Posted on 05/08/2015 9:42:14 AM PDT by SoConPubbie
Conservative presidential candidate Ben Carson says the $7.25 federal minimum wage should be raised.
“I think, probably, it should be higher than now,” Carson told CNBC’s John Harwood in an interview Friday.
Carson added that government assistance often provides more than the minimum wage in several states, allowing people to ignore the long-term benefits of a job.
"I don't necessarily blame people for saying, 'Look, I can stay home and make this money, or I can go and work this little chicken job that doesn't have many benefits,’ ” he said.
"However, recognize that if you go and take that chicken job, you gain skills, relationships, the possibility of moving up the ladder. So a year or two or five down the road, you're no longer in that position. This is what people have forgotten."
His stance on the minimum wage makes Carson an outlier among the likely field of GOP opponents and comes with Democrats looking to make it a key issue in the 2016 election.
Among fellow GOP contenders Carly Fiorina, former Gov. Mike Huckabee (Ark.) and Sens. Rand Paul (Ky.), Ted Cruz (Texas) and Marco Rubio (Fla.), Carson is the only one backing a wage hike.
Two likely contenders, former Gov. Jeb Bush (Fla.) and Gov. Scott Walker (Wis.), don’t back an increase either.
Bush said that the federal government shouldn’t raise the wage during an event in March. Walker told the Milwaukee Journal Sentinel in October that he doesn’t believe the minimum wage “serves a purpose.”
Sen. Rick Santorum (Pa.), who is weighing a bid, would be the only other Republican candidate open to raising the minimum wage. His advisers told The Hill in February that his stance could help him earn support from working families.
Democrats believe the issue will be a winner for them in 2016, with senators earlier this week proposing a measure that would raise the federal minimum wage to $12 an hour by 2020.
That figure goes well beyond the $10.10 wage that Democrats failed to pass when they controlled the Senate.
President Obama initially suggested a $9 minimum wage before backing $10.10. The administration is now supporting the $12 push.
You can eliminate every tax and regulation and you still couldn't compete with $2/day wages in China. The job flow is going to continue until our wages match theres, or until we restore the import tariffs.
Understand that, those American companies that now have significant manufacturing operations outside the territorial U.S., will not be motivated to "bring the jobs home" if they're hit with yet another tax by their government.
Wrong! It depends on who they are selling their manufactured products to. We are the largest consumer market. In many cases, we're still their primary market. They are overseas producing to sell back to America, not the rest of the world. And even if they have enough non-American sales, they aren't going to want to forego the American market. They will do just like Nissan did when Reagan pressured them. They will produce in the USA.
Begin levying import tariffs, and lots of U.S. companies will finally throw in the towel on this country altogether. There's little stopping most of them from re-incorporating under another country's flag.
They can reincorporate in another country, but they won't be able to sell to the American market without paying the tariff. So there is no benefit to leaving. They can remain here and pay the tariff on imported parts or they can leave and pay the tariff on the entire product. Or more likely lose market share to an American producer.
Besides with the import money you can lower corporate and individual income taxes. That way not only are Americans buying from fellow Americans and keeping them employed, but the Americans are keeping more of their money to spend locally.
Exactly. Strike 2. I bet he is first to drop out.
Carson added that government assistance often provides more than the minimum wage in several states, allowing people to ignore the long-term benefits of a job. "I don't necessarily blame people for saying, 'Look, I can stay home and make this money, or I can go and work this little chicken job that doesn't have many benefits... However, recognize that if you go and take that chicken job, you gain skills, relationships, the possibility of moving up the ladder. So a year or two or five down the road, you're no longer in that position. This is what people have forgotten."What Carson has forgotten is, benefits for people who can't work are also paid to people who won't work; no amount of money will get them off the dole, unless "earned" through thrilling illegal activities and not reported as income. Daycare paid by the gubmint? Grandma becomes the daycare provider, watching the grandkids, even though all three generations (or more) live under the same roof.
It depends on the meaning of what "is" is.
In economics, it is argued that price supports greatly distort the market. I'd say welfare is a price-support on wages that is separate from the explicit dollar amount of the minimum wage.
Someone on welfare can face a huge marginal tax if he/she works at a job, and be financially much worse off than if they didn't work, or just engaged in black market activities while still collecting welfare. So, practically speaking, there is a soft floor on the minimum wage that will attract workers.
I’d agree with you, but then we’d both be wrong. I have a Ph.D. in economics and taught university-level graduate and undergraduate courses in econ for 30 years and have a pretty good grasp on how the system works. Tariffs and quotas do not promote economic growth. The best they can do is transfer income from one sector to another. Why do you think so many companies have off-shored their business? You don’t suppose fiscal policy could have an impact, do you? Why do you think new small and medium sized business formations are down so much? Hint: It’s not because of tariffs and quotas, but rather taxes, regulations, and programs like Obamacare.
Some industries, primarily oligopolies, do not lend themselves to “competition which will foster innovation and drive lower prices”...capital costs are simply too high. As to real wages stagnating, you need to look at specific sectors of the economy. Those that have high skill demands have had significant wage increases while those that don’t have not. This is a supply of labor versus the demand for labor issue, not a trade problem.
Your position is one of what is called “protective tariffs’ which are used to protect emerging industries in a “third world” economy. The US hardly qualifies. Fiscal policy could do far more, and much more quickly, to augment economic growth than a tariff approach ever could. Look at the fastest growing economy in the world. Virtually Communistic a few decades ago, they have cut gov’t’s share of GDP from almost 37% to 27%, and cut corporate and personal income taxes down to 15%. The economy responded quickly to make it that fastest growing economy in the world. The country: Chile.
Do yourself a favor and drop the protective tariff as a solution and look at domestic fiscal policy and federal regulations. You’ll have a lot more convincing argument.
“If you’re worried about more money going to the government since there is no guarantee they would use it to pay down the debt, then lower the corporate and individual income taxes by the amount raised from the tariffs. You get a double whammy that way “
If you lower the corporate income tax and eliminate double taxation on dividends you would need no tariff! You get a double whammy that way.
Yea. Tariffs kept Harley Davidson alive. And they still make a low quality product based on an almost century old design.
Agreed!
The minimum wage needs to be abolished!
I agree wholeheartedly that the US government has seriously disadvantaged the USA in respect of trade. US goods are exported embedded with the full cost of the US government, and then the importing countries ADD their cost of government to the good. Advantage: FOREIGN COUNTRY!
Foreign governments rebate the cost of government to the companies that exported the goods and then the USA DOES NOT add the full cost of government to them. Advantage: FOREIGN COUNTRY!
IOW, exported US goods carry the burden of two governmets in their retail price in foreign markets and goods imported into the USA carry the burden, at best, of 1/2 a government.
Advantage: Foreign goods, both at home AND abroad!
I no wonder we have a huge and growing trade deficit!
The FairTax will restore the manufacturing base and level the playing field vis a vis USA manufactured goods and foreign goods.
Both at home and abroad, USA will be competing on a level playing field.
For more information, to to https://www.fairtax.org.
Well, I appreciate your PHD in economics. I have taken master level courses in economics myself, but my degree is an MBA.
As a PHD you should be aware that international trade is more complex than the simple argument for trade. Especially when high unemployment is involved. Or when one trade partner, like China uses state control to gather the funds and funnel them into buying not trade goods, but the equities and debt of the target country.
Fiscal policies can have an impact, but the wage differential dwarfs what fiscal policy can do. We could eliminate every tax and every regulation and still not be competitive with China’s $2/day wages. And don’t buy the Chinese propaganda that their wages have risen. They still have a couple of million people working in the fields that would love to come into a $2/day wage.
But given that they aren’t buying our products, there is no reason we should leave our market open to their products. Only when we are at full employment should we take advantage of their cheap labor and even then we should make sure it’s low value products.
Our manufacturing sector is essential for protecting the country during times of war. We have become entirely too dependent on foreign countries for both manufactured goods and even weapons.
Given your economics expertise, I’d be interested in your take on my post #149.
And that's just the minimum. The real cost of having unemployed includes the opportunity costs that are lost when they are not producing in this country.
But I'm not in favor of the fair tax. It would equalize some of the burden and get rid of the hated IRS, to be replaced with another hated agency to collect the consumption tax. But the problem with consumption taxes is that they aren't as stable as income taxes. Government revenues fall when consumer psychology causes the market to fall. Income taxes fall too, but not nearly as quick or severe.
I'd like to see the tariff income used to reduce individual and corporate income taxes as well as to pay down the debt. The real debt reduction would come from Americans going back to work and paying income taxes instead of receiving government support.
A naive and specious argument. The same argument was used during the 1950's when Ike was President. The oil industry wanted protection from super cheap oil that was just discovered in the Mid-East. Their argument, however, was that the area was unstable and we needed to establish import quotas so we wouldn't become dependent on imported oil..."our military machine depends on it!" Ike went along, and the result was OPEC. If we had been smart, we would have cap our wells, sucked theirs' dry over the years and, in the event of war, then uncap ours. The consuming public would have saved billions in the interim. Your policy suggestions are equally stupid.
So, if you want to stick by your argument, go ahead, but you're asking everyone in the country to pay higher prices for everything from cell phones to medicines. BTW, you need to update your wage information. Look at Tiananmen Square during the late 1980's and count the cars and take a look at the traffic today. You think they bought that many cars on $700 per year income?
Take a few moments and read up on Comparative Advantage and see how both parties can benefit. And if you really want to lower unemployment, you need to remap fiscal policy.
Not sure what you're really saying here. If you mean the cost of regulation and taxes, I agree. However, saying that our exported goods bear the full cost of the gov't doesn't follow, nor does it follow that our exports bear the cost of gov't for the importing country. If England imports agricultural products from us, watches from Switzerland, and cars from Germany, you seem to be saying that our goods bear the cost of the British gov't, but the other countries don't? Make no sense.
I would support the Fair Tax if they drop the idea of a prebate. If there are poor people who truly need help, let charities do it like it used to be. We have 5 generations of people on welfare in this country and probably 99% could work. I like the German system where, if you take public assistance, you must show up a gov't building every day at 7AM to clean toilets, sweep streets, or whatever else you're told to do. It's amazing how fast people under that system find new jobs.
The prebate scares me because it will be the politicians who set the prebate level and they will use that to buy votes just like they do now. My tax dollars for free cell phones? WTF.
Solution: 1) 17% flat tax, no deductions, as discussed by Friedman, 2) any politician who votes for a budget that increases the deficit by 3% or more cannot run for reelection. 3) Congress can no longer delegate regulatory authority.
Yeah, I know it will never happen. The truly sad part is that it should.
It is late and I am not thinking clearly, so I’ll get back to you tomorrow.
In the meantime, the FairTax FAQ page has this to say (http://www.fairtaxplan.org/faq_item.php?id=31):
“Question: How does this affect U.S. competitiveness in foreign trade?
“Answer: Since all U.S. exporters immediately see an average 20-percent reduction in their production costs, they experience an immediate boost in their competitiveness overseas. American companies doing business internationally are able to sell their goods at lower prices but similar margins, and this brings jobs to America.
“In addition, U.S. companies with investments or plants abroad will bring home overseas profits without the penalty of paying income taxes, thus resulting in more U.S. capital investment.
“And at last, imports and domestic production are on a level playing field. Exported goods are not subject to the FairTax, since they are not consumed in the U.S.; but imported goods sold in the U.S. are subject to the Fair Tax because these products are consumed domestically.”
I’ll have to get back to you tomorrow — it is late.
Simple economics: it’s not brain surgery.
Nice cartoon. Sums it up well.
Minimum wage is a bar against the inexperienced and low skilled having any job at all.
These people calling for a raise to anything from nine dollars to fifteen or even twenty simply need to realize that their position is absurd. Either you agree with Jeb Bush as I do that it serves no purpose and should be eliminated or, if you really think it somehow does accomplish what it is supposed to accomplish you should be calling for AT LEAST one hundred dollars an hour. If you think it works why would you want a minimum designed to allow people to barely exist, wouldn’t you want them to have new cars, fine houses etc? Believing in the minimum wage makes no more sense than believing in a magic wand but if you really believe in magic why be so stingy? Hell’s bells, why not just pass a law saying everyone is rich?
“However, saying that our exported goods bear the full cost of the gov’t doesn’t follow . . .”
Basically, what I am saying is that US goods bear the full cost of government (regulation and taxes) in their price buildup, which Professor Kotlikoff pegs at 20 - 25% of the final sales price.
“. . . nor does it follow that our exports bear the cost of gov’t for the importing country.”
Virtually all of our trading partners impose a VAT or an import duty on US goods. That is the “cost of government” to which I speak.
VAT is border adjustable. It is not imposed on exports, so foreign goods arrive in the USA virtually tax FRee, and go on the market in the US with a decided tax advantage.
US goods in foreign markets are at a decided tax disadvantage, bearing as they do the US tax burden and the importing country’s VAT.
Please understand that I am NOT advocating for a VAT! FairTax is far and away a better tax system than a VAT!
FairTax is a border adjustable tax; with FairTax, domestic and imported goods would compete heads up, both at home and abroad. That is a major WIN for America.
I am not a huge fan of the prebate either, but it should not be a show-stopper. The idea is to not tax the basic necessities of life for ANYONE; it is not a welfare scheme. If there were no prebate, the rate could be 5% or so lower.
I, too, believe that welfare recipients have certain responsibilities to us poor suffering taxpayers, and among them are staying off of drugs and performing some kind of service to the community, as in your German model. Bring that one on!
Flat tax does not solve the problem — ANY income tax is equivalent to slavery. The question is, how much of a slave do you want to be? 17%? 20%? 40% Why not 90%, as it was back in the day?
I can make a very strong case that the flat tax would exacerbate the IRS tyranny problem, but will save it for another day.
FairTax is about FReedom. FReedom is a universal — ALL men and women want to be FRee — FRee to work, earn, save, invest without the heavy hand of government interfering in their affairs.
FReedom is what we are about.
Slavery is what government is about.
I am in agreement with your points 2 & 3 in your next-to-final paragraph.
With the help of your and your FRiends and neighbors and business associates, and theirs, and theirs, etc., etc. we can get the reforms we need to restore America to its rightful place in the world.
Let’s get busy!
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