Friday, December 12, 2014

Minimum Wage and the Real Job Creators

Every single time the topic of raising the minimum wage comes up, the Republicans chant the same mantra: “It will cost jobs!”

Never mind that multiple studies over many years have shown that to be a totally bogus myth. As we all know, when it comes to Rethug dogma the “truthiness” of something doesn’t really enter into the equation.

I worked various jobs in the administration and delivery of Unemployment Insurance benefits for 30 years, and in that time I never met anyone who became unemployed because the minimum wage increased. Not one. Ever.

I did find some employers who extravagantly claimed that the small boost in the minimum wage drove them into bankruptcy and forced them to close their businesses. But even a casual examination of those businesses revealed that things like poor management or gross mismanagement, inadequate capitalization and non-competitive pricing were the real culprits.

Another article of faith for the Republicans is that business owners are the “job creators”. But are they really? Did they, for example, take those massive tax cuts and corporate welfare payments and create more jobs with the money like they said they would do?

No, they did not. Because they are not the real job creators.

We live in a nation whose economy is based on consumption. That means that, unless people are seeking to buy what you are selling, you are not going to sell it and so you are not going to produce more of it. Goods, services, widgets -- you name it. The demand has to be there.

And what that really means is that people need the money in their pockets before they can go out and buy what they want. It’s the people that spend the money who are the real job creators. They are the demand, the demand drives production and the businessman answers the upsurge in demand with more production, and people get hired to produce. That businessman is not a job creator. He is a job facilitator, doing his own job to meet the demands of the marketplace. As more people are hired, there is more money to spend in the whole economy, and therefore even more demand, which creates more jobs, and so on.

Give a rich person even more money and he will squirrel it away in some tax-free offshore account. Give a person who is making minimum wage more money and you won’t see her opening that super-secret bank account in the Cayman Islands. No, you will see her spending it on the goods and services that she needs and driving the economy.

This is simple. Economics 101. So why don’t Republicans “get it”? Are they that disconnected from reality? It sure looks like it.

1 Comment:

double nickel said...

$10.70/hr here in Manitoba. Unemployment is at it's lowest point in decades, around 5%.