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home : opinions : opinions September 14, 2014


4/7/2013 8:58:00 PM
Letter: Government should not determine wages

EDITOR:

There has been much debate about our minimum wage law. I think the middle class has had shrinking buying power combined with wages that are not keeping up with inflation. The question is, how do we correct this?

If raising the minimum wage was the answer we would make it $20 per hour or more. I think we can all agree that is not realistic. We would have massive layoffs for adults and nobody younger than 18 would get a job. So why do we think raising our current minimum wage would help? It is already a proven jobs killer for teenagers. Also, very few experienced adults work for minimum wage.

This is America; why can't employers decide what they can afford to offer as an hourly wage? If it is too low they will not get enough people willing to work for them and they will be forced to raise the pay.

Nobody thinks the minimum wage is a living wage for anybody supporting a family, nor is it designed to fit that bill. Also, why do we have the idea that all 50 states should have a federal minimum wage? Even within states there are wealthy areas that could get away with a higher minimum wage than others.

The real problem with low wages is much more complex than simply forcing a minimum wage law on most businesses. We have a federal banking system that creates inflation for the masses by increasing the money supply. Some government regulations can be unreasonable and costly on business, which slows innovation and reduces money available for making capital improvements. This makes it harder to give out decent raises to the employees.

Why not try less government heavy handed-ness and a stable currency by ending the federal currency inflation policy. I'm sure we will like the results. More freedom is what made our country great.

Joseph Gorski

Prescott Valley


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Reader Comments

Posted: Tuesday, April 09, 2013
Article comment by: Minimum Wages, or Involuntary Servitude

Without the setting of minimum wages, the Thirteenth Amendment would be powerless:

----------------------------------------------
Amendment XIII
Section 1.

Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.

Section 2.

Congress shall have power to enforce this article by appropriate legislation.


Posted: Tuesday, April 09, 2013
Article comment by: Get Real

Distraction, distraction, anything to distract from passing a budget or doing the job he was elected for, that's our loser president.

Posted: Tuesday, April 09, 2013
Article comment by: ronald raygun

2013 and still put off by the 13th amendment. Whoa is me.

Posted: Tuesday, April 09, 2013
Article comment by: Parker Anderson

Labor unions represent about 7% of American workers, far far lower than in 1980. 7% is not very many people, so when people like Alec prop them up as the big, bad boogeymen of America, it is only to score political points. The union influence has all but disappeared from America.

Posted: Tuesday, April 09, 2013
Article comment by: Zig E.

Google " Wealth disparity in America chart " and see what you come up with. It's very colorful.

Posted: Tuesday, April 09, 2013
Article comment by: ALEC BARRY

THE WHOLE PROBLEM WE HAVE WITH MOST OF THE LABOR IS THE UNIONS...IF WE COULD GET RID OF ALL THE UNIONS AND LET THE COMPANIES RUN THERE BUSINESS THE WAY THEY WANT THEN THE WAGES WOULD OVERALL GO UP BECAUSE ONLY THE WORKERS THAT DESERVE MORE MONEY WOULD GET MORE MONEY AND PRODUCTIVITY WOULD IMPROVE A MILLION PERCENT.

ALEC BARRY
PRESCOTT VALLEY, AZ


Posted: Tuesday, April 09, 2013
Article comment by: Hokas Pokas

@ Hobbes2:

Yes, you are right and I was wrong. The average wage is given as an arithmetic mean. Basically, this means, in English, for every one CEO that earns $1M/yr there must be at least 10 that earn about $100k/per year (which does not even get you into the top 10% of income earners.) In any event, statements that company CEO's are making gazillions of dollars, are overpaid (by whose estimation, I don't know) and ripping everyone off are entirely off base and uninformed.

The fact of the matter is, according to the OECD, American workers are paid the most. As your "Mother Jones" article points out productivity has increased because of automation, the internet, and other factors. Workers must be productive in order to compete in the international marketplace and because they, themselves, are expensive! If they cannot compete, the company goes broke and then there are NO JOBS. And that is exactly what is happening. Skilled jobs are being exported and replaced by low skill jobs. Government interference, i.e. XL pipeline, Boeing labor union dispute, etc., has created the problem.

An individual is paid what he or she is worth. The price is set by the marketplace. Government meddling only fouls it up.

In 2009, the top 1% earned 17% of all income and paid 37% of all federal income taxes. The bottom 50% earned 13% of all income and paid 2% percent of all federal income tax.

http://www.heritage.org/federalbudget/top10-percent-income-earners


Posted: Tuesday, April 09, 2013
Article comment by: I agree 100%

Get rid of arbitrary, government forced minimum wage today and you will no more unemployment tomorrow! Minimum wage's real reason of existing is to make liberals feel good.

Posted: Monday, April 08, 2013
Article comment by: Hobbes2 aka Sam Brunstein

TO: Hokas Pokas

Looks like I owe you an apology. No, not for my discussion of wages, but about my debates with you about GDP.

I just read the Wikipedia article and I have to agree with you that, I along with a lot of other people, have gone along with GDP as a measure of the economic health of a nation. I will never again (I hope) quote Debt as a percentage of GDP.

The Wikipedia article points out that GDP is GENERALLY ACCEPTED as a measure of economic health and then goes on to point out why it isn't.

Now I have to slog again through your derivation on income tax and see if I agree with you. As you know, first look, I accused you of having a variant on the income method of calculating GDP. I will look again.

I try to admit when I am wrong - difficult sometimes but this one hit me hard in the back of the head.

GDP is not a measure of the economic health of a country, nor of the welfare of its citizens. nor of its ability to pay its debts although it is commonly used for those purposes

For those who are interested:

http://en.wikipedia.org/wiki/Gross_domestic_product


Posted: Monday, April 08, 2013
Article comment by: Hobbes2 aka Sam Brunstein

TO: Hobbes2 akaq Sam Brunstein (me)

I got carried away and didn't really make my point. Reverse Poisson distribution indeed!

The direction of the difference between the average and the median in the reference salary of CEOs indicates that there are higher salaries than might be expected above the average.

Note that the median simply tells us that an equal number of salaries fall above and below this value. It tells us NOTHING about how much those might be.

For example, take five annual salaries of $30,000, 35,000, 40,000 45,000 and 250,000. The median is $40,000 while the average is $80,000. This is more extreme than the skew in the figures referenced by Hokas Pokas to make the point.


Posted: Monday, April 08, 2013
Article comment by: So... Logically

The government should not have anything to do with what anything makes so...tax the hell out of the the big corporations who pay no taxes (you know who you are Exxon/Mobile, e.g) as to prevent greedy executives from taking money away from the lower and middle classes by encouraging them to be greedy pond scum.

Just another view of the same coin. No matter what government sets wages. Through policies and political relationships. The lease we can do is make sure that is it so people eat instead of how many houses and yachts they have.


Posted: Monday, April 08, 2013
Article comment by: Hobbes2 aka Sam Brunstein

TO: Hokas Pokas, who wrote: "To the followers of the religion of class envy, some facts:"

I suggest that you left out some pertinent data.

The Wikipedia table is truly interesting. I support the use of Purchasing Power Parity (PPP) for making comparisons. Using the National Accounting Metholodogy is a bit iffy, as they state. So indeed, the US has the highest average income. However, "highest" is meaningless unless one is paid what one is worth!

There is another factor. From 1979 to 2009, the productivity of the US worker went up by 80%, while the average overall wage only increased by around 10% ("around" because I'm reading from a graph). At the same time, the average income of the top 1% increased by 240% (falls directly on a graph line). Did the productivity of the top 1% increase by 240%

http://www.motherjones.com/politics/2011/06/speedup-americans-working-harder-charts#13654633732011&action=collapse_widget&id=3860906

Then, the amount given for the mean (average) income of a Chief Executive at $176,840 is correct but your statement that half are above and half below is incorrect. That is the median income, not the mean and that is $168,147, calculated from the hourly wage times 2080 hours/year. Your statement would be correct if the distribution is Gaussian (the Bell Curve) but the fact that the mean and the median are skewed says that it is not Gaussian and the direction of the skew suggests that there is more at the high end. I suspect something more like the shape of a reverse Poisson distribution skewed towards the high end. It would be interesting to know the value of the Mode (the number repeated most often) but that is not given.

Bottom line: There is more money at the top than your analyisis indicates.


Posted: Monday, April 08, 2013
Article comment by: Hokas Pokas

The statement I made regarding the average CEO wage is incorrect. I gave the mean average, which is not the middle point or median.

Posted: Monday, April 08, 2013
Article comment by: Veritas Semper

Re: wages- in 2004 I was being paid about $0.08/sqft to hand drywall. In 2006 the rate had dropped to $0.055 due to the influx of cheap, illegal labor. The builders were demanding lower prices, the drywall contractors were having to reduce their rates to stay competitive and the wages dropped to 1970's levels.
The "Market" didn't change the wage rate, the lack of enforcement of the Nation's Laws did. I watched illegal labor destroy an industy that provided millions of reasonably well paying jobs for Citizens.
Think about that the next time your crappy production level home starts leaking, drywall nails pop, paint fades, concrete and stucco cracks


Posted: Monday, April 08, 2013
Article comment by: let the kids work

Following Gorski economics would have us regress to where it would be acceptable to have ten year olds working in the mines and 80 hour work weeks. Corporate trusts would run the country and there would be no social security or Medicare. Where do these folks get their crazy ideas about freedom and government??
Joe--Government plays a crucial role in assuring your freedom by tempering the the inequality and freedom restricting forces that are unleashed by unfettered capitalism.


Posted: Monday, April 08, 2013
Article comment by: Hokas Pokas

To the followers of the religion of class envy, some facts:

- According to the Organization of Economic Co-operation and Development, American workers are the highest paid and one of the least taxed workers in the world.

http://en.wikipedia.org/wiki/List_of_countries_by_average_wage

- According to the U.S. Department of Labor, Bureau of Labor Statistics, the mean annual wage for a chief executive is $176,840. This means that of the 255,940 chief executives interviewed half are above this wage and half are below this wage.

http://www.bls.gov/news.release/ocwage.htm


Posted: Monday, April 08, 2013
Article comment by: Zig E.

And let me guess Joe - Those pesky antitrust laws should go as well. Then all the " big wigs " can sit around and decide what we, the general public, will pay for the product. They could go ahead and decide the appropriate wage to pay workers in the afternoon session of the same meeting. What could possibly go wrong ?

Posted: Monday, April 08, 2013
Article comment by: Ride The Wind

I agree, but I do think the taxpayer should determine the wages for the politicians in our government.

Posted: Monday, April 08, 2013
Article comment by: John A. Citizen

Obama spending more time on AF1 on "gun control" instead of passing a budget or creating jobs. Overkill and time to move on, Obama, do the job you are being paid $400,000 yrly for an stop your damn campaigning and wasting taxpayer's money.

Posted: Monday, April 08, 2013
Article comment by: Lena Sanchez

The US has been where feds didn't regulate wages and what did we get? Kids and poor working 12 hours 6 & 7 days a week for next to nothing. Families having lots of kids to help support the family. I know I am 75 years, the oldest of 10 kids who was there… Illiteracy rate was rampant because kids worked for $1.00 a day. I was lucky that the fed law that children under 16 must be in school was instituted… That’s how it was without fed minimum wage and fed laws… Employers – more than you can imagine - worked an employee 60 hour weeks for almost nothing but then fire them without paying them what they earned and went on to do it again to another employee, kids became ill from overwork and lack of decent food. So the feds had to step in and do something, as they should! States didn’t bother with laws in regard to the middle class or poor but catering to welfare for the rich and corporations saying it builds jobs. Until 2001 & 2005 when big business and very rich loopholes and tax breaks gave them freedom to not pay taxes but reward millions of dollars to CEO’s for getting rid of employees… Historical unemployment in 2007 was the highest unemployment since the great depression and continued until 2010… Oil companies pay no taxes yet receive millions of dollars in subsidies/welfare every year! In 2009 & 2010 GE corp. got a $13 billion tax rebate yet paid ZERO taxes? BofA, Chase, etc. pays little to zero taxes but get subsidies/rebates! When corporate welfare stops then paying down the debt, built up since these laws happened, will be easily done! Minimum wage increase to at least $15 will also help the economy!

Posted: Monday, April 08, 2013
Article comment by: Joey, Joey, Joey

Another article rife with misinformation. Why, didn't you add in the daily welfare bashing as well? ...

Come on, corporate profits are at an all time high. Commerce Department says corporate profits increased to 25.6 percent in 2012, the highest in any year since 1950 and far higher than the 19.9 percent level common in the years just before the economic collapse.

Corporations have the money for raises. They're just not giving it to the people whose labor produced the profits. However, those same CEOs, whose salaries have increased to 380 times those of the 'average' worker, are the ones spreading this disinformation (the gist of your rant) to 'you people'. Please ignore the big CEO behind the curtain.


Posted: Monday, April 08, 2013
Article comment by: What's What

The government should be allowed to determine anything except protect us from our enemies. You know. Do their actual job. Other than that they do not have a clue!

Posted: Monday, April 08, 2013
Article comment by: Tom Steele

Government was best when it was three percent of the economy and only taxed imports. As the revenue goes up for government, disposable income for us goes down. There is very little productivity from government as government has no need to be efficient. It has no competition. Therefor, economics is wasted and industry is left to struggle under the yoke of taxation and regulation so what can we expect to improve?

Posted: Monday, April 08, 2013
Article comment by: Dear Mr. Gorski

I admire your optimistic thinking about some employers. However, I think it's misplaced.

I don't think it's a question of what employers think they can pay. Many pay only what they think will raise their profit margins. Too many offer minimum wage, only part time work and no benefits ( sick, vacation leave, health care coverage, etc.). With profits for some running in the millions per year, they can certainly afford to pay these things. They simply don't want to.

Yet, they don't have any problems getting people to apply for these jobs. When a new mega-giant opens its doors, even with less than viable wages and benefits, there are huge lines of people applying. Your contention that people will not work for these employers is incorrect. They will because they have to.


Posted: Monday, April 08, 2013
Article comment by: Hokas Pokas

Bravo, Mr. Gorski!



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