Wednesday, March 4, 2015

9 Months On, Koch Fears Realized After Town Raised Minimum Wage To $15

It is astonishing just how so many smart folks totally fail to get it.  The purpose of a minimum wage is to establish a base to the labor market that can be then defended and not discounted from.  Then all discounting is forced into the grey market of the illegals and the volunteers and their like.  Even they get a break.

Minimum wage needs to be calculated against a reasonable living basket of goods and services that allows an individual to have enough calories to arise in the morning and put in eight hours of light duty at least.  He also needs to shower and have a good night's sleep.  In that way everyone is ready willing and able to step up to the plate. 

If the bottom third are comfortably subsisting then unionized wages can be legislated at a specific premium before Union protection is no longer protected or necessarily permitted.   This prevents another form of monopoly exploitation.  After that it is all negotiated.  What is eliminated is negotiated exploitation of the vulnerable.

If the base Third makes B, then the middle third makes 1.6B and the top third make 2.5 B as an average we have a gross economy earning 5.6 B with an effective average of 1.86B.   If instead you discount out the bottom third so that it is costing more in taxes and impacting efficiency we have actually adjusted our gross downward to a plausible 1.7B with an added tax drag.  This is no formula for prosperity.

Eliminating this discounting drag actually produces prosperity and actually adding in my base work program consisting of four hours of volunteer effort even energizes the whole.  The definition for prosperity is no one having the time or inclination to talk about been poor.

9 Months On, Koch Fears Realized After Town Raised Minimum Wage To $15


In January, the town of Seatac, Washington, put in to effect a new $15 per hour Minimum Wage. No ramp ups, no tiered implementation. One day it was the state standard, the next, the highest minimum wage in the nation. The Koch Brothers sank a fortune to fight this measure, which fell on deaf ears as the town rejected their trickle-down theories and instead voted for the measure. The result is that for one town, they became a test bed, to put the theories behind trickle-down economics to the test.Now, nine months on, we are witnessing one of the most dramatic recoveries in the Pacific Northwest.

Last July, business owner Scott Ostrander claimed that the increased wage would force him to lay off staff, if not shut down his businesses.

I am shaking here tonight because I am going to be forced to lay people off. I’m going to take away their livelihood. That hurts. It really, really hurts. . . . And what I am going to have to do on Jan. 1 is to eliminate jobs, reduce hours — and as soon as hours are reduced, benefits are reduced.

Instead, his business, the Cedarbrook Lodge hotel, is expanding, adding 63 more beds to meet demand. Instead of layoffs, he needs to hire more people. And his story is not the only one.

Tom Douglas, who runs fifteen restaurants in the Seattle area, warned that a higher minimum wage law being considered by Seattle would force the shutdown of a quarter of his restaurants. Instead, after the results in Seatac, he is opening five new restaurants to meet demand. And this story is being repeated, over and over again, throughout the region.

Well paid employees pump money in to the local economies. This is basic economics, dating back to Adam Smith. Instead of slashing employees, which would impact any businesses ability to support their customers, they have turned to more direct approaches. A good example of this is MasterPark, an off-airport parking lot, which has added a $0.99 daily “Living Wage Surcharge“. Less than a dollar guarantees that MasterPark can give all of its employees a living wage, a small price to pay.

The biggest sign that the higher wage did not impact Seatac however comes with the news that the Seatac airport will be undergoing a half-billion dollar renovation and expansion. The growth of the airport, which as an extra-territorial administrative district does not require the higher minimum wage of the adjoining town, demonstrates that the fears pushed by the Koch Brothers and their multi-million dollar ad campaign are just nonsense.

They forgot the words of wisdom from President Franklin D. Roosevelt, in an address given in Cleveland, Ohio on October 16, 1936.

It is to the real advantage of every producer, every manufacturer and every merchant to cooperate in the improvement of working conditions, because the best customer of American industry is the well-paid worker.

1 comment:

Anonymous said...

Banned TED Talk Nick Hanauer Rich people don't create jobs

Jobs are crested by people having money to spend. The greater the disposable income they have the stronger the economy. The stronger the economy the more opportunities exist to prosper.

Rich people are only taking advantage of the opportunity that is created by people having money to spend and invest.

Tell a rich guy that claims he creates jobs to go and open a store in the middle of nowhere.

Next if he is the one that creates the jobs then he only lays off people because --- He just wants to.

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