Letter for Monday, January 7, 2019

Wage hike won’t help workers

There is talk about raising the minimum wage again. If you raise the minimum wage, the worker at best will get 80 percent due to federal and state taxes.

The cost to the employer will go up by 120 percent due to federal and state taxes on the wages. Yes, the cost of a burger will only go up by 25 cents as stated but so will the fries to go with it, and everything else (milk, eggs, bread) will go up by a few cents.

All of those few cents once they finally work through the system will be more then the wage increase. The only entity that will benefit is government. They will be able to tax 100 percent of the wages. They will also have a big windfall because the excise tax will be on all of the increases in the price of goods and services.

Government will also benefit from the fact that their liabilities to the retirement system and the money owed on bonds can be paid back with cheaper dollars. The end result is government will be the big winner and the worker will actually have less buying power.

What is really needed is government employers and unions to work together to make sure the educational opportunities are available to help people improve their skills. They also need to get into the schools and help the youth learn about different career paths from those who are actually in the workforce. This will help break the cycle.

Al Spencer, Kapaa

12 Comments
  1. Ginger Doll January 7, 2019 4:22 am Reply

    If money is the root of all evil and the rich have so much of it, does it make them the cause of so much evil in the world?
    A higher wage makes people less poor. Higher wages help everyone because the money is spent on goods and services, helping small businesses as well as big corporations. Consumer consumption creates jobs.
    Imaging you are a new car dealer. Would you like to be located in an area with low wages or high wages? Where would you sell more cars?
    A living wage provides dignity to the family earning it. The duty of government is the well being of society. Legislation requiring a living wage must be a priority.


  2. gordon oswald January 7, 2019 7:47 am Reply

    Al Spencer, a voice of reason in a sea of insanity! Thank you Al for a letter well written and intelligent! Amen!


  3. tunataxi January 7, 2019 8:51 am Reply

    I’m sure there are many people making minimum wage who would disagree. I especially like the closing sentence touting schools as the answer. Who do you think builds and runs public schools… that’s right the government. Stop before you tell me private schools are the answer for children who’s parents make minimum wage


  4. RG DeSoto January 7, 2019 8:57 am Reply

    Very good points, Al.
    “They will also have a big windfall because the excise tax will be on all of the increases in the price of goods and services.” And thanks to our new mayor, Kawakami, and the previous county council the GET will be increased with a “county surcharge” bringing the effective rate up from 4.167% to 4.7025%…A 12% increase. This increase is ostensibly for roadway improvements…but isn’t that what the county gasoline tax is for? It remains to be seen whether or not the roads are actually improved.
    The GET is, of course, an entirely regressive tax…in that it is far more burdensome for low & fixed income people who spend a larger proportion of their income on taxable goods and services.
    People like Gary Hooser, his fellow progressives and the politicians like to blame the wealthy for the plight of low-income people when in fact, as you’ve pointed out, the real culprit is the government–county, state and federal. It is these entities (especially the Federal Reserve and its inflationary monetary policy) that have destroyed the value of the dollar and place low-mid income people in jeopardy.
    Add in the terrible land use laws, regulations, obstructionist bureaucrats and the onerous permitting process and we are faced with a crisis of terribly expensive & shortage of housing for many.
    RG DeSoto


    1. Ginger Doll January 7, 2019 1:45 pm Reply

      RG
      You are right. The GET tax is a regressive tax, hurting the poor more than anyone. It should be abolished or at least, exempt GET from food & clothing.
      A fair tax is the graduated income tax. The higher the income, the higher percentage the taxpayer pays.
      But you are also wrong if you think all of our problems will be solved if government goes away.
      Without land use laws and regulations that were written to preserve Green space, the beauty of our island and access to the ocean, there would be an explosion of hotels and condos built not for resdents but more visitors.
      The “affordable housing” being build now is priced at $500k, making it Unaffordable to most island residents. One way to make it affordable is the establishment of a living wage. That is the duty of government.


    2. I saw a Vampire once January 7, 2019 6:05 pm Reply

      I think what he means is the tax the companies pays, is on the Federal Unemployment tax and that the employees pay that tax too. So that means the company don’t give a &&&& what the government does. Because the company pays the unemployment tax on the employees tax. 120%. Same goes for the private owner’s. State Unemployment taxes. They pay the employees portion of the tax. Government can do what ever they want. They just have no position on it. Why? Because they’re stupid. No knowledge of business.


  5. Pete Antonson January 7, 2019 1:18 pm Reply

    The conservative Stormtrooper boys come out of the termite eaten woodwork each time the incredible inflation causing minimum wage increase is discussed. “Why, think of the consequences if poor Johnny can buy 12 eggs instead of 10 this week!!!” Of course, they have their own methods, like the orange blob’s $2 Trillion (over 10 years) tax cut. It appears that there is some sort of conservative economic rule that when the rich keep millions more after taxes, it has no effect whatsoever on inflation! Besides, all that 20% corporate cut was going to wages, right? We know now that 56% has gone to shareholders and only 6% has gone to workers. We know now that wages have risen, by November, .08% or less, compared to the 2% in 2016! Let’s all do some cartwheels! Other features, like repatriating offshore moneys have become a mere fraction of what was promised. It just amazes me how conservatives have been able to scam the Nation for so long with their trickle down manure pile!
    (all info from bloomberg.com – you know, those radical leftist socialist progressives from Venezuela!)


    1. RG DeSoto January 8, 2019 8:20 am Reply

      Pete…at least get your terminology correct. Inflation technically refers to the growth of the money supply when it is created out of thin air by credit expansion.
      I am not a conservative or neo-con…you should be able to discern that. So you can drop the stormtrooper nonsense. That is a moniker more suited to the radical leftist who actually act like the Nazi thugs did during the 1938 Kristallnacht.
      The rest of your rant is just sarcastic drivel with a vain attempt to throw in some un-referenced statistics.

      Vampire….what can I say other than: PROOF READING is a good way to ensure the rest of us can understand what they heck you’ve written. Or take a creative writing course at KCC.

      Ginger…so you must be someone that is comfortably ensconced in a nice home. You have time to whine and wring your hands about things that someone without a house cannot consider. You are simplistic and naive with your prescription for people be able to afford housing. The problem is government…from the Fed and its inflationary monetary policy that destroys purchasing power (95% of the dollar’s value lost since Fed’s creation in 1913) to county and state laws & regulations that stagnate the supply of building lots and housing. The easiest way to reduce the price–hence the affordability–of housing is to increase the supply to at least meet demand or hopefully exceed demand, which would drive prices downward. Arbitrarily assigning some dollar value as a “living or minimum wage” is utter nonsense and, as research shows, hurts the very people that it’s meant to help. I know that notion is tough for you to comprehend…but it is the reality.

      All three of you need to get a grip.
      RG DeSoto


      1. Pete Antonson January 8, 2019 5:18 pm Reply

        Oh yeeaaah R.G., I forgot my History, the Nazis were always giving away free stuff to nonmembers of the white master race and robbing them of their independence! We kept telling them: “You Libtard Nazis are too emotionally connected to the less fortunate and if you don’t stop, homosexuals will soon have more civil rights than straight Germans!” We eventually had to fight a war to get them to stop their direction towards an welfare state without borders!

        Seriously, Nazis and fascists are extreme extensions of the right wing. Efforts to flip this historical fact are pathetic. Mussolini started out gradually as an authoritarian nationalist who liked to appear tough and call people names. If this were Italy in 1923, R.G. would be writing comments supporting the necessity of invading Corfu and how it will make Italy great again!


  6. anonymous January 7, 2019 5:23 pm Reply

    You are completely correct but you likely will get a lot of hate mail from your statement from people who don’t want to understand the implications. Raising the minimum wage only puts that first rung of the ladder higher making it more difficult for workers who want to find a job and enter the workforce. The higher cost discourages employers from creating new jobs. The benefits of a higher minimum wage are inflated away. Some employers will decide it’s better to lay people off all together and replace them with machines. Now those people don’t have a job at all!!


  7. StupidTalk January 8, 2019 10:22 am Reply

    It’s stupid talk because Everything has GONE UP every year accept for wages.

    10 years ago almost everything was half the cost it is today and since doubling the price of goods then why hasn’t the min wage doubled?

    Gov, state, county employees get a cost of living raise almost every year but the private sector suffers because majority of you people are too stupid to understand basic economy.

    If the min raised every year with the same index as the cost of inflation then we wouldn’t have this problem.

    The FACT(s) that it hasn’t are the reasons to why we are in this stupid debate.


    1. RG DeSoto January 8, 2019 2:26 pm Reply

      Stupid…speak for yourself.
      Do some research how the Federal Reserve System has trashed the value of the dollar….there’s the real problem.
      RG DeSoto


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