Posted by
PoliCzar on Thursday, December 21, 2006 3:51:46 PM
According to a news report today:
President Bush called Wednesday
for a $2.10-per-hour increase in the minimum wage over the next two
years "with targeted tax and regulatory relief" for small businesses,
but Democratic leaders, including Sen. Ted Kennedy of Massachusetts,
replied by demanding "a clean bill" that boosts wages "and is free of
any baggage."
We should not be surprised that Ted Kennedy wants
the minimum wage hike to exclude some relief on small businesses. After
all, Teddy is not exactly pro-small business. He certainly doesn’t
realize that small businesses in this country drive the economy. They
also employ more minimum wage earners than big businesses by
percentage.
The news report contained, According to Kennedy's
statement, his Fair Minimum Wage Act would raise the minimum wage from
its present level of $5.15 per hour to $7.25 an hour in three steps: to
$5.85 three months after enactment; to $6.55 one year later; and to
$7.25 one year after that.
Now, it may seem to you that this is
fair, it does to me, but we must understand the total impact of these
pay increases on a small business who can only afford to pay certain
valued employees minimum wage. Many cleaning crews, restaurant workers
and temporary employees make the minimum.
A study published in
October, as reported by CNS News, indicated that prices tend to surge
as unemployment rises in municipalities that require employers to pay
more than the federal or state minimum wages.
Let’s remember,
the higher the pay rate, the more tax the employer is paying on the
state and federal level. Kennedy disagrees with a proven fact. He of
course, is an economics wizard and has years upon years of experience
in running countless small businesses. Right? Wrong. He cannot even
cite the source of his own statistics saying that raising the minimum
wage would not harm the economy. Most of his bills in the past did just
that, harm the economy.
This may not generate a sudden impact on
the job market or inflation, but there will be one on the small
business themselves, which as noted above, ultimately drive the economy
in this country. By taxing them more, by making them pay out more in
payroll, without some sort of relief, many businesses will be hurt, and
forced to evaluate their payroll, possibly cutting jobs or working
hours of their employees to generate extra cash to pay their higher
paid minimum wage workers that are needed for day to day operations.
This change may not be noticeable at first, but over the course of this
2-3 year period, this country will see a surge in unemployment,
naturally due to the smaller businesses lacking money to pay their
employees the higher wage and the taxes they bring with them. Remember,
there is always job creation with unemployment. The jobs created may
not be ‘minimum wage’ jobs, hence unemployment levels may rise for
lower wage workers who may have trouble finding jobs that pay that wage.
Kennedy
pointed out that Congress took a $3,100 pay raise recently. I find it
funny that he mentions this. Nowhere could I find information stating
that Kennedy himself refused the pay increase as many other congressmen
and senators did at the time. But I do agree with him on that issue,
why should Congress get a pay increase? If they are civil servants,
they should work for less to give more money to the wages of their
constituency. But we all know that will never happen.
Ultimately,
Bush must compromise and pass the law. However, he must not compromise
on the tax relief portion of an edited proposal. No legislation will be
passed without ‘baggage’, be it good or bad, Kennedy knows this. After
all he has earmarked thousands of bills in the past, so why should
Republicans give him a free pass on this one?