Saturday, January 20, 2007

Minimum wage

The Democrats are beating up on Denny Rehberg for failing to back a minimum wage increase to $7.25. For once, I'm leaning to Denny's side.

It's not that I'm against a minimum wage. I would even support a modest increase and would have supported Montana's increase in November if not for the indexing provisions. But for my tiny business, $7.25 is a chunk. We've been struggling to overcome the Autopost disaster and essentially have broken even over the last 16 months. When money's that tight, every dollar counts. This would be a big hit.

Can't we pass it along to customers? No, because the big boys don't have to. So where would it come from? Either somebody goes away, or it comes out of my pocket. And believe me, as the business owner and all around drudge, I make nowhere near minimum wage.

Some people would say that people who can't afford to pay anymore than we do probably shouldn't be in business. Maybe they're right. But there are plenty of people who would rather make less money working for somebody like us than flipping burgers for McDonald's. Soon, they may not have that choice.

UPDATE: In comments, Dave Rye approvingly quotes a George Will column from a couple of weeks ago. Kevin Drum spanked Will for that here.


Teen Apple said...

You just restated Wal-Mart’s argument in favor of a minimum wage boost. Sometime ago an executive at Wal-Mart said that his company supported a higher minimum wage because (1) Wal-Mart already paid well above the minimum wage; and (2) such a wage increase would put a lot of Wal-Mart’s mom & pop competitors out of business.

Liberal do-gooders will always be capitalist dupes until they learn basic economics.

Dave Rye said...

A few weeks ago, columnist George Will presented a strong case for having the minimum wage be zero, i.e., not having one. (Aha! I saw skeptical eyebrows being raised as soon as I typed "George Will.")

As long as employees are free to quit their jobs for ones that pay better or are more appealing for some other reason, why put this onus on employers, especially those of small businesses such as The Outpost? As long as businesses have competitors and/or a need to produce a quality product or service to maintain or expand their customer base, they'll do whatever they can to keep their quality employees anyway.

Of course, Will's thinking on this issue, and the whole concept of letting the free market be truly free, will become law about the time the sun burns out.

David said...

I reiterate that my opposition to a particular minimum wage doesn't mean I oppose a minimum wage altogether. Some people simply have no bargaining power in the marketplace at all, and they need some minimal protection.

Anonymous said...

...and they will be the first ones to get cut lose when someone like you decides they can't afford the minimum wage -- so what do you think they want? a job at some wage or no job at a higher wage? That's the truth of what happens and yet do-gooders think they are being kind. They "do good" and never look back. And, by the way, the mistake someone here is making is believing that big corporations like capitalism -- capitalism would allow small businesses to compete too freely and the big corporations can't keep up with that. So bring on minimum wage and a ton of other stuff that only the deep pockets can afford.

Mark Tokarski said...

The WSJ and conservative types constantly trot out the argument that increasing the minimum wage costs jobs. Problem - we've had near twenty or so laboratory studies on that theory, and it doesn't hold water. In no state where MW has been increased has there been a decrease in low-skill employment. Nada.

Given the absence of evidence, WSJ merely appeals to authority. "Serious" economists all agree that MW costs jobs. That's the best they can do.

Minimum wages sets a standard and prevents sweatshops. Dave's idea that we can have a -0- MW would fly well in Vietnam, where they make his sneakers, but not here.

Anyway, I feel for you Dave, but you've got to come to grips with the fact that $5.15 an hour doesn't even put cheap gruel on the table anymore.

huh said...

A point missed in this comment is that the owner of the small business adds all his costs, tacks on a reasonable profit and sets his prices based on those two points. The worker, however, must live on what he/she makes. There is a decided difference between makes and earns. The mewling that the minimum wage is unfair because it forces businesses to cut into their profits to put food on a worker's table is abominable.

Mark Tokarski said...

What is the social justification for a business that cannot provide a living wage?

Anonymous said...

I am just dumbfounded at the lack of entrepreneurship that goes on in this town. Being a business owner is being an "expert" at adapting to change. Obviously this is change. Basic economics says that the more people make the more people spend.... Don't you get it? If people have more money, they will buy "more" things. Maybe even more of your things. Stop complaining and spending time on this stupid blog, and start figuring out a way to make more money with the business you already have. It never ceases to amaze me at how some business owners figure out a way to make it, and others figure out whose fault it is they are not making it.