Tuesday, September 30, 2014

The Minimum Wage Fight (and How To Fight It)

In the last segment of his latest edition of the Southern California Political Round-Up (Sept 28), radio host John Stammreich discussed the minimum wage fight as the "Third Rail" topic.

John Stammreich

Referring to his guest on the Sept 21 episode, recently-elected mayor Suzanne Fuentes of El Segundo, Stammreich expressed dismay that few Los Angeles area mayors challenged LA Mayor Eric Garcetti's plea to raise the minimum wage to $13.75 an hour or more.

Then he criticized Republicans for ignoring this issue, for refusing to talk about it.

Last of all, he remarked that a number of local cities in the South Bay didn't throw huge celebrations because of Garcetti's policy move against hotel franchises in LA City.

Because the costs of running a hotel will increase with the minimum wage, and the charges which will pass on to the clients, the smaller cities who are not raising the minimum wage will gain extensive increases in business from travelers going in and out of LAX.

El Segundo will definitely benefit, and is planning on expanding their hotels in the city.

Yet the question remains: why do Republicans, conservatives, and limited government advocates avoid refuting the minimum wage talking points on the Left?

On its surface, what could be more cruel than suggesting that individuals should work for the minimum wage? Who would not support seeing American workers making more money for their labor?

The reality is that Republicans do not want to see workers struggling under stagnant wages. Yet with all the government interventions in the economy, the unintended consequences of statist policies like raising the minimum wage do not burst forth immediately.

Yes, the individual employee finds himself taking home a little more money right away in the paycheck, without doing anything more to earn it.

What the community does not see, what the liberal economists do not take into account, what the general public never follows on, are the following:

1. Businesses end up hiring fewer people.

2. Higher-level workers usually do not receive a similar pay increase, inducing them to leave their jobs or put pressure on their employers for a commensurate salary increase.

3. Employers and businesses which do not want to endure a shortfall in their profit margins will pass on the costs of this increase in the price of the goods sold. In some cities, the regulatory burdens have forced businesses to charge a distinct tax to cover those costs.

4. With the rise in employee costs, businesses not only can freeze hiring, but they can close their businesses for a final sell-off, laying off workers, and move operations to another city (or country).

Explaining the devolution of a business in a sound bite is not an easy task.

Another part of the problem lies in the language employed by liberals, by the left on the minimum wage.

"Raise the minimum wage" is misleading. Governments, laws, politicians do not raise anything but taxes, spending, and the costs of doing business.

When legislators or city councils enact laws requiring a higher minimum wage, they are in fact forcing businesses to make difficult, costly decisions. The politicians are not paying anyone, since the salaries do not come out of their pockets.

Margaret Thatcher
Republicans need to relearn the lesson mastered by Conservative Prime Minister Margaret Thatcher:

Define the terms of debate before your opponent.

All this rhetoric about "raise the minimum wage" is a false premise in itself, as far as governments are concerned.

“Forcing the minimum wage” is more accurate, and puts liberals in a less pleasing light.

Also, these minimum wage agitators have reshaped the argument to “living wage.” As if? Entry-levels jobs are that: entry level. They were never meant to be the ongoing wage on which any worker survived.

On one hand, conservative can gleefully agree with their liberal opponents: "I support raising the minimum wage!"

But how? They can then explain their plan: allowing individual businesses to profit and hire employees, and granting those employees the opportunities to further their potential through promotion and education.

Then Republicans follow up with inquisitorial questions:

Why are you making it harder for young children to get a good education, a good job, and better themselves?

Conservatives can then recite liberals' resistance to school choice, vouchers, internships, plus the regulatory burdens which hurt businesses and thus individual workers.

They can also shame liberals' profound ignorance about economics with a question:

 How are you going to raise the minimum wage of working Americans? Are you the one paying them?

Once again, the brutal fact about government interventionism is that the law does not create wealth, but merely redistributes it by force.

The Republicans can declare: "You want to force the minimum wage. You can't raise anything!"

This kind of rhetorical shift will put away the notion that Republicans, conservatives, etc. want to keep people poor, and instead shift the blame denounce the bullying nature of the left toward ordinary Americans, including Mom-and-Pop small businesses, because liberal politicians are preventing Mom-and-Pop businesses from making their own decisions and help their communities.

Republicans should revisit another piece of advice from Prime Minister Thatcher, who reminded her Conservative peers:

 Economics are the method; the object is to change the heart and soul.

The moral argument is missing for Republicans. While Republicans insist that Democratic policies don't work, Democrats attack Republicans with personal invectives, invoking a war on women, minorities, gays, etc.

Instead of a dry economic treatise, Republicans have to call out minimum wage agitators on the truth, but with emotional appeals:

1. They believe that people are too stupid, lazy, or incompetent to rise above an entry-level job.

2. They want to see poor and minority youth at a distinct disadvantage when it comes to job-training and resume building.

(In other words, it's a racist policy to force (not raise) the minimum wage.)

3. They have never run any business, but want to run businesses into the ground or out of the state.

More dramatic assaults may be necessary. If US Senator Elizabeth Warren believes in a higher minimum wage, why doesn't she start by practicing what she preaches? If Assemblyman Al Muratsuchi (D-Torrance) wants to force the statewide minimum wage, why doesn't he start by paying his interns? Why not cover the costs with his own money?

What? I have to pay
their wage increase?!

In a striking example of this liberal hypocrisy, philosophical reporter Jan Helfeld exposed a younger Congresswoman Nancy Pelosi, who had failed to follow through on the minimum wage rhetoric with her own Congressional staff, many of whom she paid nothing. Republicans could have a lot of fun shaming minimum wage agitators on their own greedy duplicity.

Congresswoman Bachmann Blitzed Sanders on the minimum wage issue

For a strong example of debating this issue, Congresswoman Michele Bachmann superbly slapped down Socialist US Senator Bernie Sanders' class warfare diatribe about the minimum wage in one debate. First, she pointed out that Australia, with its $20 an hour minimum wage, also has high unemployment. Then she personalized the subject, discussing the plight of a single mother who wanted a good job, and better education to get a better job in the future. She even had the foresight to call out the "Democratic War on Women" because of the terrible economic policies under President Barack Obama.

Other novel responses can include success stories of individuals who started out on the minimum wage, then worked their way into prominence and prosperity in their respective professions. Wisconsin Governor Scott Walker has done a phenomenal job of relying on individual success stories in his state following the economic reforms he implemented.

These moral appeals are more effective than economic arguments.

Republicans need to employ these offense-as-best-defense tactics in the minimum wage debate. Out of fear or lack of knowledge, conservative politicians skirt the subject or push it aside quickly with an economic explanation, one which never wins the hearts and minds of voters.

A change of mind, an aggressive push to define the debate,  one depicting the liberal agenda in its true light, and Republicans can end liberals' minimum wage agitation, which hurts businesses and deprives good workers of better opportunities.


  1. And here are a few points that were not mentioned:

    You know what makes me sad and sick at the same time? Every time I read the blah, blah, blah about how we need minimum wage reform, and the huge retail chains are trotted out and flogged as the poster boys. What all this talk of reform misses are the little one-up mom n' pops - local hobby shops, boutiques, ice cream shops, cookie bakeries - special interest, non-franchised, struggling, undercapitalized, over regulated and taxed.

    These are the shops that make a town or community unique and interesting, and often destinations in their particular niche. When people travel, they seek out our shops. We offer something new and fresh and different, and our offerings say something about the qualities of our communities and our clientele. If you want to walk in the door and get expert advice (or often any help at all) and personalized service, you must go to the local shop.

    This economy has been lethal to our businesses. Market analysts reported in May that small business startups hit a 30-year low. This coincides with not only more restrictive bank lending policies, but the long-term slowdown in our economy. Many of us are either losing money or barely staying afloat. I own a little yarn shop - and until a few months ago I was the only one standing in a 35-mile radius. I sure wish I could bring home a minimum wage - I bring home nothing. I sure wish I could afford to pay more than minimum wage.

    Contrary to popular belief, not everyone who has or is looking for a job is a breadwinner. Many are looking for extra spending money, some are just looking to get out of the house. I have had people offer to come work for me for yarn. I'd love to have those people work for me. It would really help my business and would free me up so I don't have to work 6 days a week. But you know what? It is illegal for me to do that. Despite the fact that the job seeker approached me and offered to work on those terms, the state has decided that I have to pay the help (and the state) in cash. Why? What business is it of theirs if we all agree to the terms?

    Nearly doubling the minimum wage will kill my business and the remaining specialty shops in the area. We're dropping like flies. Quilt shops. Restaurants. Cosmetic shops. Art supplies. No one thinks of us when they're squawking about how we greedy employers aren't sharing enough of our wealth or our profits. Talking heads and hot-shots sneer and tell us that maybe our "business model" deserves to die. Well, maybe we do if you want to live in franchise heaven.

    You can go to Michaels and buy yarn - mostly horrible yarn. No one in the store can answer your questions or help you develop your skills. If you want premium fibers, beautiful hand-dyed products and individual attention, you need to go to a local yarn shop. Same with quilting fabrics. Same with model trains, cars and planes. Same with fresh-baked, custom made cookies and cakes. You can say goodbye to all of these if you regulate and mandate and tax us the same way you do Walmart. We cannot survive.

  2. A left-of-center California economic think tank has reached a conclusion that they are doubtless uncomfortable with. Indeed, their LA TIMES op-ed says that "we found job loss that was large enough and surprising enough that we went back through our data sources multiple times to ensure the analysis was accurate."