Herald-Mail forums

August 14, 2006

Last week's question

Martin O'Malley has challenged his Republican rival for the Maryland governor's office to urge President Bush to back a higher minimum wage. Gov. Robert Ehrlich says that's not the best way to fight poverty. Who's right and why?

Gov. Ehrlich is correct. The number of workers earning the minimum is a very low percentage and of that percentage, most are teenagers still residing at home with mom and dad. The others are receiving some form of government assistance. Raising the wage will not change their aid package but it will increase the prices you have to pay. If I have a business and I have to pay more for wages and tax overhead, I'm raising my prices.

Teenagers only make up 16 percent of the people earning the minimum wage.

Minimum wage laws hurt the poorest and lowest-skilled people the most. In fact, every time the minimum wage is raised, unemployment among the poor goes up, too.


Think of all the folks who live in the homeless shelters downtown. With no lower limit on their wages, they could get a foothold in the downtown job market by doing odd jobs for local businesses, such as cleaning up parking lots, washing windows, running errands, etc.

The value of their labor is in most cases well under minimum wage, but they nonetheless would earn a few dollars and gain experience in the workforce. If the minimum wage is raised higher than the value of their labor, though, they will be priced out of their entry-level jobs and forced to rely on social programs and panhandling. Which is pretty much how it is right now.

My understanding is that the Bush administration will only consider an increase in minimum wage if it is tied to cuts in estate taxes. This seems like an unequal compromise. I really don't think that Ehrlich has much to do with that process.

Our governor doesn't want to raise the minimum wage, require employers to provide any benefits or work to find a solution for all Maryland residents to have access to health care because his business cronies don't want these changes.

And, if businesses invested voluntarily in their workforces, I wouldn't blame him. However, business makes money on the services of those employed. Rather than improve the purchasing power of their employees and growing a better customer base to share, many businesses seem determined not to share the proceeds, except when forced.

By my understanding of how this whole minimum wage business works, raising it isn't going to do a blessed thing for raising people out of poverty.

Think about this: You pay "X" amount of money for an item rung up by someone making minimum wage. Now, that company has to pay that cashier more money to do the same job. How are they going to compensate for that? They are going to increase the costs of the items they sell. So, basically, the only way raising the minimum wage is going to HELP anyone is if it is raised without everything else going up as well. And you know, that isn't going to happen.

I vaguely remember the '80s and "Reaganomics." How did we get out of that inflation cesspool?

Ehrlich. Mandating an increase to the minimum wage would have many ramifications and reducing "poverty" won't be among them. It would increase unemployment because a price increase (a wage rate is a price) reduces the quantity of the service demanded. Higher wages, fewer jobs. Increased wage rates get added to the price of production. Costs of goods and services rise (inflation). As a result government will seek to care for higher numbers of unemployed. And guess where that leads? Increased taxes. Reduce poverty by reducing all social welfare programs, a/k/a government.

We don't need a higher minimum wage. Even the fast-food restaurants pay higher than minimum wage now.

Ehrlich. Anyone with any understanding of basic economics knows that.

Getting big business out of goverment would be a good start. Of course, Republicans don't want to raise the minimum wage; it would cut into their profits. They can't raise prices. The market is too competitive, but they won't tell you that. Just like gas prices. They use every excuse they can to keep prices up now. "Oh my, a breeze is blowing in the bay, better jack oil up to $78 a barrel." I'll bet as soon as Bush is out of office, oil prices will fall!

Give the poor man a break. Back when gas was 50 cents a gallon, minimum wage was $2 an hour. Compare that to today's prices and it is nowhere close. There are many other examples I could post here, such as the price of housing, food, etc.

It's outrageous, with today's cost of living. I must be the dumb one for getting up every morning and going to work, trying to make ends meet. It might make more sense to just quit my job, and get some Section 8 housing, food stamps and an Independence card and live for free.

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