The minimum wage debate has gone from irresponsible to obscene. Now, there is chatter out of California that they will hike their minimum wage to as much as $26 an hour. Rep. Barbara Lee says such a hike would not hurt small businesses, because she owned a 300-person company prior to coming to Congress. (I need to digress at this point. Carl Dickerson started the aforementioned company in 1965, long before the two were married, and she became an "owner").
More importantly, Rep. Lee has a dubious background of militant activism. She was a staff member for socialist Ron Dellums, before succeeding him in Congress.
This is an economic and a moral issue. While it continues to be framed as "fairness" for those working for minimum wage, it is never framed in the context of those who have worked hard, made sacrifices, and avoided self-inflicted wounds to climb the ladder to higher wages. Ironically, when it is all said and done, it could actually be most unfair to those who could one day receive $26 an hour, despite the fact that their skill sets call for a much lower income. This goes to the notion that earning a living brings out the best in us, adding an intangible, but very critical element to our existence.
Here are the facts:
- 49% of minimum wage workers are teenagers. On average, their household income is $70,600 since there is more than one person who works in these homes. Only 17% live in households where cumulative income is below the poverty line.
- 51% of minimum wage workers are 25-years-old, or older, of which 21% is a spouse, or head of household.
We feel for the single woman with three children, but it is not the responsibility of a corporation to adjust employee pay, based on the number of children in a household. In the end, this is a dangerous slippery slope, where mediocrity and less personal efforts are rewarded at the expense of small businesses and fewer jobs. In the meantime, America continues to seek out competent workers for the Science, Technology, Engineering, and Mathematics (STEM) industry, where some observers say millions of slots are currently available.
The higher minimum wage argument is folly and is designed to cover for a weak economy, anchored by poor policies, high taxes, and mountains of minimum wage workers.
Not The Solution...The Problem
|Minimum Wage Facts|
|$80,000||Average household income|
|6%||Households below poverty line|
|67%||Workers part time|
Not only is this a job killer, it is a dream killer, too. There have been 22 hikes in the minimum wage since its inception in 1938, which underscores the fact that increasing minimum wage does not solve the problems of the poor. Sure, extra money is extra money, and the rate has not been hiked in a few years.
(Protagonists will say that it is to keep up with inflation and pick an arbitrary date, but from its start at $0.25, and adjusted for inflation, that rate would be $4.15.)
Here is the irony; a hike to $22.00 would be counterproductive in the pocketbook as well. That amount of income would eliminate tax credits, and numerous assistance programs, and increase taxes. Therefore, it is a farce, but a very dangerous one.
At some point, the blowhards have to drop the act. Higher minimum wage is not the fix for which the country yearns so deeply; it is just a carnival barker distraction. Let's focus on a smarter workforce prepared to roll up their sleeves in the classroom, and to apply intellect and internal fortitude towards a goal that can be a source of pride, rather than hang on to the notion that someone else's success came at their expense, even if they were chilling out on the sofa.
All is quiet on the western front. The ECB has left rates unchanged, even as they try and talk down the Euro; in effect they are trying to have their cake and eat it too. Initial jobless claims came down a lot, but are still north of 300,000 and the previous week was revised higher. The country with the best news is China, and now experts are murmuring that maybe the Chinese government is under-reporting how great its economy is doing. By the way, how funny is this headline?
China may curb illegal money transfers
In other words, "go ahead and transfer money illegally into Macau, but don't abuse the privilege".
The earnings miss on Tesla (NASDAQ:TSLA) could keep the pressure on most momentum stocks today, so the NASDAQ should open under slight pressure, but trickles will turn into gushes real fast these days.