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A New Take on the Minimum Wage

BEGIN TRANSCRIPT

RUSH: All right, minimum wage. This is a new one. I've not seen this method of comparison before. This is Reuters, and in fact, this is part of a package of stories on the upcoming debate in Congress on the US minimum wage. There isn't going to be much of a debate. The Republicans are going to cave on this. They don't have the votes to stop it anyway. Bush is going to sign it. This is a done deal. This is just agenda-driven pressure here on the part of the Drive-Bys. "The following table," and I have the table here right here, "gives a rough estimate of the earning power of low-income workers in 13 countries around the world by calculating the time it would take for a starting worker at a McDonald's restaurant to earn enough money to actually buy a Big Mac.
"Based on an unscientific survey by Reuters reporters, low-income workers in Australia have the highest earning power of the 13 countries, earning enough to buy a Big Mac every 16 minutes. The lowest earning power is in less developed countries where it takes up to five hours and 15 minutes to earn the price of a Big Mac. That is if they have a McDonald's there." So here we go. "In Australia, minimum wage workers have to work 16 minutes in order to be able to get a Big Mac. In Japan, 22 minutes. In Britain, 22 minutes. In France 25 minutes. In the United States," the cold-hearted, cruel, mean-spirited home of hatred for the poor, "minimum wage workers have to work 30 minutes in order to be able to buy a Big Mac. In Chile, it's 43 minutes. In Russia, it's 53 minutes. In Argentina, it is one hour and 40 minutes. In Mexico, two hours and 33 minutes. In Egypt, five hours 15 minutes."
Next story: "Economists and politicians may disagree about the economic impact of a looming increase in the U.S. minimum wage, but Ohio restaurateur Dean Gregory already knows how much it will cost him. 'We've already figured out it's going to cost us between $125,000 and $150,000 a year. I'll have to raise my prices, definitely,' Gregory said. Perched above the Ohio River in downtown Cincinnati, Gregory's Montgomery Inn at the Boathouse is the busiest independent restaurant in Ohio, serving hundreds of plates of its famous barbecued pork ribs a day. The second-generation family eatery is one of many small businesses in America braced for a higher minimum wage."
Now, there is a little paragraph here entitled, "Nobody works for minimum wage," and what it basically is all about is that most people pay above the federal minimum wage anyway, already. "In Ohio, the wage is set to climb to $6.85 from $5.15 on Jan. 1. The minimum for workers who collect tips, a separate standard, will increase to $3.43 from $2.13." It goes on and on and on. "One of the entrepreneurs affected by this said, 'I don't think consumers quite understand that at some point they're going to have to pay for the increased cost of goods.'" I don't think too many of them understand it, either. This minimum wage business, "Oh, it's so compassionate. We just must do it. These people must be able to live at least a wholesome live. We can't pay 'em slave wages," and so forth.

Well, fine and dandy, but you're just going to be paying it yourself. There are many arguments against it, but they've been lost. The arguments are technical. The arguments are really economic -- and, of course, they don't jibe with the average American's touchy-feely passivity these days. We've talked about the minimum wage here and how it functions and what it actually does. It actually loses jobs, and we've also told you that the primary reason for Democrats supporting the minimum wage is because of pressure from unions. Here's the way it works, folks. All you have to know about the minimum wage, in terms of why Democrats are all for it. They cloak it in the fact that it's compassionate and that they love the poor and they want to do everything they can, Republicans are trying to keep these people down, but we're going to bring 'em up.
We're going to make sure that you poor people have at least two Big Macs, not just one. The dirty little secret is that the minimum wage is a benchmark for union contracts. What will happen is at the next big union negotiation with whoever -- any union, could be big or small -- they'll go in there to the company with whom they're negotiating and say, "Look, the minimum wage just went up from $5.16 to 6.15," or whatever it is. "These unqualified schlubs just got a buck raise. Well, we are qualified! We're the best American workers that there are out there, and we need a comparable raise in this contract, far more than just a buck an hour. Besides, if you're going to give incompetent boobs, a bunch of schlubs, a buck an hour for the sake of it, we want to get paid on the basis of our quality, our competence, and want some more time off, by the way, too."
This is the dirty little secret about the minimum wage, because it doesn't end up doing good things. It loses jobs, it raises prices, and the myth that there's families of four out there living off minimum wage. You know what nobody ever calculates here, folks? It's like when we do the poverty numbers. I'm going to get these out here in just a second. I've got it buried in the stack. When we calculate poverty; we never calculate any kind of government programs that people in poverty get. We simply calculate their wages, and if their wages are below the poverty line, they're said to be in poverty. But we don't add in the food stamps and all the other assistance that people in poverty get in this country, and that skews the whole thing. It's like that number that 16% of all wealth is controlled by 1% of the population. Those figures are absolutely worthless because the percentage of wealth that is calculated does not include the wealth -- and it is wealth, if you total it up -- that people in poverty receive as the good graces of the American people who pay for these social programs. Let me get the numbers, it will be the best way to illustrate it for you and rework the percentages.
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RUSH: Now before I get to this business of calculating who has what percentage of the wealth, another in the package on minimum wage stories today from Reuters: "Minimum Wage, Even Above $5.15, Workers Struggle." You see, folks, the country is just one big soup line, and most of the "workers" (which is a socialist term, by the way) are just half a paycheck away from utter destruction and destitution. Conyers, Georgia is the date line here. "Just because you earn a bit above minimum wage doesn't mean that you're not one step away from financial ruin, according to people on low wages in two states. In interviews in Georgia and Alabama..." I wonder why they chose Georgia and Alabama. You suppose it's because the people at Reuters think they're a bunch of hayseed hicks anyway?

"[P]eople whose wages hover above the federal minimum of $5.15 an hour, said that they were unable to save any money, and they were vulnerable to the inevitable emergencies of life. Their testimony speaks to a move by the US Congress to raise the federal minimum wage when it returns under Democrat control in January. Loss of work, a boiler breaking down in the home, a bereavement, a bad financial decision, but above all, illness were some of the factors which could quickly lead to an individual from financial stability to the edge of homelessness." Now, wait a second. I thought there wasn't any financial stability even for people who earn a bit above the minimum wage? The minimum wage is not designed to provide a savings account, financial stability, two cars in the garage, and health care. That is not its purpose; it never was its purpose.
Its purpose all along has been a political maneuver designed to show that government and certain people who work in government care. How many times do I have to go through this? We're going to raise it from $5.15 to 6.15, eh? If that's good, why not $7.15? Why stop there? Why not raise it to ten bucks? Wouldn't that be more fair than $6.15 an hour? Of course it would! And who are we kidding? You think at ten bucks an hour you're going to be able to have a savings account, two cars in the garage, and health care? Ah! They're going to need much more than ten bucks. Let's just make it 20. Let's make it 20 an hour. Do this with any minimum wage supporter and, you know, maybe go up in smaller increments and say, "Okay, look, I agree with you. The minimum wage is not enough. Let's make it ten."
"Yes!" At some point, you will get to a number, "Well, you can't go that high," at which point you have won the argument and you own them if you know what to do. "Well, why can't we pay 'em 20?" Well, it's just too arbitrary. Well, if $20 is your limit but $19 is okay, what's the difference? If any figure that you name, a certain figure is unacceptable, don't you think logically any figure is, if it's arbitrary? Every one of these figures is arbitrary, $5.15, 6.15, 7.25 an hour, it's all arbitrary. But at some point you're going to reach this number where people will say, "No, no, no, no, I can't do that much." Why? They won't be able to give you a reason other than to say, "Well, it's not worth that much." Well, it's worth eight but not 20? Wow, you're really compassionate!
Turn it right back around on them, folks, if you can remember this. Then you can say, "Look, we need a living wage. We need a minimum wage of $75,000 a year in this country," and, of course, I know most of you out there going, "Yes!" You'd take it if somebody offered it. At any rate, this business of we've gotta give some assistance here to Alan Reynolds in the Wall Street Journal today. We are told that the rich, the very rich, earn too large a share of total income all the time. What's the figure? The figure that's tossed around is the top 1% of "people" make 16% of all of the income. The conclusion is, then, that the 1% who are taking 16% of all income is unfair, and the only way to make it fair is to raise their taxes! Yes. Raise their taxes! But they don't spell out what they would like to accomplish.
Okay, let's do this. Instead of the top 1% making 16% share of total income, let's reduce it to 10%. Because liberals who love arbitrary numbers, as in the minimum wage will say, "Yes, that would be fair; 16% is unfair; 10%, that would be fair." Well, guess what, ladies and gentlemen? The calculation is wrong! This whole 1%, 16% thing is wrong. The figures are wrong. The conclusion is wrong. It's not new math or old math. It's simple arithmetic. They used the wrong total income. They leave out Social Security; they leave out transfer payments, tax-free income, income fudging income, and underground money income. They leave out -- the transfer benefits to people who are not in the top 1% changes the total income by almost 35%. When you factor in the income that is not tabulated in this 1%, get 16% of all, 35% of total income is not calculated, and when you add 35%, the top 1% are not getting 16% of all wealth. It's much less, because 35% of all wealth is not being counted. Thank you Alan Reynolds, Wall Street Journal today.

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