By Dick Miller
WE.CONNECT.DOTS: “It is easier to fool people than it is to convince them they have been fooled.” –Mark Twain
Mr. Twain was not always correct, but what else explains the myths surrounding federal minimum wage?
Large corporations that depend on cheap labor will determine when there is an increase in minimum wages because they write campaign checks to the lawmakers. The political push to keep the federal minimum wage at a paltry $7.25 per hour or at least to a token increase is best described as subtle but firm. There is no greater example of wealth controlling the political process than the minimum wage issue.
The demand to increase the minimum wage is a cruel joke. President Obama during his first term said he was for a minimum wage of about $9.00 per hour. Now that he will not need to face the voters again, he has “boldly” increased his request to over $10.00.
Obama and his version of the Democrat Party “have become so beholden to wealthy corporations and rich individuals that they can’t be counted upon to represent workers,” writes Howard Greenbaum in the International Business Times.
Why else would the mandatory minimum wage fall further behind productivity? The strength of our economy has always counted heavily on wages keeping up with productivity. Workers shared in the increased profits of their employers until several years ago when pay rates became stagnant while profits soared.
Even proponents of keeping minimum wages as minimum as possible do not dispute the above. Instead, they claim that if the minimum wage is raised too high, the result will be massive layoffs and a new recession.
There are no studies to support these theories. However, there are plenty of non-scientific “surveys.” A survey conducted jointly by International Franchise Association and US Chamber of Commerce released in October is an example.
Surveyors claim 68 percent of owners of franchised businesses would make “personnel adjustments” if the minimum wage rose to $9.00 per hour. Some 86 percent would cutback in personnel or hours on the job if the minimum wage went to $15.00. Some 72 percent of non-franchised businesses threaten to do the same.
This survey shows at least three-quarters of US business owners pay their workers for time not needed, at the expense of their bottom lines. How generous. Mike Duke is CEO of Walmart. Wisconsin keeps more comprehensive worker data than most states. Using 2004 data forward, Wisconsin government officials have determined that the employees of the 75 Walmart stores in that state account for between $75 million and $130 million in public assistance – food stamps, Medicaid, school lunches, income tax credits and the like.
The average Walmart wage is over $12 per hour, yet we subsidize their existence to that extent. Higher wages would only dent Walmart profits and Mr. Duke’s compensation package.
Don Thompson, CEO of McDonald’s Restaurants, believes in helping his employees more. Median pay for fast-food workers is $8.69. Some 87 percent do not get health insurance. Thompson does provide a web site where McDonald’s employers can get guidance to apply for public assistance. Higher wages would require Thompson to cut fees to his franchise holders resulting in less corporate profits and/or his pay.
Studies published by University of California at Berkeley’s Center for Labor Research and Education and University of Illinois determine we pay “about $7 billion annually in public assistance programs to supplement the wages of fast-food workers.”
Small wonder Duke and Thompson desert their conservative principles to support continued public assistance programs for the poor.
Bottom Line: The greatest single obstacle to a higher minimum wage is the money special interest groups give our state and federal lawmakers to keep it low. Republicans may grab a higher proportion of the political donations from business, but Democrats take their share. There are more Democrat politicians trying to impress voters they are “business savvy” than Republicans who pretend they will protect the “little people.”
More on debunking minimum wage myths later.
