Jobs combat poverty; over-regulation discourages businesses and jobs

Magatte Wade was born in the West African nation of Senegal, was educated in Germany and France, then came to the U.S. She is a frequent speaker at business conferences and college campuses, including Harvard, Yale, Columbia, Cornell, Brown, Dartmouth, MIT, and Wharton. She has started businesses and with her husband is working to create schools in Senegal.

Part of one of her addresses featured on YouTube dealt with how not to be poor. What she said to her audience is a good lesson for everyone.

“People are poor. Why are you poor?” She answered, “you're poor when you don't have enough money to meet your basic needs.” 

And then, the big question: “Where does a source of income come from for most of us?” The answer is, as former Vice President Joe Biden famously said: that three-letter word: ‘JOBS.’

This is not a bolt from the blue to most of us, but to her audiences in colleges and in her native Senegal, this solution may not be so obvious. In fact, some of her audiences responded that jobs actually come from government.

Yes, she responded, some jobs are provided by government. But where does government get the money to pay its employees?

“It comes from taxes. People who work, employees; people who hire them, the companies and employers, pay [taxes] so that we in turn pay these government people.”

So, “we're back to commerce … we're back to business.”

“So I say,” Wade continues, “okay, if ‘jobs’ is the solution to this massive, massive problem we have out there of poverty, then don't you think that maybe we should try to think about where jobs come from?”

If jobs are the answer, and jobs come from entrepreneurs, businesses, “then don't you think that we should really try and pay attention to what type of environment those businesses get to operate in,” Wade asked?

What a concept! Since businesses large and small provide the jobs people need to avoid poverty, and enable workers to pay taxes, and pay taxes themselves to support the government, let’s be careful about the environment that we create for businesses.

In America, it should be easy for someone with a new idea or just the drive to start a business that will provide goods or services, and hire some people to work in it, so long as it follows reasonable laws and regulations. The operative word is, “reasonable.”

Far too often, this is not easy, and sometimes impossible. 

Writing in Business Insider, Michael Snyder addresses this issue. “Small business in the United States is literally being suffocated by red tape. We like to think that we live in ‘the land of the free,’ but the truth is that our lives and our businesses are actually tightly constrained by millions of rules and regulations.” 

“Today there is a ‘license’ for just about every business activity,” Snyder adds. “In fact, in some areas of the country today you need a ‘degree’ and multiple ‘licenses’ before you can even submit an application for permission to start certain businesses.” It gets worse. “And if you want to actually hire some people for your business, the paperwork nightmare gets far worse. It is a wonder that anyone in America is still willing to start a business from scratch and hire employees.”

“The truth is that the business environment in the United States is now so incredibly toxic that millions of Americans have simply given up and don't even try to work within the system anymore.”

To put the regulatory issue into perspective, the Federal Register is where federal rules are catalogued. The number of pages in it was about 2,600 in 1936. That’s a lot of pages of rules, but it pales in comparison to the calendar year of 2016, when the number of Federal Register pages stood at 95,854.

Certain variables factor into this: Some rules take more pages than others, and page size is also important. However, most novels have 250 words per page, and a really long novel has 425 pages. At the end of 2016, the Federal Register had as many pages as 225 long novels, and 383 normal-sized ones.

President Donald Trump has implemented efforts to reduce regulations by signing an executive order on Jan. 31, 2017 for the agency requesting a new regulation to cut two older regulations.

A Daily Caller story said that the Trump administration “reported $23 billion in savings from 176 deregulatory actions in fiscal year 2018. Even more consequential, the administration has issued 65 percent fewer ‘significant’ rules — those with costs that exceed $100 million a year — than the Obama administration, and 51 percent fewer than the Bush administration, after 22 months in office.”

That’s a start, but a lot more needs to be done to give Americans the freedom and ability to start a business or get a job.

A final word from Magatte Wade: “Not living up to our potential is a failure for which the only person who can possibly be responsible is oneself.“

She’s right, of course, but things like over-regulation make that much more difficult for even those who are determined to succeed.

Besides benefiting pandering pols, why have a $15 minimum wage?

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Democrat presidential candidate Bernie Sanders literally screamed through a bullhorn at a campaign event in support of raising the federal minimum wage from $7.25 an hour to $15. “I’ve been pleased to march and struggle with all workers in this country who are fighting for $15 an hour and a union,” he told the crowd. “We are the wealthiest country in the history of the world, people should not have to work for starvation wages.”

The City of Seattle, Washington last year raised its minimum wage to $15 to take effect this month, San Francisco and Los Angeles, California followed suit shortly thereafter, and last week the California State Legislature passed a measure to raise the state’s minimum wage in steps to $15 by 2022, and Governor Jerry Brown pledged to sign it.

Politicians frequently advocate for higher minimum wages, which attracts a lot of positive attention from low wage earners. Campaign speeches focus on how hard it is to live on minimum wage, as if a large proportion of the workforce earns the minimum and that large numbers earning at that level are trying to support a family, and all of these people really are being enslaved by greedy businesses. Facts, predictably, tell a different story.

At the end of 2014 the number of Americans 16 and older earning hourly wages was 77.2 million. Of those, just under 3 million earned the minimum wage, about 4 percent. Among all workers that year, hourly and salaried, those earning at or below the minimum was just 2 percent, and only 1.04 million minimum wage workers held full-time jobs. Of the entire full-time workforce, only 0.7 percent earned at or below the minimum wage.

Who are these 3 million minimum wage hourly workers? Nearly half – 48.2 percent – are between 16 and 24 years of age, and 2.6 percent are 65 or older. More than half work in food preparation and related “hospitality” industries, 31.4 percent are high school graduates, 23.1 percent did not earn the high school diploma, and only 9.1 percent have a college degree.

Most of them are second or third earners in their household; the average family income of a minimum-wage worker exceeds $50,000 a year. Furthermore, most minimum wage workers graduate to higher wages quickly as their skills and experience increase, usually getting a raise in less than a year.

People generally make minimum wage when they get an after-school job, or to help out while they are going to college. They make minimum wage for jobs that require little skill, and are often supplemented by tips. People make higher wages when they gain experience or hold jobs requiring higher levels of skill. Professionals and technically trained workers make more than fast food workers, checkout clerks and grocery baggers, as it should be.

Those who run businesses have to decide how much they can afford to pay for the different types of jobs in their business. Wages are based upon the importance of each job to the business, the experience and skill of individual workers, the number of people available for each job, and the overall cost of labor and other expenses, balanced by business income.

When government edicts artificially increase labor costs, businesses must offset the increase by cutting costs, increasing income, or a combination. Every minimum wage increase of $1 an hour costs a business about $2,500 per employee per year in wages and payroll costs. Other employees making a little more than the minimum will either require a raise, or deserve one, dramatically increasing the labor costs. Something has to change to offset that expense.

Businesses likely will reduce staff, particularly cutting positions where several workers have the same job. Maybe they employ robots or other machines to do certain tasks. Have you been to a restaurant that has a touch-screen device on each table? You can order and reorder some items and pay your bill with a machine.

There now is a robot burger maker that can turn out up to 360 burgers per hour. It can grind, stamp and grill made-to-order patties. It can cut and layer the lettuce, onions, pickles, tomatoes, etc., put them on a bun, and even wrap them up to go. This device would replace three full-time kitchen staff and ultimately cost the business less.

Higher labor costs mean that prices of many items will necessarily go up, some significantly. Even as minimum wage workers get more money, they and everyone else will see their cost of living increase, gobbling up a good bit of the higher wage.

Few Americans earning the minimum wage really “need” a higher wage to survive. Analyzing the coming increase in Alberta, Canada to $15 per hour, Robert P. Murphy and Charles Lammam of the Fraser Institute concluded, “In short, the minimum wage is neither an efficient nor effective strategy for helping the working poor.”

Minimum wage earners need to work their way to higher pay through education, training and gaining experience, like Americans have done for decades. A federally mandated minimum is, and always has been, a colossal mistake. It will reduce jobs among the very people it is supposed to help.

If we raise the minimum wage, we’ll get these fantastic results!!

The narrative of the left is that even people who have never had a job and/or don’t have any skills deserve and need a “living wage.” Merriam-Webster defines a living wage as “a wage sufficient to provide the necessities and comforts essential to an acceptable standard of living,” which varies widely depending upon where one lives.

The drive for a hike in the minimum wage to $10.10 an hour, or sometimes as much as $15 an hour, lives on as a cause du jour for some Americans, defying the laws of business economics. Workers, labor unions, and politicians, support the wage hike through lobbying efforts, civil demonstrations, and labor strikes often paid for by labor unions.

These folks reject out of hand the fact that every job has an actual calculable value in the business it is a part of that takes into account the benefit to the business’s entire operation, the qualifications of the worker, and other real factors, unlike what drives the minimum wage hike: it is a nice idea, makes people feel good, helps unions raise members’ wages, and garners support for politicians.

The National Center for Policy Analysis (NCPA) notes that minimum wage hike proponents support an increase because it would save the government money in social support services, since those whose wages rise will be less likely to seek and need welfare benefits.

Research by the Economic Policy Institute shows that increasing the minimum wage to $10.10 an hour would reduce welfare spending by $7.6 billion, but that is only 3.8 percent of the total of $200 billion in welfare spending that taxpayers fund. Not that saving seven or eight billion is a bad idea.

However, in its efforts to give to people things they should earn through personal effort, the left focuses on the benefits of their ideas, and ignores the negative consequences.

This erroneous reasoning is responsible for a long and growing list of government programs the negatives of which far outweigh their benefits. The Community Reinvestment Act combined with repealing Glass-Steagall, and Operation Fast and Furious spring quickly to mind.

Addressing the negative impact of a wage hike, NCPA cites research by Ben Gitis of the American Action Forum asserting that raising the minimum wage will result in lost jobs. His analysis shows that 2.2 million new jobs would not be created, totaling a stunning $19.8 billion in lost earnings, if the minimum wage is increased.

The truth is that the number of minimum wage earners who really need a living wage is tiny. Only about 3.6 million workers, or 2.5 percent of all workers, earn the minimum wage, according to Bureau of Labor Statistics, and teenagers living at home comprise 31 percent of that group. And 55 percent are 25 years old, or younger, mostly inexperienced and just learning skills. Therefore, of all workers over 25, only 1.1 percent would be affected by a wage hike that would cost 2.2 million future jobs.

Combine that small number with the fact that well over half of workers earning less than $9.50 an hour are the second or third earner in a family, two-thirds of whom earn more than $50,000 a year, and that critical number shrinks even more.

As a percentage of hourly workers those earning the minimum wage has shrunk dramatically since 1980, when they comprised 15 percent of that group. Today, that portion is just 4.7 percent. And more than half of them are part-timers working less than 30 hours a week.

If you earn the minimum wage it certainly is appealing to imagine getting an increase in your wage of about half. But a hike in the minimum wage has to have solid economics-based reasons behind it, or it shouldn’t happen. The economic reality is that the numbers just don’t add up to support a $10.10 an hour minimum wage.

This wildly popular idea evolves from not understanding business and basic economics. How, in a country with education spending on average of $11,000 per student per year, can there be so many who have no idea about things like supply and demand, and how high costs, high taxes, excessive regulations raise prices and decrease sales.

The United States has just lost the top spot in the world in productivity to China, the first time since Ulysses S. Grant was president that America has not led the world.

A friend who ran a company doing business in several foreign countries was talking about his company’s expansion into China a few years ago. At the time China had 1.35 billion people, he said: 100 million communists, and 1.25 billion capitalists.

While Communist China embraces capitalist principles and becomes the most productive nation, the United States, once the bastion of free enterprise, increasingly embraces socialistic mechanisms and lost the lead in productivity for the first time in more than 130 years.

Most likely few of the proponents have ever had to make a payroll or keep a business viable in the face challenges like competition, high taxes and onerous regulations.

Foolish ideas like raising the minimum wage without sound reason helps explain our loss to China and our overall anemic economy. 

Does stopping corporate inversions require a stick, or a carrot?

The Obama administration and Democrats in Congress have recently focused on corporate “inversion” as something needing quick attention. In an inversion, a US company starts or buys into another company in a country with a lower corporate tax rate and then calls the new country home, enabling it to avoid some taxes in the US. Although US companies still pay the same rates on US income, the lower rates apply to income earned abroad.

The Congressional Research Service reports that there have been 47 inversions in the last decade, and Business Week online identified 14 since 2011. The administration brought the issue to the fore with a letter from Treasury Secretary Jack Lew saying that inversions ‘’hollow out the U.S. corporate income tax base.”

The issue has both practical and political importance, highlighting the lower amount of corporate taxes collected, and also providing politicians who may be or become candidates for office a populist issue to exploit, like Sen. Elizabeth Warren, D-Mass., considered a potential presidential candidate.

Leaders of both political parties on the Senate Finance Committee – chairman Ron Wyden, D-Ore., and Sen. Orrin Hatch, R-Utah – agree that the tax code needs major reform, however, the two parties have different approaches on exactly how to accomplish that goal.

Peter Merrill, a director at PricewaterhouseCoopers, testified before the Finance Committee and discussed how US corporate taxation rules compare to those of other countries. He named two areas of the US tax system that “fall far outside international norms: the high corporate rate, and the worldwide system of taxation,” both of which he said make it more difficult for US companies to compete in global markets. Citing increasing competition from other nations, he said in the last 15 years the number of US companies on the Forbes Global Top 500 list has dropped by a third, from 200 to 135, and noted that the US corporate tax system contributes to this decrease.

The US corporate tax rate is the highest among major economies, Dr. Merrill said, more than 14 points above the average for the other Organization for Economic Co-operation and Development countries, and nearly 10 points higher than the average for the other G7 countries. And he noted that while other countries have substantially lowered their tax rates since 1986, the US raised its rate to 35 percent in 1993.

President Barack Obama wants Congress to enact corrective legislation that is retroactive to May, arguing that the proposal will stop companies from rushing into deals to avoid lower taxes. And he accuses these corporations of being economically unpatriotic.

Reuters reported that Mr. Obama said in remarks at Los Angeles Technical College: "Even as corporate profits are higher than ever, there’s a small but growing group of big corporations that are fleeing the country to get out of paying taxes.” And he added, "They’re technically renouncing their U.S. citizenship, they’re declaring their base someplace else even though most of their operations are here. You know some people are calling these companies 'corporate deserters.'”

Other prominent Democrats echoed that sentiment. Rep. Chris Van Hollen, D-Md., quoted in The Wall Street Journal, characterized these companies as "deserting the U.S. in order to dodge their obligations to the country and American taxpayers."

Senate Finance chairman Wyden wants to make it harder for U.S. companies to move their headquarters abroad, and commented, "… corporations must understand that they won't profit from abandoning the US." Secretary Lew joined that view, calling for a "new sense of economic patriotism."

Attacking companies as “unpatriotic” because the US tax system is punitive and encourages them to move overseas to lower costs is both hypocritical and dumb. They are legally operating within the complex and confounding framework government provides for them, and are trying to maintain profitability in an increasingly competitive global market.

Democrats want action taken now to limit inversions, but there are sound arguments that this will make things worse. Putting duct tape on the tax code instead of rewriting it and making it comprehensible and sensible is why things are such a mess. Comprehensive tax reform is the best solution.


It’s not for nothing that the Democrat Party has been tagged “the tax and spend party.” They go happily along championing high taxes to fund politically popular programs without any apparent clue that their policies frequently do more harm than good.

“Comprehensive tax reform would reduce deductions and lower tax rates for everyone," said Michael Steel, spokesman for House Speaker John Boehner, R-Ohio.

The way to encourage businesses to stay in the US and expand, or relocate to the US is to make it desirable for them to do so, and have a tax code that says “we want you here.” That means slashing tax rates to competitive world levels, stop taxing foreign income and eliminating some deductions.

Businesses provide goods and services that people want and need. They also provide jobs that enable people to afford things they want and need, and they pay taxes that support governments at all levels.

Business is the goose that lays the golden egg. Democrats need to understand that instead of beating the goose, they need to nourish it.

What do minimum wage demographics say about raising the wage?

There has been a lot of uproar in the media lately about raising the minimum wage so that those people earning it would earn a “living wage.” But what do demographics about those earning the minimum wage tell us?

According to the Current Population Survey (CPS), which is a joint effort of the Bureau of Labor Statistics and the Census Bureau, 3.7 million workers reported earning the minimum wage of $7.25 or less per hour. Now 3.7 million is a lot of people, but when looking at the entire workforce, it’s a small portion – only 2.9 percent. Slightly more than half of them are aged 16 to 24, and 62 percent of that group are students.

Nearly 80 percent of those earning the minimum wage work part-time jobs and belong to families that earn nearly triple the poverty level for a family of four at $65,900 a year, while only 22 percent live at or below the poverty line. Three percent have finished college and obtained a degree, and 5 percent are married.

Many of those aged 25 and older work in jobs where they also earn tips, like restaurant workers, so their total pay most nearly always exceeds the minimum wage. While most do not live in middle- and upper-income families, they also are not living in poverty, having an average family income of $42,500, just less than double the $22,350 poverty line level for a family of four.

Advocates of raising the minimum wage – and many minimum wage earners who respond to the hype those advocates produce – complain that you can’t raise a family or even live a decent life on the minimum wage, so therefore it should be raised to provide a “living wage.”

When you realize that only 3 of every 100 workers earn the minimum wage, the problem doesn’t seem as dire as the advocates for a wage hike want you to believe. And when you look at the kinds of work that minimum wage earners perform, and who minimum wage earners are, it seems even less dire. These jobs require little education or training, and are overwhelmingly held by young people living at home.

Based upon the demographics, there’s no economic reason for a higher minimum wage.

You won’t find trained and educated people like electricians, mechanics, carpenters, plumbers, nurses, pilots or teachers, or lawyers, doctors, CPAs, engineers, and others who have gotten an extensive education and additional training making minimum wage, or anything near it.

But more importantly, the number of minimum wage employees who really need a “living wage” because of family or unusual personal needs is very small, and there are better ways to help them.

Assuming all minimum wage employees worked 20 hours a week, a $2 increase in the minimum wage would cost employers $2,080 a year for each employee, plus increased payroll taxes. For all 3.7 million workers, the increase would cost $7.7 billion a year, plus increased payroll taxes. Those working more than 20 hours a week adds even more costs.

Additional costs arise when those making between the old and new minimums get increases to get them to the new minimum, and when those making close to the new minimum get increases to keep them proportionately higher than the new minimum. The costs would be substantially higher than $7.7 billion. And guess who bears that cost? Employers? No.

Consumers will pay higher prices, producing reduced sales, and those higher prices will also affect those who just got a raise.

A Heritage Foundation research report released last February notes that while many advocates of higher minimum wages suggest a higher wage “to help low-income single parents attempting to survive on just a minimum-wage job … just 4 percent of minimum-wage workers – or 148,000 – are single parents working full-time, compared to 5.6 percent of all U.S. workers.”

To add billions in increased consumer costs to benefit a relative few doesn’t make sense. They need to become qualified for better paying jobs, and if that is difficult or impossible for them, and if government is going to provide welfare, those people should receive help.

“Contrary to what many assume,” the Heritage report notes, “low wages are not [the] primary problem [of the poor], because most poor Americans do not work for the minimum wage. The problem is that most poor Americans do not work at all.”

The faction promoting a higher minimum wage consists primarily of two types of people: those who do not understand or don’t care about the most basic concepts of business economics, and politicians who benefit from pandering to minimum wage earners.

Current government policies are designed for purposes other than to help people escape poverty; therefore government needs to start encouraging job creation so that people in poverty have better opportunities to take control of their own lives and work their way out of poverty.

Returning America to the land of opportunity it used to be, where people were able to go as far in life as they were able, should be President Obama’s major goal.

Random thoughts on the passing scene

Some of those who think the American health care system needed to be trashed and reformed in the image of the Canadian system might be interested in the opinion of Bacchus Barua, a senior economist with Canada's Fraser Institute.

"Healthcare in Canada is anything but free," he states, noting that the average family of four pays more than $11,000 a year in taxes for hospital and physician care. However, he explains in an article for The American "surely such expenditure is justified if Canadians receive a stellar healthcare system in return for their tax dollars. Unfortunately, that simply isn't the case."

Specifically, he lists some problems with his country’s system:

** Canada has fewer physicians, hospital beds, and diagnostic imaging scanners, and performs fewer medical interventions than its American and European counterparts.

** Canada has one of the lowest physician-to-population ratios in the developed world.

** A recent survey found that Canadians must wait an average of about 4 1/2 months for medically necessary elective procedures after referral from a general practitioner.

** The wait for diagnostic imaging technologies like MRIs is over two months on average.

** Patients in Canada are likely to wait two months or more to see a specialist, six days or more to see a doctor when sick or needing care, and four hours or more in the emergency room.

** Due to the lengthy waits, about 40,000 Canadians leave the country for treatment elsewhere each year [like the U.S.].

** Public drug plans covered only about a quarter of the new drugs approved for sale in Canada between 2004 and 2010.

He concludes: "These realities serve to dismiss the mythical notion that a Canadian-style healthcare system" is highly desirable.

We are headed in that direction.

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During the mortgage banking crisis the federal government pressured large banks like JPMorgan Chase to take over the bad mortgage loans sold by failing banks Washington Mutual and Bear Stearns. Now the government is fining JPMorgan $13 billion for helping the feds deal with the crisis. Can you say “shakedown?”

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Planned Parenthood involves itself with topics other than planning parenthood on its Facebook page, discussing topics like why some types of sexual activity are painful, transgender issues, and promoting Obamacare. Not exactly family planning.

An article on the Internet site bighealthreport.com reports that on Planned Parenthood’s Facebook page for teens it answers the question: “Is promiscuity a bad thing?” and that the organization defended doing so with the statement, “there’s nothing bad or unhealthy about having a big number of sexual partners.”

Isn’t this the mentality that has led to 40 percent of our babies being born out of wedlock, and males with multiple children from multiple “baby mamas?”

This “advice,” such as it is, increases the likelihood of HPV and cervical cancer among females, in addition to STDs. “Even the Guttmacher Institute, the former research arm of Planned Parenthood, considered ‘a person to be at direct risk for STDs if he or she had had two or more partners during the 12 months preceding the interview’ during one of their research studies,” Big Health Report said.

The article notes “a person with low self-esteem has been shown to engage in sexual relations earlier, and engage in riskier, unprotected sex with multiple partners.” Does that sound like “nothing bad or unhealthy” to you?

Seriously? This is what we get for $542 million in federal subsidies?

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The “government shut down” really amounted to about 17 percent of the government being “shut down,” and that is somewhat like going to a mall that has 100 stores and finding only 83 that are open for business. So, while things were uncomfortable for some folks, it bore no resemblance whatsoever to the government actually shutting down.

Of course, if the mall management blocked off stores that otherwise would be open, things would be more uncomfortable. No sensible businessperson would do that, but a petty, politics-dominated administration would, and did.

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The emotional push to raise the minimum wage to $15 dollars an hour for those working the least skilled jobs in the fast food industry puts the spotlight on a fundamental misunderstanding of basic economics.

Advocates think the wage ought to be based upon concerns totally unrelated to the job and the business the job is a part of. “I flip burgers at Burger King, and can’t support my family on what I make, so raise the minimum wage,” is the mentality behind this ill-advised movement. In their mind, if a PhD. in English, mathematics, biochemistry, or any other field somehow ended up ringing up Happy Meals at MacDonald’s, the wage ought to be based upon his/her training, or some arbitrary “living wage” concept.

A job is worth whatever the employer says it is worth. Anyone who doesn’t like the wage is free to not take the job, or to look for a better one. If the employer can’t find people to work at the selected wage, he or she will have to raise it. Anyone who tries to find a better job, but can’t, needs to pipe down and do the job the employer allowed them to have until they can find a better one.

"Living wage" mentality reflects misunderstanding of business reality

Fast food workers in seven cities were on strike last week demanding a "living wage" of $15 an hour, more than twice the $7.25 they currently make. Empathy aside, this expectation is a fantasy.

Every job has a value, but it is based not on what the person who has the job thinks it should be worth, or what sympathetic observers think it should be worth, but on its role in the business.

How important is the job to the business, compared to other jobs? Are other people who can do the job a scarce commodity, or are there thousands of them? Some jobs require substantial training, while others do not, and individuals with the required training deserve higher pay than those without training. Minimum wage jobs in the fast food industry require no formal training; the worker can learn on the job, and while the worker is learning to do the job satisfactorily, the boss endures lower-than-necessary productivity.

Who exactly works for the minimum wage? These jobs are entry-level work intended for people just getting started in the workaday world, like students trying to earn a little money while pursuing their education, or people with little or no skills or experience looking to get some skill and experience. About half of the 1.6 million minimum wage workers are under 25 years of age. The minimum wage is not intended to be, and cannot be, a “living wage.”

The minimum wage is, indeed, a low wage, but most of those workers get a raise in less than a year, and there are fewer of them today than in the past. The number of people making at or under the minimum wage today is 28 per 1,000 wage and salary workers, while in 1976 there were 79 per 1,000 wage and salary workers.

Most employers want the best workers they can find, so if most workers produce 10 of something an hour and Joe can produce 12 an hour, or if Mary’s work is of higher quality than other employees, the boss is likely to give them a raise to keep them on staff.

For people in minimum wage jobs with few or no skills, demanding their salary be doubled to a "living wage" is somewhat akin to high school students demanding they be given a college diploma. And anyone earning minimum wage that is unhappy with it can go look for a better-paying job. If they can't find one, do their best at the current job, and get some training that will qualify them for something better.

An organization calling itself Socialist Alternative illustrates graphically the failure of a “living wage" minimum wage in an article titled "Profit is The Unpaid Labor of Workers."

"Hypothetically, lets assume that our job pays $7.50 an hour and our boss wants us to work for twenty hours," the article says. "At $7.50 an hour for twenty hours, that’s a total of $150. In that same period of time, however, the work we do will probably make $300, $400, or $1000 worth of pizza."

And here's where it gets good: "What does this mean? Just for arguments sake, lets assume we only create $300 worth of pizza. After our boss gives us $150 for our week’s worth of work – meaning our own labor essentially pays our wage – he is left with an additional $150 that he did not work for."

There’s a brilliant bit of insight hidden in that paragraph: "our own labor essentially pays our wage." To the socialist mentality, the only cost of running the pizza parlor is what the boss pays the pizza maker. Everything else – flour, sauce, pepperoni, cheese, insurance, rent/mortgage, electricity, water, sewage, trash pickup, taxes, fees, etc. – the boss apparently gets for nothing, and the money collected for the pizza that is not paid to the pizza maker is ill-gotten gains.

The "living wage" strikers similarly do not understand business, and what happens when wages go up. Raising the minimum wage requires a commensurate raise in all wages, to avoid causing strife among the other workers, and that means price increases that make the business less competitive. That could lead to staff cutbacks or ultimately closing the business.

The strikers and the socialists fail to understand and appreciate the investments of the owner(s), who may have mortgaged their home to finance the business, and managers of larger businesses, who usually have spent years in training and working to get where they are, perhaps starting as a minimum wage employee themselves.

Owners get whatever is left over after everyone else – employees, venders, lenders, taxes, etc. – have been paid. Often, particularly in the beginning or during hard economic times, that is little or nothing. And, few employees work as hard as the owner of a small business, and particularly a new business, yet the Socialist Alternative begrudges them making a decent return on their investment of capital and time.

It’s easy to criticize the boss from the sidelines. The best course for these critics would be their forced entry into the business owner’s world. At their own expense, of course. They would undoubtedly see things differently in short order.