Why Do We Opt For Tinkering With The Failed Minimum Wage?
Alternatively Titled: "The Definition Of Insanity Is Doing The Same Thing Over And Over Again And Expecting A Different Result Each Time."
By Pejman Yousefzadeh Posted in Economy | Featured Stories — Comments (4) / Email this page » / Leave a comment »
Especially, when we can do so much better (read on):
BOTH the House of Representatives and the Senate have recently passed bills raising the minimum wage. The Senate bill includes tax breaks for businesses, based on the following logic: While a minimum wage increase is popular, the resulting higher labor costs will translate into fewer jobs, more expensive products or both. The solution, the senators concluded, was to subsidize companies that hire disadvantaged workers, in order to reimburse them for these higher wage costs.
Does this reasoning hold up? A look at one of the key pieces of this business tax package -- the Work Opportunity Tax Credit, which has been in place since 1996 and would be extended for five years under the proposal -- suggests otherwise.
First, most eligible companies don't take the credit, which averages about $1,000 for each employee who belongs to one of the specified categories of workers (for instance, recent recipients of welfare or food stamps). Even though national surveys show many such workers being hired, employers claim the credit for less than a third of them.
Second, there is no evidence that employers have hired more eligible workers as a result of the program. Indeed, according to a number of studies -- including one by the Department of Labor, another surveying 101 temporary help agencies, and a statistical analysis of welfare recipients in Wisconsin -- the credit seldom influences hiring decisions of participating firms. Many companies wish to avoid preferential hiring, even though the policy is explicitly intended to give disadvantaged job seekers an advantage in the labor market.
The author of the piece, economics professor Sarah Hamersma, offers a better way to help the working poor. Read the whole thing. And needless to say, I concur.
« Rethinking the Goals of a National Mortgage Bailout — Comments (45) | What we read in the Chinese Tea Leaves: Trade Protectionism — Comments (11) »
Why Do We Opt For Tinkering With The Failed Minimum Wage? 4 Comments (0 topical, 4 editorial, 0 hidden) Post a comment »
since the federal government doesn't yet own all means of production, it doesn't have any authority over CEO wages. But, just in case you're interested, the wages of CEOs of companies with federal contracts is capped and has been for a couple of decades.
Finally, there is nothing in the article that would lead anyone to believe that it could be used to advocate wage caps.
If you want to post, fine. The price of admission is being able to read.
"A man can never have too much red wine, too many books, or too much ammunition." -- Rudyard Kipling
There just that pesky Constitution thingy in the way, which protects rights to property, which include its usages in salaries.
Incidentally, how does that help the health of the country?
...a long habit of not thinking a thing wrong, gives it a superficial appearance of being right...
---Thomas Paine---
to hear a straightforward defense of the right to private property.
By that I mean the natural right to earn, keep, use, or exchange peacefully-acquired property, which is one of the unenumerated rights referred to by the Ninth Amendment.
And that amendment, rather than some self-contradictory notion of "substantive due process," is the proper rubric for striking down government violations of private-property rights.
It makes sense that rising costs will lead to more expensive products....and yet, no one ever mentions capping the wages and benefits of those at the top of the organization. Keep in mind that since the 70's the average workers wages have stagnated, when adjusted for inflation, while the CEO's and other upper brass has seen there benefits sky-rocket.
Here's my suggestion: upper management can not be allowed to earn more than 10% more than the lowest paid in the organization. It will make our companies more competitive internationally and it will increase the number of jobs. By your own logic, this is position is necessary for the health of our country....I sure hope FOX runs with this soon.