To The Daily Sun,
Dave Pollak waxes elegantly about increasing the minimum wage. I like Dave, he is a nice guy. Dave speaks of a political calculus. There surely is one. Minimum wage is a sword used to ratchet up anger toward people who oppose hiking wages. The minimum wage debate is 100 percent pure political calculation, wrapped in the poor for protection.
Increasing the earned income tax credit is far more aimed and effective in raising the incomes of the less fortunate. Even those at the OMB (government) admit this readily. Democrats don't like to talk about it because it lacks the political, head-bashing possibilities babbling endlessly about the minimum wage does.
No one is opposed to doing everything possible to lift the living standards of the poor, as long as those actions don't harm more people than they help. Dave speaks to the positives, but seems oblivious to the harm and disincentives that go hand in hand with raising the minimum wage. All Dave's facts and assertions are reasonably correct. But, Like every other liberal contributor to The Daily Sun he conveniently leaves out information critical to the debate. He omits that information because it vaporizes his thesis.
It could be simply observed the minimum wage has been increased numerous times over the decades. Yet, welfare demand has set recent records and inequality flourishes as I write this. Just listen to Bernie or Hillary for 30 seconds if you disbelieve. Still, liberals demand the same, dyed-blue, donkey solutions that have proved ineffective since Edison discovered the light bulb. Democrats have been vigorous advocates for the less fortunate for a century. Where are the poor today? Up the creek. Dave's fix, same old solutions, and remedies that ignite political heat, stir resentment and division to win elections.
Nothing lights a fire under small-business owners to replace labor with technology faster than increased labor costs. Until labor can be replaced with automation they simply increase product prices to offset those higher costs. Small business owners require a generous profit to offset the risk of what in many cases is the entire loss of their money. Business investment is notoriously risky and dangerous. Without a high return on capital , NO ONE would ever open a new business. Nine out of 10 new business fail within the first 10 years of opening. That is an astronomical death rate tied to a devastating capital loss. The potential rewards must offset those potential losses.
If Dave and others want to see first-hand the devastation of wages increases not paid for with higher productivity you don't need to go far. Visit your local MacDonald's store. MacDonald's has been under relentless national pressure by unions to increase their minimum wages, in many places to $15 an hour. Those union wage pressures have dynamited the so-called "Dollar Menu" that helped produce a low-cost lunch bill, especially for a family. Almost all those " dollar menu items" have now been increased by 20 to 80 percent since the wage demands began. There are almost no dollar items left that cost $1. The 100 or so employees at each store who pocket $20,000 more in wages a month is paid for by MacDonald's 10,000 customers now paying $100,000 more a month in higher prices. Trump and Hillary don't eat at MacDonald's, but the bottom 50 percent of the economy does. The increased minimum wage gave those people $1. We took $5 from them in higher prices. A net loss for them.
That is why after a century of Democrats sure fire, ideas to rescue the poor, like increasing the minimum wage they are still looking for a huge paddle. Dave's minimum wage logic keeps them all in brown-colored water.
- Category: Letters
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