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Living Wage Pizza Bombing in the Marketplace

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alloak41
(@alloak41)
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Locals applaud pizza shop owner for significantly raising his pay scale, but aren't lining up to buy $30 pizzas.....

http://muskegonpundit.blogspot.com/2015/08/california-pizza-shop-tries-to-sell.html


 
Posted : August 28, 2015 7:55 pm
Muleman1994
(@muleman1994)
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Locals applaud pizza shop owner for significantly raising his pay scale, but aren't lining up to buy $30 pizzas.....

http://muskegonpundit.blogspot.com/2015/08/california-pizza-shop-tries-to-sell.html

_________________________________________________________________________

Wait, the liberals said raising the minimum wage would spur economic activity and bring in more revenue.


 
Posted : August 29, 2015 8:25 am
Sang
 Sang
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The minimum wage wasn't raised in the area, just by this one store.............

This guy did it on his own, just for his employees...... for this to work, the other people in the community also need the wage hike, so they have the additional money to spend on things........ but you knew that.... great example!

[Edited on 8/29/2015 by Sang]


 
Posted : August 29, 2015 10:18 am
Muleman1994
(@muleman1994)
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The minimum wage wasn't raised in the area, just by this one store.............

This guy did it on his own, just for his employees...... for this to work, the other people in the community also need the wage hike, so they have the additional money to spend on things........ but you knew that.... great example!
_________________________________________________________________________

When the liberals said raising the minimum wage would spur economic activity and bring in more revenue they didn’t mention your excuse why it isn’t working.

Excuses don’t help people.


 
Posted : August 29, 2015 10:26 am
alloak41
(@alloak41)
Posts: 3169
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Topic starter
 

The minimum wage wasn't raised in the area, just by this one store.............

This guy did it on his own, just for his employees...... for this to work, the other people in the community also need the wage hike, so they have the additional money to spend on things........ but you knew that.... great example!

Great idea. The business model is failing and the owner is worried about shutting down, so take
failure and spread it around to other businesses as well? What about folks on fixed income, when a gallon of milk runs you $10? How is this fair to them?

The ironic part of the story is the store owner wasn't trying to make some kind of statement. He really believed folks that had been imploring businesses to pay a "living wage" would support his business for doing so. They haven't. These ideas always good in theory, but not so much in the real world.

This is example A-1 why wages are not set on what it costs people to live.


 
Posted : August 29, 2015 12:33 pm
Muleman1994
(@muleman1994)
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This populist political issue the liberals are pushing is blowing up in the faces of real people.

Surprise! Leftist minimum wage policy backfires in Seattle suburb
http://www.unitedliberty.org/articles/17751-warning-to-seattle-seatac-businesses-slashing-benefits-overtime-in-wake-of-wage-hike

We Are Seeing The Effects Of Seattle's $15 An Hour Minimum Wage
http://www.forbes.com/sites/timworstall/2015/03/16/we-are-seeing-the-effects-of-seattles-15-an-hour-minimum-wage/

Seattle’s Minimum Wage Hike Causing Major Problems

http://yournation.org/seattles-minimum-wage-hike-causing-major-problems/


 
Posted : August 29, 2015 12:36 pm
Swifty
(@swifty)
Posts: 401
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The minimum wage wasn't raised in the area, just by this one store.............

This guy did it on his own, just for his employees...... for this to work, the other people in the community also need the wage hike, so they have the additional money to spend on things........ but you knew that.... great example!
_________________________________________________________________________

When the liberals said raising the minimum wage would spur economic activity and bring in more revenue they didn’t mention your excuse why it isn’t working.

Excuses don’t help people.

Are you able to make a comment about economics without using words like liberal and low info?

You know bigotry is both borne of stupidity and perpetuates it. You need to read the article and you would see the narrative is being supplied by a right wing zealot like yourself and not a liberal.

Obviously, as Sang mentioned, community wages need to rise so people can purchase more expensive items.

But there have always been cases where entrepreneurs repackage items like burgers and pizzas and sell them at prices way higher than the market standard. It works in many cases. It doesn't in others but the determinant will be the market.

In this case the pizza shop owner decided to implement a social business model and be a market leader in improving the lot of low income workers. It’s generally understood that these models take time to spill over on the business end. A probable immediate benefit is staff loyalty which would result in better quality of product and service. Customers in this sense would realize the difference in quality and then decide if they want to pay for it. Pizza customers are not that discriminating and so this may be a tough market to demonstrate this benefit at first.

This case does fit a capitalist model where entrepreneurs try to identify different market niches to compete.


 
Posted : August 29, 2015 12:37 pm
alloak41
(@alloak41)
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Topic starter
 

This populist political issue the liberals are pushing is blowing up in the faces of real people.

As per usual. Seems as if there is a failure to think things through. The failure to grasp basic laws of economics is staggering.


 
Posted : August 29, 2015 12:43 pm
Muleman1994
(@muleman1994)
Posts: 4923
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The minimum wage wasn't raised in the area, just by this one store.............

This guy did it on his own, just for his employees...... for this to work, the other people in the community also need the wage hike, so they have the additional money to spend on things........ but you knew that.... great example!
_________________________________________________________________________

When the liberals said raising the minimum wage would spur economic activity and bring in more revenue they didn’t mention your excuse why it isn’t working.

Excuses don’t help people.

Are you able to make a comment about economics without using words like liberal and low info?

You know bigotry is both borne of stupidity and perpetuates it. You need to read the article and you would see the narrative is being supplied by a right wing zealot like yourself and not a liberal.

Obviously, as Sang mentioned, community wages need to rise so people can purchase more expensive items.

But there have always been cases where entrepreneurs repackage items like burgers and pizzas and sell them at prices way higher than the market standard. It works in many cases. It doesn't in others but the determinant will be the market.

In this case the pizza shop owner decided to implement a social business model and be a market leader in improving the lot of low income workers. It’s generally understood that these models take time to spill over on the business end. A probable immediate benefit is staff loyalty which would result in better quality of product and service. Customers in this sense would realize the difference in quality and then decide if they want to pay for it. Pizza customers are not that discriminating and so this may be a tough market to demonstrate this benefit at first.

This case does fit a capitalist model where entrepreneurs try to identify different market niches to compete.

______________________________________________________________________

Well the experts say, supported by local media that this populist political is not working.

If the SEIU militants, backed by George Soros, pressing the matter want more money they should get a real education and a real job.
It is a matter of personal responsibility.


 
Posted : August 29, 2015 12:45 pm
Swifty
(@swifty)
Posts: 401
Reputable Member
 

Great idea. The business model is failing and the owner is worried about shutting down, so take
failure and spread it around to other businesses as well? What about folks on fixed income, when a gallon of milk runs you $10? How is this fair to them?

Economics is way to complicated a field for you as well. How is this failure being spread around? You need to find real cases that have something to do with what you are trying to critique. You are speculating on events that have yet to happen and blaming everything on a case of independent entrepreneurship.


 
Posted : August 29, 2015 12:48 pm
MartinD28
(@martind28)
Posts: 2853
Famed Member
 

The minimum wage wasn't raised in the area, just by this one store.............

This guy did it on his own, just for his employees...... for this to work, the other people in the community also need the wage hike, so they have the additional money to spend on things........ but you knew that.... great example!
_________________________________________________________________________

When the liberals said raising the minimum wage would spur economic activity and bring in more revenue they didn’t mention your excuse why it isn’t working.

Excuses don’t help people.

Are you able to make a comment about economics without using words like liberal and low info?

You know bigotry is both borne of stupidity and perpetuates it. You need to read the article and you would see the narrative is being supplied by a right wing zealot like yourself and not a liberal.

Obviously, as Sang mentioned, community wages need to rise so people can purchase more expensive items.

But there have always been cases where entrepreneurs repackage items like burgers and pizzas and sell them at prices way higher than the market standard. It works in many cases. It doesn't in others but the determinant will be the market.

In this case the pizza shop owner decided to implement a social business model and be a market leader in improving the lot of low income workers. It’s generally understood that these models take time to spill over on the business end. A probable immediate benefit is staff loyalty which would result in better quality of product and service. Customers in this sense would realize the difference in quality and then decide if they want to pay for it. Pizza customers are not that discriminating and so this may be a tough market to demonstrate this benefit at first.

This case does fit a capitalist model where entrepreneurs try to identify different market niches to compete.

Great post. I enjoyed reading that. It was stated well and shows a real fundamental understanding of a macro view on this issue, as opposed to the usual culprits who do drive by criticisms.


 
Posted : August 29, 2015 1:13 pm
alanwoods
(@alanwoods)
Posts: 1053
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for this to work, the other people in the community also need the wage hike, so they have the additional money to spend on things........ great example!

That's just classic inflation and devalued currency.


 
Posted : August 29, 2015 1:16 pm
MartinD28
(@martind28)
Posts: 2853
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So this example and an unconfirmed quote of, "This movement, it’s going on everywhere” would represent a valid case study in microeconomics that proves wage increases of this nature will not work in the long term? Any respected economist only accepts cause & effect based upon preponderance of evidence.

Interesting in that the article from the blog cited has a picture and quote from Ayn Rand. That explains about all one needs to know.


 
Posted : August 29, 2015 1:17 pm
Sang
 Sang
(@sang)
Posts: 5754
Illustrious Member
 

This populist political issue the liberals are pushing is blowing up in the faces of real people.

As per usual. Seems as if there is a failure to think things through. The failure to grasp basic laws of economics is staggering.

As you and mule have done a great job proving............ Grin


 
Posted : August 29, 2015 1:27 pm
Muleman1994
(@muleman1994)
Posts: 4923
Member
 

Great idea. The business model is failing and the owner is worried about shutting down, so take
failure and spread it around to other businesses as well? What about folks on fixed income, when a gallon of milk runs you $10? How is this fair to them?

Economics is way to complicated a field for you as well. How is this failure being spread around? You need to find real cases that have something to do with what you are trying to critique. You are speculating on events that have yet to happen and blaming everything on a case of independent entrepreneurship.

___________________________________________________________________

Already posted:

Surprise! Leftist minimum wage policy backfires in Seattle suburb
http://www.unitedliberty.org/articles/17751-warning-to-seattle-seatac-busin esses-slashing-benefits-overtime-in-wake-of-wage-hike

We Are Seeing The Effects Of Seattle's $15 An Hour Minimum Wage
http://www.forbes.com/sites/timworstall/2015/03/16/we-are-seeing-the-effect s-of-seattles-15-an-hour-minimum-wage/

Seattle’s Minimum Wage Hike Causing Major Problems

http://yournation.org/seattles-minimum-wage-hike-causing-major-problems/


 
Posted : August 29, 2015 1:57 pm
Sang
 Sang
(@sang)
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The links you provided for Forbes and UnitedLiberty don't work.

The one for yournation is 4 short paragraphs long, and doesn't list any problems that are being caused.

Try again.......


 
Posted : August 29, 2015 2:40 pm
Muleman1994
(@muleman1994)
Posts: 4923
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The links you provided for Forbes and UnitedLiberty don't work.

The one for yournation is 4 short paragraphs long, and doesn't list any problems that are being caused.

Try again.......

_______________________________________________________________________

The FORBES link works just fine.

http://www.forbes.com/sites/timworstall/2015/03/16/we-are-seeing-the-effects-of-seattles-15-an-hour-minimum-wage/

[Edited on 8/29/2015 by Muleman1994]


 
Posted : August 29, 2015 2:59 pm
Sang
 Sang
(@sang)
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You seem to be incapable of posting a link, or even reading the articles you link.....

Tell me how the only link that works - yournation - says anything at all, let alone support your "position"?

Since you can't link, I'll post the entire article for you....

Seattle’s Minimum Wage Hike Causing Major Problems

The minimum wage in Seattle has been raised to $15 per hour. Critics are using the results of that effort as evidence that raising the minimum wage hurts the economy.

Opponents say, despite the fact more people are applying for jobs, hiring is not taking place. Instead, managers are taking more responsibilities to avoid the extra costs of hiring someone. Businesses have lain off workers or frozen the size of the workforce. Parking lots are charging more in order to cover the extra expense. Hotels are reducing benefits to employees to cover the extra cost in wages.
Seattle’s minimum wage was the result of a compromise worked out by a committee of business executives, community advocates, and union representatives. Not all employers are required to pay the minimum wage until 2025.

Such a compromise does not stop critics from saying that the overall result will be negative for the economy and for workers. They say that companies will keep more skilled workers while offering fewer jobs to less skilled workers. As a result, they claim, it will be more difficult for new workers to find jobs. The success or failure of Seattle’s new minimum wage law may have great bearing upon the national debate regarding income equality and the minimum wage.

So - explain how that article with the misleading title supports your position....


 
Posted : August 29, 2015 3:06 pm
LeglizHemp
(@leglizhemp)
Posts: 3516
Illustrious Member
 

i don't know, those prices don't look too bad if you think about tipping the delivery driver or a 15-20% tip for dine in. with 5 stores they look like they are still doing ok. i'm still digging for better info about how his experiment is going.

https://lanesplitterpizza.com/#pizza-pies

http://www.yelp.com/biz/lanesplitter-pizza-and-pubs-oakland-2

http://www.yelp.com/biz/lanesplitter-pub-and-pizza-emeryville

[Edited on 8/29/2015 by LeglizHemp]

[Edited on 8/29/2015 by LeglizHemp]


 
Posted : August 29, 2015 3:07 pm
Rusty
(@rusty)
Posts: 3259
Famed Member
 

Too much worrying and blaming for burger flippers not making $15 an hour ... not enough effort to get higher paying manufacturing jobs back. Blame whoever you want for this. Just sayin'.


 
Posted : August 29, 2015 3:07 pm
tbomike
(@tbomike)
Posts: 1388
Noble Member
 

Well lets see, the Forbes article is from March. The $11 minimum wage in Seattle went into effect on April 1. Hmm.


 
Posted : August 29, 2015 3:10 pm
Sang
 Sang
(@sang)
Posts: 5754
Illustrious Member
 

The links you provided for Forbes and UnitedLiberty don't work.

The one for yournation is 4 short paragraphs long, and doesn't list any problems that are being caused.

Try again.......

_______________________________________________________________________

The FORBES link works just fine.

http://www.forbes.com/sites/timworstall/2015/03/16/we-are-seeing-the-effects-of-seattles-15-an-hour-minimum-wage/

[Edited on 8/29/2015 by Muleman1994]

Again, an empty article. It was written in March, before the minimum wage was raised..... it only speculates on what 'might' happen.....


 
Posted : August 29, 2015 3:10 pm
LeglizHemp
(@leglizhemp)
Posts: 3516
Illustrious Member
 

this is from 2 years ago. i think this place has more problems than high prices and living wages.

http://www.sfweekly.com/foodie/2013/04/17/lanesplitter-pizza-employees-protest-working-conditions-with-walkout


 
Posted : August 29, 2015 3:28 pm
Muleman1994
(@muleman1994)
Posts: 4923
Member
 

Conservatives look at issues such as minimum wage from a results-oriented point of view. Does a certain law make sense and what actual results will be produced?
Liberals like President Obama take a process-based approach where “intentions” are more meaningful than the actual results.

Some liberals here, incapable of sourcing information, are more interested in supporting their failed president that looking at the actual facts and results of politically motivated laws.


 
Posted : August 29, 2015 4:05 pm
Muleman1994
(@muleman1994)
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Member
 

The term liberal has a poor connotation with many Americans so the left has adopted the term “progressives” as they are afraid of being accurately labeled socialists.

Fine, here is progressive’s view of the minimum wage issue:

The progressive case against a minimum wage increase

August 28, 2015 12:20 am • By David Nicklaus

http://www.stltoday.com/business/columns/david-nicklaus/the-progressive-case-against-a-minimum-wage-increase/article_1c0a4320-2b29-5ca3-a7ac-d4d1afc18e2d.html

St. Louis nonprofits say forcing minimum wage for disabled workers could cost jobs
The pending city wage bill would include those workers, though federal law exempts them.

Nicklaus: $15 minimum wage push looks like a job killer

Cities are entering uncharted territory with their big increases

$15 minimum wage proposal faces business backlash

Employers say bill would force them to move or cut jobs

Many supporters of a higher minimum wage like to imply that their opponents are conservatives who put corporate profits above poor people’s lives.

That caricature is far from the truth. Just ask Antonio French, who has built a reputation as a progressive, even a firebrand, in six years as a St. Louis alderman. He spent many hours with Ferguson protesters last year, and he has fought the business establishment on key development issues.

French voted against the minimum-wage bill the Board of Aldermen advanced Tuesday, and he’ll oppose it again when it comes up for a second vote Friday. In a phone conversation, he described his stand as both principled and practical.

“It would have been an easy vote for me to vote yes,” French told me. “I don’t have a lot of businesses in my ward. I do have a lot of poor folks who think the minimum wage is a great idea, but I know it’s not.”

The bill would raise St. Louis’ minimum wage to $11 an hour by 2018, a 44 percent increase over the statewide minimum of $7.65.

Such a steep climb, French worries, would price many young people out of the job market.
In the city of St. Louis, the unemployment rate for 16- to 19-year-olds is 34 percent. For 20- to 24-year-olds, it’s 16 percent. Raising the minimum wage amounts to knocking out the lowest rung of a career ladder that’s already out of reach for nearly 2,400 young city residents.

French has seen the effect that an $8- or $9-an-hour job can have on young people’s lives. He fears that if the minimum goes to $11, employers will hire older, more experienced workers rather than taking a chance on a kid.

Economists refer that as labor-for-labor substitution. It’s hard to see in big-picture statistics, which may be why some studies find that raising the minimum wage doesn’t eliminate jobs in the short run.

William Wascher, a Federal Reserve Board economist, has done extensive research on the effects of minimum-wage increases. He’s convinced that they do reduce employment over time, and he’s even more certain that they harm the least-experienced workers.

“Minimum wages do more harm than good,” Wascher said. “They reduce employment opportunities for low-skilled workers, and they don’t appear to do much to reduce poverty.”
The harmful effects that show up in studies of statewide or nationwide increases will be more severe in an area as small — and with as much concentrated poverty — as the city of St. Louis.

If employers move outside the city limits to avoid the minimum wage, they’re less likely to hire the young city residents whom French is hoping to steer away from the drug trade. He says a part-time job paying $200 a week can keep a young person off the streets and probably away from prison or an early grave.

French, who has an MBA from Washington University, knows some of those $8-an-hour jobs won’t exist at $11. He respects the moral argument some of his colleagues make about a living wage, but thinks it’s out of touch with the reality he sees in the city.

“I’m just trying to put poor folks to work,” French says. “The biggest problem we have is unemployment.”

The logic is simple, even though it seems beyond the grasp of other self-styled progressives. If a policy is going to make your biggest problem worse, it’s a bad policy.


 
Posted : August 29, 2015 4:35 pm
Sang
 Sang
(@sang)
Posts: 5754
Illustrious Member
 

Bullshit, Mr. Conservative.......

You (& alloak) use an example that has nothing to do with raising the minimum wage in an area, just 1 business, and try to say that your wrong example proves something.....

Of course, everything in the world is the liberals fault or Obama's fault..... must be nice to have an uneducated view of the world.....

Maybe you can explain why the conservative wet dream of trickle down economics didn't work.... and how the 1 % now have almost 50% of the wealth..... great results there....


 
Posted : August 29, 2015 4:55 pm
Muleman1994
(@muleman1994)
Posts: 4923
Member
 

Bullshit, Mr. Conservative.......

You (& alloak) use an example that has nothing to do with raising the minimum wage in an area, just 1 business, and try to say that your wrong example proves something.....

Of course, everything in the world is the liberals fault or Obama's fault..... must be nice to have an uneducated view of the world.....

Maybe you can explain why the conservative wet dream of trickle down economics didn't work.... and how the 1 % now have almost 50% of the wealth..... great results there....

______________________________________________________________________

The little liberal boy crying because he can't justify his master's failures.

Sad.

Considering the Obama economy is still faltering, his "economic recovery" from a recession is the slowest since WWII, anemic job growth and his regulations are driving more and more middle class families toward poverty his using the political pandering minimum wage tactic is all about he can talk about.

Pathetic.


 
Posted : August 29, 2015 5:07 pm
Sang
 Sang
(@sang)
Posts: 5754
Illustrious Member
 

Boy, look at those goalposts move! Did he cause the recession? How are those republican jobs and infrastructure bills doing? There is something pathetic here, and everybody sees it but you..... 😛

So how are those trickle downs helping you?


 
Posted : August 29, 2015 7:03 pm
Muleman1994
(@muleman1994)
Posts: 4923
Member
 

Boy, look at those goalposts move! Did he cause the recession? How are those republican jobs and infrastructure bills doing? There is something pathetic here, and everybody sees it but you..... 😛

So how are those trickle downs helping you?

________________________________________________________________________

I'm loving life and doing quite well. Thanks for asking.


 
Posted : August 29, 2015 7:08 pm
Muleman1994
(@muleman1994)
Posts: 4923
Member
 

One of the left’s (an Obama fav) go to guys for economics:

Warren Buffett Explains How a $15 Minimum Wage Would Hurt Workers
May 26, 2015

As Fortune observes, Warren Buffett is one of the Left’s favorite billionaires, but he occasionally says things they don’t want to hear. At such times, liberals politely ignore him and wait for him to say something useful to their cause, at which point the fulsome praise resumes.

They prefer not to dwell on such hypocrisies as the energy Buffett devotes to lawfully avoiding the high taxes he philosophically supports, which is no surprise, because hypocrisy is the grease that keeps the gears of socialism turning. Aristocratic privilege is the enticement leftists have always offered to useful industrialists.

The Left isn’t going to like what Buffett had to say about the minimum wage in the Wall Street Journal last week. After reviewing the numbers for income inequality (growing,
especially during the Obama years, although Buffett tactfully avoids pointing that out) and poverty (static, despite trillions of dollars spent in the War on Poverty), he blows a hole through liberal class-war boilerplate about the rich somehow getting richer off the backs of the poor:

No conspiracy lies behind this depressing fact: The poor are most definitely not poor because the rich are rich. Nor are the rich undeserving. Most of them have contributed brilliant innovations or managerial expertise to America’s well-being. We all live far better because of Henry Ford, Steve Jobs, Sam Walton and the like.

Buffett explains at length that specialization is both the source of our incredible national wealth, and the difficulty some people – and, more disturbingly, some families - encounter when trying to access it. In a pre-industrial age when most of the population could perform most of the available jobs, and failure to perform generally resulted in starvation, there wasn’t much “income inequality” until the wealthiest aristocrats and hereditary royalty were considered. Sociologists regard the evolution of an independent middle class as an important achievement, but it inevitably creates a larger, more distinct underclass as well. “Poverty” was not as compelling a subject when just about everyone was equally poor… and commoners had few opportunities to significantly improve their station.

When liberals set aside their favorite “revolutionary” class-war conspiracy theories and deal with the realities of middle-class specialization, their preferred remedy is demand greater spending on education. Here, too, Buffett commits heresy, and swings into “Bell Curve” territory to boot, gently using a sports metaphor to suggest that some people will always have trouble achieving prosperity no matter how extensively they are educated:
The remedy usually proposed for this mismatch is education. Indeed, a top-notch school system available to all is hugely important. But even with the finest educational system in the world, a significant portion of the population will continue, in a nation of great abundance, to earn no more than a bare subsistence.

To see why that is true, imagine we lived in a sports-based economy. In such a marketplace, I would be a flop. You could supply me with the world’s best instruction, and I could endlessly strive to improve my skills. But, alas, on the gridiron or basketball court I would never command even a minimum wage. The brutal truth is that an advanced economic system, whether it be geared to physical or mental skills, will leave a great many people behind.

And then he drops the word bomb that should turn most of his liberal admirers ferociously against him, if they can make themselves read and understand what he’s saying:
In my mind, the country’s economic policies should have two main objectives. First, we should wish, in our rich society, for every person who is willing to work to receive income that will provide him or her a decent lifestyle. Second, any plan to do that should not distort our market system, the key element required for growth and prosperity.

“Willing to work? What the heck is that supposed to mean?” welfare-state fetishists will howl, echoing President Obama’s implacable hostility to work requirements for welfare – the most successful policy reform in a generation, and one he couldn’t wait to undo as swiftly as possible. It is a sacred presumption of modern liberalism that nearly everyone is “willing to work,” but no one should really be required to do so. Despite towering evidence to the contrary, the Left does not want to believe there is a demand component to employment. Chronic high unemployment is solely a result of greedy capitalists refusing to offer jobs, or refusing to hire certain people, and not in any meaningful way influenced by the enthusiasm of the unemployed for seeking work.

Likewise, the struggle of the working poor to make ends meet is deemed to be solely a result of those greedy capitalists refusing to pay a “decent wage,” defined by the Left with increasing political discipline as $15 per hour. That’s the snake oil Buffett came to dump in the sand, but his suggested alternative is also problematic:

That second goal [avoiding distortions to the market system] crumbles in the face of any plan to sizably increase the minimum wage. I may wish to have all jobs pay at least $15 an hour. But that minimum would almost certainly reduce employment in a major way, crushing many workers possessing only basic skills. Smaller increases, though obviously welcome, will still leave many hardworking Americans mired in poverty.

The better answer is a major and carefully crafted expansion of the Earned Income Tax Credit (EITC), which currently goes to millions of low-income workers. Payments to eligible workers diminish as their earnings increase. But there is no disincentive effect: A gain in wages always produces a gain in overall income. The process is simple: You file a tax return, and the government sends you a check.

In essence, the EITC rewards work and provides an incentive for workers to improve their skills. Equally important, it does not distort market forces, thereby maximizing employment.
He goes on to outline the fraud and confusion surrounding the EITC, and notes the most obvious problem with using it as a primary supplement to working-poor income: it’s currently delivered as an annual sum at tax time. Buffett suggests remodeling the EITC to become a monthly payment, which should be a fairly simple change to implement, although our massive federal mega-bureaucracy tends to scream like a stuck pig and howl that it’s grievously under-funded whenever its workload is even marginally increased.

The more serious problem with Buffett’s suggestion is that the Earned Income Tax Credit is a horrible idea. The income-tax system should not have been corrupted into a dispensary of welfare benefits. It should be entirely concerned with funding the government, in the lightest, simplest, most evenly-distributed manner possible.

It currently resembles that ideal in no way, shape, or form. We have a big problem with the public perception that many Americans – 47 percent to quote one famous estimate – have no “skin in the game,” bearing none of the tax burden, and therefore having every reason to support madcap spending programs. The big problem is that so many people within that “47 percent” incorrectly believe themselves to be free riders, when in truth they pay all sorts of hidden taxes, even if their net income tax burden is near zero. Also, there are people who do pay net taxes, but cannot perceive the burden, because it’s all taken painlessly out of their paychecks with mosquito-bite withholding, and their only conscious interaction with the tax system is an annual refund check they perceive as a gift from the State.

Leaving the minimum wage alone and using the EITC to supplement low-wage income avoids the market distortion Buffett warns against – i.e. labor costs go up, so employers make do with less labor, or raise prices on everything to compensate. However, it merely shifts the burden of the all-encompassing welfare state into the murky waters of general taxation, making it invisible to most of us… and that’s a huge problem.

We need to be more conscious of what the State takes from us, and gives to others, not less. Welfare programs need to be clearly identified as such and monitored carefully. The recipients of government “charity” must be clearly aware they are on welfare, and given incentives to achieve self-sufficiency as quickly as possible. It’s certainly true that monthly EITC checks would be far more obvious than dumping an unfunded mandate on employers to provide welfare through absurdly inflated minimum wages, but for both payers and recipients, a permanent subsidy delivered through the tax system is something that can all too easily be ignored as a permanent fact of life.

I must also confess skepticism that the EITC can ever be reformed from the fraud Buffett mentions, because the bureaucracy has no real incentive to eliminate that fraud. Dramatic cuts in government funding are the one and only way to make bureaucrats take waste and fraud seriously – they won’t take decisive action until that money is coming right out of their hides.

“There is no perfect system, and some people, of course, are unable or unwilling to work,” Buffett concludes, doubling down on his willing-to-work heresy. “But the goal of the EITC – a livable income for everyone who works – is both appropriate and achievable for a great and prosperous nation. Let’s replace the American Nightmare with an American Promise: America will deliver a decent life for anyone willing to work.”

I think that premise should be vigorously challenged from the Right. The “American Promise” is a welfare check? Working people should rely on cash subsidies from the government to make ends meet? How about we get government’s boot off the neck of industry, and see what a lightly burdened, unfettered free market – a beast that has not existed within most of our lifetimes – can do to make most of us, including the “working poor,” self-sufficient?
Without regulatory meddling and the absolutely insane burden of financing our bloated and corrupt centralized State, most of us should be able to make a decent living – yes, even in the age of technological specialization – without extracting compulsory subsidies from our neighbors. Those who truly can’t make a decent life should enjoy reasonable and compassionate assistance… clearly labeled as such, with a sane definition of “poverty,” and stringent rules to prevent abuse.

Of course, if any of his friends on the Left bothers to listen to what Buffett says about the minimum wage and welfare, they’re likely to be much more upset about his notion of identifying those who are “willing to work,” and holding those who are not responsible for their life choices.


 
Posted : August 29, 2015 7:11 pm
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