World's Richest Woman Makes Case for $2-a-Day Pay: Should We End Minimum Wage?

You are endorsing the classic "Race To The Bottom." Have you considered the endgame when labor value is destroyed like that? All your solution will accomplish is the permanence of a vast underlass of coolies. At least coolies in Mao's China had the *Iron Rice Bowl* they could count on. We won't even have that if we get what you prescribe!

The big problem is that America's wealth-creating economic activity has largely been offshored so that the banks and elite cartels can exploit arbitrage (comparative advantage) between sweatshop labor and the residual creditworthiness of American consumers. The Feds sent Henry Kissinger to ask Chairman Mao how he keeps 1+ billion Chinese docile and busy. Mao replied that the American people are able to access the wealth created by our DOMESTIC mining, agriculture, and manufacturing. Take that away, take away labor protection, and they won't have the courage or energy to resist Washington's dictates.

Fast forward to today. The American economy produces nothing but economically worthless make-work jobs, which makes Federally-mandated minimum wages even more crucial just to survive. If you removed those minimums, we would be worse than a 3rd world toilet and the upper 1% would collect even more obscene levels of ill-gotten profit. That, by the way, was the core of Reaganomics. The theory was that taxation would be more efficient if the rich were be allowed to go wild, raping, plundering, looting, merging, offshoring, and piling up wealth WITH THE UNDERSTANDING that it would be taxed and redistributed with fewer losses. OF COURSE, when it came time to collect the taxes, the rich refused and THAT'S when Bush Sr. had to raise taxes despite his pledge not to raise taxes. Rmember that time???

What is needed NOW is to drain the Wall Street swamp of the $1.5 QUADRILLION in stolen wealth that churns daily between hedge funds, banksters, NGO's, and other parasites. A FULL 1% Wall Street sales tax ought to be levied every single time a security gets traded! I don't care if Goldman Sachs is running flash trade programs every millisecond! ONE PERCENT off the top every time! Split that revenue 50/50 between the U.S. Treasury and the States. Restore full funding of New Deal and Great Society public relief programs for starters. Raise tariffs up and let the trade wars begin! Unleash the IRS on corporations and persuade them to repatriate the factories, mills, and other facilities. Repeal just about everything passed since the Bush Crime Syndicate came to power, using Reagan as cover.

Ultimately, I'd like to see our economy and regulatory structure restored to the way it was in the 1950's. That being a full-set domestic economy and New Deal regulations with additional teeth in them this time. There's NO practical reason why it cannot be done - political cowardice, malfeasance, and treason notwithstanding.

That kind of thinking seems to leave out the basic of economics, which is supply and demand. If the average worker in the U.S. starts to make less money, then the prices and costs of goods and services will go down, because if they didn't then the goods and services wouldn't sell. The economy balances itself out. I agree that there needs to be some regulation, regarding safety and working conditions, but taxing the rich to take care of the poor isn't going to create jobs, it's only going to allow funding for more social programs to take care of the people who don't work because they don't have jobs. Letting the rich hoard all of the money isn't going to fix anything, either. Taxing or not taxing the rich isn't going to create jobs. If one person owned 90% of the world's wealth, and kept it for himself, then the value of the wealth that is still in circulation would go up. If the average income went down to $1000 a month, then the average cost of living would go down, because if it stayed the same, and nobody could afford to buy the things they needed, then the people selling them would no longer be able to make a profit, which would mean they would have no other choice but to lower their prices, or go out of business.

Don't get me wrong, I think there are a ton of problems regarding business ethics. I feel very strongly that there needs to be standards regarding working conditions and safety on a global scale. I also feel that no cost should be externalized (they externalize costs by polluting instead of paying the extra money for clean production, and by overworking and abusing their employees instead of paying the extra money for healthy and safe working conditions, and by committing other atrocities to avoid paying money), and that there needs to be regulations regarding product safety, and forcing honesty in regards to goods, services, and business practices. I just don't think that taxing more or less is going to create jobs, although creating incentives for companies to bring their production lines back to the U.S. (and eliminating the tax incentives for outsourcing, which I'm horrified even exist in the first place) should be a priority.

It's still a fact that minimum wage laws have destroyed some jobs. Again, my example is the jobs around where I live, where the companies/farms can't afford to pay employees minimum wage without going out of business, therefore they can't legally employ anyone. If it wasn't for minimum wage laws, many out of work individuals in my area would be able to work for these companies/farms. Economically speaking, employers can get better employees by offering higher compensation, so it's in their best interest to offer compensation that fits the skill level necessary for the job. I can foresee high school kids working at the lowest wage jobs, and people will not be willing to go through the training/education that it takes to get certain jobs if the wages and benefits weren't higher, so if employers want employees with any level of training/education they will have no choice but to offer higher wages. Eliminating the minimum wage will not eliminate decent-paying jobs. Even now, most jobs are wiling to pay more than minimum wage, even in many entry-level positions.

"Supply and Demand" is NOT an infallible law! Even Supply and Demand MUST be made subservient to the Greater Laws of social tranquility and the general welfare. Both of which are prime points in the Preamble to the U.S. Constitution. The General Welfare clause is listed twice. Once in the Preamble and elaborated on in Article 1 Section 8.

To make Supply and Demand infallible abandons mankind to the Law of the Jungle and Darwinism. Your points on taxing the rich are classic Straw Man arguments; popularly floated about in neocon talk shows. The rich of today, being the topmost 1% or even the topmost 0.5%, have an unjustifiable and immoral concentration of wealth that produces NOTHING. It is ALL either being played on Wall Street or offshored. Their collected wealth (never earned) represents an Economic Gravity Well. They distort the macro economy in such a destructive way by compelling money and markets into an ever tightening orbit around these elite power centers, while the rest of us are either neglected or under-served. That is Classic Market Failure.

To counteract such Market Failure, minimum wages are imposed and worker protections passed into law. A curious form of Market Failure is when these high concentrations of money and power seek to undermine and get around the domestic markets they wish to exploit. That is where offshoring, sabotage of worker rights, destruction of labor value, and starvation of credit to small businesses comes in.

These small businesses could hire people at the prevailing minimum wage if they weren't being harassed by government and the IRS at every turn. On the flip side, too many of these small businesses are just as exploitative as giant corporations and some worker protection must be imposed.

Back to taxes. A popular Straw Man argument is that taxes can only come from income taxes. There is an UNTAXED mass of paper and fictitious wealth on Wall Street to the tune of $1.6 QUADRILLION!!! That is how much gets churned and positioned for theft via arbitrage every year. THAT is what should be taxed and here's how to do it. A FULL 1% Wall Street sales tax on every security trade. Goldman Sachs has supercomputers that make 1000's of trades a second. Beautiful! Every single one gets taxed at 1% as it changes hands! One percent out of $1.6 QUADRILLION gets split 50/50 between the U.S. Treasury and the state treasuries. NOT ONE PENNY for financial games! ALL OF IT for infrastructure projects and the FULL RESTORATION of welfare programs lost because of Clinton and Bush.

To prevent wealth from becoming concentrated and malignant, as we have seen over the past 30 years, we restore the progressive taxing curve as it was in the 1950's with the top tax rate at 95% for all personal income above, say, $2 million per year. That can be hashed out by economic studies. The idea that the rich are better at deciding where their money ought to be spent has been thoroughly and utterly debunked and we have the past 30 years to prove it.

The article is rife with logical fallacies, namely begging the question and correlation/causation. The top 1% keep getting richer while the poor stay poor because of government meddling in the market, creating a crony corporate system rather than a pure capitalist system, which we have actually never had anywhere at any time, even in the good ole USA during the so called "golden age." THIS is what needs to be fixed. Minimum wage is just a leech put on a patient because we don't truly understand his illness and wanting to raise the minimum wage is like saying the patient is dying because we aren't using enough leeches. So few truly understand economics. I suggest you read "Why Government Doesn't Work" by the late Harry Browne and check out www.mises.org

Employment in the overall economy depends on aggregate demand or spending,

What evidence supports this? In fact, the more people have to spend, the more they are willing to spend for the same thing, causing inflation which in turn will cause more cries for raising the minimum wage. This vicious cycle repeats itself over and over again each time the minimum wage is raised. If it is such a great idea, why stop at just under $10/hr? Why not raise it to $50/hr? Why not make absolutely E-V-E-R-Y-O-N-E-S wage $25/hr, no more, no less? I'll tell you why. Without competition for the higher paying jobs, people would become even more apathetic in their jobs than they are now and society would pretty much crumble. Either that, or the more industrious will figure out a different way to game the system and make more, further increasing the wage disparity. Furthermore, attaching minimum wage to inflation is a good way to cause our money to become so devalued so fast that we will suffer the same problems Russia had when the USSR first dissolved and their currency became worthless. This is an inherent problem with fiat money systems because if all the government has to do to get more money is print it, more money in circulation without an increase in true wealth (production) means that each unit is worth less with each new unit printed.

The vast majority of Americans would favor an increase in the minimum wage

Appeal to popularity.

But our financial elite have a veto over what we want to vote for, in large part because of our system of legalized bribery – i.e. the financing of political candidates’ elections.

I accept the premise, but reject the conclusion. Again saying that our economy is weak because government isn't interfering enough is the same as saying the patient died because we didn't use enough leeches.

Contrary to prevailing myths about who would benefit from a proposed increase in the minimum wage, 88 percent of the 28 million workers affected are not teenagers.

Here we have a straw-man argument. The argument from the Austrian (as opposed to Keynesian) economic school is not that a raise in minimum wage would help teenagers, but that it hurts teenagers. Who is McDonald's going to hire, a high school student who just wants to have some spending money, or a single adult mother who is going to be at work every day by hook or by crook so she can feed her child(ren)? What minimum wage does, is makes that first rung into the work-force too high for a high school student to be able to reach without significant help. With no minimum wage, a high school or college student who wishes to just make some spending money, or even get experience and build a resume, will have a much more difficult time getting that first job than they would if there were no minimum wage. To illustrate, Dr. Mary Ruwart, author of "Healing Our World," took jobs for little or no pay just for the experience while in college. After graduation, she fared much better than her peers, getting better job offers and more pay, all because she was willing to forego instant gratification in order to build a more impressive resume.

From 1979-2007 about 60 percent of the income gains have gone to the now infamous 1 percent at the top

This is the aforementioned correlation/causation fallacy I mentioned. The article makes it seem like this is due to the minimum wage not being high enough, but the minimum wage has seen a 250% increase in this time period. In 1979, the minimum was $2.90. By 2009, it was $7.25. This is an increase of $4.35 cents, which is an increase of 250% and a total increase from the original $0.25 minimum of 2900%. One can hardly draw the conclusion that not raising the minimum wage is what caused the top 1% to get richer. There must be another cause.

When you examine the evidence and weigh the arguments, the argument to end the minimum wage (and all other crony corporate "feel-good" programs) is much stronger than the argument to increase it.

"Employment in the overall economy depends on aggregate demand or spending."

This is basic economics. Increase demand (buying power) and the increased consumption will create a need for more production. (jobs). The only time prices may increase is if the first time we raise the minimum wage we set it way to high which is unlikely and even then it would be just a one time increase if we referenced it to inflation from then on. Or prices may rise if production can't keep up with a growing demand requiring more capacity to be built, or outsourced. Even then, companies are hesitant to increase prices for fear of reducing overall demand. (There are millions still waiting for an iPhone 5 but prices are staying constant from the day of it's release). The inflation argument is one the conservatives have used many times to please their corporate backers but have been proven false. In the 50's and 60's wages grew with productivity. And inflation was lower than ever 1-2% , compared with our 3-4% in normal economic growth since the mid 80's . Our productivity has almost doubled since then but wages have stagnated and are now going backwards for high school grads. So why the higher inflation rates (in normal times)? It's definitely not wage growth. Inflation has not stopped or gone backwards (deflation)like wages have . All that extra wealth from increased productivity or GDP/ worker hr. has gone to the top.

"I accept the premise, but reject the conclusion. Again saying that our economy is weak because government isn't interfering enough is the same as saying the patient died because we didn't use enough leeches."

I agree, the government has interfered too much . In the wrong direction . Since about 1981. They gave huge tax cuts to the rich while leaving the middle class with the debt. They have since Reagan greatly destroyed collective bargaining rights which is why wages haven't gone up and even reversed. And have given tax incentives to businesses to offshore our most productive sector of the economy . Manufacturing. Not the richest , which is Wall Street bankers, but the most productive and beneficial to society.


"Contrary to prevailing myths about who would benefit from a proposed increase in the minimum wage, 88 percent of the 28 million workers affected are not teenagers"

This is true. Only 12 percent of people making these terrible minimum wages are teens. The other 88% are older. (Economic Policy Institute) an independent source.
The mimimum wage should have kept up with inflation over the past 44 yrs. and if it had it would have been 10.00/hr now and should continue up with inflation.

As for your so called straw man conclusion (Keynesian vs. Hyak or Friedman), you are outdated. Friedman economics have been almost completely debunked for over 30 yrs. now, from the days conservatives (who loathed the idea that government can play a beneficial role in the economy) used it to let the economy go by itself and either self correct, or destruct. The Brits gave up on it in the 80's after their economy went berserk. Causing 12% unemployment and a huge drop in their economy. Most economists have abandoned monetarist theory. What people don't realize (and conservatives will never admit) is that although Reagan said he would follow monetarist policy , in reality his policies were thoroughly Keynesian . And our economy did O.K then unlike the Brits. Except for all his borrowing and spending (mostly for military buildup) which increased the debt drastically.
The Austrian School of Economics you refer to is a tiny group of libertarians at war with mainstream economics. They reject even the scientific method that mainstream economists use, preferring to use instead a pre-scientific approach that shuns real-world data and is based purely on logical assumptions. But this is the very method that thousands of religions use when they argue their opposing beliefs, and the fact that the world has thousands of religions proves the fallibility of this approach. Academia has generally ignored the Austrian School, and the only reason it continues to exist is because it is financed by wealthy business donors on the far right. The movement does not exist on its own scholarly merits.

http://www.huppi.com/kangaroo...

Didn't understand what you were trying to convey about a minimum wage that's too high for a high school student to start out on. The minimum wage is the bottom rung (lowest skill level ) on the ladder no matter what it is. And a high school student would have no more problem doing the job at $ 10.00 than he would at $5.00 but would be much better off if it were $10.00. The minimum wage is the floor and it would cause all (or most) higher skilled jobs above it to go up too if it were raised . Everyone would do better off provided it is set at an appropriate level.

"This is the aforementioned correlation/causation fallacy I mentioned. The article makes it seem like this is due to the minimum wage not being high enough, but the minimum wage has seen a 250% increase in this time period. In 1979, the minimum was $2.90. By 2009, it was $7.25. This is an increase of $4.35 cents, which is an increase of 250% and a total increase from the original $0.25 minimum of 2900%. One can hardly draw the conclusion that not raising the minimum wage is what caused the top 1% to get richer. There must be another cause."

Believe it or not if the minimum wage had kept up with inflation these 20 yrs it would have been around $ 8.57 . And the article says income gains, not minimum wage. And that should have increased with productivity, which almost doubled . But the real average income flatlined all those years except for a couple of yrs in the late 90's (Clinton). A big windfall for corporations.

http://www.huppi.com/kangaroo...



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