The NewsTalkers

The NewsTalkers, provides you with all the features you enjoy on other social networks without being confronted by unwanted content.

Speak Your Mind about anything news worthy, in our fully moderated Forum. Feel like being social? We have a group activity board and chat feature free of politics. Have a special interest or cause? Set up your own group. And of course, every member has their own "Homepage" which  is fully customizable. 

What is truly unique about NewsTalkers is that it's community driven. Members have a voice in all aspects of NewsTalkers, so there are no policy changes without member-input. Feel free to contact me with any ideas. My door is always open.

Perrie Halpern Resident Adviser

Moderators:

Perrie Halpern
A. Macarthur
Larry Hampton
P Faden/Pedro
Randy/Justice For Trayvon
Mike in Ga.

MIT
Dowser
Jerry Verlinger

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Robert in Ohio

Income inequality and the wage disparity are real problems in the United States that deserve real solutions and not just a lot of theatrics and posturing by politicians and talking heads looking to capture popular support to further their political agendas.

Some would argue that we should just raise the minimum wage to $10, $12, $25 or even higher and that will take care of the problem and the middle class will be revitalized, the American Dream will be available to all citizens and the economic skies will be blue and sunny for the rest of days.  Wealth redistribution is another solution advocated by certain political ideologues who proffer a variety of ways to affect this redistribution, but the crux of it is taking money from people who have earned it or acquired it through inheritance and give it to people who have not been so fortunate in their economic endeavors but still want the money they feel they deserve.

There are problems and obstacles with both of these approaches which doom both to failure.  The former ignores ancillary economic and social factors critical to individual success and attainment of the American Dream as well as Newton’s Law which declares that for all actions there are equal and opposite reactions and some of those reactions can be just as serious as the original problem.   The problem with the latter solution is quite obvious, the people who have earned or legitimately acquired wealth and/or positions with high incomes are justifiably adverse to having their money ripped from their hands and given to someone who they may or may not feel has expended sufficient individual effort to succeed on their own.

Actions and reactions sound very scientific and that should appeal to folks who want facts to trump feelings, emotions and beliefs about what happens or does not happen.

Let us consider for a moment the following scenario.  The federal minimum wage is increased by 50% which would put it at approximately $12.00 per hour throughout the nation.  Hard to argue that this would not be a welcome and celebrated event for millions of American workers, but that is not the end of the story.  What happens next? 

There would be a natural and corresponding increase in the cost of doing business for employers which would be arithmetically greater than the actual salary increase for the workers owing to the actual increased wages, increased payroll tax costs and increased costs of retirement plans and other benefits provided to employees.  It can be argued that many businesses could simply absorb these added costs but the reality of the world we live in is that the increased costs of doing business would be passed along as price increases on goods and services to consumers, which would negate to some degree the benefit of the wage increase.   The raising of the floor of the wage structure in the country would also create corresponding increases (not necessarily the same percentage increase) at wage levels above the minimum wage all the way to the top of a company’s salary structure, as increasing costs in the economy would require higher wages for workers to maintain their standards of living resulting in even higher operating costs for businesses.

Some people might argue that many, many jobs would simply be eliminated but I think that is unlikely as most businesses have contracted their work forces as much as possible already and cannot continue to cut the number of employees to cut costs.  Therefore, the prices of goods and services would rise in proportion equal to or perhaps even greater than the wage increase and since the rising tide would raise all boats, the poverty level might go up a little but those living in poverty would likely remain there.

So a more complex solution is needed to the economic woes of the middle class and the working poor in the United States, which must include a resurgence of a manufacturing/production base in the U.S., tax code reform and regulation enforcement that encourages corporate domestic development and expansion along with improvements in the education system to better prepare American workers for new, more technically demanding jobs in the new middle class.

I am fully supportive of raising the minimum wage and tying future increases to the CPI, but we should not be so naïve as to see an increase in the minimum wage as a cure for the woes of the working poor or the economy when it is only a small part of the solution that is needed and that it will have unintended consequences that will also require solutions.