Posted on 06/22/2003 2:40:45 PM PDT by sfwarrior
There's a stealthy new political movement brewing that seeks to raise taxes, create unemployment and drive businesses to failure. It's well organized and well financed, and it's succeeding. It's the national "living wage" movement, whose basis is a philosophy that espouses in reality nothing more than a glorified local minimum wage that's isn't very minimum.
The movement gets strong financial support from labor unions, liberal organizations (such as the Ford Foundation and the Tides Foundation) and social-activism groups. Advocates of a living wage have been unsuccessful getting states to increase minimum wages, so they've focused their powerhouse strategies on cities, with tremendous success.
Advocates of the living-wage movement have been pushing local governments to try to force employers to pay high wages, regardless of worker skill or ability, for what are basically unskilled, entry-level jobs. The theory behind the living-wage laws is that the government should require employers to pay workers according to their needs, not according to their skill, experience, productivity or worth. This, of course, turns the free-market upside down and, not surprisingly, that's one of the principal goals of some of the movement's advocates.
And the movement is going gangbusters. Originally begun in Baltimore in 1994, it had until last year introduced such a law into just 60 municipalities. Now, 97 cities have living-wage laws. California, unsurprisingly, accounts for nearly one-third of all communities in the nation that have a living-wage law, including such cities as Los Angeles, West Hollywood, Santa Monica, Santa Cruz, San Francisco, Berkeley and Oakland. Basically, they're in all our left-wing-controlled cities.
Initially, such laws were narrowly drawn to cover only employees of local governments or their contractors. However, increasingly, the living-wage movement has become even more aggressive. It has advocated high minimum wages that would apply to all private businesses within a defined geographic area. The Santa Monica City Council, for example, passed a law requiring certain employers in the city's "coastal zone" to pay at least $12.25 an hour if benefits are not provided, and, not to be outdone, the Berkeley law covers all employers at the Berkeley Marina, located on city-owned public land. The movement also chalked up wins for a citywide minimum wage in New Orleans and in Santa Fe, N.M.
Tell It to the Judge
However, some courts have stepped in and stopped the rapid expansion of these laws. Last year, Louisiana's Supreme Court overturned a New Orleans law that sought to raise wages for all businesses there. The court ruled that the city's authority to enact the law was preempted by existing state minimum-wage law.
Emboldened by the success of living-wage opponents in the Louisiana courts, the Santa Fe Chamber of Commerce has just filed a lawsuit against that city's living-wage law, which affects all businesses, not just the ones contracting with the city.
And despite the fact that California's labor market cratered in May, according to the state's Employment Development Department, the activists of the living-wage movement plod along unfazed. California lost 21,500 jobs just in May -- that's more than the rest of the nation combined -- yet the Left still thinks the solution is to raise everyone's wages to some artificial number. Yeah, like that'll help. Incredibly, there is still strong momentum, and local politicians are still willing to impose even more restrictive living-wage ordinances. But there's still some hope -- not only in the courts but also in the ballot box.
Last year, Santa Monica voters defeated an expansion of one of the nation's most far-reaching living-wage laws. After the city council passed the law, citizens forced it onto the ballot in a referendum. Why complain? The law provided for a wage that is only about 80 percent more than the California minimum wage of $6.75. But the voters, even in uber-liberal Santa Monica, turned it down. Unfortunately, most of these laws never make it to a vote.
California Businesses Say "Sayonara"
Of course, when wages go up to $12.25, employers are burdened with additional costs, including increased workers'-compensation payments and federal, state, local taxes, and real wage costs to the employer can be well over $17 an hour. Furthermore, California is already a certified unfriendly-to-business state. Businesses that can relocate out of state have been doing so far faster than you can say, "Which way is the border?"
Earlier this month, Angelo R. Mozilo, chairman and chief executive officer of Countrywide Financial, blasted California for its inhospitable business climate. "I am sad to say that California, where Countrywide has been headquartered for more than 30 years, does not provide a business climate that is conducive to cost control or business productivity. We will be forced, and are forced, to expand outside California." And, with 30,000 employees, Countrywide is one of the state's largest employers.
A report published by the University of New Hampshire notes that more than 300 of the nation's leading economists consider a living-wage ordinance to be the least effective and efficient way to increase the real earning power of lower-income working families.
A separate study by Sacramento State University Professor Suzanne O'Keefe indicates that with an increase of a worker's wages from the minimum wage to $10 per hour, the worker will receive a $2,800 net increase in earnings at a cost of $6,500 to employers, taxpayers and customers! Yikes. Think about it.
The costs to cities aren't cheap. When municipalities tell contractors who do business with them just how much to pay their workers, that's no problem for the companies. The companies just jack up the cost of the contract the city pays. That's easy. And the cities are willingly paying these increased costs -- untold millions of dollars, and probably billions nationwide.
What's a few million here or there? It's ultimately the taxpayers who get stuck with the tab of this ill-advised Ponzi scheme. The hapless taxpayers, including other working poor, get to pay to subsidize another group of lucky beneficiaries. Why should the politicians care? If there's a budget problem due to the costs of the living-wage law, they can always raise taxes and fees while cutting services, just as San Francisco and California are doing right now.
Poor Will Suffer
Many low-income workers may lose their jobs as a result of living-wage ordinances. In order to stay competitive, one needs to consider the displacement effect: A worker earning $6.75 per hour may not be kept around to receive a new $10-per-hour wage; an employer now can go get the very best person for that position. A worker with greater job skills and work experience might displace this worker, or the position may even be eliminated entirely. This is how it works in the real world.
In addition, if the purpose of these laws is to allow people to climb out of poverty, it doesn't work. As soon as everyone at the bottom rung is lifted up, prices rise, because more people can afford the hikes. That's simply how the system works. For example, the fact that ever since women entered the workforce en masse starting in the 1960s, many families have had two income earners has caused home prices to increase dramatically.
The living-wage movement has been incredibly successful... READ THE REST OF THE ARTICLE
(Excerpt) Read more at sfgate.com ...
The poor US educational system, combined with a lot of other issues (lack of cultural values within many large ethnic groups, liberal policies promoting "equality" over competence, etc.) will eventually destroy this great experiment we call America. Too bad.
And as a business owner with 3 employees, forced by gummint to pay a higher wage than the job produces back to the company, I have to lay off my 2 most junior employees to afford the one left. And you better believe that I will re-structure that ones responsibilities to ensure that their presence in the company generates revenue and does not cost me more than it is worth. If you can't get at least a break even on your product and production of your employees, you are out of business. The idiots in government get to spend borrowed and fictional money, but try that in a real-world small business and see how far you get.
So now we have 2 former workers out on the street with no income (no spending power either) to demand their living wage from someone else. Good luck, none of the other business owners I know can afford you either.
What part of this simple concept is so hard for a liberal to understand?
The unions don't care about black and minority and older workers displaced by wetbacks. At minimum of close to minimum wages, Americans won't pay the extortionate union dues. No, the "living wage" is just a mechanism for unions to get a better pay back from wetbacks and illegal immigration.
They always overstate the costs of living, downplay a person's own poor decision making as a contributing factor to their situation, and fail to mention opportunities that might improve a person's standard of living, such as the Earned Income Tax Credit.
Long story, but worth it. Bear with me:
Listening to NPR news this morning, I heard just such a story. A reporter was riding along with what they called a "low wage worker" as she was getting on the bus to go to work at Comcast in Detroit. She lamented that she couldn't afford a car on what she makes. The whole story was an overwrought diatribe about the ordeal she has to go through to ride public transportation.
The narrator, in somber tones, emoted that she has to wait for the bus in the cold and rain, "there is no shelter to keep her warm and dry." She had to change buses twice to get where she was going. She complained that sometimes the buses are late, sometimes she doesn't know if they'll show up at all. She constantly worries about whether she'll miss the bus and be late to work, putting her job at risk.
The story then repeated the same sort of bleating about her journey home. The narrator commented that she gets up at 4am to catch the bus to work and doesn't arrive home at night until about 8:30pm.
In the midst of the story, she intersperses various complaints about life as a low wage worker. One thing she misses is her music. Her Walkman broke a year ago and she just can't afford to buy a new one.
Now, toward the end of this oh-woe-is-me-athon, we learn that this single woman, without dependents, pays only $270 a month for her big city apartment (no doubt rent-subsidized), and makes $11 an hour!
I'm sorry, but if you can't afford to buy a Walkman, much less a car, when you make $11 a hour and your rent is only $270 a month, and you have no dependents, you've got a problem. And you get no sympathy from me whatsoever.
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