Let the Facts Speak

Original Article from Washington Post:

https://www.washingtonpost.com/posteverything/wp/2016/08/10/so-far-the-seattle-minimum-wage-increase-is-doing-what-its-supposed-to-do/?postshare=7621470846183974&tid=ss_tw&utm_term=.eb5660b6bd9d#comments

My Thoughts

There are additional costs a business incurs when increases in wage occur other than just the wage itself as a comment to the post suggested - matching the social security contribution, state disability, unemployment $ and an increase in workers compensation insurance which is based on payroll. There may be others I left out.  

The costs to the business is more than the wage itself.   Now build a formula that calculates the true cost and shows the amount of money lost by a McDonald’s in Seattle per year. Now figure it out for every McDonald’s in the US where states are increasing the minimum wage. Now we are talking big bucks. At McDonald’s every penny counts when reporting to Wall Street. 

@HillaryClinton Be critical of her promises. There were several inaccuracies in her speech. One example is her reason Ford increased wages for workers to $5 a day. She said and I’m paraphrasing, “so employees could buy more of the products Ford was making”. This is not true. Keep in mind there were no state or federal minimum wage laws back in 1913.  The decision to increase pay to $5 from $2.25 was made primarily to decrease his high turnover of workers which was extremely costly to the overall business. A decision 100% driven by the company. By free enterprise.

Ford’s actions show free enterprises’ ability to recognize the need to increase wages in order to benefit both the business and the worker. 

The first time we see minimum wage in the books was the Davis-Bacon Act in 1931 which proposed a federal minimum wage in the construction industry. Here’s an excerpt from Thomas Sowell’s article with a link underneath:

“The following year, the Davis-Bacon Act of 1931 was passed, requiring minimum wages in the construction industry. This was in response to complaints that construction companies with non-union black construction workers were able to underbid construction companies with unionized white workers (whose unions would not admit blacks).”

Read more at: http://www.nationalreview.com/article/415569/ruinous-compassion-minimum-wage-laws-thomas-sowell

We see the state minimum wage for the first time in MA in the year 1938.

Additional Resources:

http://journalistsresource.org/studies/economics/inequality/the-effects-of-raising-the-minimum-wage

Why Ford raised wages: http://www.forbes.com/sites/timworstall/2012/03/04/the-story-of-henry-fords-5-a-day-wages-its-not-what-you-think/#4fb3f3491c96

https://mises.org/library/yes-minimum-wages-still-increase-unemployment

Original Article by John Burnett August 11, 2016

http://www.wbur.org/npr/488428558/in-south-texas-fair-wages-elude-farmworkers-50-years-after-historic-strike

John, thank you for posting the article. My thoughts.

“This is where history repeats itself.” And it will continue to repeat itself for farm workers and agriculture businesses in South Texas because employees and employers continue to break laws and the government continues to not enforce these laws. Undocumented people coming into the US put themselves in a situation where fear of being deported gives leverage to the employer to pay someone with the same skills and experience a lower wage. The undocumented worker and the employer are breaking the law - the undocumented worker is here outside the bounds of the law and the employer is hiring an undocumented worker.

The two paragraphs below referenced in your article can be argued to be one in the same. In both scenarios the common theme is “undocumented workers”. As long as there are undocumented workers in the fields to be taken advantage of and pay lower wages than jobs documented workers can get elsewhere then this problem will never go away. This may be why “fewer and fewer U.S. residents or citizens are willing to do this work”.

“In 1966, growers in cahoots with the Texas Rangers brought in pickers from Mexico to break the farmworker strike. Mexicans harvested the melons and put picketing Texas workers out of a job.”

“Today, Mexican laborers pick much of America’s produce. But 50 years later, they’re not necessarily replacing legal U.S. workers. The fact is, fewer and fewer U.S. residents or citizens are willing to do this work.”

Other questions are raised: What happens when an undocumented worker gets hurt on the job and can’t work? Can they file a claim? If they can’t how do they get healthcare and who pays for it? How are Workers’ Comp insurance rates for agriculture affected by this situation and so on.

Fair Wages 

“As soon as Jimenez got a work permit, he quit the fields. Now he’s a manager at a Dollar Store in the town of Elsa.”

“Her fresh-faced grandson, Aaron Gonzalez, who is 19, sits on the sofa next to her. As a kid, he worked in the fields with his family, but he vowed last summer would be his last watermelon harvest. Aaron is going to St. Edwards University in Austin to be an athletic trainer.”

Jimenez and Aaron: Well done and all the best on your new journey.

Right this isn’t a job you have to do for the rest of your working life - there are other options and you made the choice to get skills/experience to move into management or get an education to give you access to options. You understand it’s the worker’s responsibility to acquire new skills and knowledge to have more options to get a higher paying job.

This applies to everyone in the US that is fit to work. It’s not the employer’s or the government’s responsibility to ensure jobs or livable wage. All workers in a Free Enterprise are paid based on what they produce not based on what they need to live. Competition, market conditions and state wage laws are a few examples of what can affect wages. 

However the situation of undocumented workers (the invisible worker) throws this into a tailspin specifically in this example of farm workers where laws are being broken by employee and employer and are not being enforced by the government - making it harder for other laws to be enforced to protect workers.

Free Enterprise

“Growers have heard the criticism: If you want to solve the labor shortage, pay your workers better. But Schuster, who hires about 200 farmworkers a year, says it’s not that simple. Agriculture in the Rio Grande Valley is at the mercy of market forces and geography." 

Look at history and data to present facts to make long term decisions at the local, state and federal level of government. Not for short term political gain or personal gain. There’s no room for those agendas in American politics.  It’s common sense that comes with representing the people being served - where doing what’s best for the people should always be the goal.