Tuesday, September 03, 2013

They Can Take It Out Of Petty Cash

One day in June, talking about the Affordable Care Act, Rush Limbaugh pretended he was concerned about the wages of low-paid workers.  He stated

Now we're gonna dump anywhere from 11 to 46 million low-wage and unskilled people into the country competing for jobs, which is only going to force wages lower.  So it means your opportunity for your piece of the pie is going to be spread around to even more people who are gonna be much more attractive to hire 'cause they're not gonna cost very much to hire. And if the law gets implemented as designed, the amnesty law, they won't be eligible for Obamacare or welfare benefits for couple years or longer.

That means they'll really be affordable to hire because businesses will not have to provide them those benefits, as opposed to hiring you, they would have to.  So it becomes more and more attractive for American business to hire the incoming low-wage, low-skilled, uneducated workforce that they crave.

That didn't last long.  On Friday, he stated

Instead of asking for the minimum wage to go up because it's compassionate or makes you feel good, why don't you go in and demand that a Big Mac only costs half what it costs now? 'Cause it's just too expensive. You can't afford it.  Why don't you do that?  Or why don't you, as I say, agree to pay double what it costs?  But any time you want to go into any business and arbitrarily set the value of something in that business, you're going to affect everything else that happens.

Double the costs?  The Huffington Post recently published an article by an undergraduate student at the University of Kansas which cllaimed doubling McDonald's salaries would result in an increase of only 68 cents for a Big Mac. Soon after, though, HuffPo learned that the Columbia Journalism Review found errors in the analysis and the blog reported

A typical fast-food restaurant spends 30 to 35 percent of its income on labor,according to a recent release from the Employment Policies Institute, a research organization whose work is often cited by those who argue against increasing the minimum wage. The institute estimates that small-business owners who run McDonald's franchises spend about a third of their income on wages, which would mean the price of a Big Mac would go up by $1.28 to $5.27.

That would amount to an increase of 32%- according to the analysis by a conservative organization.   The idea that raising the minimum wage would cause the cost of a Big Mac by 50% is, well, imaginary. A group of 100 economists in favor of raising the minimum wage contends that an increase in price of 1% would cover half the cost of increasing the minimum wage to $10.50. And given its new CEO received a compensation package worth $13.8 million for 2012, the company probably can afford to treat its employees a little better.

And that does not take into account the value to the employee that she then will be able to afford a meal at the (sort of) restaurant at which she works.  Nor the value to the taxpayer because the employee may not need food stamps, Medicaid, or housing subsidies.    And the 32% is, in more ways than one, a conservative estimate.  Demos maintains, as summarized in The American Prospect

A minimum wage increase would also mainly impact large companies with over 100 employees, which employ two-thirds of low-wage workers, and not small businesses. These same companies are enjoying record profits and can well afford a wage increase. In fact, as a recent Demos report found, a wage of $12.25- 20 percent higher than the proposed wage increase- would cost only one percent of large retailers total annual sales and would result in an increase of $0.15 per shopping trip for the consumer.

In March, a Democrat in the House and one in the Senate introduced a bill to increase the federal minimum wage from $7.25 per hour to $10.10 per hour and peg increases to the rate of inflation. The grassroots movement to raise the wage began at McDonalds "restaurants" in New York City, N.Y.  and spread to Kansas City, Detroit, Chicago, and other cities.  Now it has reached the west coast, where 

The Seattle Times has reported about how workers in Seattle filed wage-theft criminal charges. In SeaTac, a city ballot initiative would raise wages for service workers to $15 an hour. Berry pickers in Skagit County struck and are threatening to do so again. Tacoma workers are campaigning for paid sick leave as Seattle workers won last year. And the Seattle mayoral primary pitted candidates against one another over low-wage jobs at a nonunion grocery chain.

It's a fight for dignity- and a livable wage- and it only has just begun.

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