Article

MOON-BAT ECONOMICS STRIKES AGAIN IN MASS. AS GUV RAISES MINIMUM WAGE TO A RUINOUS $11 AN HOUR

By DAN VALENTI

PLANET VALENTI News and Commentary

(FORTRESS OF SOLITUDE, MONDAY, JUNE 30, 2014) — What is it about Massachusetts? Is our Kool-Aid not spiked with the jungle juice of common sense? Do we sit geographically too far right in these here contiguous 48? Does that explain the dreadful, one-party “moon bat” politics that have politically pushed our beloved Commonwealth off the left edge of left? How could the state that gave this country the heart of its glorious Revolution produce such a top-loaded, tilted policy so bereft of prudence, wisdom, and, backbone?

Granted, we ask a rhetorical question, since the Democratic Party rules in Massachusetts without opposition. Massachusetts, as a result, does not have a healthy, functioning “democracy” (in republican form, lower-case “r”). Rather, the lack of meaningful opposition from roll-over-and-play-dead Republicans (upper-cse “R”) has created a lock-step form of totalitarianism.

Typical of this state: We can’t even get our dictatorships right.

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Case in Point: Minimum Wage, Maximum Bad Economics

With that preamble of thought in mind, THE PLANET shares this news lead from Reuters:

BOSTON (Reuters) – Massachusetts Governor Deval Patrick on Thursday signed into law a measure raising the minimum wage to the highest of any U.S. state, $11 per hour, by 2017. 

The move comes as U.S. Democrats nationally are trying to make the minimum wage a key issue ahead of midterm congressional elections in November, framing the effort as a quest of conscience on behalf of the millions of Americans living on wages that have not kept up with rising costs of living.”

Don’t you love that heroic-sounding phrase: “a quest of conscience.” THE PLANET grants that the words play well in the cheap seats, but if one can extract oneself from the emotionalism and try to view the matter from the ceiling rather than the floor, one gets the more complete picture.

Raising the minimum wage represents a triumph, once again, of tax-n-spend politics over sound economics. The measure boosts the $8-an-hour minimum wage by $3 an hour, an increase of 27%.

Here’s why it’s a bad idea:

Consequences — Unlike what supporters predict, raising the minimum wage will not act as a stimulus to the economy. Raising minimum wage to $11 an hour will place an unbearable burden on employers, who will be forced to trim staff. Services will suffer and unemployment will rise. According to a study by the Federal Reserve Bank of Chicago, “10 percent increase in the minimum wage lowers skill employment by 2 to 4 percent and … restaurant employment by 1 to 3 percent.”

Outsourced — Rather than pay $11 and hour, some businesses will simply outsource the jobs out of the country, where the hourly cost of labor is far less expensive and the quality is comparable or better.

Hurting Workers — History shows that selecting an arbitrary level for minimum wage, one that does not take into account market forces, hurts more than helps workers at that level of the economy. Minimum-wage jobs go to workers who generally lack skills.

The Poor Shall Remain with Us — The preponderance of research strongly suggests that arbitrarily boosting minimum wage does not lower poverty levels, according to the Employment Policies Institute: “Multiple studies ahve demonstrated little to no relationship between higher minimum wage and reductions in poverty,” the institute says in a policy brief.

Costs Go Up — Paying low-skilled workers more money forces employers to raise the cost of their products and services. This creates a “ripple effect” on other co-dependent sectors of the economy. All economies have a high degree of interdependence, the same with natural ecosystems. Economic “ecology” dictates that raising minimum wage for employers will affect many other parts of the economy, including, of course, the consumers, who will be paying higher prices.

Young Workers Hurt — Raising the minimum wage to $11 will force higher-skilled workers into lower-skilled jobs, depriving younger workers with less experience from such bottom-end jobs.

Automation — Employers will search for ways to automate processes currently done by human beings. This will boost productivity and lower costs in the long run, resulting in fewer job opportunities at the economy’s lower end.

Pay Cuts for Others — The temptation will be for employers to lower the compensation of workers who are making more than $11 and hour. Many will receive pay cuts, unjustified except for the sole reason of balancing out the arbitrary $11-an-hour “price point” for low-skilled labor.

In general, it is “always” best to let market forces determine fair compensation. Ah, but the politicians in Massachusetts, who always know what’s best for us better than we do, are incapable of strategic thought when it comes to public budgets.

Raising the minimum wage was a stupendously bad idea, and the Commonwealth’s economy will pay for it. Like June as of midnight tonight, we should have kissed it goodbye

What do you think?

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“Ah! Why wilt thou afright a feeble soul.”John Keats, “The Eve of St. Agnes,” (1820)

“OPEN THE WINDOW, AUNT MILLIE.”

LOVE TO ALL.

27 Responses to “MOON-BAT ECONOMICS STRIKES AGAIN IN MASS. AS GUV RAISES MINIMUM WAGE TO A RUINOUS $11 AN HOUR”

  1. Luke
    June 29, 2014 at 11:29 pm #

    All I know is that 40 hours at $8 is $320 or a bit more than $1280 every 4 weeks BEFORE TAXES, SOCIAL SECURITY, TRAVEL EXPENSES, CHILD CARE, AND ON AND ON…

    When people work full time (if they are lucky enough to get 40 hours) and have to choose between no child care, food, medicine, health care, and a place to live something is wrong.

    We have created a world of rank poverty and a standard of living so low as to embarass the people who don’t have to live on this wage .. yet..

    But ask yourself-.. if you lost YOUR job today.. how long would it be before you are hoping to get a job ANY job .. and what $8 an hour would do to meet YOUR bills.. How far would $1300/month (before taxes..) go to maintain YOUR lifestyle?

    Jesus said, “so as you treat the least of my people you treat Me.” Starvation wages, no medical care, loss of hope cry out for action. A livable wage is what we owe people. My comfortable living should not come on the desperate quest for survival of the marginally employed.

    • Wilson
      June 30, 2014 at 4:02 am #

      It’s “wrong” that people working full time might still not earn much, so let’s have the government “make it right” by causing them to lose their jobs! You’ll feel even better about yourself when you donate $5 if they have zero income

  2. Scott
    June 30, 2014 at 4:00 am #

    Like makes a good argument. Big companies SHOULD pay people more but they don’t and govt trying to force them to won’t work either they will just make cuts and do everything they can to circumvent the new law even if it cost them
    More money than paying people fairly.

  3. Pat
    June 30, 2014 at 4:13 am #

    I have been very unsure of what the minimum wage increase will do. I have been working jobs that pay $9.00 an hour and find it very hard to survive on that, however, if employers start cutting jobs and it becomes even harder to find jobs, this will be really bad!!!

    I think people should earn more money per hour than $8.00 or $9.00 even for some unskilled labor. Not sure how this will play out. Right now I am working a job that pays $12.00 per hour. This is a forty hour position. I love it, but it is only a temporary job.

    I agree about the Democrats ruling without opposition and how unhealthy this is, but the voters don’t get it here in Massachusetts. Must be something in the water here that people truly believe one party rule is best.

  4. C.J.
    June 30, 2014 at 4:41 am #

    According to the Economic Policy Institute, the average CEO compensation in 2013 was $ 15.2 Million, (based on 350 representative companies).
    Only the head of Pittsfield’s many non profits make a small percentage of that. Now we can empathize with TES as he wants to catch up.
    OMG what if CEO compensation levels were used to offset the minimum wage as it is spread over the three years.
    NO Way ! That is a radical and novel idea.

  5. Shakes His Head
    June 30, 2014 at 6:03 am #

    maybe the United Way can stop siphoning off the real charities here in the Berkshires?

  6. Shakes His Head
    June 30, 2014 at 6:20 am #

    Do any of the readers here care about the implications of Harris v. Quinn as a first amendment case? The libs are pandering while SCOTUS could potentially smack down foundations of State and Federal labor laws.

  7. Gene
    June 30, 2014 at 8:05 am #

    Harris v. Quinn ruling cold be potentially huge. Ruling for Harris means that people can’t be forced to join unions. In my opinion that would be a victory fo the people and a loss for union strong arming.

  8. Thomas More
    June 30, 2014 at 10:18 am #

    There’s only one reason why companies like Micky D’s Wendy’s, BK and Wal-Mart pay minimum wage and that’s because they can’t pay less.

    • Luke
      June 30, 2014 at 7:26 pm #

      RIGHT!!! great point.. and why not pay less.. people are desperate and any money is better than no money.. social darwinism..

  9. levitan
    June 30, 2014 at 11:02 am #

    If $11/hr is minimum wage, then there’s little difference between the prevaling white collar professional wage of $15/hr that is standard to Berkshire County.

    What’s the point of training up?

    • Scott
      June 30, 2014 at 12:52 pm #

      Exactly I’ve found no matter what I pay someone they’re ungrateful. $11 an hr still isn’t good enough for most people. No one wants to work their way up they wanna start at the top. I’ll Bill out $35 and hr t&m but I’ve spent the last ten years building a reputation and earning it. When I first started I was working for other people for less than ten and worked my way up to sixteen then on my own at twenty sometimes less. But some young guy starting out has no idea what it takes and most have very little ambition. I know it sucks to make a fraction of what the boss makes even though you work harder and longer I was there myself but if you want a job and good pay you have to earn it. I think the govt involvement in minimum wage will only make things worse. It’s encouraging entitlement and snubbing the people who do work hard and deserve it. But I’m also aware there are other economical and social factors at play. Plus I always start people out at around $11-$16.

  10. Linda
    June 30, 2014 at 11:44 am #

    Forcing small companies to pay that wage (the mom and pops, and other businesses) will kill a lot of them. They will hire fewer or if that doesn’t work make fewer do more work. If that doesn’t work, go out of business. The way I read this article it’s not worried the Big Boys but the little companies.

  11. Joe Pinhead
    June 30, 2014 at 12:45 pm #

    The purpose of raising the minimum wage is to do nothing more than to pander to a group of voters and for the legislatures to feel better about themselves. As sad as it is to say it will do NOTHING to help the plight of those struggling to live on that wage or any other low wage.
    The issue is simple to get paid more than minimum wage you need more than minimum skills. Think of all the monies we as taxpayers have “invested” in training programs (Berkshire works) education etc. it simply does not work for everyone. It does not work for various reasons, people are disenfranchised, disengaged, caught up in drugs and alcohol etc. raising the minimum wage will not correct any of those other the other issues that those stuck in minimum and low wage jobs are cursed by and subject to.
    How much has the Commonwealth and City for example “invested” in economic development? Or job training? What about all the subsidized housing we pay for on top of the heating assistance etc.? If you’re going to count only the wages earned it is grossly unfair and incomplete.
    The fact that the minimum wage needs to be raised by the Commonwealth in any manner is an admission that those tasked with developing the economy, the workforce and the infrastructure to name the big 3 have failed and failed miserably.
    The fact that CEO’s make much more is irrelevant, they have much more responsibility to both the shareholders and the employees. Anyone can start a company work at it and pay their employees what they feel is correct.
    Scott, just wondering you say big companies should pay people fairly, what is fairly? Fairly to who? Can the Government define fairly? In what context? Social, political? Some other context? Has anyone ever limited you in what you can pay your help? Please define “big Company” I would like to understand that term.
    We can and probably will differ on this and the politicians love to start these type of discussions by pointing to some entity who can’t defend itself in this day and age to detract from the failures that there policies while however good intentioned have delivered. We will sit here and bash Walmart or some “Big Company” but will not hold a single elected or appointed official accountable although we spend untold treasure on economic development. Face it the war on poverty has failed you can try and legislate poverty out of existence but as is evident by a mandated raise in the minimum wage politicians who have never created anything other than glossy photos and connections sure won’t help the working poor. I wonder if cutting the waste, graft, corruption and cronyism from the tax rate wouldn’t be a more prudent way to proceed. Hell I’m crazy for even thinking that. Let the name calling and bashing begin.

    just sayin

  12. Matt
    June 30, 2014 at 1:28 pm #

    Costco’s starting pay is $11.50 an hour, and the average employee there earns $21 an hour, not including overtime. About 88 percent of Costco workers also benefit from company-sponsored health insurance

    Now if one of the largest businesses in the country can do it..

    They do it because it makes money for them, increases morale and productivity, reduces turnover, and their purchasing power which boosts the economy.

    No one argues when there is a new loophole for the large corporations, tricks to make money in the US and hide the profits overseas while shafting US workers.. but the hostility to the people who are unemployed or underemployed means that many people feel they took the last seat in the lifeboat.

    There is enough food in the world to wipe out hunger, emough medicine to cure illnesses rampant in the underdeveloped nations, and enough money in the richest country in the history of the world to care for its citizens.

    How many of you are willing to confront the reality that denying people a living wage means that children go hungry, adults die from poor or no medical care?

    Are we Darwins “naked apes” or are we our brother’s keepers?

    • Joe Pinhead
      June 30, 2014 at 2:40 pm #

      Precisely my point they start at a higher rate than the mandated minimum because Costco see’s the value in doing so, not by force. Evidently Costco has decided that the price of recruitment, training, productivity etc. is valued at about 11.50 to start. They are not forced to start people at that rate. If all the “investments” in economic development and education had panned out or done ½ of the claims labor would be at a premium or more heavily valued and starting wages would raise as well. If everyone decided to start shopping at Costco and it became clear the reason why was due to the wages paid to employees was greater than minimum than the other vendors would be compelled to follow suit or go out of business. Consumers would mandate its really that simple.
      We are not Darwin’s “naked apes” we are our brothers keepers which cuts both ways, how many jobs will not be created because the owner of the store simply cannot afford to pay that much out with higher taxes, regulations etc? or are those who did not get hired not our brothers?.

      • Scott
        July 1, 2014 at 3:47 am #

        Shopping somewhere on such a righteous principle sounds good on paper but you’re giving your fellow apes way too much credit. Sure it’s something I think about that’s why I’d rather spend more money than go to walmart but the majority of people don’t think that way.

        • Joe Pinhead
          July 1, 2014 at 7:28 am #

          Evidently “us apes” understand that minimum wage jobs are and have always been meant as entry level positions not the destination. Lower pay in exchange for learning work skills etc as you progress through the system. The fact that there is such a limited amount of progression in this area is due to policy not a lower wage. As you claim to be so caring what do you say to the elderly on a fixed income who will get a meager cost of living adjustment who will have to do with even less now due to cost increases because of this policy and an increase in tax rates? Are they not our brothers as well? That’s right they were not mentioned in the news article(s) instead the media focused on people who might not have played by the rules quit school had children out of marriage etc. Where such apes that we think the elderly on fixed incomes after playing by the rules building a city and working hard to build the greatest country in the world. Should not have to find a job or live out their days in a constant struggle. So sad to read from you that you think of us that are concerned about those who have done their duty and played by the rules are apes. But if that’s what I am so be it I’m proud to be one.

          • Scott
            July 1, 2014 at 1:23 pm #

            You misunderstood my post. I don’t really have a side or any answers. Maybe I’ll sit down and draw a line on a piece of paper later and weigh the pros and cons. This is what I do know. Govt involvement should be limited and legislation should be written incentive based. And there are working poor being taken advantage of. Ps. I don’t think you’re an ape.

  13. Tim bartini
    June 30, 2014 at 2:05 pm #

    Matt. Great reply!

  14. Scott
    June 30, 2014 at 2:09 pm #

    By fairly I mean people who work hard and are loyal should be compensated adequately as opposed to keeping them poor. Don’t act like there’s not companies who abuse employees and keep them in poverty. Some people believe it or not need a voice because they are incapable of speaking up for themselves. With that said I’ve given loyal service and was denied a raise after a year so I left. I thank those people though as it’s situations like that that have me drive to so things for my self.

    • Joe Pinhead
      June 30, 2014 at 2:52 pm #

      Scott, yes there are companies who treat their employees worse than others and some treat their employees better than others irrespective of size. Here is my rub if a person has a skill than he or she can take that skill to another place of employment where the conditions are better in that persons eyes.
      We have no right to dictate what is better or “fair” for each individual, I know of 3 companies in my field that pay less but provide onsite child care and schooling up to grade 6 should they be mandated by government to stop the schooling and pay everyone the same wage? By the way the school and day care is open to all from the custodial staff to the HR people and the software programmers etc. I am compensated extra as I am a field person removed from those facilities is that “fair”? what if I have no children but work at a place like this is it “fair”? see with the proper education and training the individual has the power to decide what is fair or best for them not the government not a union but the individual. Each deciding what is best for each of us and our families and each having equal access to the tools of empowerment now that sounds “fair” to me

      • Linda
        June 30, 2014 at 5:54 pm #

        I agree with you Joe. Govt should stay out of it. I own a small 9and successful service business with a handful of employees. I don’t want Boston forcing me on the question of compensation.

        I want my bottom line to do that. That’s the only way I can run my business at a profit which takes a lot of advance planning. LEaving the market out of it and creating a fake hourly wage not dependent on market will cause chaos with a lot of small businesses.

      • Scott
        July 1, 2014 at 3:40 am #

        Some people are forced by geographics as well. I understand what you’re saying. But there are people stuck who can’t just take thier skill somewhere else for whatever reason. Some peoples only skill is that they show up and work hard. Big companies like Walmart let the tax payer subsidize health insurance/food. Let’s be honest here the majority of people that this bill will help or hurt depending on how things go are poor minorities in poor urban areas.

  15. Luke
    June 30, 2014 at 7:25 pm #

    I have always believed that all laws start from values. Child labor laws, wage and hour laws, and so on were passed to protect the work force from exploitation by powerful business interests.

    When people can’t feed their families even after working 40 hours , or have medical care, or a safe place to live, there is a need for society to step in and protect them.

    When slaves were freed, the south said their economy would collapse; when mine safety regulations were adopted mine owners said they would have to close.. factory owners said child labor laws, minimum wage, and environmental safety standards would destroy their profitability and force them t close. Yet, all these things happened and as a result people have had better lives; we are a more enlightened society, and a better one when judged by the standard of how we care for the least among us.

    We have lost sight of our obligation to protect our citizens from exploitation… by the mcdonald’s and walmarts, and and and who take advantage of massive unemployment to pay poverty wages.

    OK.. I’m now getting off my soapbox… If I haven’t convinced you.. try living on $320/week for a few weeks (and don’t forget to pay your taxes, medicare, and so on)..

    • Scott
      July 1, 2014 at 3:42 am #

      Luke you bring valid points to the debate thanks!

  16. Jonathan Melle
    June 30, 2014 at 7:25 pm #

    There is NO democracy in Massachusetts! All 5 Berkshire delegates to Beacon Hill’s State House — Ben Downing, Smitty Pignatelli, et al — are running unopposed this year of 2014. Even Andrea Nuciforo II is not challenging Congressman Richie Neal this year of 2014.
    If a worker doesn’t make about $40 per hour or more plus adequate health insurance benefits, he or she is working poor.
    Even $11 per hour minimum wage is a joke!
    You are supposed to pay your rent or mortgage with one week’s pay per month. You are supposed to save one week’s pay per month toward your retirement account like a 401k or an IRA. You are supposed to save one week’s pay for a rainy day account. You are supposed to spend one week’s pay for your basic needs like food, gas, and the like. You can’t be middle class making $11 per hour!