By Al Lewis
A DOW JONES NEWSWIRES COLUMN, July 23, 2009
Business owners nationwide can’t wait until Friday when the federal minimum wage goes from $6.55 to $7.25 an hour.
That’s according to a group called “Business for a Shared Prosperity.”
This share-the-wealth agitator has assembled a colorful array of endorsements on its Web site, businessforafairminimumwage.org. It quotes Costco Wholesale Corp. (COST) Chief Executive Jim Sinegal and even Adam Smith, the philosophical founder of capitalism.
It also quotes Camille [Moran], who owns a Christmas tree farm in Louisiana:
“The higher the wage an employee receives, the more income he or she has to purchase goods and services for their family, which is indeed the best medicine for our economy.”
But someone who hacks down trees just so consumers can watch them die in their living rooms as part of a fleeting seasonal ritual is not a qualified economist. Additionally, Caramor doesn’t seem to understand what our country’s greatest economic minds have already decided:
The “best medicine for our economy” is to give trillions of dollars to failing banks, taxing generations of small business owners and wage earners to come. Giving our lowest-paid workers a raise, by contrast, is just plain socialist.
“History has proven time and again that increasing the minimum wage increases purchasing power among people who are living hand-to-mouth,” said Arnold Hiatt former chief executive of Stride Rite Corp. (SRR).
The extra $28 a week that the minimum wage increase will deliver is enough to buy one Stride Rite shoe and a pack of shoestrings.
“Living on a shoestring is not the best incentive for workers,” said Nancy Denker of Focus Ink in Albuquerque, N.M. “The stress of poverty puts the mind in a place of worry instead of work.”
I actually think it’s the other way around. People making minimum wage often work three jobs and don’t have time to worry. It’s the grossly overcompensated who worry, particularly in a recession.
“Anyone who thinks the minimum wage shouldn’t be raised should try living on it,” said Phillip Rubin, chief executive of Computer Software for Professionals in Oakland, Calif.
Sounds like I need to start asking those people under the bridge if they can write me some software code.
“I cannot understand how we expect families to exist without … a livable wage,” said Bernard Rapoport of American Income Life Insurance Co. in Waco, Texas.
Not to sound like too much of a nihilist, but why should anybody “expect families to exist?” Plenty of families are non-existent - they just aren’t recorded in the census data - and it’s impossible to sell them life insurance.
“We need ditch diggers,” said Beverly Johnson, legislative chair of the Kansas Business and Professional Women. “I don’t want to dig ditches. If I want my ditches to be dug, then I should not be paying the least amount that a ‘desperate’ person will work for.”
Have you hugged your desperate ditch digger lately? Or your fruit picker? Or your garbage man?
“There is no rational reason why our society should allow some people to earn enough to own five mansions while those who pick their fruit … and pick up their garbage can’t even afford a small house,” said Richard Johnson, president of Associated Merchant Services in Nashville, Tenn. “Why shouldn’t someone who is willing to do that be rewarded with enough income to enjoy a decent lifestyle?”
“Even the increased rate of $7.25 is an insult to workers and employers,” said Amy Ventura, co-president of Storm Graphic Arts in Montclair, Va.
It’s less than the minimum wage workers made in 1956 - $7.93 when adjusted for inflation - the group claims, citing Bureau of Labor statistics. Or course, in 1956, $50 (or roughly a day’s wage after taxes) could not even get you into an iPod shuffle.
“Paying your employees well is not only the right thing to do but it makes for good business,” said Costco’s Sinegal.
If Sam’s Club paid its workers more, who knows, they may even start shopping Costco.
“They who feed, clothe and lodge the whole body of the people, should have such a share of the produce of their own labor as to be themselves tolerably well fed, clothed and lodged,” Adam Smith wrote in “The Wealth of Nations” in 1776.
So now even Adam Smith wants us to “share the prosperity,” too?
I always thought that guy sounded like a socialist.
(Al’s Emporium, written by Dow Jones Newswires columnist Al Lewis, offers commentary and analysis on a wide range of business subjects through an unconventional perspective. The column is published each Tuesday and Thursday at 9 a.m. ET.)
-By Al Lewis, Dow Jones Newswires; 212-416-2617; email@example.com
Copyright 2009 Dow Jones
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