From: Lee Chadwick Simmons (Dr)
ACSLee@ntu.edu.sg
I have some thoughts on this from the perspective of a former employer who
went out of business due to the minimum wage increase when it went over $5
an hour. I used to be in the business of raising money for charities. We
made telephone calls requesting donations and sent out mass mail asking for
donations. My market was the small start-up charities who could not afford
the large firms who do this type of consulting and charge enormous fees. One
of my early contracts was with MADD when they were getting going. I hired a
lot of high school students who worked in the evening for around $4 an hour
to start. In order for them to get a raise they had to generate more income
than their wages cost me. We were paid on a percentage basis on all income.
Keeping in mind that there are office, managerial, telephone, printing and
other expenses they had to generate about 5 times their hourly pay in
donations to justify their salary. For most of those students this was their
first job and they did get some valuable experience in the business world.
They were not counting on their income to support anything except their own
teenage lifestyle. It takes a week or so to train someone to do this kind of
work, some are just not suited and then they have to maintain sufficient
income to cover that week plus their ongoing salary. Some did quite well and
received much higher wages. Most didn't. This kind of business to help
charities is usually seen as a positive input to society. Training young
people is a positive input to society. However, I am out of business due to
the minimum wage increase. What all this verbiage is getting at is that for
the most part the minimum wage applies to people who it are not trying to
use it as their main income and to raise a family. Simply applying it to all
on the basis of the increased cost of living does not help those who are in
the position of just entering the workforce.
Second thought is on taxes. The people who are making minimum wage pay
almost no income tax. The amount of money lost due to them losing their job
or even if their job is moved overseas is tiny. Instead we should probably
train them to do more value added jobs and increase their standard of
living. As far as I can tell the only ways to increase the standard of
living in any society is either to increase output on a per capita basis or
to increase the value added that each person inputs into the goods and
services produced by that society. If we really wanted to improve the
standard of living we would close down the low paying jobs and move them
overseas and retrain those doing them to do higher value added jobs. The
textile industry is a prime example of this. Just recently I found an
article on some McDonalds outsourcing the voice and order taking at the
drive through windows. It turns out to be faster and more accurate.
Lee C. Simmons
Auburn University
SimmoLC@auburn.edu
________________________________
From: Business Ethics Teaching Space on behalf of Charles Wankel
Sent: Mon 1/3/2005 11:13 PM
To:
BETS-L@LISTSERV.UIC.EDU
Subject: Re: Is it sensible to raise the minimum wage in New York?
From: Jan Bohren [mailto:
Ethos21st@aol.com]
My last thought on this one is that expansion of the Earned Income Tax
Credit allows the employer who doesn't pay a living wage to pass the
difference off on the American taxpayers. Should we support that
business person without making him or her open the books to see the
profits they are reaping from the business?
- Jan Bohren
On Jan 3, 2005, at 6:55 AM, Ian Welton wrote:
> Norman Hawker on 03 January 2005 at 05:40 wrote:-
>
>>
>> These objections, at least from US employers, could be met by
>> expanding
>> the Earned Income Tax Credit for employees who make less than
>> a living
>> wage.
>
> How would this deal with any ethical aspects of an employers
> responsibility
> towards employees?
>
>
> Jan Bohren in the message of 03 January 2005 at 05:31 said:-
>
>>
>> Notwithstanding the objections of employers who feel they could not
>> stay in business by having to pay a "living wage" to
>> employees, perhaps
>> the economics ought to drive out of business those who choose to
>> exploit people who can't find jobs where the pay meets or exceeds the
>> poverty level.
>>
>> Another way to look at this would be to consider whether an
>> employer in
>> China or Southeast Asia that now pays $3 a day for labor should
>> continue to pay unlivable wages to employees in order to
>> compete in the
>> shoe, sock, or clothing market.
>>
>> Where exactly does the concept of labor exploitation fit in our
>> business economy? Maybe the FLSA is not such an archaic law
>> after all.
>
>
> What affect would raising the costs of any consumer products have on
> the low
> income families reliant upon those low cost products for their
> survival?
>
>
> Fred Nickols on 03 January 2005 at 09:11 observed:-
>
>> Norman Hawker's suggestion (see below) reminds me of another
>> tax issue. The
>> practice of off-shoring erodes the tax base. People lament
>> the loss of jobs
>> but, so far at least, I haven't heard much about the negative
>> impact of
>> off-shoring on taxes. Where is that being examined?
>>
>
> Where income redistribution by a tax system is used, which
> organisations/social groups generally benefit?
>
>
> If any, what degree of importance is given to any privacy involved in
> these
> matters to the individuals/organisations concerned?
>
>
> Ian W
>
>> -----Original Message-----
>> From: Business Ethics Teaching Space
>> [mailto:
BETS-L@LISTSERV.UIC.EDU] On Behalf Of Fred Nickols
>> Sent: 03 January 2005 09:11
>> To:
BETS-L@LISTSERV.UIC.EDU
>> Subject: Re: Is it sensible to raise the minimum wage in New York?
>>
>>
>> Norman Hawker's suggestion (see below) reminds me of another
>> tax issue. The
>> practice of off-shoring erodes the tax base. People lament
>> the loss of jobs
>> but, so far at least, I haven't heard much about the negative
>> impact of
>> off-shoring on taxes. Where is that being examined?
>>
>> Regards,
>>
>> Fred Nickols
>>
nickols@att.net
>>
>>> -----Original Message-----
>>> From: Business Ethics Teaching Space
>> [mailto:
BETS-L@LISTSERV.UIC.EDU] On
>>> Behalf Of Norman Hawker
>>> Sent: Monday, January 03, 2005 12:40 AM
>>> To:
BETS-L@LISTSERV.UIC.EDU
>>> Subject: Re: Is it sensible to raise the minimum wage in New York?
>>>
>>> On Jan 3, 2005, at 12:31 AM, Charles Wankel wrote:
>>>
>>>> Notwithstanding the objections of employers who feel they
>> could not
>>>> stay in business by having to pay a "living wage" to employees...
>>>
>>> These objections, at least from US employers, could be met
>> by expanding
>>> the Earned Income Tax Credit for employees who make less
>> than a living
>>> wage.
>>>
>>>
>>> Norman W. Hawker
>>> Associate Professor
>>> Haworth College of Business
>>> Western Michigan University
>>> 1903 West Michigan Avenue
>>> Kalamazoo, Michigan 49008
>>