False promises in minimum wage debate
editor's pick

False promises in minimum wage debate

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Money

To the editor:

Money is stored value. It is the amount of worth that the market places on the services performed. The market is apolitical and unemotional.

Minimum wage creates a self-fulling prophecy of failure. If the entry level McDonald's worker makes $15, here are some questions. Does the shift manager at a McDonald's — often making about $14 to $15 an hour — get a $7.75 raise or does that shift manager get an equal percent raise of 100.0 7%, taking his pay to just over $30?

Many union contracts, mostly manufacturing union contracts and possibly SEIUs, had a clause dating back to the 70's that any raise in the minimum wage would automatically be added to the hourly wage in effect at that time. Not a big deal then because the minimum seldom was raised more than 10 cents at a time. The clause is one of the reasons manufacturing unions are for a higher minimum wage — follow the money. Some trade unions had that clause. For those that did the Union Tradesmen would get a $7.75 raise. Their lawyers might argue that the contract actually means the same percentage raise, but that would have to be argued out in court.

If the raise went into effect it would be inflationary, and the poverty level would end up being pegged at a higher rate, therefore necessitating the continuance of subsidized government payments. For those who have argued that it is not inflationary, why not make it $25 or $50 or $100 and make everybody wealthy on a comparative basis to today's dollar standards but without the buying power? However, keep in mind that whenever inflationary raises are given at any level they add to the overall inflation rate — and yes, this is also true for Social Security, Medicaid, Medicare, Section 8 housing, food stamps, disability, etc.

The concept that a minimum wage of $15 would alleviate government support payments is false. Whenever you raise the bottom, no matter where it is, it is still the bottom and every one above that level needs to be increased proportionately or over time productivity decreases as the incentive to move up shrinks until it becomes nonexistent.

By the way, Mr. Doelder was incorrect in remembering that the minimum wage in 1967 was $1.10. On Feb. 1, 1967, it was raised to a $1.40, an increase of 12% from the previous $1.25. A 12% increase today would take it to $8.33.

Ron Grabski,

Williams Bay

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