I have a hard time believing that Wal-Mart signs their new employees up for food stamps. Sounds like one of those urban myths to me. Maybe somebody here who works for Wal-Mart can confirm this for us. I believe one of us is a Wal-Mart manager.
Anyway, the "living wage" issue has always irked me. How is a "living wage" defined? I don't believe it ever can. Some people can squeak by on a $20,000 salary. Others consider anything below $100,000 a year an insult. Depends on the individual. In a country where even welfare recipients have TVs, DVD players, home computers and designer clothing, how should poverty be measured?
But let's just say, for the purpose of argument, that all of us were liberals and we wanted to institute a "living wage" for all Americans. What would that living wage be? $10 an hour? $20 an hour? Why stop there? Why not make the minimum wage $50 an hour, then poverty would be eliminated, right?
Well not exactly. Let's take the lower example and raise our minimum wage to $10 an hour, which many liberals would tell you is pretty close to that elusive "living wage." That's nearly twice the current minimum wage.
OK, but of course it doesn't stop there. What about all the people who were making $9 an hour or $8 an hour? We'd have to raise their salaries too. But it wouldn't be fair to just raise them to the new minimum wage to where they are making the same as people at the entry level. So you would have to boost their salaries proportionately so that they maintain their pecking order. So you'd have to pay them in the $14 to $15 range .
Ok then, we are finished right? Well, not exactly. What about all the people who were making $10-15 an hour? Are we going to give all the people making less than them big raises and leave them at the same pay rate? That would cause a mutiny. So we have to pay them more too. And on and on and on. Bottom line is that if we raise the minimum wage by about $5 an hour, then we have to raise just about EVERYBODY's salary by about $5 an hour.
This would result in a gigantic increase in the cost of labor in our economy.
Now there are apparently some liberals out there who have the notion that business owners and stock holders are going to just take it in the pants and accept lower (or no) profits. But that's just not going to happen. The business owners are simply going to raise the price of their goods and services to protect their profit margins.
The net result of that will be that whatever big raise we all get will very quickly be offset by the rising prices of goods and services. So those who were at the minimum wage are now sitting pretty at $10 an hour. But suddenly, they realize that a Big Mac and fries costs them $8 instead of the $4 they used to pay. (Remember that everybody at McDonalds is now getting paid nearly twice as much now). Prices at Wal-Mart must now increase so that Wal-Mart can make their new payroll. So everybody ends up paying more for everything and suddenly, those making "only" $10 an hour are having trouble making ends meet again.
But the bad news doesn't stop there. Faced with skyrocketing labor costs, companies begin moving their operations offshore at even a faster pace or they simply cut jobs, forcing those left behind to work even harder. Millions of jobs are lost and now our taxes must rise to pay for all the millions of new people on the welfare roles.
Welcome to Europe.
I'm making a similar argument in a reply I'll post later. Wouldn't the argument from inflation also apply *against* tax cuts? The targeted tax bracket will get more money, so the things that the people in that tax bracket buy will cost more.
I do hope the fellow who started this thread comes back. Otherwise I shall have wasted my time on a troll.