Daily Archives: January 7, 2013

January 7, 2013 · 9:46 PM

Would A $15 Minimum Wage Work?

Jobs Cityscape - http://mariopiperni.com/

Seems there’s no real concern for “the people”…just “the corporations”.  Ask the SCOTUS Justices who voted to allow Citizens United.

Mario Piperni

Diana McGinness believes so.

“Cut, cut, cut entitlements!”

“Reduce the debt!”  We need to broaden the base (i.e more taxes on the 47%)!

“Reduce the size of government!”

Turn on any cable news network and that’s all you’ll hear.

And the only answers the politicians have are:  raise more taxes and/or cut entitlements (not defense, of course) or both.

We hear the GOP wants to cut food stamps and other programs that help the poor.  That something must be done with SS and Medicare because they’re going broke and Medicaid needs to be cut back, too, because we just don’t have the money.  And the Democrats refuse to let these programs take a hit.

People are tired of paying taxes to help the “lazy 47% who don’t pay taxes, is the complaint.

The economy is too sluggish, it’s not growing!

So we’re in gridlock as usual with no answers that either side is willing to accept.

Is there an alternative?  Maybe.

What if we could add  $169,260,000,000 to the economy?

Add $25,389,000,000 to the treasury each year in the form of taxes (without increasing anyone’s taxes.  Over 10 years, that’s $2.5 trillion add to the Treasury that could be earmarked to reduce the debt/deficit.

Reduce the costs of programs providing food stamps, housing vouchers, and the big one – Medicaid?

Collect $10,494.120,000 more annually in FICA premiums to shore up Social Security and Medicare.  That’s over $1 trillion in 10 years, that would surely strengthen each of these programs for the coming years without making major changes in the program.

How, you ask?

Increase the minimum wage to $15.00.

Using 2010 numbers, the poverty level for 1 person under 65 was $11,344.  That’s someone making $218.15 per week, or $5.45 an hour.  The working poor receive assistance in the form of housing vouchers, food stamps, and Medicaid and pay little, if anything in the form of federal taxes.

Using the federal minimum wage in 2010 of $7.25 and the then number of working people making poverty level or less in wages of 10,500,000 you can extrapolate those numbers as follows:

10,500,000 x $7.25 per hour for 40 hours @ 52 weeks = $158,340,000,000 in wages annually. FICA at 6.2% for these workers would contribute $9,817.080.000 to SS/Medicare. Of course, some of these are part-time jobs, so this is merely an example.  But for every person who can be removed from government assistance, that’s less tax dollars needed to support them.

And if you think a person flipping burgers doesn’t deserve $15 per hour, consider how much of your tax dollars are going to subsidize their wages so they can be paid $7.25 to flip those burgers.  One way or the other, the consumer/tax payer is paying a considerable amount to get that burger flipped.

Now change the minimum wage to $15.00 per hour and extrapolate the numbers:

10,500,000 x 15.00 per hour 40 hours @ 52 weeks = $327,600,000,000 in wages annually.  FICA would be a contribution of an additional $10,494,120,000.  Over 10 years that would be over $1.4 Trillion dollars.

With a 15% tax rate, those wages would contribute $25,389,000,000 annually in revenue to the Treasury and could be targeted to directly reduce the debt.  Over 10 years that would be a $2.5 Trillion deduction, in addition to the reduced expenditures for food stamps, housing vouchers, and Medicaid.

Add an additional $169,260,000,000 increased purchasing power to the economy.

Increasing the minimum wage would also add to the treasuries of states in the form of sales tax, income tax, among other taxes these dollars would generate.

A two-person working household could generate $30 per hour providing them income to save and possibly purchase a home.

The counter-argument will be that increasing the minimum wage will reduce jobs.  There are many studies that disprove that argument. There are several papers (links here) that refute that argument.

The other counter- argument will be that the cost of everything will go up and the jobs will move overseas.

First, these are service industry jobs…now 7 out of 10 in the U.S.  - it’s going to be hard to ship them overseas.  Are you going to order your burger from the McDonald’s in China and have it flown over to the pick up window?  I think not.  Nor is the Wal-Mart worker going to be shipped over there either so you can restock the shelves yourself.

As for the cost…two things to consider.  Are you going to pay $15-30 for a McDonald’s Big-Mac?  I think not.

Prices are determined based on the floor (the lowest price a seller can sell a product for) and the ceiling (the highest amount a consumer is willing to pay), and on competitor pricing.

And while the prices may go up — if the consumer is willing to pay and competitors are not competing — the consumer/taxpayer is already paying.  If the end game allows your taxes to be reduced and you, the consumer, have the freedom to choose where you will make your purchases — based on competitive prices and your willingness to pay and the fact that you have more money to spend then haven’t we all won?

When you look at the trillions of dollars that are currently not being invested in our economy via our workers, but are sitting on the shelf waiting to invest…the only question I have is is – who better to invest in than the workers and our economy?

An interesting idea but my concerns would be the impact a $15 minimum wage would have on American competitiveness in global markets. Diana addresses this point.

Yes, that is an argument for manufacturing jobs – but most of those are gone already – some are coming back because, in part, the Chinese are demanding higher wages.

But the service industry jobs are what I’m referring to – they can’t take those overseas.  And with so many of our jobs now in that category (7 out of 10) and these being the lowest paying jobs out there, it’s a place to begin.

Your thoughts?

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· 5:31 PM

Entitlement reform” is a hoax

I have a feeling that a lot of people knew this already…but this is for those who might not know…

Salon – Robert Reich

No, Social Security won’t contribute to future budget deficits

It has become accepted economic wisdom, uttered with deadpan certainty by policy pundits and budget scolds on both sides of the aisle, that the only way to get control over America’s looming deficits is to “reform entitlements.”

But the accepted wisdom is wrong.

Start with the statistics Republicans trot out at the slightest provocation — federal budget data showing a huge spike in direct payments to individuals since the start of 2009, shooting up by almost $600 billion, a 32 percent increase.

And Census data showing 49 percent of Americans living in homes where at least one person is collecting a federal benefit – food stamps, unemployment insurance, worker’s compensation, or subsidized housing — up from 44 percent in 2008.

But these expenditures aren’t driving the federal budget deficit in future years. They’re temporary. The reason for the spike is Americans got clobbered in 2008 with the worst economic catastrophe since the Great Depression. They and their families have needed whatever helping hands they could get.

If anything, America’s safety nets have been too small and shot through with holes. That’s why the number and percentage of Americans in poverty has increased dramatically, including 22 percent of our children.

What about Social Security and Medicare (along with Medicare’s poor step-child, Medicaid)?

Social Security won’t contribute to future budget deficits. By law, it can only spend money from the Social Security trust fund.

That fund has been in surplus for the better part of two decades, as boomers contributed to it during their working lives. As boomers begin to retire, those current surpluses are disappearing.

But this only means the trust fund will be collecting from the rest of the federal government the IOUs on the surpluses it lent to the rest of the government.

This still leaves a problem for the trust fund about two decades from now.

Yet the way to deal with this isn’t to raise the eligibility age for receiving Social Security benefits, as many entitlement reformers are urging. That would put an unfair burden on most laboring people, whose bodies begin wearing out about the same age they did decades ago even though they live longer.

And it’s not to reduce cost-of-living adjustments for inflation, as even the White House seemed ready to propose in recent months. Benefits are already meager for most recipients. The median income of Americans over 65 is less than $20,000 a year. Nearly 70 percent of them depend on Social Security for more than half of this. The average Social Security benefit is less than $15,000 a year.

Besides, Social Security’s current inflation adjustment actually understates the true impact of inflation on elderly recipients — who spend far more than anyone else on health care, the costs of which have been rising faster than overall inflation.

That leaves two possibilities that “entitlement reformers” rarely if ever suggest, but are the only fair alternatives: raising the ceiling on income subject to Social Security taxes (in 2013 that ceiling is $113,700), and means-testing benefits so wealthy retirees receive less. Both should be considered.

What’s left to reform? Medicare and Medicaid costs are projected to soar. But here again, look closely and you’ll see neither is really the problem.

The underlying problem is the soaring costs of health care — as evidenced by soaring premiums, co-payments, and deductibles that all of us are bearing — combined with the aging of the boomer generation.

The solution isn’t to reduce Medicare benefits. It’s for the nation to contain overall healthcare costs and get more for its healthcare dollars.

We’re already spending nearly 18 percent of our entire economy on health care, compared to an average of 9.6 percent in all other rich countries.

Yet we’re no healthier than their citizens are. In fact, our life expectancy at birth (78.2 years) is shorter than theirs (averaging 79.5 years), and our infant mortality (6.5 deaths per 1000 live births) is higher (theirs is 4.4).

Why? Doctors and hospitals in the U.S. have every incentive to spend on unnecessary tests, drugs, and procedures.

For example, almost 95 percent of cases of lower back pain are best relieved by physical therapy. But American doctors and hospitals routinely do expensive MRI’s, and then refer patients to orthopedic surgeons who often do even more costly surgery. There’s not much money in physical therapy.

Another example: American doctors typically hospitalize people whose diabetes, asthma, or heart conditions act up. Twenty percent of these people are hospitalized again within a month. In other rich nations nurses make home visits to ensure that people with such problems are taking their medications. Nurses don’t make home visits to Americans with acute conditions because hospitals aren’t paid for such visits.

An estimated 30 percent of all healthcare spending in the United States is pure waste, according to the Institute of Medicine.

We keep patient records on computers that can’t share data, requiring that they be continuously rewritten on pieces of paper and then reentered on different computers, resulting in costly errors.

And our balkanized healthcare system spends huge sums collecting money from different pieces of itself: Doctors collect from hospitals and insurers, hospitals collect from insurers, insurers collect from companies or from policy holders.

A major occupational category at most hospitals is “billing clerk.” A third of nursing hours are devoted to documenting what’s happened so insurers have proof.

Cutting or limiting Medicare and Medicaid costs, as entitlement reformers want to do, won’t reform any of this. It would just result in less care.

In fact, we’d do better to open Medicare to everyone. Medicare’s administrative costs are in the range of 3 percent.

That’s well below the 5 to 10 percent costs borne by large companies that self-insure. It’s even further below the administrative costs of companies in the small-group market (amounting to 25 to 27 percent of premiums). And it’s way, way lower than the administrative costs of individual insurance (40 percent). It’s even far below the 11 percent costs of private plans under Medicare Advantage, the current private-insurance option under Medicare.

Healthcare costs would be further contained if Medicare and Medicaid could use their huge bargaining leverage over healthcare providers to shift away from a “fee-for-the-most-costly-service” system to a system focused on achieving healthy outcomes.

Medicare isn’t the problem. It may be the solution.

“Entitlement reform” sounds like a noble endeavor. But it has little or nothing to do with reducing future budget deficits.

Taming future deficits requires three steps having nothing to do with entitlements: Limiting the growth of overall healthcare costs, cutting our bloated military, and ending corporate welfare (tax breaks and subsidies targeted to particular firms and industries).

Obsessing about “entitlement reform” only serves to distract us from these more important endeavors.

Edit: Emphasis is mine

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Robert Reich, one of the nation’s leading experts on work and the economy, is Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. Time Magazine has named him one of the ten most effective cabinet secretaries of the last century. He has written 13 books, including his latest best-seller, “Aftershock: The Next Economy and America’s Future;” “The Work of Nations,” which has been translated into 22 languages; and his newest, an e-book, “Beyond Outrage.” His syndicated columns, television appearances, and public radio commentaries reach millions of people each week. He is also a founding editor of the American Prospect magazine, and Chairman of the citizen’s group Common Cause. His widely-read blog can be found at www.robertreich.org.

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· 5:07 PM

America’s Craziest Sheriff Sends Vigilantes To Arizona Schools (Posse Comitatus)

Thousands of armed vigilantes in Arizona schools.  What could possibly go wrong? (Sheesh!)

Think Progress

Maricopa County Sheriff Joe Arpaio will begin sending armed “posses” to patrol around Arizona schools today, in response to the shooting less than a month ago at Sandy Hook elementary school.

Arpaio made a name for himself by abusing the civil rights of undocumented immigrants — and fordetaining a six year old undocumented child. Now he’s heeding the NRA’s advice that every school needs a “guy with a gun” and is sending out volunteers “with questionable pasts” to guard students:

Arizona’s 3TV reports that Arpaio’s volunteer force is comprised of around 3,000 members, some of which have criminal pasts.

According to CBS5, Arpaio’s office has provided a list of more than 50 schools in unincorporated Maricopa County that will be patrolled by the posses, which are in charge of providing all of their own weapons and equipment. The volunteers will not actually be posted on school campuses, but will instead monitor the areas around the facilities.[...]

The program is getting started as Arpaio prepares to be sworn in for his sixth term on Monday. The volunteer patrols will kick into full gear on Wednesday, and will be rolled out with a press conference.

Arpaio has thought of less friendly uses for firearms in his recent past. Back in November, the sheriff decided to arm his deputies with automatic weapons to stop “illegal aliens” “attempting to escape” his county.

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· 2:02 PM

FLASHBACK: GOP Senators Praised Chuck Hagel’s Statesmanship, Foreign Policy Expertise

Sens. Chuck Hagel (R-NE) and John McCain (R-AZ) in 2004.

Oh, the hypocrisy…

TPMDC 

As Republicans plan their opposition strategy on Chuck Hagel’s anticipated nomination as the next secretary of defense, Democrats are digging up and circulating examples of top GOP senators saying nice things about their former colleague in the past.

Sen. John McCain (R-AZ) in particular was a vocal advocate for Hagel’s character — even after his dissent on U.S. foreign policy regarding Iraq and Israel were well-known.

In 2006, while he was preparing to run for president, McCain was asked whether he’d consider Hagel for a cabinet post. “I’d be honored to have Chuck with me in any capacity,” he said. “He’d make a great secretary of state.”

Two years later, McCain reaffirmed that position after securing the Republican nomination, telling The Associated Press that Hagel is a “respected leader in America” who “served his country admirably, with honor and distinction.”

At a 2007 fundraiser, Senate Minority Leader Mitch McConnell (R-KY) called Hagel “one of the premier foreign policy voices (and) one of the giants in the United States Senate,” according to the Nebraska-based Lincoln Journal Star.

The following year, McConnell, bidding farewell to his retiring colleague, praised Hagel as a “great statesm[a]n” and “leading voice in foreign affairs.”

“In two terms in the Senate, Chuck has earned the respect of his colleagues and risen to national prominence as a clear voice on foreign policy and national security,” McConnell said. “Chuck’s stature as a leading voice in foreign affairs has earned him a reputation, in just 12 years in the Senate, as one of Nebraska’s great statesmen. This is a tribute to his intelligence, hard work, and devotion to a country that he has served his entire adult life.”

Sen. Lamar Alexander (R-TN) bid Hagel farewell by praising Hagel’s “independent background” and “sense of independence.” Alexander said Hagel — along with then-Sen. Dick Lugar (R-IN) — “understands the world better than almost anyone.”

The former Nebraska senator received similar parting accolades from Republican Sens. Mike Enzi (R-WY) and Bob Corker (TN), who will vote on his confirmation.

Kindness toward a departing colleague may simply be a matter of courtesy, but Democrats will be eager to remind those Republicans of their glowing remarks.

Democrats also note that Republicans emphasized their respect for Hagel even as they strongly disagreed with him on foreign policy toward Iraq, Israel and Iran.

Back in 2006, commenting on the unfolding battle between Israel and Hezbollah, McCain suggested Hagel’s proposed solution was “not workable” but qualified his disagreement.

“Well, look, there’s no man I admire and respect more in the world than Chuck Hagel,” he said. “We have deep bonds of friendship.”

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· 2:33 AM

Monday Blog Roundup 1-7-2013

Bump, Honeymoon or What?
We don’t focus on it anywhere near as much post-election but President Obama’s solid..

10 Things to Know for Monday
Your daily look at late-breaking news, upcoming events and stories that will be talke..

Lines drawn in gun-control debate
Lawmakers kept up the renewed debate over the nation’s gun laws Sunday, with the Sen..

An Image Each Day: The Year in Photographs
The year 2012 was a cyclone of news. Through the highs and lows, LightBox presents a

Hillary Clinton Returning To Work Monday
WASHINGTON, Jan 6 (Reuters) – U.S. Secretary of State Hillary Clinton will resume he.

Video: “Zero Dark Thirty” and the war on terror
Film critic David Edelstein talks about The controversial account of the hunt and kil..

Four dead from guns in Aurora, Colorado again
Another day, another shooting. Mental health & video games may play a part, but ..

GOP Rep: ‘It’s About Time’ We Had Another Government Shut Down
Appearing on CBS’ Face the Nation this morning, Rep. Matt Salmon (R-AZ) enthusiastic..

Video: Hagel nomination would face challenges from many quarters
Rachel Maddow reports on the range of arguments from both sides of the aisle in oppo..

Scandalous Online Claims Force Official Response in Steubenville Rape ..
Shocking video evidence of rape admissions and allegations of a wide cover up enterp..

 

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