Thursday, January 04, 2007

Minimum Wage Goes Up in NC. Unemployment Figures Follow Close Behind!


On New Year’s Day, here in North Carolina, the minimum wage went up, by one dollar, to $6.15 an hour. The national minimum wage is $5.15 and hour. So, the Tar Heel state is blazing the way for the national minimum wage! Take it from one who knows, first hand, you’d better hope not!

Small businesses in NC, even before Christmas, were deciding who would be laid off from their jobs this month and next. They were also trying to determine how much of the added cost of doing business they could pass on to their customers. There’s nothing new about this, it’s the way business works. I still find it amusing to find folks in the US who actually think businesses pay taxes! Those of us who have been in business know that businesses do NOT pay taxes… their patrons pay the taxes for them in increased prices for the product, or products, that business sells. This is the capitalist system.

The same holds true for wages paid to employees of any business. The patrons will pay a part of that increase and the company will lay off (or fire) as many employees, as they must, to hold their cost of doing business to a level which will allow them to make a profit. For without a profit the business will simply have to close it’s doors… and ALL the employees of that business will be out of a job.

The highest single cost of any business is the cost of employees. There are the wages, the social security taxes, FICA, and, of course, the health insurance, which companies are almost forced to pay for. So, when the government comes along and mandates that a small business MUST pay it’s employees more, by the hour, that is a time of hard decisions which must be made by the owners and operators of those businesses. Inevitably… somebody is going to lose their job, or jobs. Then the state and national unemployment figures go up. It is a vicious cycle. But, it is the way of business.

Allow me to tell you a story, which happens to be true because I know the people involved personally.

The national minimum wage went up. The general manager of the business had a meeting with the board of directors and they considered the costs of doing business for that company and a decision was made, by the board, that one employee must be fired, ASAP, in order for the company to hold it’s cost of doing business down and allow the company to make a profit. (Remember… without profit, the company would be shut down completely) The general manager was told to choose one employee and fire him, or her.

The GM had a difficult decision to make, deciding which employee he could do without and sustain the day-to-day operations of the company at the current level. Finally, a person was chosen. But the GM was experiencing difficulty in actually firing the employee. You see, in small businesses, employees and bosses often become friends. Such was the situation in this instance.

So, the GM dragged his feet.

The next board of directors meeting rolled around and the directors wanted to know, first thing, if the GM had fired that one employee. He told them he had not, because, somehow it did not seem the right thing to do so. The board told the GM, flat out, to either fire the employee or consider himself terminated! The GM fired the employee. Thus was the company kept solvent for a while longer.

Now, this is not a fairy tale. It is a factual story and it is an example of what goes on in small businesses all over this nation when the minimum wage goes up. People who can least afford to be out of a job find themselves in just such a situation. Unemployed.

The minimum wage is nothing more than a political tool. It is another means by which those who govern us can manipulate us… and in so doing salve their own consciences, which continually bother them as a result of the huge salaries they pay themselves at the expense of the governed.

Now that the socialists have control of the US government, you can bet the national minimum wage will go up. You can also bet the national unemployment figures will go up, too.

Right thinking people have to ask themselves, had I rather have a job working for a low wage than have no job at all? It is a simple question… and it gets at the nub of the problem.

If I had my way, there would be no minimum wage, period. A prospective employee would dicker with a prospective employer over what his, or her, pay would be. Or, the prospective employee would agree to work for the wages the prospective employer was offering. Or, be out of work! That is the way the system OUGHT to work. As it is, people who are worth more than $6.15 an hour will be working for that. On the other hand, employees who are not worth $6.15 and hour will be getting the $6.15 an hour, anyway. There is something wrong with that sort of arrangement.

Well, think what you will, but here in the Tar Heel state we are bracing for more small manufacturing plants to close and move to Mexico, or other lands off-shore, as a direct result of the increase in their cost of doing business in this state.

Somehow, folks on the Left have decided that business is in “in business” to do us a favor…to provide jobs, as well as goods and services the public needs. They may think that… but it is simply not true. See, the plain and simple fact is… that businesses are in business to make money for the owners or stockholders. That is first and foremost. Everything else comes after that. No profit… no business and, of course, no jobs. I don’t know how to boil it down to anything more basic than that.

Until our politicians come to understand, and accept that, we will continue to have the fluctuations in the unemployment numbers we have come to expect after every increase in the national minimum wage.

I cannot fathom why this is so difficult to understand. Heck, I learned this in High School Economics class in the eighth grade! It must be awfully difficult to learn, though. Look at all the MBA’s from Harvard and Yale in our Congress today, who, themselves, don’t understand it.

Of course THEY UNDERSTAND IT! As I said earlier, in this post, it is simply a way for them to manipulate us. It is the use of raw power. And we are dumb enough to fall for it over and over again, much like Pavlov’s dog.

Finally, I spent my younger years in a Mill Town. For those of you not familiar with what a Mill Town is… it is a town controlled by the local Mill which happens to be the single largest employer of the town’s citizens. Many is the time I have seen wages go up by a certain percentage rate…and ... within days the prices in the stores would go up… by the same percentage rate! The poor employee was left in no better shape than he was before his wages were increased. In some cases, he was in worse shape, because he was in danger of being “laid-off”. (And many usually were.)

Control a man’s wages… and you control the man.

Something to think about.

Longstreet

5 comments:

Frank said...

I think we should set a maximum wage as well, I am sick of hearing about CEOs of FAILING companies getting a parachute worth hundreds of millions to escape the consequences of their failed leadership. Also I am sick of all the BS back dated stock option malarkey..... They just don't play by the rules of capitalism, sir. "Steal all you can, grab all you can and to hell with the next guy", just doesn't sit right with me. Maybe I'm too honest or naive or something.... Maybe I'm just stupid for believing in everyman for a greater good instead of everyman for himself.

OTTMANN said...

Great Post Longstreet! Dems are all about making government more powerful than the people it represents. Redistributing money as they see fit while raising taxes is their entire game in a nutshell. Oh, that and taking the rights of individuals away in favor of groups and Unions.

We're in for hell over the next 2 years.

Longstreet said...

"We're in for hell over the next 2 years."
****************
I couldn't agree more! If the GOP Senators don't stop Pelosi, we are in for a collapse of our economy and rampant terrorist attacks inside the borders of the US. But, don't count on the Republican Senators having the testosterone to what must be done! That's why they lost!

Best regards, Ottmann!

Longstreet

Frank said...

Oh, that and taking the rights of individuals away in favor of groups and Unions.
*****************************

I've lost more individual freedoms under Bush than any other president ever! Unions just make it an even playing field between employees and management. Without them companies do as little as possible for their employees. If you are truly for family values you would demand unions to enforce safe working conditions, better pay, health care, and paid time off to spend with your family over just being a "Cog in the machine" for some trillion dollar business. Next time your asked to work late or weekends or a holiday turn down the double time, don't use vaction or sick time, and buy your own medical insurance, if you use these things that unions fought for and won you are a hypocrite and a typical republican.

Frank said...

just another side note:

If I had my way, there would be no minimum wage, period. A prospective employee would dicker with a prospective employer over what his, or her, pay would be. Or, the prospective employee would agree to work for the wages the prospective employer was offering. Or, be out of work! That is the way the system OUGHT to work. As it is, people who are worth more than $6.15 an hour will be working for that. On the other hand, employees who are not worth $6.15 and hour will be getting the $6.15 an hour, anyway. There is something wrong with that sort of arrangement.
***************************************

I don't get out of bed for anything less than $15.00 and I make well over $20.00. $6.15 is terrible, I would rather rob or steal to get by, sell dope or pimp hillbilly girls because if I got caught jail would be better than what I could provide for myself at $6.15. If you dickered with no minimum wage we'd all make $6.00 per week because people would under cut each other for work.... hence the need for unions. And for your story of the GM, if the Board of directors was reduced by 1 person, the total package of the fat cat could be used to hire 100 people that work and the company would be solvent...... you always keep a hard working guy down.