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Tuesday, May 10, 2005

Chicken Little Republicans

Posted by: Hammer / 8:09 AM

Sorry to mix the barnyard metaphors, but Chicken Little Republicans are sounding awfully Groundhog Day. The Minnesota GOP has issued a dire warning: raise income tax rates on the wealthiest Minnesotans and it will "cost our state jobs". It's such an important message Republican Party of Minnesota Chairman Ron Eibensteiner repeats it three paragraphs later:
"With today's good news on job creation, a tax increase on the people who create jobs in this state is the last thing we should be doing," added Eibensteiner. "This proposal will make Minnesota less competitive and will cost the state jobs."
Where have I heard that before? When Bill Clinton proposed tax increases in 1993 to rein in the Reagan/Bush deficits, Republicans sounded the same alarm:
"Clearly, this is a job-killer in the short-run. The impact on job creation is going to be devastating." Rep. Dick Armey, (Republican, Texas)

"The tax increase will ... lead to a recession ... and will actually increase the deficit." Rep. Newt Gingrich (Republican, Georgia)

"I will make you this bet. I am willing to risk the mortgage on it ... the deficit will be up; unemployment will be up; in my judgment, inflation will be up." Sen. Robert Packwood (Republican, Oregon)

"The deficit four years from today will be higher than it is today, not lower." Sen. Phil Gramm (Republican, Texas)

Under Clinton, the American economy added 22 million new jobs. This is not a surprise. The American economy always does better with a Democrat in the White House. (More like that here.)

Three years after being wrong about an income tax hike, Republicans were wrong again. In 1996, Clinton pushed a long-overdue increase in the minimum wage. Republicans were aghast:

...[B]ack in 1996, Republicans responded with Nostradamus-like forecasts of doom. "A job killer cloaked in kindness" is how House Majority Whip Tom DeLay characterized the president's plan to hike the minimum wage from $4.25 to $5.15 an hour. Rep. John Shadegg warned that 1 in 4 young minority workers not in school would lose his job. Then Sen. Hank Brown predicted a juvenile crime wave "of epic proportions."

Time has not been kind to these predictions. Since the increase went into effect (in two steps, beginning Oct. 1, 1996), overall U.S. employment has climbed nearly 3 percent on a seasonally adjusted basis; employment of black youth has gone up about 11 percent; and juvenile crime has declined.

Don't Republicans ever get tired of being wrong?


Hammer, Hammer, Hammer. There is no causitive evidence that an increase in the minimum wage lead to the supposed benefits of a reduction in crime and an increase in employment rate of black young men. Could it just have been that the population base itself increased? How can there be a reduction in crime when all we hear about is the ever increasing incarerated population in this country. Someone is trying to muddy the waters. Could Hammer be slinging facts that look good to him only?

I oppose an increase in the minimum wage because it increases prices on products overall.

A small business, of which there are more in this country than large business, has to either reduce expenses in other areas or increase price of whatever their product is, if that business is required to increase their wage expense line and still meet the same P/L.

As an employee of a large corporation you don't see what this does to a companies overall health.

Also, as a consumer, do you want to pay more for your products produced by minimum wage labor? That is the question you have to ask yourself, because I guarantee you that every company out there feels that they are already running lean and mean, and there is nothing to cut on the expense line. That means the wage increase is passed onto the consumer.

Don't forget that the people earning minimum wage are consumers too, so whatever benefit they see from an increase in the minimum wage is short lived. As soon as prices catch up with the
increase, these workers are back in the same boat.

Ask yourself, if we have increased the minimum wage in the past to give a "living" wage to those workers, why do we need yet another minimum wage increase?

By Anonymous Ba Ha Ha, at 9:54 AM  

I agree on the first point -- there is no proven causitive link between an increase in the minimum wage and reduction in crime (or an increase in the employment rate). However, the prediction from the right was that the increase in the minimum wage would result in an explosion in crime and an explosion in joblessness. Both those preditions were as far off the mark as possible. My point is not that the increase in the minimum wage decreased crime -- my point is that the claims the Republicans are making now are very similar to claims made in 1993 and 1996. In those years, the Republican claims were demonstrably false. Because the Republicans have a bad track record of predictions on the economy, there's no reason to trust the predictions made today.
I will disagree with you, though, on the minimum wage. I believe in minimum labor standards, including wages. If I have to pay a couple cents more for a Happy Meal, I'm okay with that. The problem is that the minimum wage is not pegged to inflation, so it is always falling behind. The purchasing power of the minimum wage was far greater forty years ago than it is today.
I think the solution is to agree upon a minimum wage based on purchasing power -- if you work full time you should be able to buy this much stuff. Then tie the wage to inflation so we don't have to shock small employers with a 10% increase in the minimum wage every 5 years.

By Blogger Hammer, at 10:31 AM  

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