This post started off several years ago as a post in response to something someone posted on FB, on a friend's wall. I recently reread it and realized it nicely explains my theory about business and life and government. If you disagree with the general tone of this article, we likely shouldn't be doing business together…
Enjoy!
A friend posted an article on Facebook the other day about the plan our Good and Right Savior, the All Knowing All Powerful President O, the Lord of the Left and the Right, Protector of the Downtrodden, Presider over the Captains of Industry, and Darling of the Wall Street Fascists had proposed to raise the minimum wage…he is after all the protector of the down trodden.
Steve asked me to chime in, specifically, and so I Have tried for now on 3 days. The problem is all my responses just got too long for a FB comment. Sure they might show up but who wants to tread a 6 page response in a FB comment section, even if it is as entertaining as this post will be! So I have responded via this blog post. I hope, hope, hope, the people who have commented will read this and comment here, or back on FB. I hope those reading this, especially entrepreneurs, will seek our Steve Sipress on FB and friend him….it'd be a good idea for your business!
Some of you will see this post as an Ad Hominem attack. While I am not polite, I have also backed my points up with sound philosophic thought, basically the right of someone to use and dispose of their property (in this case their business) as they see fit and the right of people to enter a contract as they see fit. I am not polite because of the arrogance, the complete disregard for my rights, and the the presumption of the comments I am responding to. This guy is effectivly, by proxy, coming into my business with a gun, taking money from the till and giving it to my employees.
Since I make my money in trade, I don't abide by thieves, whether they operate by proxy or directly.
So here is the link to the original article Steve posted:
Here is a response from a FB friend of his:
“Given people's perceptions, you may or may not be phrasing the question correctly: it's not necessarily a question of helping or hurting their business, it's a matter of social policy: if free markets were left to themselves, many hard working people, even with 2 jobs, would be liviing close to the poverty line; so the question for many is how much should an individual working 60 hours over 2 jobs, or a couple working 3 jobs for 100 hours a week combined, earn, and what benefits should they have. Also, there is a belief that if the poorer earn more, they will also spend more – benefiting small businesses (how the plusses and minuses work out, I don't know). These added costs would not only apply to small businesses, but also to bigger businesses (eg, Walmart) that prefer to skimp on salaries and benefits. Seems to me that the more pressing problem for small businesses (at least in distribution) is the impact of the Internet: why should a brick and mortar store be at a structural disadvantage to an Amazon.com not only because Amazon pays lower rent per square foot of space, but also because it does not have to charge/pay sales taxes (although that advantage seems to be going away over time, as sales taxes are being imposed). If some of these structural issues were addressed, would small businesses be better able to survive paying higher wages?”
And:
“Steve, I don't know if I can address you and Jeff in a comprehensive manner, but here are bits and pieces:
The Ayn Rand article does not get into any specific details about Wal-Mart's pay practices. But see this article:
http://www.forbes.com/…/raising-the-minimum-wage-would…
Places like Costco thrive while paying significantly above minimum wage to even their lowest paid workers – and they have a motivated work force. The article I mention also makes the very important point that a higher minimum wage could result in a lesser need to feed at the government trough. You can't have it both ways – a low minimum wage and cutting benefits to the poor (which is what Paul Ryan seems to prefer).
You assert that many minimum wage people give minimal effort (I don't disagree, but there are many who don't) and I think Jeff says that if they don't like their wages they should find somewhere else to work. Of course, if a business does not like the attitude/effort of an employee, they should fire him/her and find someone else willing to provide more for the same wages. It works both ways. [Also, perhaps employees might be more motivated if you paid them more.]
Where I disagree with Jeff is his complete faith in free markets: let supply and demand set wages. Here's the problem: in pure theoretical capitalist economic models, you have perfect information (everyone knows what others are making/paying elsewhere, what the supply and demand is) and free transferability (it costs nothing to move to a place with better/higher paying jobs). That is not reality. Reality is that there is imperfect information – big companies know far better than small companies and individuals what is out there (although the Internet is lowering that gap) – and no free transferability (it costs lots of money to move from one location to the next). So supply and demand in the real world typically favors the employer (particularly in lower paying jobs), unless you have a unique situation as in fracking North Dakota, where there is massive disequilibrium (both in the labor market and in the housing market) – the advantages of employers in supply-demand equations created a basis for a goverment role to fix some of the perceived inequities. Hence, the welfare state, including the minimum wage.
If you want to minimize the scope of government, then you can't have so many people at or below the poverty line. Leaving it to the goodwill of people to give to charities is not enough; people do not give enough to charities. So, a boost in the minimum wage is one way to address the problem while spreading the burden across the entire population, including small businesses.”
First, I am going to leave this guys name a mystery. If you go find the post you can read it there, but I'm getting ready to tear him apart here on the blog, and I see no reason to point out who made this ridiculous statements.
You see, there are just so many mind-numbed (read brainwashed) assumptions and unsubstantiated leaps in logic in this guys response I hardly know where to start. So I will just go through and address each thing on a point by point basis. Enjoy!
Given people's perceptions, you may or may not be phrasing the question correctly: it's not necessarily a question of helping or hurting their business, it's a matter of social policy:
********* No it's not you collectivist twit! It's a matter of their business and ONLY their business! When the government sets wages, etc. for GOVERNMENT employees it is, arguably, a matter of social policy (although it shouldn't be.) The government, representing the people in a society, arguably has other things to consider when it sets wages for it's workers and contractors. (BTW, that is one of the most important reasons why Government should do as little as possible. Things like ROI, efficiency and long term cost/benefit analysis give way to 'buying votes' for the next election.)
If the idiots pushing for a minimum wage increase, or a minimum wage at all, want to help people make more money, let them open up a business and pay the workers more. Once they get big enough the wages around that business will go up as a result of natural market competition. Of course, they don't want to do that, they just want to use guns to force others who have worked their asses of to give away more money…and it is giving away more money, make no mistake. If I'm an employer and I have a job to do and that job is worth $5/hour, but you force me to pay someone $7-8/hr plus take 15% on top of that, and force me to comply with a whole host of regulations, all of which have a cost, guess what…that job is left unfilled or I just make someone else in my business do it. If you'd like to see more people employed at higher wages, stop using your fucking guns to force me to overpay and stop making it so expensive to have employees.
If you want to give employees all those protections and all that good pay, start a business and do it! Stop acting like a coward and using guns, by proxy, to force others to do it, just because you think it's “the right thing to do.”
BTW, the using guns statements are the reality of government. If you don't do what the government tells you to do, eventually men with guns come and take you or your stuff. Each and every law you encourage the government to pass, each and every dictate from any level of government, is backed up by a gun! If that makes you feel uncomfortable you should reconsider your position, not ignore me for pointing it out. You are no better than a common thief…worse really, at least the thief has the courage to use the gun himself.
if free markets were left to themselves, many hard working people, even with 2 jobs, would be liviing close to the poverty line;
***********This is one of those brainwashed assumptions I told you about. It's simply NOT true. We didn't have a minimum wage in the US until 1938 and believe it or not, employees weren't dying in the streets of starvation. As a matter of fact the market was improving conditions for workers rapidly! Sure it started off pretty bad, but the market corrects all problems…including employee mistreatment or underpayment.
The numbers are clear, employee conditions, wages, etc were rapidly improving. The minimum wage, among other things, just allowed the government to take credit for something that was happening already.
so the question for many is how much should an individual working 60 hours over 2 jobs, or a couple working 3 jobs for 100 hours a week combined, earn, and what benefits should they have.
************And the answer is: They deserve to be paid some percentage of the money their skills produce for the business they work for. If their employer is willing to pay $1 an hour for those skills, and the employee can't find anyone willing to pay more, they deserve $1/hr. If they want more, find someone for whom their skills are more valuable OR get new skills.
The entirety of your comments on this point suggest workers and their value are static, immovable, and they can't make themselves more valuable. If that were true, you might (MIGHT) have a point. However, just because someone refuses to make themselves more valuable by going to school, or the library, or Google, or finding a mentor or any other of a 1000 ways to lean new skills, doesn't mean I am obligated as a business owner to pay them more. This is about personal responsibility, period. You either believe adults are responsible for themselves for you believe they are incapable of taking care of themselves. There is no middle ground. Either the ball is in their court, or you believe they are helpless without you, which is pretty damned arrogant of you as far as I'm concerned.
Also, there is a belief that if the poorer earn more, they will also spend more – benefiting small businesses (how the plusses and minuses work out, I don't know).
************* Maybe true or maybe not (I suspect not) but irrelevant either way. This is not a matter of collective well being, it is a philosophic matter of the right someone has to dispose of their property and handle their affairs in the way they see fit. You don't have the right to tell someone what kind of car to drive or how much to pay for it. Telling them how much to pay their employees is the same kind of intrusion. Their business, their property (a business is property), their rules. If no one will work for the business, they'll have to change the rules or go out of business. If they offer terms that are too 'skinny' the best workers will go elsewhere and their business will not survive, or thrive. On the other hand, the folks paying the most for the skills they need, have an advantage over the rest of the market. These are business decisions that should be left to business owners and prospective employees…not decided by idiots with guns in ivory towers!
These added costs would not only apply to small businesses, but also to bigger businesses (eg, Walmart) that prefer to skimp on salaries and benefits.
**************** The yearly revenue number doesn't effect the moral implications of your argument. And, arguably, large businesses should pay less than small business. There's much clearer opportunity for advancement, your job is far safer, etc. If you work for Best Buy you're less worried about the company going out of business and you're more likely to have advancement opportunities than if you work for the local computer shop. There is value to that and that value means it might be worth taking less money in your envelope today.
Seems to me that the more pressing problem for small businesses (at least in distribution) is the impact of the Internet: why should a brick and mortar store be at a structural disadvantage to an Amazon.com not only because Amazon pays lower rent per square foot of space, but also because it does not have to charge/pay sales taxes (although that advantage seems to be going away over time, as sales taxes are being imposed). If some of these structural issues were addressed, would small businesses be better able to survive paying higher wages?
************* You are now going way afield of the discussion. I will point out though, the buggy whip manufacturers would agree with you. Business advances and the marketplace advances and when it does it leaves behind those who will not keep up. Just like the employee who has been outsourced or his job replaced by a robot and he was fired for his lack of skills in other areas of the business…the company that will not adjust to trends will die, and deserves to die. The marketplace is only interested in people and companies who serve it. Changing laws and interfering in that evolution only, ever, hurts the consumer.
“Places like Costco thrive while paying significantly above minimum wage to even their lowest paid workers – and they have a motivated work force.
***************** So what?! Wal-Mart should pay more because Costco does? You are truly proud of your ignorance aren't you! How dare you start making sweeping decisions for a business you don't own and have no in depth knowledge about because a completely different business has a different pay scale, at least based on what some reporter in one magazine article told you. Piss off! If you're so damned smart, why aren't you a Wal-Mart exec fighting for high pay for the employees? Or, you could put YOUR money where YOUR mouth is and open a business and pay YOUR employees anything you want. Of course you won't do that, because like most statist pigs, you'd rather just take from those who produce in order to see your theories tested (by the way they have been tested over and over and they have failed again and again. Of course that doesn't fit into your narrative of the world, so you ignore the failures and just keep using guns to impose your beliefs on ME!)
The article I mention also makes the very important point that a higher minimum wage could result in a lesser need to feed at the government trough. You can't have it both ways – a low minimum wage and cutting benefits to the poor (which is what Paul Ryan seems to prefer).
*********** False choice! I call bullshit!!!!! This is a favorite technique of you statist assholes who want to control every part of my life. Your suggestions that the government is the ONLY entity that can help the poor is complete and utter bullshit! And your implication that if the minimum wage was done away with all the poor would lose everything is bullshit!!!!
The truth is ONLY 4.7% of the workforce are paid minimum wage. If the minimum wage was raised, even with the ripple effect, it wouldn't effect that many of the workers. To the businesses it effected, it would be devastating, but it isn't that many businesses.
The issue is an issue of the right to use and dispose of your private property…it is an issue of philosophy. It is your philosophy that has torn down every great nation and is killing our right now.
You assert that many minimum wage people give minimal effort (I don't disagree, but there are many who don't) and I think Jeff says that if they don't like their wages they should find somewhere else to work. Of course, if a business does not like the attitude/effort of an employee, they should fire him/her and find someone else willing to provide more for the same wages. It works both ways. [Also, perhaps employees might be more motivated if you paid them more.]
Where I disagree with Jeff is his complete faith in free markets: let supply and demand set wages. Here's the problem: in pure theoretical capitalist economic models, you have perfect information (everyone knows what others are making/paying elsewhere, what the supply and demand is) and free transferability (it costs nothing to move to a place with better/higher paying jobs). That is not reality. Reality is that there is imperfect information – big companies know far better than small companies and individuals what is out there (although the Internet is lowering that gap) – and no free transferability (it costs lots of money to move from one location to the next). So supply and demand in the real world typically favors the employer (particularly in lower paying jobs), unless you have a unique situation as in fracking North Dakota, where there is massive disequilibrium (both in the labor market and in the housing market) – the advantages of employers in supply-demand equations created a basis for a goverment role to fix some of the perceived inequities. Hence, the welfare state, including the minimum wage.
************* Nonsense! The truth is supply and demand is often tilted in favor of the worker. It's just a matter of a worker approaching his skill set the same way a business approaches it's products and services. Sure, if you're only skill is flipping burgers then supply is far greater than the demand and it's tilted in favor of the employers. However, if you have taken control of your destiny and learned to be a truly skilled chef, the balance flips in your favor.
I happen to know a 22 year old high school drop out who trained himself as a DR Copywriter who makes min $150,000 a year and is a up and coming star in the niche business he works in. The same is true for a whole slew of skills, but if someone refuse to find out what those skills are and then learn them…that's their fault. And I should not be made to pay them more then they are worth because of it.
Someone unskilled workers need to a “living wage” doesn't put a lien on the profits of my business….period!
Your statement above shows a dramatic lack of understanding of the marketplace. It saddens me that you get to elect people who use guns to make producers pay unskilled idiots more than their menial jobs are worth because you're too ignorant about the functioning of the marketplace to understand how wrong you are. You have no business sticking your nose into employer employee relationships!
If you want to minimize the scope of government, then you can't have so many people at or below the poverty line.
****************** The truth is, even Bono from U2 admits (Who is not known as the most business friendly chap in the world) nothing – not subsidies, not government, not giveaways – comes close to raising people out of poverty like entrepreneurial capitalism. By definition, the MORE government involvement, the LESS entrepreneurial capitalism…which translates to more poor people. More government interference means more poor people, which, according to you, means more need for government interference!
Your ignorance is painful!!!!
Leaving it to the goodwill of people to give to charities is not enough; people do not give enough to charities.
****** That's because they're taxed to goddamned much you Statist PIG!!
So, a boost in the minimum wage is one way to address the problem while spreading the burden across the entire population, including small businesses.
******* You're an idiot, and your blind confidence in your ignorant talking points is offensive. If you want to pay people more, start a business and stop using guns to impose your theories on me…ASSHOLE!!!
The laws you beg your politicians to pass (and enforce at the point of a gun) effect my children, and that pisses me off! I'm the one who worked 70, 80, 100 hours a week to build this, you didn't! I'm the one who spent in excess of $100,000.00 on mentors, education material, travel to business seminars, coaching groups, masterminds, etc to learn how to build a business, not you and not my employees! I'm the one who has laid awake at night worried about how I was going to cover my bills because revenue wasn't what we projected, not you and not my employees…who get their money whether I get any or not!
Who do you think you are to suggest you have the right to decide how much I pay MY employees in MY business that I BUILT (no matter President O things), you arrogant, ignorant fuck!!!