Monday, March 6, 2017

Ever wondered what would happen if...

...there was no Federal minimum wage?

Answer:  We would all be better off.

Better?  Really

Sure.  Let me explain...

First of all, ask yourself if there's anything, ANYTHING in the Constitution of the United States that gives the Federal Government the authority to impose a Federal minimum wage upon anyone.  You'll find upon a wee bit of research that the answer is...nothing. Nothing at all.

The 10th Amendment to the Constitution, the last Right in the Bill of Rights, which, by the way, comes as a "boxed set of ten," and not a "pick and choose which ones you like and disregard all the rest," specifies clearly that all rights not granted to the Federal Government by the "several states" remain the province of the "several states."  In other words, if we didn't give the Feds the authority to do something, they don't have the authority to do it.  

And what authority did we give the Feds?  Four things:  (1) Mint our money; (2) Deliver our mail; (3) Defend our borders from all enemies, foreign and domestic; and, (4) Organize agreements and referee disputes between the "several states."  And one could reasonably argue they're doing a really crappy job of all four.  But back to the subject... 

Then why, one could reasonably ask, did the Gummint come up with such a thing as the Fed min-wage, and how does it manage to still hang around, and even grow, up until today? 

Good question.

Think about it.  What gives the people you elect the right to say that the Korean grocer down the street, the Indian 7/11 convenience store owner on the corner, the lumberyard at the end of town or the bowling alley at the mall must pay their employees a certain minimum wage?  They have no such right.  Yet, they imposed it way back when and it just kind of grew and grew, like Topsy, I guess.

I took a job cleaning up a retail store after school while still in my early teens at the rate of $.75 cents an hour.  And I was damned happy to get it.  Yet, had there not been a min-wage of that amount back then, what would that store owner have been willing to pay to get his shop cleaned?  

I offer up here and now he might have been willing to pay more.  Because had there not been a min-wage in effect, then "supply-demand" economics that controls every aspect of our capitalistic society, except for those situations in which the Federal Government insinuates itself, would have taken hold and dictated a wage acceptable to both the employer and the employee.  A negotiated hourly wage that would have attracted and kept the employee and a price of goods or services sufficient to cover, via profits, that often "dirty word" to the Liberals among us, the wage the employer had to pay.  Shocker!  And that, kiddies, is how capitalism works...

BTW, this little posting is being brought to you by a graduate and certified economist who is both a rabid believer in capitalism, and an entrepreneur with more than 40 years of business ownership and operation.  And that's the basic problem:  The people usually dictating what an employer must pay via min-wage have never started a company, or hired anyone, or met a payroll, or tried to make a profit and remain in business while suffering the onslaught of insufferable bureaucratic rules and regulations and fees and requirements.

Just look at what's happening now.  There's a major league push to increase the min-wage from the $7 - $8 range nationwide to a flat $15.00 an hour.  A doubling of the hourly rate.  What could possibly be behind such a huge, and most who know would argue, unworkable, bump in hourly wage? 

It's really simple.  The union participation rate in our Country has gone down from almost 50% of the work force back in the post-WW2 era to just over 6% today.  And it's decreasing. And the union bosses that depend upon the collection of union dues to continue paying themselves hundreds of thousands of dollars per year are worried. Very worried. They should be.

The SEIU, or Service Employees International Union, as an example, the nice folks whose membership is comprised of hotel maids and hospital janitors, the $10 an hour-types, have spent $50 million dollars so far to try and unionize the fast food industry. And they've selected McDonalds as their main target to try and force, force the fast food folks, most of which are franchised, to accept a flat $15.00 an hour.  They would then be able to unionize these workers and charge them dues, thus doubling their membership virtually overnight.

Of course, there's a couple of problems with this strategy. First, if they are successful, their new members would wind up making too much money for Earned Income Tax Credits, that check from the IRS they get for not making enough money (!), losing their food stamps and being left out on rent and other low-income subsidies.  So they'd go from $10 bucks an hour or so, to less than that when income taxes and union dues get subtracted, and benefits get taken away.  Of course, the SEIU isn't telling them that...

Second, the Mickey D's of the world, you know, Jack-in-the-Box's, the Carl's Jr.'s, etc., franchise their stores.  That means they have nothing, NOTHING to do with how much their franchisees pay their workers.  They cannot, by law, have an input.  That's the way franchise laws work.  So, roughly 95% of all the 36,000 MickeyD's out there are off-limits to this Oak Park, IL-based franchiser.  

Yet, the SEIU has their paid protesters out in force in front of their headquarters marching and pissing and moaning each and every day, doing their level best to get the Media to help them shame this burger chain into forcing its franchisees to increase what they pay their workers.

They can't.  It's against the law.  But the SEIU is just damn dumb to know this, apparently.  I guess we should be shocked, but hey, I'm not.  

What they have been able to accomplish is to coerce the Liberal-managed cities they own and control to implement such a new hourly standard.  Cities like Lost Angeles, Santa Monica, Santa Cruz, San Jose, San Francisco, Portland, Seattle, etc.  L.A.'s new min-wage of $15/hour kicks in on New Years Day, 2020.  By then, every employer in the City must be ready to cough up that much dough if they want to stay in bizz.  Think it will work?  I don't...

-  Take Seattle-Tacoma International Airport, for an example. Sea-Tac implemented $15/hour last year.  As of last count fully 30% of all its retail and food stores have closed. Couldn't stand the new pay rate, it seems.

-  Applebees has just gone over to an I-Pad ordering system. No more waitresses bringing you water and taking your order.  Only a wait staff to bring your food. Thousands have been laid off so far.

-  Wendy's has just announced that 1,000 of its 3,600 stores will do the same by early next year.  Customers will order via a kiosk and the only employees will be cooking the food and delivering it to the customer.

-  Carl's Jr. has just relocated its HQ from Santa Barbara, CA to Plano, TX.  Its CEO, Andy Puzder, the almost-Secretary of Labor, has decided the one year and $one million cost to open a new store in CA versus the three months and $60,000 each in TX means there will be no more new stores in CA. It has built more than 70 stores in TX so far, with many more to come.  That's more than 35,000 new employees in Texas and 35,000 fewer employees in California.  Hey Gov. Brown!  The handwriting in on the wall!

-  And MickeyD's has begun installing robots into its company-owned stores to cook the burgers and the fries. These electronic employee-replacers cost $250,000 each, but are proving to pay for themselves in just over two years. Thereafter, no coming in late, no breaks, no excuses.  And every burger and every order of fries will be produced perfectly.  This, plus kiosk ordering systems, and franchisees will no longer have min-wages to worry about.  Each McD's has more than 50 employees.  Think of its new profit picture when two-thirds of them simply vanish.  

There are many more examples.  But suffice it to say if a business can't make money at $15.00 an hour, it will go out of business.  Or it will take its business out of state. Both are happening here in California. 

So, even if the SEIU is successful in making $15.00 an hour America's new standard, it's highly likely that by the time the dust settles there will be hundreds of thousands, perhaps even several million fewer min-wage positions looking for unskilled people to fill them.  Think that's what the SEIU had in mind?

I don't... 

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