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Brownback's former tax consultant criticizes federal minimum wage as 'black teenage unemployment act'

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Art Laffer, the $75,000 consultant who helped shape Gov. Sam Brownback's tax changes, called the federal minimum wage "the black teenage unemployment act."

While on Fox News on Wednesday, Laffer said the minimum wage "makes no sense to me."

He added, "I mean, honestly, it's just the teenage — black teenage unemployment act, and this is the very groups that we need to have jobs and not be put out of work because of the minimum wage."

Laffer argued that more teenagers would be hired if employers could pay them less than the $7.25 federal minimum.

His comments were made during a discussion on the possible extension of unemployment benefits for the long-term unemployed.

In 2012, Laffer, who is considered the father of supply-side economics, was hired by the Brownback administration for $75,000 for consulting work on the governor's tax plan.

Laffer championed Brownback's plans to cut income tax rates, eliminate credits and deductions and rely more heavily on the sales tax.

At the time, Laffer also supported Brownback's plan to end the state portion of the Earned Income Tax Credit, which helps low-income, working Kansans. Later, Brownback backed off that proposal.

Comments

Bruce Bertsch 9 months, 2 weeks ago

What should we expect? Laffer is a discredited economist who created the greatest redistribution of wealth in history...upward to the rich from the poor. His is idea of reducing taxes to increase business opportunity, commonly referred to as supply side simply does not work in a demand based economy. Brownback's grand experiment is proving this again in Kansas. Its also interesting that most minimum wage jobs are not held by teenagers but by the recently unemployed adults, making his comments moot.

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William Enick 9 months, 2 weeks ago

Yes...the place to be in 2014 if you own a business and want cheap labor is Vietnam. 28 cents an hour...it went done there & it will go down here....Unless...

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Andrew Dufour 9 months, 2 weeks ago

Yes people when will we learn, if only employers could pay the unemployed $2.13 an hour everyone would have a job, imagine the Utopia that would create. Of course detractors would say that the market would dictate a solid wage but with 3 unemployed for every job I'm pretty sure the market would dictate a dismal wage that workers would be forced to take. But since people are living so lavishly on minimum wage now I'm sure cutting it down to next to nothing would be a boon for our State.

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Larry Sturm 9 months, 2 weeks ago

.

That is a racist statement if there ever was one. BROWNBACK AND LAFFER ARE BAD FOR KANSAS.

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Fred Mertz 9 months, 2 weeks ago

The unemployment rate for black teenagers is around 43 percent. What good is it raising the minimum wage if people can't get jobs?

What is better, to have a high minimum wage that deters businesses from hiring teenagers or paying teenagers $2.30 an hour and letting them gain work experience that might allow them to advance to higher paying jobs?

Can they support themselves on such a low wage? Of course not but they are not supporting themselves now either.

43% unemployment is horrible.

It is not racist to point out how a policy will hurt a subgroup of teenagers.

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Andrew Dufour 9 months, 2 weeks ago

http://www.bls.gov/opub/ted/2013/ted_20130325.htm Statistics on the minimum wage. This serves to make two points. 1: only 4.7% of people make the minimum wage ergo it's not like employers are barely scraping being forced to pay an excessively high wage as 95% of employers pay more than the minimum wage. Thus, it's fairly foolish to argue that the minimum wage is depressing jobs because if that were the case a significantly higher percentage of employers would pay the minimum wage. 2: While many people making the minimum wage are young, they're not all a bunch of teenagers. Roughly 30% of those making the minimum wage are over 24 years old. Dropping said minimum wage to as you suggested 2.30 an hour would force people trying to support a family onto a great deal of government programs and probably make most of them homeless.

Finally, study after study shows that raising the minimum wage does not result in a depressing of job creation. Generally, what happens when the minimum wage is increased is. . . the minimum wage increases. There certainly is a threshold at which it would have a negative effect on hiring but 2-3dollars higher than it is today is not that threshold. If the minimum wage even kept up with inflation based on 1969 numbers it would be 15.00 an hour now, if it kept up with inflation and productivity it would be 22.00. I'm not suggesting a 22.000 minimum wage, what I am suggesting is that raising our dismal 7.25 would not destroy our economy.

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Steve King 9 months, 2 weeks ago

Not a racist statement? Are you kidding us? Is that you think? He said nothing about a "subgroup". What he said was:

"I mean, honestly, it's just the teenage — black teenage unemployment act, and this is the very groups that we need to have jobs and not be put out of work because of the minimum wage."

So only black teenagers make minimum wage? What a crock. And 30% of minimum wage earners are over the age of 24? I call foul. Isn't most of Walmart minimum wage? And then they educate their employees on how to apply for food stamps!

The minimum wage keeps the vultures from paying people next to nothing for low skill positions. Unfortunately not everyone can be a rocket scientist and as pay scale follows one's skill set some are less fortunate and need a minimum substance to just exist.

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Amy Varoli Elliott 9 months, 2 weeks ago

Technically if a business pays their worker $7.30 they are not paid minimum wage, a lot of big box companies will do this to avoid being criticized for paying minimum wage.

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Fred Mertz 9 months, 2 weeks ago

Black teenagers have the highest rate of any group. Pointing out that a policy will hurt them even more is not racist.

If someone said this new law would result in the police profiling teenagers, black teenagers, no one would consider it racist. The same applies here. It is not racist to point out that raising the minimum wage would hurt black teenagers. You may disagree that it will hurt them but to say it isn't racist.

On average Wal Mart employees make more than minimum wage. Not much but more.

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Fred Mertz 9 months, 2 weeks ago

Doesn't make me uncomfortable and I still disagree.

Are the people who say Kobach's voter ID law hurts minorities also racist? Same type of generalization.

You just hate Brownback and anything related to him and will try to discredit him by using the race card. Old and ineffective.

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Thomas Bryce 9 months, 2 weeks ago

Don't Have to use "The Race Card". Brownback is Discrediting himself and His Party by HIS OWN Actions. Interesting that conservatives see Racism only in others and not in themselves and other members of Their Own Party. That "Holier Than Thou" attitude will be your undoing. Elections are coming. The Results of "Brownback's Experiment" are showing. Time for the Pendulum to swing.

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Fred Mertz 9 months, 2 weeks ago

Thomas think and say what you want about Brownback but this wasn't about him. Labeling everything racist has the same effect as crying wolf. People are less likely to respond to true instances of racism.

Fortunately I am not a member of the GOP and have little love for them so I am more inclined to view issues through a less jaded lens than the fanatics in both parties do.

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Thomas Bryce 9 months, 2 weeks ago

First, I apologize for assuming you were a GOP Member. My Bad. Second, i agree with your statements on Racism. So overplayed that most are confused and do not recognize real racism when they see it. Third, I do not hate Governor Brownback as you seem to believe any one who disagrees with his policies must. He does not rate that degree of emotion from me. I believe He is Bad for Kansas, Yes. But ,I don't Hate the man.

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Richard Heckler 9 months, 2 weeks ago

Raising the minimum wage is not about black people. It is about families being able to sustain themselves without food stamps. Wal-Mart and McDonald's could afford to do this without increasing their store prices. Increased minimum wage would unfortunately create more sales for both giants.

Wal-Mart money is busy closing public schools throughout the USA in hopes of increasing their personal wealth further. A detriment to society.

The more money people make the more they spend and invest.

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Richard Heckler 9 months, 2 weeks ago

Wal- Mart and McDonald's can afford $15.00 per hour. It seems to me CEO wages and their golden parachutes are a drag on corporate budgets and over rate the individuals at the same time.

Robert Reich, who certainly knows a thing or two about labor and economic policy, says it's time for some of the nation's largest employers to start paying their workers a living wage.

In a petition he launched on MoveOn.org on August 26, Reich, who served as Secretary of Labor under President Clinton and is also a Huffington Post blogger, urges corporations like McDonald's and Walmart to increase wages so workers can finally "get a fair share in this economy." The petition, which had 6,956 on Thursday afternoon, is to be delivered to McDonalds CEO Don Thompson and Walmart CEO Michael Duke.

“Your typical employee is now earning $8.25 to $8.80 an hour,” Reich states in the petition. “[Walmart and McDonald’s] can easily afford to pay [workers] $15 an hour without causing layoffs or requiring price hikes.”

In the petition, Reich points out that Thompson earned $13.8 million last year, which is 800 times what a typical McDonald’s worker made. Duke's $20.7 million pay package in 2012 was more than 1,000 times what a typical Walmart worker earned.

Watch Reich's full video. http://www.huffingtonpost.com/2013/08/29/robert-reich-wages-mcdonalds-walmart-_n_3837762.html

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Brett McCabe 9 months, 2 weeks ago

First off, if you are going to post, why not have the courage to use your real name?

Secondly, and I'm not sure how many times this has to be explained (and proven): running the economy and running a business are not the same thing. Reich knows quite a bit about running an economy, but you may be able to outsmart him at selling hot dogs.

Finally, I would guess that most CEO's work approximately half-as-hard as most of the employees who work for them. And that's being generous.

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Andrew Dufour 9 months, 2 weeks ago

Mr. Richards, do you have ANY idea how many minimum wage workers work 2-3 jobs and EASILY work 80 hours or more a week. It is incredibly disingenuous to assume they're all lazy bums that are only poor because they don't want to work hard. I don't doubt that CEO's work hard and have a lot of pressure on them but that discounts the incredible pressure and stress that comes with living paycheck to paycheck and wondering where your child's next meal is going to come from. We can quibble about reasonable CEO pay and whether they're worth over 1k times as much as the average employee but to argue that if only poor people were smarter and worked harder they'd be just as successful is complete total bunk.

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Fred Mertz 9 months, 2 weeks ago

Andrew how many minimum wage earners work 2-3 jobs. This is an important fact in the discussion. Looking forward to finding out the answer.

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Andrew Dufour 9 months, 2 weeks ago

Brock, how many CEOs are there of multi-million dollar Corporations. If those numbers are equal then I guess it doesn't really matter, my point is still valid that just because you're working and making minimum wage doesn't mean your lazy.

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Michael LoBurgio 9 months, 2 weeks ago

88.3% of those who would be helped by a minimum wage increase are at least 20 years old.

Restore Kansas Paul Davis for Governor

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Glenda LaRue 9 months, 2 weeks ago

This minimum wage issue is not about teenagers. It is about people that have to work to support themselves or contribute to their families support. Those are the people who need to have the minimum wages raised . Let every politician and every corporate executive live on minimum wages for a year not touching their own wealth. Then they are qualified to make these changes. Our alternative is voting them out of office. What about our Veterans Keith Richards? Did they also make a bad choice ? They served there country. What did you do?

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Steve King 9 months, 2 weeks ago

Poor life choices? Like being born with a learning disability? As the father of a special needs child I have call you out for your simple minded callousness in that statement. He will have to struggle all his life to try to earn a decent living because of the choices life befell him. And because some heartless CEO won't pay a living wage to their "head count". I've been there and I've heard the same callousness in staff meetings where these titans consider their employees less than common chattel so the statement their earn every penny is a crock.

In Lawrence, they consider $17.50 a minimum living wage. So how is someone to raise a family on less than half that? And then start cutting their benefits because it will force them to go get a job. I keep hearing this and I keep wondering where are these jobs? Currently there are 3 people chasing every 1 job opening. Fundamentally there are no jobs available for 2/3 of these citizens.

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Fred Mertz 9 months, 2 weeks ago

A corporation has no obligation to pay a living wage. They only need to pay enough to attract the quality of worker they need to run their business and be profitable.

You, not corporations need to provide for your son today and in the future. I hope he can develop and acquire the skills he needs to live a full and independent life but it is your responsibility to help him not a corporations.

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Fred Mertz 9 months, 2 weeks ago

The minimum wage is a feel good solution but doesn't solve anything. People are still poor and the number is increasing. We need to focus on real solutions.

I wonder how many people would support increasing the minimum wage if they had to pay for it directly. It is easy to be generous with other peoples money. And I say directly because we as consumers pay for it in higher product or service costs.

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Andrew Dufour 9 months, 2 weeks ago

How does he provide for his families future. . . umm via being paid by the company he works for. There are unfortunately hundreds of thousands of people that are completely dependent upon the corporations to support them and their family via a livable wage. And it's also in the corporations self interest to pay a decent wage because guess what, those people are going to take that money and put it right back into the economy.

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Brett McCabe 9 months, 2 weeks ago

The increased minimum wage is largely necessary because of the near-demise of unions in the country. Unions ensured good wages, benefits and retirement for their members. Now, without them, the electorate must become a union to negotiate, en masse, health benefits (thank you ACA), better wages and fairness in the marketplace.

Interestingly, most large businesses hate unions as much as they hate an increased minimum wage or universal health coverage. And please spare us the "unions almost drove the auto industry out of business" argument. Every time I hear it, I form a mental picture of 5 or 6 line workers at a GM plant sitting across the table from some Harvard MBA's and Georgetown law graduates during the contract negotiations. Those poor, dumb executives getting taken advantage of by those line workers!

Unions saved the American worker. Without them, we'll need to do it ourselves. Raising the minimum wage is only one step of many that needs to be taken.

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Lucas Hachmeister 9 months, 2 weeks ago

It is strange that so many of us equate life circumstances to personal decisions made by the individual. For instance often times I hear people comment on how a poor person deserves to be destitute because of the bad choices they made just like a rich person deserves all that wealth because of the hard work and excellent decision making they employed. This view point is an extreme over simplification of the issue and has very little data to back it up. The reality of our world is that all people's lives are at the mercy of a chaotic and often times brutal system forged throughout many millions of years of random events and natural selection. To judge a person by their lot in life is to ignore all of the circumstances beyond their control that lead them to where they are now. Sure the CEO of a large privately held company has made a number of smart decisions to help him get to where he is in life but this is only part of what got him there. There are always a multitude of factors beyond our control that help us attain success or plunge us into the pit of despair. Many of the very wealthy sole proprietors I have worked for in the past had only achieved success ultimately because of their family's fortune. This factor was completely beyond their control since these fortunes were accumulated prior to their birth and yet it had a huge impact on what level of success they experienced in their lifetime. The hilarious part is I have heard many of these people who came from a very wealthy family attempt to make the case that they somehow had more to do with the level of success they have attained than the millions of dollars that repeatedly bailed them out of foolish investments and failed business endeavors. Of course as their employee I would just hold a straight face and keep working away at the project at hand to ensure that money kept flowing through the door.

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Fred Mertz 9 months, 2 weeks ago

But for the grace of God, there go I..... This is very true and anyone who is living a good life should recognize this as a truth. They should also recognize that life isn't fair and others are much less fortunate than they are. They cannot change that life isn't fair, but they can choose to give back and help others less fortunate than themselves.

I believe this but I also believe I have no right to legislate charity, whether it be a corporation or an individual. I also believe we as a society need to figure out how to lift all our citizens out of poverty. Yes, there will always be the poor because poor is a relative term in a sense. What we need to do is create a system, a culture and an environment where we eliminate poverty and create opportunities and true hope for people to move from being poor to middle class and beyond.

We need to hold people accountable for their actions but in a way that doesn't punish children and force them to live in poverty. Breaking the cycle of poverty starts with them. The key to winning the war against poverty is nutrition, medical care, and early education for children from day one of their life.

It is the parents responsibility to do these things but we will either pay now or later if we don't do it. Doing now will pay dividends later.

I will never be convinced that government should set wages paid to an employee. Ensure safe work conditions - yes, but set wages no.

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Steve King 9 months, 2 weeks ago

Lucas; well said.

Maybe if you worked during the Industrial Revolution under the lash of J.P. Morgan, Rockefeller, and Carnegie in their sweat shops you'd be more convinced of the need for government protection of the workers, minimal wage thresholds included.

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Kevin Elliott 9 months, 2 weeks ago

racially and economically stupid comment, of course he would be a friend of Brownback.

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Betty Bartholomew 9 months, 2 weeks ago

What is this claptrap that the min wage is meant for teenagers and entry level workers (and by the way, who the heck do you think is doing the work at McDonalds when said teenagers are - supposedly - in class)? From the FLSA, which establishes the minimum wage, page one:

"(a) The Congress finds that the existence ... of labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers (1) causes ... to spread and perpetuate such labor conditions among the workers of the several States; (2) burdens commerce and the free flow of goods in commerce; (3) constitutes an unfair method of competition in commerce; (4) leads to labor disputes burdening and obstructing commerce...; and (5) interferes with the orderly and fair marketing of goods in commerce. That Congress further finds that the employment of persons in domestic service in households affects commerce. (b) It is declared to be the policy of this chapter, through the exercise by Congress of its power to regulate commerce among the several States and with foreign nations, to correct and as rapidly as practicable to eliminate the conditions above referred to in such industries without substantially curtailing employment or earning power."

In case you missed it, the FLSA is concerned with "labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers..."

And honing in further, "...maintenance of the minimum standard of living..."

Seeing as how the FLSA deals exclusively with wages and hours and how the FLSA is applied, I think it's entirely fair to say that yes, the minimum wage was intended to provide a minimum standard of living, one which today's minimum wage does not and cannot meet.

When one further includes the stance of FDR, one of the main proponents of the FLSA and the man in charge when it was passed, how can people continue to argue that the minimum wage was not meant as a living wage? Most tellingly, after the passage of NIRA (the failed predecessor to the FLSA), he penned, "It seems to me to be equally plain that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country." So no, the minimum wage was not meant to provide a middle class standard of living, but it certainly was meant to lift people out of abject poverty, which today's minimum wage does not and cannot do.

It is unfortunate and infuriating that companies and the politicians those companies have lobbied have managed to turn a vehicle for the betterment of our society into a complete wreck, and even more infuriating and unfortunate that people have fallen for their "minimum wage was never meant to be a living wage" mouth garbage.

FDR links: http://bit.ly/1d1pxeX | http://bit.ly/1ai1Lid | http://bit.ly/1iYa6NV

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Eileen Emmi Jones 9 months, 2 weeks ago

This is shockingly racist. Even more shocking is that the consultant felt no shame in making that racist statement.

"Governor Davis" is sounding better to me all the time.

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Steve King 9 months, 2 weeks ago

Thanks Betty. That should keep them quite for a while.

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