Every So Often He Does Something I Agree With

Every so often President Obama does something I agree with.

His support of raising the minimum wage is one of those things. I remember reading that Henry Ford paid his workers higher wages than the standard for that time. When asked why, he said that he wanted them to be able to buy his automobiles.

That remark demonstrated a core understanding of what grows markets that seems to elude today’s corporatists.

The theory that we should cut taxes and give benefits to those at the top while we allow wage earners to suffer an endless downward trajectory in earning power is not good economics. Those who make goods and provide services need customers with the money to buy their products. American industry needs American customers to keep this county strong.

The miracle of the American economy is not that it has created a few fantastically wealthy people. The miracle is that it has provided opportunity, a high standard of living and good lives for almost all of us.

Will raising the minimum wage fix our economic woes? No, it won’t. The reason our economy has been basically stagnant for so long is simple: We’ve exported our industrial base and the jobs that go with it.

Raising the minimum wage will not fix this problem. Nothing short of taking government back from corporatist control will put America back where it once was.

However, raising the minimum wage will increase the buying power of many millions of people. That alone will stimulate the economy.

I disagree with trickle down economics. We need jobs and good wages for the people of this country. That will bring wealth for everyone.

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  • David J. White

    I remember reading that Henry Ford paid his workers higher wages than
    the standard for that time. When asked why, he said that he wanted them
    to be able to buy his automobiles.

    I’ve often thought that Wal-Mart applies what I like to call the “Reverse Henry Ford Principle” in paying its employees: it pays them so little that they can only afford to shop at Wal-Mart.

  • AnneG

    Rebecca, I don’t think our economy or economic problems are that simple. We have a multi-dimensional economy with diverse markets that are spread out pretty far geographically. I think that the government should be more like river banks or a sea wall than dams, dikes, locks and canals. The government and bureaucracy just cannot respond as quickly as the market itself. One of our biggest problems is transition from a physical labor based to an information based economy and the problems seem to be similar to those of the industrial revolution. There are lots of jobs in the trades and skilled labor that go begging, some because lack of available training. I don’t think raising the minimum wage will make a dent in that, especially taking into account who actually makes minimum wage. The govt needs to make sure employers don’t run roughshod over workers, health or rights, or environmental concerns, but they have no business shutting down industries as the Feds are doing right now, either.

  • oregon nurse

    I believe the ultimate end game of the 1% of the 1% is to own everything we need for survival: food, clothing, shelter, maybe even sun and air. That’s why they don’t care that we’re losing the ability to buy consumer goods – getting us to go into debt to buy optional stuff is just the middle strategy. The end game is going in for the kill on the non-optionals. By making us wage slaves unable to independently own anything they can set the prices to extract the maximum from us. Sort of a company store idea on a global scale.

    When I see billionaire ‘philanthropists’ getting involved in the alteration of wheat and rice crops I know that’s where this is headed. It’s Monsanto on a global scale.

  • http://ashesfromburntroses.blogspot.com/ Manny

    Nobody working on autmobiles makes the minimum wage. Min wage is for entry level people, college and high school kids. It raises the cost and therefore they’ll be less of them working. In a era where the work focre participation is the critical economic issue of the day, this is down right wrong headed.

    “However, raising the minimum wage will increase the buying power of many millions of people. That alone will stimulate the economy.”
    Haha! And increase the cost of basic items. What this will do is make it a win fall for those who get the jobs and put at a serious disadvantage those that are let go. Sound like income inequality to me, and then the ones that don’t get jobs may qualify for welfare. And then we’ll have to raise taxes It’s the pefect Lieral mentality. drive the cost up, get more people out of work, increase public dependency, increase taxes, drive the economy down. This is why Democrats are not trusted to run the economy.,

    • hamiltonr

      You must live in a different world Manny. Even in New York, there were huge lines for good union jobs recently. People are working at two and three Mcjobs, trying to feed their families. Why is it ok to put billions of dollars into corporate welfare and allow our corporations to ship our economic base overseas, eliminating the good jobs, but giving a raise in the minimum wage would be terrible?

      I work in government, remember, I know how the die are loaded for the rich and powerful and how we keep ripping off those at the bottom.

      • Steve Pålsson

        It seems to me that advocating an increase in the minimum raise ethically demands addressing the question of the resulting increase in unemployment.

        I dispute your implication that questioning the wisdom of increasing the minimum wage logically entails favoring corporate welfare or shipping our economic base overseas.

        • hamiltonr

          I don’t believe it will result in increased unemployment. In fact, I think it will stimulate buying power, which can only aid employment, especially at the bottom end.

          I didn’t intend to imply that opposing increasing the minimum wage many favoring corporatism. I was saying that corporatism is the root cause of our economic malaise.

          • Steve Pålsson

            Thanks. That clears things up.

            I don’t think corporatism or corporate welfare are OK and it seems highly unlikely to me that a raise in the minimum wage could literally decrease unemployment, though surely there would be things like the increase in buying power you mentioned that would mitigate the increase in unemployment we might otherwise expect.

          • AnneG

            The government cannot wave its hand and fix a problem. All these government actions, like 99 weeks of unemployment payments, have consequences, lots of them. Raising minimum wage is not going to solve anything. Getting rid of corporate welfare, including agricultural subsidies will, though. This is the wrong approach. What about all those small businesses that will let people go because they cannot keep on another employee? CBO is right.

            • http://ashesfromburntroses.blogspot.com/ Manny

              You know what it is AnnG? The Democrats have nothing to run on. Their signature accomplishment “Obamacare” is a DISASTER and so they have to create a bogeyman, and that bogeyman to run on and demogoguie the issues with are businesses. That and religious people. The Democrats create bogeymen.

          • http://ashesfromburntroses.blogspot.com/ Manny

            Can you explain how corporatism is the root? Especially since it was the banking industry that was forced by government to provide mortgages to people who couldn’t afford the houses they bought that brought about this recession? Do you want to compare how many people are employed by corporations in this country, their salary and benefit structure as compared to small business, and their ability to hire more than jobs require?

        • http://ashesfromburntroses.blogspot.com/ Manny

          Absolutely right Steve. Corporations have almost no min wage jobs. Small businesses emply min wage personnel.

      • http://ashesfromburntroses.blogspot.com/ Manny

        I’ve said everything in my responses below. I’ll just cite a Forbes article that pulls the statistics from the Bureau of Labor of just who earns min wage. You want to create better paying jobs, the min wage is the WRONG tool. GROW the ECONOMY.
        http://www.forbes.com/sites/jeffreydorfman/2014/01/30/almost-everything-you-have-been-told-about-the-minimum-wage-is-false/

    • http://outsidetheautisticasylum.blogspot.com/ Theodore Seeber
      • http://ashesfromburntroses.blogspot.com/ Manny

        First off that’s Oregon and not everywhere else. So, you don’t know what the business climate is like and whether that transfers everywhere. There are high paying jobs in Oregon that pull workers away, and so create a vacuum for low skill jobs. Second, they looked at about a dollar difference, which in amounts to a 10% increase. Obama is talking about going from $7 & change to $10 & change, a 50% increase. Don’t tell me that’s not going to have an impact. Third, employers are looking to replace every low skill worker they’ve got. They are automating, mainly because of the cost of healthcare. With this they have every incentive now to get rid of every low skill job out there. Fourth, I hold to my position that people earning min wage are temporary workers who are going to jump to the next job available. Read through here:

        http://www.forbes.com/sites/jeffreydorfman/2014/01/30/almost-everything-you-have-been-told-about-the-minimum-wage-is-false/

    • oregon nurse

      Manny, your notion of who is paid min wage is not correct. I can tell you that the majority of caregivers, both child and elder care, some of the hardest and most important jobs are often done by mature workers who are earning min wage or just above. There is no ladder out of it and people don’t get meaningful raises for experience – it is always an entry level wage no matter how long you’ve done it. Lot’s of people performing all kinds of important services at all ages are making min wage or little more.

      I’m not arguing for or against an increase here just pointing out that I think you are out of touch with who and what jobs are actually being paid min wage. Rebecca is right, family breadwinners are working multiple low wage, no benefit jobs, just to get the absolute basics for their family. We have shipped far too many of our skilled blue collar jobs overseas that used to pay enough to raise a family on just to keep more profits in the pockets of shareholders and pay ridiculous corporate salaries. We are losing the middle-class American dream and that can only be very bad for families and the stability of our future.

      • http://ashesfromburntroses.blogspot.com/ Manny

        According to this Forbes article, where he cites from the Bureau of Labor statistics:

        “there are about 3.6 million workers at or below the minimum wage (you can be below legally under certain conditions). That is 2.5 percent of all workers and 1.5 percent of the population of potential workers. Within that small group, 31 percent are teenagers and 55 percent are 25 years old or younger. That leaves only about 1.1 percent of all workers over 25 and 0.8 percent of all Americans over 25 earning the minimum wage.”

        http://www.forbes.com/sites/jeffreydorfman/2014/01/30/almost-everything-you-have-been-told-about-the-minimum-wage-is-false/

        As to the multiple low wage jobs, we need to GROW the economy to CREATE JOBS. The Democrats have ruined job creation and now want to further ruin it, just so there is a dependent class of people who feel indebted to them.

        • oregon nurse

          In my post I said “earning min wage or just above”. The “just above” workers aren’t going to make it into those stats but just above min wage is still impossible to support a family on. Just above is what people are earning year after year in lots of jobs because there is no ‘career ladder’, no starting out at the bottom and working your way up, there’s only bottom. If lucky, they are getting raises of 30 -50 cents/hr per year until they hit the employer max in a few years and then it’s stagnant until the gov raises the min. again. You cannot raise strong families on those kinds of jobs. We have too many jobs at the bottom wage scale and too many at the upper
          end with the greatest losses in the middle. It’s the bread and butter family wage jobs that have left our shores. Some people have the means, opportunity, and intellectual skills to make a living in the professional world. Those who didn’t and have traditionally made a living from skilled manual labor have been pushed to the low wage arena as manufacturing and other skilled trades have been lost.

          What does grow the economy mean to you? Are you satisfied with more low paying or part time service jobs with wages just high enough to buy cheap foreign-made Wal-Mart goods? Are you happy just seeing unemployment rates decrease without any attention to what those ‘new’ jobs pay or who is filling them (like college graduates)? Do you care that people who have lost jobs over the last decade are not getting new jobs that pay anywhere near what they were earning previously? Do you care that there is serious ageism in employment and those in their late 40s and above are finding it VERY hard to regain income when laid off and at a time when they are trying to put kids through college, care for aging parents, and save for their own retirement all at the same time? These my friend are the new employment demographics that your stats can never describe.

          • http://ashesfromburntroses.blogspot.com/ Manny

            Growing the economy means economic activity increases, which provides jobs. We need jobs where industry and high tech is produced in this country. We have to make it attractive for companies to situate their businesses here. Raising the min wage only drives up the cost of living and the cost of business. It may help that one percent (but also drive up their costs so who knows if it’s a net plus) who earn min wage but limit growth. I don’t mind if min wage increased with inflation, but a 50% increase is ridiculous, and really just a political ploy.

        • Sus_1

          1 penny more than minimum wage wouldn’t be included in the statistics correct?

          • http://ashesfromburntroses.blogspot.com/ Manny

            I don’t know what that means, but I wouldn’t mind if the min wage went up with inflation, but a 50% increase is ridiculous and just a political ploy. Did you ever get a 50% increase for doing the same job?

  • BTP

    The stagnation of wages for most American wage earners has nothing to do with the minimum wage. As the CBO pointed out, while it helps those who can get the increase, it will eliminate plenty of jobs.

  • Almario Javier

    Indeed, Catholic Social Teaching would demand a living wage. If it cannot be got by mutual consensus between employers associations and trade unions, the Government has the duty of ensuring such.

  • Dave

    Bah, I would like to think that this would help, as companies certainly pay their workers as little as they can get away with, and could care less about whether their workers make a living wage or not.

    Unfortunately, I am pretty sure that companies will simply make less people do more work so that the bottom line remains the same. I’ve seen it happen too many times to believe otherwise.

    It’s something that Obama can do that looks good to everyone on paper, but I believe it will result in more unemployment.

  • http://outsidetheautisticasylum.blogspot.com/ Theodore Seeber

    I call this the Utopia of Jesus Christ, in this blog kicking off a series of posts on economics:
    http://outsidetheautisticasylum.blogspot.com/2014/02/the-utopia-of-jesus-christ.html

    Matthew 20:1-16 demands no less of us.


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