Archive for Sunday, March 31, 2013

Battle resumes over Earned Income Tax Credit

March 31, 2013


Kansas government
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— Senate Vice President Jeff King is picking up where Gov. Sam Brownback left off in taking aim at the Earned Income Tax Credit, a refundable tax credit designed to help low-income wage workers and their families.

But unlike Brownback, who last year wanted to eliminate the credit to help pay for his proposed income tax cuts, King is pushing for support of a bill that would cut nearly in half the state version of the EITC and use that revenue to expand a property tax refund program for disadvantaged Kansans.

"Every dime of the money from the EITC will be used to help the elderly, low-income families and the disabled pay the property tax burden that is placed on them," said King, R-Independence. "It will help them keep their homes, help them stay in the state," he said.

But supporters of the EITC say one needy group shouldn't be helped at the expense of another.

"I have sympathy for Senator King’s desire to assist his constituents with property tax relief," said Sister Therese Bangert, of the Sisters of Charity of Leavenworth. "However, taking resources from working, low-income families is not a good solution and does not promote tax fairness," Bangert said.

Last year, the governor sought to eliminate the state portion of the EITC. The plan was to take two thirds of the savings and use those dollars to attract more federal dollars for programs designed to help low-income families. The remaining third of the savings was to go toward increasing the standard state income tax deduction.

Brownback ended up signing into law sweeping income tax cuts but the EITC was left standing after a furious pushback. This year, Brownback proposed more tax cuts, but didn't touch the EITC.

More than 200,000 Kansas families receive the EITC and the average state portion is $380 per household.

"In Kansas, the state EITC lifts thousands of children and families from poverty each year," said April Holman with Kansas Action for Children.

King's bill would cut that credit nearly in half, reducing the Kansas EITC from 17 percent of the federal credit to 9 percent. That would save the state $42 million, according to the Kansas Department of Revenue.

Under the bill, those revenues would be used to expand the Homestead Property Tax Refund program by raising the income threshold from $32,400 to $34,400, and increasing the maximum refund amount from $700 to $1,200.

"The disabled who aren't working are not helped at all by the EITC," King said. "They're helped dramatically by the homestead program. Your fixed-income seniors, who are in many parts of the state, including my own, forced out of homes they've lived in, due to tax burdens, sometimes forced across state lines because of lower property taxes, they're helped by the homestead and not the EITC," he said.

But Bangert said, "The elderly who are being forced to leave their homes from high property tax rates should be a separate concern for legislators. The two populations should not have to be in competition for the state’s resources," she said.


Michael LoBurgio 2 years ago

Reducing the EITC is a tax hike on 200k+ working Kansans

What is the EITC?

The Earned Income Tax Credit (EITC) gets and keeps people in Kansas working. It can only be claimed by people who earn income through work and pay taxes, and the credit is structured to encourage people to work more hours. At the federal level, it was designed to offset payroll, excise and income taxes paid by families with low- and moderate-incomes, leaving them with more to support their children and easing their transition from welfare to work. Because working families who receive the federal credit also pay a substantial share of their income in state and local taxes (sales, excise and property taxes that as a share of income hit lower-income families harder than wealthier ones), Kansas established its own EITC.

Who is impacted by the EITC?

In 2010, 211,262 families in Kansas (or 17.4%) benefited from the federal government’s EITC. Those same families received over $80 million, or $381 per household, through Kansas’s version of the tax credit and spent those dollars on basic needs in local communities in your district.

Kansans who work should be able to support their families and meet their basic needs. But low pay makes it difficult for many families to get by. The Earned Income Tax Credit (EITC) helps families who work pay for basic necessities. It encourages and supports work by giving low-earning families a boost in income and offsetting some of the taxes they pay. And it is the nation’s single most effective tool for keeping children out of poverty.

optimist 2 years ago

Wrong! It's a tax reduction for a significant number of working class families.

DScully 2 years ago

The Homestead refund not only helps those who live in homes, it also helps, or should I say helped, those who cannot afford a home and live in apartments. I know people who benefitted from that refund who live in apts, they were able to pay bills and put money back into the economy with the Homestead refund. Thanx to Sam the sham, they no longer can do that.

just_another_bozo_on_this_bus 2 years ago

Reinstate the income tax on the wealthy and the corporations they own in order to fund an expansion of the Homestead Property Tax Refund-- don't take money primarily from poor kids in order to fund it (while simultaneously increasing the sales tax on baby food.)

larrybill 2 years ago

Every person I know how gets the EITC brags about the $8000 refund check they get and how big of a TV they are going to buy. BlueKansas posts "The Earned Income Tax Credit (EITC) gets and keeps people in Kansas working. It can only be claimed by people who earn income through work and pay taxes, and the credit is structured to encourage people to work more hours. At the federal level, it was designed to offset payroll, excise and income taxes paid by families with low- and moderate-incomes, leaving them with more to support their children and easing their transition from welfare to work. Because working families who receive the federal credit also pay a substantial share of their income in state and local taxes (sales, excise and property taxes that as a share of income hit lower-income families harder than wealthier ones), Kansas established its own EITCs" . The EITC is a joke. It doesn't help transition people from poverty it promotes people to stay in poverty.

weeslicket 2 years ago

larrybill says its an $8000 refund a year for everyone he knows. the article states the average is $380 per year. previously, bluekansas uses the number $381 per year.

hmmm. something seems not quite correct here.

jonas_opines 2 years ago

Fed versus State. Although it's something of an exaggeration to say $8000 (yeah, exaggeration on ljworld, shocking!), Fed EIC refunds Can be easily in the 3000 to 5000 range if you have the right range of income (10k to 20k, more or less), and have a few kids.

They're also refundable, so you get them whether or not you owe any taxes. The refundable EIC is, pretty much, giving people money for no other reason than being poor and having multiple children.

thinkagain 2 years ago

Larrybill, if everyone you hang out with gets an EITC and brags, maybe you should hang out with different people.

tomatogrower 2 years ago

And maybe he should give the names of the people with whom he hangs out, since they seem to be scamming us taxpayers at the expense of those who can use that $380. I would say an audit of these friends of his should be ordered.

tomatogrower 2 years ago

Why haven't you called this in? Are you harboring these people you know?

Armstrong 2 years ago

The EITC is a license to be lazy. Case in point. Family X whom I have known for several years consists of 9 people. Dad the only "worker" in the family has a entry level job that pays entry level pay. ( Dad X does have higher paying skills )

I ran into Dad X at the beginning of this month and noticed several new toys in their rented home. Surprised at all the goodies I asked if he had gotten a new job. " No just got our taxes back so I got me a couple motorcycles and campin' gear for the kids and me" Dad X further explained If I make too much money I lose out on public assistance, EITC, school lunch/breakfast programs....

I guess the upside is they make enough money to keep themselves in Big Gulps, Budweiser and smokes every day.

just_another_bozo_on_this_bus 2 years ago

That's a great argument for implementing a true living wage, isn't it?

jhawkinsf 2 years ago

What do you suppose a true living wage would need to be for a family of 9 with only 1 worker?

Armstrong 2 years ago

It's his choice to work that job. Dad X has other options. Mom could get off her lazy Arse and work too. Living wage has nothing to do with their lifestyle choice.

just_another_bozo_on_this_bus 2 years ago

A living wage shouldn't be based on outliers such as the very unusually large family you posit.

ChuckFInster 2 years ago

Dude, looks like Dad X has other options but is choosing to stay in a low paying job

ChuckFInster 2 years ago

Anyhoo ? Golly, circle the wagons Festus!!!

tomatogrower 2 years ago

Ok, I see you one person and raise you two, Armstrong. My hard working sister and daughter who did, and they admit it, make really lousy choices in ex husbands, have received these credits. Mostly they have done things like catch up on their gas bill for the winter, fix their cars, buy shoes for their child. Oh yes, once my sister used it so she could buy a soccer outfit for her son. I guess that would be considered a luxury to you, but sports kept him off the streets. And my daughter bought some new clothes for herself one year, because she was working as a receptionist and her employer was hinting that if she didn't dress better, that she wouldn't have a job. Oh, and she wanted to keep her job, so she wouldn't have to go on welfare, which would cost tax payers a whole lot more money.

Bob Forer 2 years ago

I am sure a well-to-do conservative like you hangs out with the working poor. Your credibility is zero.

Armstrong 2 years ago

Armstrong is not a snob nor do I pretend to be an enlightened elitest like yourself.

appleaday 2 years ago

The issue of "future orientation" in people of different socioeconomic classes is complex and interesting and it's not clear whether the ability to think about the future or not "causes" eventual socioeconomic status or if it's the other way around. I do know that many families I work with, who are 3rd or 4th generation lower SES, have little ability to plan for the future and, when they get a little extra cash, tend to spend it on whatever they happen to want at the moment. Those of us who have learned the benefits of planning and saving, see it as wasteful, but I'm not prepared to judge what I haven't experienced. Here's an interesting article:

tomatogrower 2 years ago

This is why putting our education dollars toward teaching real life skills, instead of making testing companies rich, would be a great idea. My parents were poor and knew nothing about planning ahead. I learned good financial strategies from school. Integrating schools with different socio economic levels is also important, even more so than integrating them racially.

Keith 2 years ago

There is an awful lot of worrying about tax cheats at the low end of the income scale, and next to no worrying about tax cheats at the high end and corporations.

jhawkinsf 2 years ago

That's because much of the "cheating" being done at the upper end of the scale is being done legally, through deductions and loopholes. Because our very complex taxing laws favor those with the ability to access armies of lawyers and accountants with unique skills to access those hidden loopholes, it favors the wealthy and corporations. Eliminate the complexity and you will be going a long way towards leveling the playing field.

That said, once you argue that my deduction is needed or that my loophole is necessary, it will be that much harder to argue that their deduction or loophole is unfair. Eliminate them all and then resist the temptation to exempt anyone for any reason.

Jock Navels 2 years ago

eliminate the eic and raise the state minimum wage to a level so a person who works 50 fourty hour weeks makes more than the poverty level for a family of three - about $9.75 an hour.

Armstrong 2 years ago

Get ready to open your wallet, that increase is a pass through to the consumer.

Jock Navels 2 years ago

as it is, it's a pass through to the tax payer. and who pays state income tax in kansassippi now?

jhawkinsf 2 years ago

You're advocating for a 35% increase in the minimum wage. I've go to wonder, what type of business would be able to adapt to that type of demand?

I suspect your small town Kansas mom and pop grocery store, already under a great deal of pressure, would find it difficult to adapt to that large a change in it's employee costs. Costco in the nearby larger town will probably be able to adjust. I suspect your small town Kansas diner would be hard pressed to adapt while McDonalds and Burger King will be able to. I suspect your small town Kansas mom and pop hardware store will be hard pressed to adapt while Home Depot will.

Wal-Mart, Sam's, Costco, they will be fine. In fact, they employ many more targeted individuals that your proposal to raise the minimum wage will in fact reach a far greater number of individuals who work in those large box stores. But there is a downside, assuming there is the belief that mom and pop locally owned businesses have a place in our society.

BTW - Your proposal to raise the minimum wage 35% is substantially less than some of the other proposals I've seen in this forum. Those other proposals would seal the fate of locally owned businesses all the more quickly.

ChuckFInster 2 years ago

If the big corporations were cheating wouldn't they be in trouble with the IRS, FTC, and other government watchdog agencies ? Your analogy is flawed.

Cait McKnelly 2 years ago

Robbing Peter to pay Paul so that the Guv can pay off Mammon.

Fred Mertz 2 years ago

Someone explain to me how raising the minimum wage helps the poor. As I see it, when the business' labor cost increase they pass it onto the consumer so the "extra" income earned is negated. Plus, as a skilled employee, my compensation must increase because of the labor market. So the poor remain poor

jafs 2 years ago

It's an interesting question.

If you do a little research, you'll find that there are differing opinions on the minimum wage, and the results of increasing it.

It's not at all certain that labor costs would increase, especially at large corporations, where they could choose to pay those at the top less, so as to pay those at the bottom more. Or that your wages would necessarily increase as well.

It is true that businesses will pass on as much of any extra costs as possible to customers, of course.

But, if you think more broadly, if a lot more folks made more money, that would mean that some businesses could increase costs somewhat, but not necessarily commensurate with the increase in wages, because they'd get more business from folks working at other businesses, who could now afford to shop at their business.

So, folks who can only afford to shop at Wal-Mart now might shop elsewhere, increasing the customer base for other businesses.

chootspa 2 years ago

That would be true if they had no competition and no profit margins. Cosco pays employees much better than Sam's Club does, for example, and they both sell similarly priced goods.

Fred Mertz 2 years ago

Another question I have is why hasn't Paul Davis stepped up and announced that he will challenge Brownback? Time is running out for a viable candidate to step forward and begin fund raising and campaigning. Paul is really the only choice with a chance to win.

Richard Heckler 2 years ago

Sam ALEC Brownback and associates are quite skilled at pulling OUR tax dollars from the economy which is wreckanomics/supply side economics and NOT very good at economic growth.

Why would anyone give AMC 47 million tax $$$$$ to move across state lines? How smart can that be? Sam why did you do that?

If the Brownback big Government wanted to cut back on the EITC the big government would find ways to put people to work making better than poverty level wages. This seems much more fiscally responsible. Sam Brownback probably added quite a few to the list of folks receiving EITC when he fired thousands of hard working people for no reason.

Here's a thought I came across the other day that might help a situation.

How High Could The Minimum Wage Go? A 70% boost—to $12.30/hour—would help millions of workers, without killing jobs.

Working people almost being able to be self sustaining. Novel idea.

jhawkinsf 2 years ago

"How high could the minimum wage go" A 70% boost - to $12.30/hr. - would help millions of workers, without killing jobs."

Do that and my business is going bye-bye, along with the jobs and the taxes I pay. And when storefront after storefront goes empty, say goodbye to the tax base.

Hey Merrill, if I send between 20-30 unemployed people to you, will you hire them at $12.70/hr. or shall we just raise taxes on everyone to pay for the increased costs associated with their unemployment?

Richard Heckler 2 years ago

Did you read the article?

The more people make = the more they spend = more jobs created = more economic growth = more money spent = more tax revenue generated = more jobs created

jhawkinsf 2 years ago

It won't work in the real world. Many businesses make some profit, but not enough to absorb a 70% increase in labor costs. Those that can, the big box stores like Costco, are well known for their predatory business practices. While the little guy will be forced to pass on to their customers the increased costs of doing business, the big box stores will keep prices low, for a period of time. In case you haven't noticed, Costco's parking lots are already full. They will become more so when the little guys pass on their increased costs. Soon, the little guy will go out of business, causing unemployment, loss of tax revenue and a lowering of property values which will further reduce the tax base. Then Costco will raise prices.

For those workers that you're advocating for, those earning between the current minimum wage up to those earning your proposed $12.70/hr., 80% of them might benefit by getting a substantial pay increase while 20% of them will become unemployed. The unemployment problem in the U.S. is already great. Your proposal will only make that problem worse.

And when the government loses revenue from the loss of sales taxes, when government loses revenue from a lowering of property values, who do you think will be asked to pick the slack? The Koch brothers? Exxon/Mobil? Haliburton? Whoops, not Haliburton, they've long since moved their corporate offices outside the U.S., you know, for tax purposes.

Bob Forer 2 years ago

If the only way you know how to make is buck is to exploit the working poor, I suggest you come up with a better business plan.

jhawkinsf 2 years ago

How about this for a solution. I have several employees who earn substantially more than what Merrill suggests the minimum wage should be. They've worked for me for years, some, decades. How about I lower their wages, giving it to the guy who has worked for me for two weeks and doesn't yet know where we store things.

Therein lies the problem, Sycho. It's fun to toss around words like the working poor. But frankly, if an employee doesn't yet know where we keep supplies, he's not of much value to the business. Of course, there is the hope he will learn. But right now, today, he's being paid for what he is worth to the business. What you are suggesting is that an employee is worth minimum wage, just for showing up and then more if he actually provides some work to the business.

Bob Forer 2 years ago

Yes, it's fun to toss around words like the working poor. but from your perspective, I am sure it is more fun to exploit them for profit.

I hope the connection you make with the material goods you buy with your profits is an adequate substitution for making real connections with human beings on a level beyond exploitation.

Might I suggest church, or perhaps a more enlightened and modern form of moral education.

The example you use, that your new employees are too dumb to know where you keep your supplies, even after being on the job for two weeks, is indicative of the contempt you have for the people you exploit.

jhawkinsf 2 years ago

I don't exploit people. I work beside them. He's the deal, something I doubt you'll admit. Some people have very limited skills. Very limited. Some have poor working habits. Very poor. These are the people who are being hired at minimum wage jobs. They are not being hired as legal secretaries who have very specific skills. They are not being hired as para-legals, also with specific skills. And they are certainly not being hired as lawyers, with specific skills. They are being hired with just about no skills whatsoever with the hope they can develop the skills necessary that they might become of value to the business. If they do develop the skills that are of value to my business, I pay them more. But for the period of time when they are of very limited value to the business, for the time they are learning where we keep things, or for the period of time when they learn how we do things, yes, they are paid minimum wage because that's all they are worth to the company. Some don't learn the skills necessary. I usually give them about a month. If they don't, I let them go. Will you hire them Sycho? Will you sit them down at a desk with a computer screen and let them render some legal opinion? Will you pay them the prevailing wage for an attorney? Or will you pay them minimum wage? None of those, Sycho, because you're not hiring them at all, are you? I am.

Bob Forer 2 years ago

Your argument is the same tired argument used by others who exploit the less fortunate among us. In my opinion, anyone who is able and willing to perform menial labor should receive a living wage. Anything less ins our great country of wealth is simply unacceptable from my perspective.

This is not an economic issue that is subject to debate. it is a moral issue. And you and I obviously have different morals.

And yes, I run a small business, and when i hire labor, they receive a minimum of $12.00 an hour. I have too much shame to hire human being (and work along side them, as you claim to do) for an amount that is below a living wage.

My parents taught me that it is wrong to exploit other human beings. Apparently, you didn't learn the same lessons, or if you did, you choose to ignore them out of selfishness.

It is indeed regretful l that some human being are able to enjoy wealth that is the product of the exploitation of the sweat and labor of other persons,. I guess people like you are able to rationalize it by believing those they hire are not worthy of a decent life because of their personal shortcomings and that by hiring them at a substandard wage, you are doing them a favor.

Slave owners had a similar perspective on the humans they abused.

Frankly, people like you disgust me.

Now, go away and count your money.

jhawkinsf 2 years ago

You don't know me and the things you are saying are nothing short of slander. I treat my employees well. I work right beside them, doing the exact same work they do. So I know the value of their work. And while you say it's not an economic factor, it is. At the end of the day, the books need to be balanced. Bills need to be paid. Taxes need to be paid.

Interesting that you should mention $12/hr, because I make less than that. Of course, I work 80 hours per week, as does my wife, so though we have a comfortable income, it's the result of years (read: decades) of hard work and sacrifice. Whatever money I do count, I know in my heart that I earned every penny of it and will apologize to no one for it.

Bob Forer 2 years ago

I am entitled to my opinion, and I am also entitled to state such opinions pubilcly. What i wrote was not slander. Learn some constitutional law before you throw around terms you obviously know nothing about.

And by the way, if you have been running your business for decades and find yourself working eighty hours per week at less than $12.00 per hour, it sounds like you probably have a poor business plan and/or poor business skills. But then again, since you claim that people are paid their true worth, perhaps that is all you are worth.

Bob Forer 2 years ago

I am entitled to my opinion, and I am also entitled to state such opinions pubilcly. What i wrote was not slander. Learn some constitutional law before you throw around terms you obviously know nothing about.

And by the way, if you have been running your business for decades and find yourself working eighty hours per week at less than $12.00 per hour, it sounds like you probably have a poor business plan and/or poor business skills.

But then again, since you claim that people are paid their true worth, perhaps that is all you are worth.

jhawkinsf 2 years ago

Felt so good about that post you decided to make it twice, huh. Need to learn computer skills?

I work because I enjoy it. I've always enjoyed it. And now that I could easily retire, I continue to do it because I enjoy it.

Money is not as important to me as you think it is. I enjoy being productive. I have had several successful businesses. I'm not bragging because as I've said here publicly, I had one colossal failure as well. Such is life.

Perhaps I am earning what I am worth. Of course, that means I have nothing to apologize for, which works out well, because I won't. I know in my heart I earned what I have. No apologies needed and none given.

But let me ask you this question, sycho. You say you run a small business and pay your employees $12/hr. Why don't you pay them the going rate for, oh, say, a lawyer? Surely lawyers are not better human beings that your workers, are they? Why treat them with so much less dignity, and pay, as a lawyer would get?

Bob Forer 2 years ago

I pay lawyers $10.00 per hour. That's about all they are worth.

jhawkinsf 2 years ago

So you'll pay someone less than your stated minimum because the value of their work is less than that minimum, and despite your conscience, which demands you pay them more. I do the same with dishwashers and bus persons, depending on the value of their work. See how much we can agree about. We just needed to find a profession we both held in low regard, lawyers.

jafs 2 years ago

While by no means guaranteed, it's very possible that if a lot of folks making minimum wage make more, they would spend it at your business, which they can't afford to do right now, increasing your customer base, and thus your revenue.

Adjusted for inflation, the minimum wage from 1968 would be about $10.50 today. If the point was to provide a minimum level of earning power for those at the bottom, shouldn't we at least adjust it for inflation over the years?

jhawkinsf 2 years ago

How many big stores were there in 1968? Was there a McDonalds on every corner? How much of our consumer goods were produced in China or Bangladesh in 1968? That's who we're competing against.

And as I said in the past, consumers are already voting their preference with their wallets. We all like to talk bad about Wal-Mart, about how they don't pay enough, how they mistreat their employees, how they import goods from China, undercutting local businesses. Yet their parking lot is full.

Local businesses that compete with those guys are not making huge profits. They are making some, but not a lot. Raise the minimum wage a percent or two, or even three, and they'll adjust. Raise it 70%, as Merrill suggests, and they'll go out of business. Again, while Wal-Mart employees will enjoy a pay increase, my employees will be unemployed. They employ far more people, so yes, you'll get some bang for your buck. It won't help my employees, maybe Wal-mart will hire them on. Maybe Merrill will. Maybe you'll go into business and ire them, Jafs.

jafs 2 years ago

You assume that people have a choice, and many don't, because those at the bottom don't make much. Folks with more disposable income generally don't shop at Wal-Mart, or much.

It's all connected. If you pay people less, then they have fewer choices, and will generally choose the cheapest option.

Are you saying that even if people make more money, they won't frequent your business? If so, perhaps you're not offering enough "bang for the buck" - isn't that supposed to be the idea of competing businesses in a capitalist economy?

jhawkinsf 2 years ago

Government has the right to tax businesses. They have the right require permits and it's associated fees. They have the right to regulate. No one is denying that. But when the government comes in and mandates a 70% increase in employee wages, that's not capitalism. In fact, that's just the opposite.

You mentioned 1968. You might as well have mentioned 1868 for all it matters. The fact is that the marketplace has changed a lot since then. Look at Merrill's many posts. He's talking about Exxon/Mobil. Or Wal-Mart. Or Koch Industries. Try inserting his ideas while thinking of a diner in Eudora or a mom and pop grocery store in Tonganoxie. Trying to squeeze those business models into a Costco solution won't work, not in the real world. You'll drive those businesses out of business, real world. I really don't care what article has been written, what study has been done. I'm talking real world. Real world you'll be bumping up the wages of 80% of those at the lower end and you'll be causing the other 20% to become unemployed. Real World. You'll be expanding the business footprint of big box stores while small storefront properties empty. There will be a decline in property values and property taxes. Real world. There will be less shopping choices for consumers and as we know, with less choice, less competition, will come higher prices. Real world. And who do you think will make up for the lost tax revenue? The Koch brothers? Costco? Or the middle class? Real world.

You know, Jafs, you've been very coy in this forum as to what it is that you do for a living. I know more about your wife's work that your own. I do have my suspicions, but I'll keep that to myself. But I will say that I sense you have little real world experience. Let me tell you this, a degree in social work is fine, but a good social worker has experience to back that up. Likewise, doing business in the real world involves more than looking at charts in some magazine. There is no substitute for experience.

jafs 2 years ago

That entire post isn't responsive to mine at all.

Are you opposed to any minimum wage at all? That's a likely conclusion from your post. If not, then I say it should be adjusted for inflation, otherwise it doesn't do what it's supposed to do.

At $7.25/hour, you're probably taking home about $1000/month, without any sort of health insurance or other benefits. And, you're probably not eligible for free health care, because you make too much for that.

I'll conclude that your "real world" experience doesn't generate a competitive business, if a lot more folks with a lot more money wouldn't go there.

jhawkinsf 2 years ago

I am not opposed to a minimum wage. And perhaps it should have been increased a little at a time, over the years so that it would have kept up with inflation. But that didn't happen. To suddenly impose a huge increase in the minimum wage would drive many businesses out of business.

Let's look at things logically for just a second. Many in this forum say things like businesses could simply reduce their profits. They are suggesting that many businesses exploit their workers so that they may simply put huge profits into their pockets. But if what I'm suggesting is true, that businesses will go out of business, that's not the type of business I'm talking about. The type of business I'm talking about is the type that is making a modest profit. Substantially changing their labor costs will turn them from a modestly successful business into a modestly unsuccessful business. Those are the businesses I'm talking about. The mom and pops. If it were as simple as simply reducing profits, sure businesses would stay in business because they are still profitable. But not all will fit into that category. Small businesses making a small profit will become unprofitable and fold. And they'll be doing so because the government has imposed a substantial burden on them. I never said they didn't have the right to do that. But I do question the wisdom of doing so.

jafs 2 years ago

Why do you continue to ignore the new customers that may likely result from increasing the minimum wage?

If folks can only afford to shop at Wal-Mart now because they don't make enough to shop elsewhere, it's certainly possible, and I'd say likely, that they might choose to shop somewhere else if they could afford it. If you ever go there, you find that almost all of their customers appear to be very low income folks.

I understand the differences between small and large businesses, and generally speaking, I wouldn't treat them the same across the board because of those differences. But even with your business as an example, you could make different choices and retain employees at $10.50/hr if you wanted to, I'm sure of it.

You may not want to, or may not feel it's "fair", although that's not a term you like much. But, I'm sure there's room in your budget, assuming that you're as successful as you say you are. And, if it's a business that provides good value, then you'll get more customers as well.

Capitalism is brutal, on both employees and small business owners. The only reason I'm not quite as "anti capitalist" as bozo is is because I see the possibility of "win win win" situations. Meaning that customers get good value for money, employees make a decent living, and business owners make money as well. But, there are fewer and fewer examples of that I can find, which is sad and unfortunate.

jhawkinsf 2 years ago

If you read my post above, I replied to another poster that my wages are less that what he paid his on an hourly basis, though I made up for it by working 80 hours per week. As does my wife. And we've done it for decades. So success came at a price. I won't apologize for it.

But the fact is that I tend to keep my prices low, with a small profit margin, in order to compete with the big guys. I can't offer a "dollar menu", like McDonalds. My business plan must be something different. A radical change in my business plan, one imposed by government, will make my modestly profitable business unprofitable. Maybe. I'm not sure. But I'd rather not take that chance. Would you?

In the long run, a more well paid for population might spend more of their money in my business. In the short term, I might go out of business. Hmmm, how's that for a fine business strategy?

I see that you concede that large and small businesses might need to be treated differently. That's been my point all along. Others in this forum are not too keen on that idea. Merrill mentions strategies that reminds me of Exxon/Mobil, not a diner in Eudora. Sycho proposes sweeping changes, treating a small town grocery store the same as Costco. Real world, I don't think those are wise decisions.

jafs 2 years ago

I said "across the board" - I think I would create the same minimum wage laws for both though.

If your prices are low, then there's even a greater chance that folks with more money will patronize your business, even if they rise a little bit.

And, if your prices are low, and you treat your employees well, but you still have to work 80 hours/week, and don't make much money, then you're getting the short end of the stick, assuming your goods/services are of decent quality. Why are you so quick to suggest everybody else should go out and start their own business?

jhawkinsf 2 years ago

I work so many hours specifically to keep my labor costs down, which in turn allows me to keep the quality of my services high at a reasonable price. But the fact is that if I suffered a bad six months or a bad year, it just wouldn't make sense for me to stay in business. Why, on the hope and prayer that this radical change imposed by the government might, maybe, perhaps work itself out in the long run?

That gets me back to the statements I have made previously, what type of business can survive a dramatic labor cost increase for a year? It's the large ones, the Costcos, the Wal-Marts. It's not the small town Kansas mom and pops.

jafs 2 years ago

Doesn't sound like a great deal to me - lots of work and stress for little reward.

But again, why do you assume that a rise in the minimum wage would result in a bad year for you? As soon as those at the low end make more money, they're likely to spend it, and very possibly at your business, given your description of it.

Patricia Davis 2 years ago

Hiring people for a non living wage and bleating that one's business would go down in heaps if one had greater expenses (and less profit) is a step cousin to slavery. If your business can only stay alive through exploitation, I say "bye-bye."

jhawkinsf 2 years ago

You've already said bye-bye, whenever you shop at Costco or Wal-Mart. Their parking lots are full of people who have said bye-bye. The only question left is are you willing to either hire all those displaced workers or are you willing to have your taxes substantially raised to provide for those people and have your property taxes raised substantially to compensate for the lost taxes paid for by the businesses that disappear.

Sorry, but if you present businesses with a lose/lose proposition, you will be presented with the same option.

Bob Forer 2 years ago

The only bad part of your example that I would have a hard time stomaching is the use of my tax dollars to pay for your support.

jhawkinsf 2 years ago

No worries, Sycho. I'll simply ease into a well planned and well deserved retirement. I'll ask nothing from you.

Richard Heckler 2 years ago

Top level management and corporate CEO's receive wage increases,golden parachutes and shell out to stockholders plus pay out to political campaigns. Who has gone out of business as a result?

Gasoline prices go up yet have heard of no one going out of business.

Medical insurance has increased annually for decades yet no one goes out of business.

Cost of political campaigns have risen astronomically yet no one goes out of business.

Millions have lost jobs due to fraud in high places not to wage increases.

Wages rarely increase to keep up with the above increases? Isn't there something wrong with this picture?

just_another_bozo_on_this_bus 2 years ago

The effects of raising the minimum wage on both employment and inflation have been well studied. The results of those studies is that there is minimal effect on either.

jafs 2 years ago

Well, it's not that clear from my research - there's evidence in both directions, especially on employment.

just_another_bozo_on_this_bus 2 years ago

The effect is very minimal, not non-existent. Regardless, the minimum wage at its current level is a license to exploit, and there's no justification for that.

And while raising it might cause some businesses to hire fewer employees, the increased income of workers at the low end of the scale means they have more ability to spend at other businesses, who in turn hire more employees (at higher wages.)

jonas_opines 2 years ago

You might also lose them at loose.

Unless this is like hunting. Loose the Lefties at the Logically! Loose them now!

Armstrong 2 years ago

IKU57, I tried that line of questioning with Boz. You won't get an answer

jafs 2 years ago

Not at all necessarily true.

First, there's nothing "artificial" about adjusting the minimum wage to keep pace with inflation, which would bring it to about $10.50/hr. Next, large corporations could simply choose to pay those at the top less, and so pay those at the bottom more, without raising prices or anything else.

And, the net effect of many people having more money is logically that they will spend it, thus creating more customers (not necessarily at the same businesses, of course).

Smaller businesses might feel it more, I'll grant that.

jafs 2 years ago

Inflation is a rise in the costs of goods and services.

The causes of inflation are multiple, and complex.

You seem to be mixing two things together, unemployment and inflation - I'm not sure why. And you're also mixing up private businesses paying higher wages with government programs.

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