The uncomfortable truth about minimum wage.

There are times in life when I can argue politics and truly see the point that the other side is making. I may disagree with it, but at least I can see where they are coming from. Other times, it seems like some points-of-view are more than merely a difference of philosophy, but an entirely different thought process that I am incapable of grasping. Lately, I have been struggling a lot with people who think that the answer to poverty is to raise the minimum wage. I can’t even pretend to see the advantage of this move, so it is really hard for me not to come across as smug…try as I might.
For me, the problem starts long before we even get to the point of discussing wages, workers, inflation, and economics. For me, it starts with defining poverty. Hate Capitalism if you like, but the US has reaped many generations of benefit from our imperfect little system. The standard argument is that capitalism makes the rich, richer and the poor, poorer. I venture to say that we have a LOT to learn about poverty in this country. The poorest of the poor in this country still possess more than a large population of the rest of the world. In the US, poor means having to take public transportation, having to eat Ramen Noodles, or not having a smartphone. To much of the world, poverty means that many children starve to death. It means that there is no clean water. It means that there is no safe shelter. That said, my argument begins by thinking that we need to get over our feelings of entitlement and accept that being a poor America would be a dream-life for much of the rest of the world. As our “poor” citizens dream of home ownership and luxury cars, the “poor citizens” in many countries dream of having a meal every day and pray that their starving children live through the night.
With THAT soap-box out of the way, let me address the issue as it begins for most of us: wage disparity.
Is it necessarily fair that a CEO makes $1Million dollars a year and a laborer makes minimum wage? Probably not. I guess. I don’t know. Maybe? Maybe not? The truth is that it doesn’t really matter if it’s fair, because no one ever said that life was fair. It’s not fair that I’m balding. It’s not fair that I was born with only 9 fingers. It’s not fair that I’m not handsome. It’s not fair that I wasn’t born a Kennedy or a Rockefeller. LIFE ISN’T FAIR! We need to get over this feeling of entitlement that we have; this feeling of social-class jealousy. If someone has invested their money, their lives, their blood/sweat/tears into a company to make it a success, why SHOULDN’T they reap the benefits from it without being labeled a monster for being successful? It really does boil down to jealousy. Maybe they were born with the investment capital, maybe they earned it…but we don’t care. They have what we want, so we expect the government to go be the playground bully and beat him up, steal his lunch money, and then share it with us. Our concept of ‘fair’ has been skewing out of control for decades. As with anything in life, when a benefit is given, the first generation is thankful for it, the second generation expects it, and the third generation doesn’t know how to live without it.
So, for argument, we’re going to pretend that it is completely ‘fair’ and equitable to raise minimum wage by, let’s say 10%, for the ease of mathematics. In Illinois, lawmakers are actually throwing around talk of a 20% hike. So, moving away from a paper argument, what would that actually do for a minimum wage worker? For simplicity’s sake, let’s say that they were making about 9 bucks an hour, and with the hike, they would make 10. Currently, they are making about $360/wk, which would increase to about $400/wk. That’s a $160/month increase that would obviously be a welcome change to any of us. But really…is there anyone, and I mean ANYONE who doesn’t think that the business owner (who is now having to pay OUT that increased $160/month/employee) won’t raise their prices to make up the difference? Of course they will. Wages make up a significant part of any business’s expenses. One would be hard-pressed to find a business that would just say, “lose about $160/week for every employee? SURE…why not. The bottom line doesn’t really matter…and hey, if I explain to the electric company why I can’t pay the bill, I’m sure they’ll understand….” Hogwash. The fact is that the total price of consumable goods will increase at about the same proportion that the increase in minimum wage affects their payroll. The worker makes more cash, but the worker’s monthly bills all go up about the same amount. The only thing that we have succeeded in doing is causing an inflation bubble. And quite frankly, I think that we are delusional if we think that the companies won’t pad their pockets and raise prices to slightly ABOVE the new pay matrix.
Again, for the sake of argument, let’s pretend that somewhere, there is some relief…that somewhere in that 10%, some companies didn’t quite raise their prices accordingly, and the average worker was actually able to keep some of that cash for himself.... The next question is ‘how far-reaching is this ‘inflation bubble’?’ I believe that it is further-reaching than we can afford. As that worker’s wages went up, and the price of goods followed, we inadvertently caused another problem…we priced ourselves out of the international market.  The US does not exist in a vacuum.  We have to compete with foreign markets; we have to maintain an equitable price. As the price of our products is artificially inflated, we lose our edge to compete in an international market. On the homefront, the opposite happens: foreign goods don’t rise in wholesale price at the same level that domestic products do. That said, one of two things happens. The distributor either raises the prices of the foreign goods, making a higher profit margin, or the distributor chooses to make the same profit margin regardless of wholesale cost, making the foreign product less expensive in the retail market. Either way, the American product becomes more expensive. Will some buy the American product regardless of cost? Yes. Will everyone? No. The end result is American lay-offs and production slow-downs based on the number of people who choose to pay the higher prices. The irony, of course is that the minimum wage worker is getting further and further behind…or worse, laid off…while the business owner is making a higher profit margin selling foreign goods. The truth be told, this has been going on for many years, and is just one of the many reasons that our jobs are going overseas. At some point, the American people need to get back to critical thinking instead of basing our decisions on sound-bytes and feel-good legislation. Too often there are long-term consequences that are never weighed and considered. We've stopped thinking for ourselves.  Instead, we trust the government to do our thinking for us. Then, when this all backfires, the government looks at us and says, “see what a mess this is? You need us more than ever!” No. We need to stop artificially inflating prices and accept the fact that, as long as wages and prices stay relative to each other, it doesn’t matter what the dollar amounts actually are. If we truly want to help the minimum wage worker, the best thing that we, as a country, can do is to stay competitive. Increase our GDP, lower the trade deficit, increase production. As production increases, jobs increase. As production increases and entry-level jobs are created, current jobs increase in pay and responsibility. As production increases, per capita unit pricing lowers. As production increases, growth is required in other areas to sustain the increase in production. Our problem in this country is not that minimum wage is too low. The problem is that production, and therefore jobs, been driven to other markets…often by the very legislation that was designed to make lives better.

US Constitution

I often confuse people with my politics. I align myself with neither major party. Most often, I vote my conscience, but in a "lesser of two evils" kind of way. In all honesty, it gets harder and harder to vote that way because the "lesser of two evils" seems to be more evil than it used to be. Simply, I find that both parties continue to stray further and further from the Constitution and the founding principles of our great country. I doubt that the founding fathers would even recognize our government as the evolutionary child of what they fought for. Now, make no mistake, I understand that change is both necessary and unavoidable. What concerns me is the shift in principles. In fact, the principles and responsibilities of the Federal Government have evolved so much, that it is even arguable that we are based on the Constitution for little more than parliamentary procedure. If most Americans are really honest with themselves, they have little more than a passing knowledge of the Constitution. They had a semester of learning it in grade school and have likely not looked at it since. How, then, can we intelligently elect officials whose purpose is to uphold the constitution? I propose that we can't...and don't. We elect our representatives based on their political party, social leanings, and fiscal beliefs rather than their adherence to the the constitution. So, is the constitution even relevant to our modern society? I suppose that depends on our willingness to allow it to be the fluid document that it was intended to be. Before the constitution was ratified by the original 13 states, there were such points of contention that 10 amendments had to be made before it could be agreed upon. The framers of the constitution as well as those first 10 amendments (the bill or rights), recognized that the country would evolve and made provision for future amendment, as well as making such statements as, "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people," [tenth amendment] to cover the inevitable situations that would arise. Unlike the articles of confederation, which added the idea of federal powers needing to be "expressly given" power, the language of the tenth amendment was weaker, giving rise to the overpowering counter-force of "implied powers." The problem with "implied" power is that it is up to the individual who is LOSING the power to prove that it was theirs to begin with. The first game-changing test of implied -vs- expressed powers was probably the Civil War. If the states had sovereignty to make their own laws, and the Federal Government was there primarily there to provide for the COMMON defense, and to regulate INTERSTATE commerce, do those powers not imply sovereignty of the individual state? Yes. but, enough sovereignty to secede? For the first time, the Constitution had a paradox in it. The only way to preserve the Union was to say that the Federal Government had more power than the individual states. Yet, in so doing, it redefined, and (in many ways) negated the tenth amendment. Once the Federal Government had the power, it would continually push the envelop of "implied powers" until the Federal Government became the power-wielding organism that it is today. As is true in all of human nature, once power is given, or taken, or assumed...it is substantially harder to take it away. And so, this is where the Republicans and Democrats are the same: the thirst to be the party with the power. If the Constitution is going to stay relevant, that power will need to be weaned away. Fortunately, it can be. The power hemorrhage can be stopped by the States at a Constitutional Convention. I believe that we need a Constitutional Convention more than we need anything else in this country. More than a certain party gaining control. More than laws and social issues being fixed. Even more than jobs and economic security, I believe that we need a Constitutional Convention. In my humble opinion, the collapse of this country is imminent without a fundamental shift in power AWAY from the Federal Government and back to the States and local municipalities. Although I believe that there are several amendments that need to be discussed at a convention, the applicable one here is adding the word "expressly given" to the tenth amendment. We have been fed a lie for the past several generations, and that lie is that we need the federal government to take care of us. That somehow, we are incapable of surviving without the government there to make decisions for us. As we have slowly believed this lie...and more-so with each passing generations...we have just come to accept that this is the way that things are supposed to be, and that our government ultimately has our best interest in mind. As I've said for many years, 'never trust anyone who makes a living off of you.' You see, I believe in the original idea of the tenth amendment, as stated in the federalist papers, that the purpose of the federal government was for protecting the borders, and regulating commerce between the states, and settling disputes, NOT to be our "boss." Our government was originally powered like a pyramid. The local governments had the most direct powers, unless EXPRESSLY limited by the state government. The state government, then, had the next level of power. The Federal Government was there to settle disputes, regarding the constitutionality of laws. It was no one's "boss." We have to change our thinking. We have to change the taxation system to reflect this. What is the purpose of sending our tax dollars to be filtered through a ravenously greedy system, and then sent back to us by way of credits, subsidies, and programs. We forget the government has no way to make any money, in and of itself. The money that is doled out was ours to begin with. How can anyone in Washington have any real clue about what goes on in Adeline IL? They can't...which is why there are representatives...who serve an entire state or an entire district. We've got the pyramid upside down. We keep the smallest amount of monies and the least amount of control local. Then we give the state more money and more control. Finally, the Federal Government takes everything that it wants. And the truth be known, the Federal Government is so huge that there is really no way to audit how efficient it is. At bare minimum, we know that it is parasitic, as it has no source of revenue outside of the taxpayer. So, is our constitution still relevant? I suppose that it is as relevant as we choose to let it be.

Primaries

Today is the GOP primary in Florida. The media is pretending to be excited. The GOP is pretending to be excited. Probably the only person in the country who is truly excited is Barack Obama, as he watches the two front-runners dig up enough garbage to make sure that neither one of them is electable in the general election.
As an independent, this has been a tough year to watch GOP politics. In full GOP fashion, they have failed to assess the heartbeat of the nation. The nation cries, "We need jobs." The GOP replies, "We hear you...we don't homos to be able to marry as well!" The nation cries, "Help us to not lose our homes." The GOP replies, "Why yes, let's outlaw abortion!"
The GOP has sold its soul to the religious right. And its ironic, because it has caused them to advocate the very things that they once stood against. The GOP was founded on the principles of maintaining the basics of the "Republic." (No, we are not a democracy and we never have been; if you don't understand why, look it up.) The GOP gained its standing in the political system by promoting two basic ideas: First, that there needs to be a lean federal budget. Secondly, that the way to accomplish that is to follow the constitution, particularly the 10th amendment which gives all peri-constitutional rights to the individual states to determine. If this was what the GOP PRACTICED, I would be a whole-hearted Republican. Unfortunately, this is not the case. The GOP says that we need to trim the budget and cut federal spending. Yet, who was the last Republican President (or congress) that actually did that? They preach, "spend less" but they practice, "spend it on different things." They preach, "limited federal government" but they practice, "make federal laws governing social issues."
And so I sit, as an independent. I watch the past 3 years of spend, spend, spend (and control)...and then I have to look at the Republicans in the primaries who want to control, control, control (and spend).
I truly believe that it is time to stop electing career politicians. We are in finacial trouble. What we need is someone who has a proven track-record of making businesses work (preferrably without a bailout). Get the government out of social decisions and make them focus on what the constitution lays out as governmental duties.