paid minimum wage is being paid all that they truly deserve and have earned. There is not a balance in bargaining power between employees and employers; employers typically have the upper hand and most of them take advantage of it.

    In-N-Out Burger single-handedly proves the assertion wrong that paying one's hirelings more will result in unemployment or even higher retail prices. They pay their people substantially more than do their competitors, yet they offer a superior value to the customer and still make a profit. The answer is that unlike many businessmen in Utah and in this country, the owners of In-N-Out take their Christianity seriously and recognize that with "free market" and capitalism" come moral responsibility.

  • Hutterite American Fork, UT
    Jan. 17, 2014 3:26 p.m.

    Raising the minimum will have repercussions. Some large corporations may see lower profits. But it's still worth it. If we go the other way, to the conservative panacea where there is no minimum wage, only illegal immigrants will do the job. If you want to see it in action, take a drive around the lettuce fields near Yuma.

  • mcclark Salt Lake City, UT
    Jan. 17, 2014 3:23 p.m.

    Every time talk about the minimum wage being hiked, there are grave warnings of disaster. Every time it is hiked, nothing bad happens, more people make more money that they then spend, helping the economy. And I am a small business owner.

  • george of the jungle goshen, UT
    Jan. 17, 2014 12:50 p.m.

    As it is we had 3 people that 1 could of done because there are a lot of lazy people, any one that has a brain wants to have perspective to get a job.

  • Shaun Sandy, UT
    Jan. 17, 2014 12:16 p.m.

    @Mike Richards. I get your point but how would having more low paying jobs actually be better for this country? If the garment trade is gone because they can not pay people 2.25 an hour how would repealing the minimum wage so that trade can come back actually help the economy?

    Its trade policy and monetary policy that need to change. We will never be able to compete with slave labor in other countries.

  • Irony Guy Bountiful, Utah
    Jan. 17, 2014 12:11 p.m.

    Mr. Samuelson is wrong. Businesses DO consult studies about operational issues like compensation. I have found for year that it pays, as a businessperson, to be able to read "studies."

  • McMurphy St George, Utah
    Jan. 17, 2014 10:42 a.m.

    The lower the income, the more Govt assistance is available, e.g., food stamps, subsidized housing, earned income tax credit. For those on the lowest rung of income, what private business does not pay them the taxpayer does.

  • Mike Richards South Jordan, Utah
    Jan. 17, 2014 10:40 a.m.

    Raising minimum wage doesn't cost jobs? Let's see. When you buy gasoline, do you always buy the same brand, or do you stop at the station that has the lowest price? Why? Don't you believe in paying a higher price for the same product? If you are a business and you can pay workers $15 per hour when their real value is $5 per hour, are you going to bankrupt your company and pay an extra $20,000 per year for the same value?

    The garment trade is gone because of demands for wages that were higher than the value given.

    Obama seized GM and Chrysler because union workers demanded higher wages than the customer was willing to bear. He funded that takeover by destroying the pension plans of policemen and teachers who had been foolish enough to trust the government to pay bondholders before paying off unions.

    Look around your home and office. How many items do you own that were made in America? Why don't you support American wages and American workers?

    Now, tell me that raising the minimum wage won't destroy jobs.

  • Kent C. DeForrest Provo, UT
    Jan. 17, 2014 10:27 a.m.

    Somehow we have forgotten the fact that corporations are chartered by government (the people), and for what purpose? To enrich a few executives and stockholders? Sorry, wrong answer. There was a time in this country when government chartered corporations rarely, temporarily, and to serve public purposes. They were kept on a short leash and disbanded if they forgot their prime directive. But now the tail is wagging the dog. Someone needs to remind corporations that, although they must stay profitable in order to exist, their primary purpose is not to make money. The only defensible excuse for their existence is for them to produce products society needs (or perhaps wants) and to provide opportunities for people to have meaningful work. It's amazing how much we have been taught to forget over the past 150 years of increasing corporate domination.

  • 10CC Bountiful, UT
    Jan. 17, 2014 10:19 a.m.

    Based on economic theory, raising the minimum wage should be highly disruptive, inflationary and have a depressing effect on the low end of the labor market, overall a very poor idea.

    Unfortunately, the data simply does not bear out this expected outcome, which is why there is nothing resembling a consensus among labor economists on the issue, as there was in the late 1970s.

    Since the theory and data don't match, it's reasonable to take a pragmatic approach. There are some really good reasons to consider increasing the minimum wage.

    Aggregate demand remains stubbornly sluggish as profits soar, and wages are stagnant. Employees spend a much greater percentage of their income in stimulating aggregate demand than do the wealthy, who look more for investment opportunities... as demand remains stagnant.

    The data that confounds labor economists on why increasing the minimum wage doesn't result in a domino effect of bad outcomes suggests that if low end workers are paid more, they're less likely to "job hop", which results in higher training costs for employers, and greater productivity. In other words, "Win-Win".

    Sometimes the orthodoxy is erroneous - in those cases we should adjust our thinking.

  • Happy Valley Heretic Orem, UT
    Jan. 17, 2014 9:46 a.m.

    The fruits of trickle down economics bear little nutritional value after 30 years of failure.

    Yep, Mike and Chris are right, it's the poor's fault they should pull themselves up by their boot straps, if they could afford boots.

    "And lets be clear, it is NOT McDonald's or Walmarts responsibility to pay workers enough" to feed themselves forget about a family, and if your business model is dependent upon the government paying for your employees food, medicine and utilities to exist, who's the real welfare recipient, the business that profits into the billions or the person who isn't worth full time employment because another corporation is gaming the system on the backs of the middle class.

  • Shaun Sandy, UT
    Jan. 17, 2014 9:38 a.m.

    High wages, mid wages and low wages is what capitalism produces. Being realistic, not everyone can move to the top because market forces come into play. If all these low skilled workers educate themselves to get into a high paying field then supply naturally exceeds demand.

    In return there are pressure on wages to come down because people get desperate and will work for less.

    Im more in favor of taking away tax breaks for big businesses like walmart, target, etc who have people on public assistance.

  • Esquire Springville, UT
    Jan. 17, 2014 9:32 a.m.

    Many assume that a higher minimum wage would be bad for business. I argue the opposite. Yes, there would be a short term impact. But don't forget two key factors. First, business will make the adjustments needed because they want to stay in business and continue to make money. It will all settle out with a little time. History shows that to be the case. Second, and this is an issue that the business community forgets and which also applies to taking manufacturing overseas, but a well paid consumer base is a consumer base that will consume, and that means more sales, which means more for everyone. Opposition to a reasonable minimum wage is short-sighted.

  • Spangs Salt Lake City, UT
    Jan. 17, 2014 9:22 a.m.

    Here is the story, "market forces" disciples:

    Either you help people survive with government assistance or the "market" is forced to pay people a living wage. If we don't do either, then gangs of 'have nots' run around taking what they need/want from those that 'have'. What do we get for putting limits on how low a person can be paid? We get public order, we get stability, and we get at least a sliver of upward mobility.

    Invisible Hand maintains that we just give the poor cash money because mandating minimum wages would destroy the labor market. Well, we have raised the minimum wage time and time again and the world hasn't ended. To the contrary, we have good data that it actually helps the economy every time it has occurred. What we haven't done is release the "free market" to do with America what it likes. You know who has the most free market? Somalia. When 300 million people get together and agree not to play by any rules, we have anarchy. When people struggle to make enough money to survive, we get desperate people doing desperate things.

  • Invisible Hand Provo, UT
    Jan. 17, 2014 8:59 a.m.

    The very existence of minimum wage is an insult to freedom. Why does government presume to tell two freely bargaining parties what the terms of their agreement should be? The market knows what someone's skills are worth, not some politician. If we want to help the poor, low-skilled and people just starting out, it would be better to give them money directly instead of driving them out of the labor market through counterproductive government mandates of a minimum wage.

  • KDave Moab, UT
    Jan. 17, 2014 8:54 a.m.

    Raising the minimum wage is like a dog chasing its tail, it can never catch up. As the mandated raise works its way up the ladder to all employees, an employer is forced to raise prices. The resulting cost of living increase is always more than the new min. wage covers and the poor get poorer. But, it sells well to the uninformed to buy votes.

  • Chris B Salt Lake City, UT
    Jan. 17, 2014 6:56 a.m.

    If someone is worth more than they currently are paid, another company will be willing to pay them more.

    If no one will pay why someone wants, perhaps they are not worth it.

    And lets be clear, it is NOT McDonald's or Walmarts responsibility to pay workers enough to feed a family of 4

    It's McDonald's responsibility to pay for the work done.

    It's each persons responsibility to provide for their families.

  • Mike Richards South Jordan, Utah
    Jan. 17, 2014 6:39 a.m.

    Every decision in life has a consequence. Legislators who try to buy our votes by telling us that actions have no consequences are cheating our nation. Low pay directly equates to low skills. How many brain surgeons are out of work? How many are being paid minimum wage? How many became brain surgeons by dropping out of school?

    As long as liberals try to solve poverty by making poverty attractive, we will always have poverty. Hungry people get tired of being hungry, especially when they know that they caused their own hunger. Looking into the eyes of my wife and eight children every morning was my greatest motivator to do something significant with my time so that they would not suffer.

    Foolish people allow government to "help" the poor by taking away every incentive to rise above poverty. Government pays "think tanks" to tell us that raising the minimum wage will not cost jobs. Government also told us that if we liked our insurance policy we could keep it. Fool me once, shame on you. Fool me twice, shame on me.