Monday, June 01, 2015

The Race Toward A $15 Minimum Wage

Via Global Wealth Protection . . . 
"To say that a higher minimum wage would bolster the economy is like telling someone to keep a mortgage so they can write off the interest. In no way is it a net benefit to have a mortgage and pay interest just so you don’t have to pay taxes on the interest. The math doesn’t work. The interest is greater than the taxes you’d pay on it. Likewise, it’s not how a rise in the minimum wage works because the price of goods don’t stay the same so it’s not like $1,000 in wages more in outlay equates to $1,000 in revenues. If people don’t spend that money and decide to save, if people pay off debts with that money rather than spend, and if the cost of goods go up then it’s no longer a wash. It’s a loss.
"Los Angeles will be facing similar problems as it institutes its 5-year plan to $15 per hour from $9 per hour. This is such a welcomed treat to this lovely blue state that the unions asked for an exemption!  You read that correctly. Seems unions like asking for exemptions when laws are passed ostensibly to benefit the good ole proletariat. Remember when they asked for an exemption from Obamacare? Well now they are asking for exemptions from the Los Angeles minimum wage.
"One of two things is happening here: either the unions don’t want the state to collectively bargain and phase them out of the picture altogether OR they want to dangle lower wages to businesses that aren’t currently unionized. Either way, their motives are never any good. One minute they want healthcare and higher wages…then when the government mandates it, they don’t want it anymore? Makes you wonder, doesn’t it?
"The bottom line is: we are pricing ourselves out of the labor market one city at a time. This is exactly why the US has lost its footing in manufacturing, customer service, and data entry. These entry level jobs just aren’t worth $15 per hour. This is one of the many reasons the unskilled and/or under-skilled are struggling to find jobs. This is why we import more from developing countries than we export. These are all part of the bigger picture of a failing US economy."
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