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WALL STREET, NEW YORK, UNITED STATES – 2018/09/27: Hundreds of CUNY faculty and staff marched through Wall Street Financial District on September 27, 2018 to demand public investment in the City University of New York. Staff. Hundreds of members of the union, carrying billboards, piquetted on the New York Stock Exchange before going to the investment bank of William C. Thompson, chairman of the board of directors of CUNY. (Photo by Erik McGregor / Pacific Press / LightRocket via Getty Images)
Former financial analyst and television commentator Larry Kudlow, now director of Donald Trump's National Economic Council, has just said it. No increase in the federal minimum wage. Period.
In fact, if he wanted to, no minimum wage, whether federal, state or local, as he said at a Washington Post event on small business, as reported by The Hill and 'other.
At the federal level, he said: "My point of view is that a federal minimum wage is a terrible idea and will hurt especially small businesses."
According to Hill, Kudlow also stated that he opposed minimum wage levels established by the state and local communities.
The argument that a standardized approach is unrealistic is well founded. I live in a rural area of western Massachusetts, in a state where the minimum wage is $ 11 / hour and an upcoming voting initiative to raise it to $ 15.
The economy here is nothing like Boston's. The cost of living no longer. I have friends and acquaintances who own small businesses here. Some may pay $ 14 or $ 15 an hour and probably do not. Maybe some small businesses in Boston could. Conditions will be different in other parts of the country and many may find it even harder to endure a minimum wage of $ 15.
For an example, look at the story of Esquire about poor representative Devin Nunes, a Republican at home who has become a fierce enemy of immigration. Unfortunately, his family sold his dairy farm in California, his home state, and moved to Iowa. Apparently, they pay 14 dollars an hour, but for undocumented workers and can not afford higher wages, not to mention health insurance and 401 (k) accounts for workers.
For fear that the irony comes to the end of the discussion, I really have sympathy for these people. Milk production, like any other agricultural work, is difficult and ruthless. There is an overabundance of milk, prices are ridiculously low and farmers depend on federal subsidies to stay in business. Margins are pathetic and a sudden increase in spending could put a lot of money. Since the year 2000, 42,000 dairy farmers have ceased operations.
The concerns that many small businesses have about staying afloat are not imagination.
That said, the issue of minimum wages is also broader than that of small businesses, which politicians often use as cover when they really want to protect large corporations that make large donations to the campaign coffers.
As Seattle has shown, it is possible to structure a minimum wage law to focus on big business and excuse, to a certain extent, too small businesses. Such a law should consider full-time equivalent employees because many companies are already playing games. They keep employees less time full time, so they do not need to provide benefits such as health insurance, which we need, should be managed by individual companies. But it is possible.
It is wrong to claim that it is only small businesses. Kudlow says that if you reduce taxes, that is, you allow companies to make bigger profits, the wages will eventually follow. But when is it supposed to happen?
You will find below a chart that I have created on the economic research site of the Federal Reserve of Saint-Louis. There are two lines. Blue represents the overall profits of companies after taking into account changes in inventory valuation and capital consumption.
The second line, in red, represents the real median wage of American workers. Real means that it is adjusted to account for inflation, so any growth exceeds the cost of living and therefore constitutes a gain.
Comparison of corporate profits and median wage, July 1, 1979 to July 1, 2018Federal Reserve Bank of St. Louis
The rows are indexed as of July 1, 1979, which means that the numbers on that date correspond to a reference of 100. The indexed value for a given date shows how it compares to the reference value. If, for example, real median wages reach an index of 200, by that date they are double the amount of July 1, 1979, taking into account inflation.
Dry the bitter tears and calm the bursts of laughter. We know that they do not do it. The line for the median salary is flat. The corporate profit line, with some setbacks, remains on the rise.
No matter how much profit companies make. They stopped sharing with the bulk of the workers 40 years ago. Assume that even lower taxes than the cuts provided in the legislation on last year's gifts – which will increase the public debt – will suddenly drive up wages, that is, ignoring historical evidence.
Wages increase to a certain extent. According to some estimates, they could reach the level of 3% in the publication of employment figures on Friday. But it's still pretty much nothing and it's like giving a dice to the water to a person who has gone through a long period of drought. The rise in wages is also the result of the tightening of the labor market and the need to compete for workers. This has nothing to do with lower taxes.
There are also cases like Amazon, which raised its minimum wage to $ 15, but only after prolonged public pressure, bad public relations and a threat from Bernie Sanders to put pressure on a bill to raise additional taxes while employed workers are still entitled to a job. assistance.
Kudlow is right in saying that a single minimum wage that ignores differences in local conditions is probably unrealistic. However, there are many measures to support such measures because it has become the only way to get companies to react. For some strange reason, without the pressure of the public and the government, this money from the tax reduction stays with the company and its shareholders and never goes out. And society can not stand the growing inequality and continues to remain stable and productive.
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WALL STREET, NEW YORK, UNITED STATES – 2018/09/27: Hundreds of CUNY faculty and staff marched through Wall Street Financial District on September 27, 2018 to demand public investment in the City University of New York. Staff. Hundreds of members of the union, carrying billboards, piquetted on the New York Stock Exchange before going to the investment bank of William C. Thompson, chairman of the board of directors of CUNY. (Photo by Erik McGregor / Pacific Press / LightRocket via Getty Images)
Former financial analyst and television commentator Larry Kudlow, now director of Donald Trump's National Economic Council, has just said it. No increase in the federal minimum wage. Period.
In fact, if he wanted to, no minimum wage, whether federal, state or local, as he said at a Washington Post event on small business, as reported by The Hill and 'other.
At the federal level, he said: "My point of view is that a federal minimum wage is a terrible idea and will hurt especially small businesses."
According to Hill, Kudlow also stated that he opposed minimum wage levels established by the state and local communities.
The argument that a standardized approach is unrealistic is well founded. I live in a rural area of western Massachusetts, in a state where the minimum wage is $ 11 / hour and an upcoming voting initiative to raise it to $ 15.
The economy here is nothing like Boston's. The cost of living no longer. I have friends and acquaintances who own small businesses here. Some may pay $ 14 or $ 15 an hour and probably do not. Maybe some small businesses in Boston could. Conditions will be different in other parts of the country and many may find it even harder to endure a minimum wage of $ 15.
For an example, look at the story of Esquire about poor representative Devin Nunes, a Republican at home who has become a fierce enemy of immigration. Unfortunately, his family sold his dairy farm in California, his home state, and moved to Iowa. Apparently, they pay 14 dollars an hour, but for undocumented workers and can not afford higher wages, not to mention health insurance and 401 (k) accounts for workers.
For fear that the irony comes to the end of the discussion, I really have sympathy for these people. Milk production, like any other agricultural work, is difficult and ruthless. There is an overabundance of milk, prices are ridiculously low and farmers depend on federal subsidies to stay in business. Margins are pathetic and a sudden increase in spending could put a lot of money. Since the year 2000, 42,000 dairy farmers have ceased operations.
The concerns that many small businesses have about staying afloat are not imagination.
That said, the issue of minimum wages is also broader than that of small businesses, which politicians often use as cover when they really want to protect large corporations that make large donations to the campaign coffers.
As Seattle has shown, it is possible to structure a minimum wage law to focus on big business and excuse, to a certain extent, too small businesses. Such a law should consider full-time equivalent employees because many companies are already playing games. They keep employees less time full time, so they do not need to provide benefits such as health insurance, which we need, should be managed by individual companies. But it is possible.
It is wrong to claim that it is only small businesses. Kudlow says that if you reduce taxes, that is, you allow companies to make bigger profits, the wages will eventually follow. But when is it supposed to happen?
You will find below a chart that I have created on the economic research site of the Federal Reserve of Saint-Louis. There are two lines. Blue represents the overall profits of companies after taking into account changes in inventory valuation and capital consumption.
The second line, in red, represents the real median wage of American workers. Real means that it is adjusted to account for inflation, so any growth exceeds the cost of living and therefore constitutes a gain.
Comparison of corporate profits and median wage, July 1, 1979 to July 1, 2018Federal Reserve Bank of St. Louis
The rows are indexed as of July 1, 1979, which means that the numbers on that date correspond to a reference of 100. The indexed value for a given date shows how it compares to the reference value. If, for example, real median wages reach an index of 200, by that date they are double the amount of July 1, 1979, taking into account inflation.
Dry the bitter tears and calm the bursts of laughter. We know that they do not do it. The line for the median salary is flat. The corporate profit line, with some setbacks, remains on the rise.
No matter how much profit companies make. They stopped sharing with the bulk of the workers 40 years ago. Assume that even lower taxes than the cuts provided in the legislation on last year's gifts – which will increase the public debt – will suddenly drive up wages, that is, ignoring historical evidence.
Wages increase to a certain extent. According to some estimates, they could reach the level of 3% in the publication of employment figures on Friday. But it's still pretty much nothing and it's like giving a dice to the water to a person who has gone through a long period of drought. The rise in wages is also the result of the tightening of the labor market and the need to compete for workers. This has nothing to do with lower taxes.
There are also cases like Amazon, which raised its minimum wage to $ 15, but only after prolonged public pressure, bad public relations and a threat from Bernie Sanders to put pressure on a bill to raise additional taxes while employed workers are still entitled to assistance.
Kudlow is right in saying that a single minimum wage that ignores differences in local conditions is probably unrealistic. However, there are many measures to support such measures because it has become the only way to get companies to react. For some strange reason, without the pressure of the public and the government, this money from the tax reduction stays with the company and its shareholders and never goes out. And society can not stand the growing inequality and continues to remain stable and productive.
