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Fallout from minimum wage hike

Every action has an equal and opposite reaction, right? From AZ Central:

Oh, for the days when Arizona’s high school students could roll pizza dough, sweep up sticky floors in theaters or scoop ice cream without worrying about ballot initiatives affecting their earning power.

That’s certainly not the case under the state’s new minimum-wage law that went into effect last month.

Some Valley employers, especially those in the food industry, say payroll budgets have risen so much that they’re cutting hours, instituting hiring freezes and laying off employees.

Mark Messner, owner of Pepi’s Pizza in south Phoenix, estimates he has employed more than 2,000 high school students since 1990. But he plans to lay off three teenage workers and decrease hours worked by others. Of his 25-person workforce, roughly 75 percent are in high school.

“I’ve had to go to some of my kids and say, ‘Look, my payroll just increased 13 percent,’ ” he said. ” ‘Sorry, I don’t have any hours for you.’ “

The Employment Policies Institute in Washington, which opposed the recent increases, cited 2003 data by Federal Reserve economists showing a 10 percent increase caused a 2 percent to 3 percent decrease in employment.

It also cited comments by notedeconomist Milton Friedman, who maintained that high teen unemployment rates were largely the result of minimum-wage laws.

“After a wage hike, employers seek to take fewer chances on individuals with little education or experience,” one institute researcher told lawmakers in 2004.

Tom Kelly, owner of Mary Coyle Ol’ Fashion Ice Cream Parlor in Phoenix, voted for the minimum-wage increase. But he said, “The new law has impacted us quite a bit.”

It added about $2,000 per month in expenses. The store, which employs mostly teen workers, has cut back on hours and has not replaced a couple of workers who quit.

Lost jobs aren’t the only consequences. How about this?

Kelly raised the wages of workers who already made above minimum wage to ensure pay scales stayed even. As a result, “we have to be a lot more efficient” and must increase menu prices, he said.

That’s the one aspect that seems to get lost on the pro-increase folks: businesses won’t just absorb their increases in cost. They’re going to cut costs (hold off capital purchases, lay off employees, etc.) and/or increase prices to offset their unnecessary cost increases. If prices of goods and services rise, then purchasing power diminishes…so exactly WHAT was the benefit of the increase again?

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February 12, 2007 Posted by | economic ignorance, minimum wage | Leave a comment

Democrats and class envy: it’s all they have

When you’re a functional economic illiterate like most liberals, it’s easy to get sucked into class envy (especially if you’re a non-producer of society). I am not a wealthy man, but I do not begrudge those who are. Hell, I’d like to be one someday. However, were my life to end without the accumulation of millions of dollars, I would have no doubts that I was a success in life nonetheless.

However, according to the left, I should despise those who get rich. I should be resentful. I should violate one of the seven deadly sins by possessing envy. Pardon me, but I think I’ll pass on that. Star Parker has more:

In a Newsweek column titled “How Dems Can Win White House,” Sen. Chuck Schumer, D-N.Y., opines about the difficulties that the Democratic Party has had in defining itself.

The senator wonders, enviously, how Republicans have been able to “identify issues that connected to their deeply held values,” reduce them to a few words – eight according to Schumer – and communicate to the American people.

“What are our eight words?” the senator asks.

But Democrats have a very clear picture of who they are. And newly elected Democratic Sen. Jim Webb of Virginia, who his party picked to give their response to the president’s State of the Union address, knows his party’s message and communicated it clear as a bell.

Aside from the senator’s criticisms about the war in Iraq, the entire substance of his thoughts about what is going on in our country was about differences in earnings. Specifically, about the differences in earnings between CEOs and the “average worker.” “When I graduated from college, the average corporate CEO made 20 times what the average worker did; today, it’s nearly 400 times.”

So, Schumer, listen to your newly elected colleague. He has succinctly summed up what your party is about. I call it the politics of envy.

Wealth, of course, is produced by individuals going to work. Not by politicians getting them ticked off that their neighbor is making more than they are.

But the latter is what the Democratic Party is about.

Webb’s remarks were an extension of a column he wrote in The Wall Street Journal shortly after he was elected in November. In that column, he talked about our country drifting “toward a class based system.” And then, of course, contrasted minimum wage earners with the “average CEO of a sizeable corporation” who “makes more than $10 million dollars a year. . . .”

But do large CEO earnings say that we’re now a class based society? Where do these guys come from?

How about the legendary and recently retired CEO of General Electric, Jack Welch. His father was a train conductor. I think a survey of America’s CEOs would show that most of these men, and women, come from middle class working families and got where they are through hard work. (It is a myth that most rich people inherited their money. The vast, overwhelming majority of wealthy people earned their riches through (cover your eyes, my liberal readers) WORK! – Ed.)

How about Stan O’Neal of Merrill Lynch? O’Neal pulled in a whopping $48 million last year. Somehow, in Webb’s “class based” society, this black man managed to become CEO of this Wall Street monolith.

Here’s something about O’Neal’s background from a profile in Fortune Magazine: “Raised on a farm in rural Alabama during segregation, he was educated in a schoolhouse built by his grandfather (a man who was born into slavery and whom O’Neal recalls with deep emotion).”

Regarding Webb’s claims that most Americans are not participating in our thriving economy, the same Bloomberg news article reporting that Stanley O’Neal’s $48 million payday was up 30 percent from the previous year, reported that the “five largest Wall Street firms paid their employees a total of more than $60 billion last year, up more than 32 percent from 2005. . . .”

All evidence I see is that Wall Street, a barometer of the nation’s health, is booming, that the black grandson of a former slave is running one its largest firms, and that all the employees of the firms there are sharing equally in the boom.

But this message doesn’t sit well when playing to envy, that base human emotion, forbidden by the Tenth Commandment, is your strategy for grabbing onto political power.

And why is Webb obsessed with $10 million CEOs, who actually are producing something (Stan O’Neal is in charge of a firm with 50,000 employees that produces $50 billion in revenue)? Why isn’t he concerned about the 42 NBA players who earn more than $10 million? How about the top ten movie stars, all of whom earn well more than $10 million?

Where, of course, the Democrats’ politics of envy mindset also takes us is to wonder about how the rest of the world might look at all Americans. The World Bank defines poverty as earning $1 a day. That means that a minimum wage earner in the United States earns 40 times as much as the world’s poorest people.

How many people on this planet earn $1 a day? About 320 million. More than the whole population of the United States.

What we need, in this country, and around the world, is freedom and hard work. Not envy.

The problem of the party of Webb and Schumer is not communicating their message. It’s having the wrong one.

January 30, 2007 Posted by | economic ignorance, minimum wage, Webb | Leave a comment

Kennedrunk’s economic illiteracy

From Neal Boortz:

The Democrats class warfare minimum wage increased is now being debated in the Senate .. and Ted Kennedy is about to have a stroke. Did you hear this pathetic man screaming at the Republicans? “What is it about it (the minimum wage) that drives you Republicans crazy? What is it about working men and women that you find so offensive?”

Well … of course .. most of you will recognize this as cheap demagoguery. There are two faulty premises to Kennedy’s question:

1. The working wage has some meaningful connection to “working” men and women.

2. Republicans are offended by working men and women.

Both premises are false.

Let’s deal with this “working men and women” line first. This rhetorical nonsense is now a basic part of the left wing class warfare arsenal. The goal here is to foster the idea that the more money you make the less you work. The reality is that there we have two resources we can use to make money, physical labor and mental labor. Most of us use a combination of the two. The ugly little fact is that, generally speaking, and professional athletes aside, the more of your mind you use the more money you will make, and the more of your muscle you use the less money you’ll make.

Here’s another fact. The more money you make, the more likely it is that you will vote Republican. The less money you make, the more likely you will vote Democrat. Bring this all together and you’ll soon figure out that the more you use physical labor to earn money, the more likely it is you will vote Democrat.

Knowing that almost all Americans value the concept of hard work, the Democrats have worked to promote the concept that the only real work that physical labor. Working with your mind — managing investments, for instance — just isn’t work. Therefore the only real working people out there are those who work with their hands instead of their brains …. or those more likely to vote Democrat. Once you’ve made this absurd concept a reality you have created a wonderful class warfare weapon. If you’re smarter than the average bear, and if you realize that it is not the role of government to set wages, you then become an enemy of “working men and women.”

This, then, enables Ted Kennedy’s demagoguery. He first asks what it is about the minimum wage that, as he says, drives Republicans so crazy. Simple. First — there are still a few Republicans out there who believe that in a free market economy it is not the role of government to set wages. If the government can set a minimum wage, what is to stop the government from setting a maximum wage? If the government can set a minimum wage, then why can’t the government set a minimum wage based on family size? Why can’t the Imperial Federal Government of the United States just pass a law saying that the minimum wage goes up by $2.00 per hour for every child born to the worker? Once you allow the government to have a say in establishing the value of labor … the sky is the limit. Where does it stop?

Secondly … Republicans realize that less than 20% of the people in this country who earn the minimum wage live in families that are anywhere near or below the poverty level. Over six out of ten people who begin work at the minimum wage have received their first raise within the first year. Only 15% of minimum wage workers are still receiving the minimum wage after three years on their job. What percentage of the full time work force is earning just the minimum wage? Around 1 percent.

So .. to answer Kennedy’s screaming questions: The minimum wage drives (some) Republicans crazy because there is absolutely nothing in our Constitution that allows the government to set wages, and the minimum wage is used by Democrats as nothing more than a tool of class warfare. Around one percent of full-time workers earn the minimum wage, and most of them are part of families that are well above the poverty line. It just isn’t an issue. Knowing Republicans are also upset because they know that the Democrats push for the minimum wage increases are just another way of telling unions “thanks for your support.”

And to answer Kennedy’s second question, there is nothing about “working men and women” that Republicans find offensive. What they do find offensive is the Democrat use of the phrase “working people” as a tool of class warfare through their attempts to convince lower income Americans that those who make more than they do aren’t really working for the money they earn.

Considering that Ted Kennedrunk was born with a silver brandy sniffer in his mouth, one wonders if through his fermented stupor, he sees the irony of bashing those he does not consider to be “working people”?

By the way, for those of you who haven’t been here long, please click here to read why Democrats really want to raise minimum wage. Hint: unions are clamoring for it, despite the fact that union workers don’t make anything NEAR minimum wage.

January 29, 2007 Posted by | economic ignorance, hypocrisy, Kennedrunk, minimum wage | 1 Comment

UPDATED: Tuna and minimum wage

Updates at the end of the post. From Neal Boortz:

As part of their first 100 hours plan, Democrats are pushing a hike in the minimum wage. It’s going to happen, with several Republicans and even President Bush prepared to go along with it. But did you know that American Samoa…a Democrat stronghold…is being exempted from the minimum wage increase?

And just what are the reasons being given for this? According to the chairman of the House, Education and Labor Committee, Democrat George Miller of California, the economy of American Samoa doesn’t have the ability to handle the United States’ minimum wage and should be exempt. Nice try…want to know the real reason? The answer is the tuna industry and like the product itself, this one stinks to high heaven.

The average wage for Tuna workers in American Samoa is $3.60 an hour. One of the biggest employers there is Starkist Tuna…which is headquartered in San Francisco…Nancy Pelosi land. Anybody care to take a closer look at the campaign contributions of Democrats in the last election? One thing is for sure, the delegate from American Samoa, a Democrat, is loaded down with campaign cash from the tuna industry.

So there you have it…a double standard. On the one hand, we’re told you can’t raise a family on $5.15 an hour and the minimum wage must be raised to $7.25 an hour. But for the right price in campaign contributions, the tuna industry in American Samoa can avoid the minimum wage altogether…they just have to stuff the pockets of the right Democrats. Where is the media on this one?

Will the press be taking a closer look at Nancy Pelosi’s campaign finance disclosures? Probably not. But somebody will.

So much for “working families”, huh? The minimum wage increase may be bad for business in America, but that sure beats harming a business interest in American Samoa, doesn’t it?

UPDATED (1/12/07 – 11:43 a.m. EST): The normally linguine-spined GOP hits back at the hypocrisy. From the Washington Times:

House Republicans yesterday declared “something fishy” about the major tuna company in House Speaker Nancy Pelosi’s San Francisco district being exempted from the minimum-wage increase that Democrats approved this week.

“I am shocked,” said Rep. Eric Cantor, Virginia Republican and his party’s chief deputy whip, noting that Mrs. Pelosi campaigned heavily on promises of honest government. “Now we find out that she is exempting hometown companies from minimum wage. This is exactly the hypocrisy and double talk that we have come to expect from the Democrats.”

One of the biggest opponents of the federal minimum wage in Samoa is StarKist Tuna, which owns one of the two packing plants that together employ more than 5,000 Samoans, or nearly 75 percent of the island’s work force. StarKist’s parent company, Del Monte Corp., has headquarters in San Francisco, which is represented by Mrs. Pelosi. The other plant belongs to California-based Chicken of the Sea.

“There’s something fishy going on here,” said Rep. Patrick T. McHenry, North Carolina Republican.

During the House debate yesterday on stem-cell research, Mr. McHenry raised a parliamentary inquiry as to whether an amendment could be offered that would exempt American Samoa from stem-cell research, “just as it was for the minimum-wage bill.”

A clearly perturbed Rep. Barney Frank, the Massachusetts Democrat who was presiding, cut off Mr. McHenry and shouted, “No, it would not be.”

“So, the chair is saying I may not offer an amendment exempting American Samoa?” Mr. McHenry pressed.

“The gentleman is making a speech and will sustain,” Mr. Frank shouted as he slammed his large wooden gavel against the rostrum.

I really didn’t need to know where Barney Frank’s been slamming down his “large wooden” anything! “Don’t ask, don’t tell!” or so I thought.

UPDATED (1/12/07 – 11:49 a.m. EST): Also found in that same WT article is this nugget of idiocy from the GOP:

Some Republicans who voted in favor of the minimum-wage bill were particularly irritated to learn yesterday — after their vote — that the legislation did not include American Samoa.

“I was troubled to learn of this exemption,” said Rep. Mark Steven Kirk, Illinois Republican. “My intention was to raise the minimum wage for everyone. We shouldn’t permit any special favors or exemptions that are not widely discussed in Congress. This is the problem with rushing legislation through without full debate.”

They didn’t learn of the Samoa exemption until AFTER their vote? Did they not even read the freakin’ bill on which they were voting before they cast their votes?? If you ever needed proof that politicians value style over substance, there it is.

January 12, 2007 Posted by | minimum wage | Leave a comment