“To understand the workings of American politics, you have to understand this fundamental law: Conservatives think liberals are stupid. Liberals think conservatives are evil.” Things That Matter, Charles Krauthammer (reprinted from the Washington Post, July 26, 2002
When we discuss economics, politics or social trends at family gatherings, in the coffee break room or with friends during holiday gatherings, the polarity seems more intense every year, not less. Talk flows back and forth with hammer blows of conflicting facts and less and less listening from either side. How do we resolve the seemingly irresolvable? How do we compromise on issues built on inviolate, but contradictory core values?
The progressive decries the widening gap between the rich and the poor, which is undeniable. But over nine million formerly well paying industrial blue collar jobs have fled to emerging second and third world countries, and with production goes innovation. Those nine million jobs have been replaced for the most part by service sector jobs or retail, and rare is the instance that those relatively low skill jobs pay anywhere near as much as a trained machine operator or union car assembler. The gap grows, but it is facile to make the assumption that the exploitive business owner shoulders all the blame. We who benefit from lower prices at the cash register vote with our wallets and with the unintended consequence of hurting the highly paid, middle class blue collar worker.
Demonstrations at Walmart to pay its workers more than the current average $17,500 sound rational on MSNBC. The underlying economics that drive the decisions by management to set wages are more complicated. Stocking shelves at Walmart with made in China or Mexico sweaters cannot pay as much as practiced loom operators knitting those sweaters once made in the former textile mills of the Blackstone River Valley in Massachusetts and Rhode Island. Raising the minimum wage reduces hiring and harms the opportunity of those with few skills entering the workforce, where they will learn how to show up on time, to work diligently and improve their proficiency.
If Walmart decided tomorrow to raise the pay and benefits of all their workers $6,000 per year, it would no longer produce a profit for its owners and would not be viable as an ongoing business, having insufficient resources to compete, replace trucks and pay the light bills. If they raised their prices to accommodate the higher pay, the customers would soon be over at BJ’s or K-Mart buying their Chinese made sweaters and jeans where shelves are stocked and cash registers staffed with lower paid workers. Or consumers would buy fewer sweaters because they can’t afford the higher prices.
Raising the minimum wage to a “living wage” is terrific as a campaign slogan, but implementation without repercussions is a tricky business. NAFTA is a two edged sword.
“Cowboys games at AT&T Stadium can consume up to 10 megawatts of energy, more than is used in three hours by the 3.7 million residents of Liberia.” Kevin Kerr, Sports Illustrated 12/30
American “exceptionalism” is a commendable slogan and core belief as well, but can our citizens reasonably expect that having 4.5% of the world’s population and consuming one-third of the world’s paper, a quarter of the world’s oil, 23 percent of the coal, 27 percent of the aluminum, and 19 percent of the copper is sustainable in a global economy with the other 95.5% wanting their fair share of resources? Do we believe it is prudent governance to hinder development of domestic sources of oil through fracking while continuing dependence for oil on those who hate us? Does it make sense to hinder a pipeline from our closest neighbor and ally, which own of the third largest reservoir of oil reserves in the world? Do we really believe this will prevent Canada from selling this oil? The oil will be sold, and likely to those who burn it far less efficiently and cleanly than our more closely regulated industries and vehicles. Does this truly advance the cause of fewer hydrocarbons poisoning the atmosphere?
“I have seen great intolerance shown in support of tolerance.” Samuel Taylor Coleridge
Under the flag of “diversity,” the personal freedom in Western culture and in the United States has been under attack for nearly fifty years: especially the freedom to live out religious beliefs that do no harm. Jack Phillips, a baker in Colorado, politely declined the business of a same-sex couple who wanted to buy a wedding cake. The Left espouses diversity of belief and practice except when it comes to anyone who disagrees with the tenets of their own secular faith. Rather than simply going to another baker (of whom there are many), the couple sued Mr. Phillips and received a court judgment. He was fined. If he refuses to pay the fine or bake a cake, he can be sent to jail. This is not discrimination in the workplace or hiring practices or bullying or any of the other injustices that have been redressed in the courts. Jack Phillips chose not to participate by baking a cake and was punished by the court. How soon will churches be forced to perform marriages that violate their core beliefs? Will those churches have to get out of the civil marriage business, as the Catholic Church was forced out of the adoption business, closing down the largest adoption provider in the country?
The American Civil Liberties Union recently sued a Catholic hospital to force it to perform abortions. The Left for years had a mantra stating that, “If you don’t like abortion, don’t have one.” Apparently that doesn’t hold true if a hospital chooses not to perform one.
“I’ve always felt that a person’s intelligence is directly reflected by the number of conflicting points of view he can entertain simultaneously on the same topic.” Abigail Adams
Mrs. Adams was a superb communicator married to a superb communicator. Their letters to one another are a priceless legacy. She was also a lot smarter than most, including most especially me. I have a difficult time, as do many, trying to “entertain simultaneously conflicting points of view.” – More than ever when those points of view are almost fundamentally irreconcilable. Compromise may not be possible. e.g. How do we reconcile an issue when one group sees only “women’s reproductive rights” (who can oppose someone’s constitutional rights?), and the opposition sees murdered babies who merited protection and nurture? A Solomonic solution is not possible.
How do we reconcile political viewpoints when the Attorney General lets slide Black Panthers caught on video tape intimidating voters at polling places, and then goes hard after the Little Sisters of the Poor for upholding their rights of personal conscience against the Obamacare monolith mandating abortifacient drug coverage? How do we find compromise when one side is convinced the opposition is naïve and a little stupid, and the other side sees their opponents as evil incarnate? How do we reconcile opposing views in which one side perceives exponentially expanding government both in size and scope as a grave danger and the other envisions it as the road to Utopia? There remains little common ground upon which to stand.
This post started with a Charles Krauthammer quote, and it will end in one from a 2012 Washington Post column reprinted in “Things That Matter.” Read the book.
“(President Obama and progressives are) equating society with government, the collectivity with the state. Of course we are shaped by our milieu. But the most important influence on the individual is not government. It is civil society, those elements of the collectivity that lie outside government: family, neighborhood, church, Rotary club, PTA, the voluntary associations that Tocqueville understood to be the genius of America and source of its energy and freedom.
Moreover, the greatest threat to a robust, autonomous civil society is the ever-growing Leviathan state and those like Obama who see it as the ultimate expression of the collective.”
Quo Vadis Blog 
Raising the minimum wage reduces hiring and harms the opportunity of those with few skills entering the workforce, where they will learn how to show up on time, to work diligently and improve their proficiency. There be those who doubt this.
If Walmart decided tomorrow to raise the pay and benefits of all their workers $6,000 per year, it would no longer produce a profit for its owners and would not be viable as an ongoing business, having insufficient resources to compete, replace trucks and pay the light bills. There be those who doubt this.
If America is going to be a land of service jobs instead of the former “blue collor” jobs, then they will have to pay a living wage, and we who make use of their services will have to pay up.
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Can always count on Father Joe for a well thought out challenge. Let me try this:
1.) Most people I know in the workforce benefitted greatly from their early jobs. I certainly did. Just learning to show up, get along with co workers, perform per instructions and training, communicate to managers and advance based on hard work are valuable lessons not learned any other way that I know of. Without those early jobs, how do we learn these things. And now, having been in management for thirty years or so, it is a given that if new workers cost too much, we have to find another way to get the job done and keep costs down with higher productivity or by replacing underperforming associates with those who can do a better job. But hiring raw trainees is less likely the more they cost. Factor in the impact of Obamacare on health insurance and the 30 hour threshold, and they all mitigate against new hiring. Just the way it is.
2.) I trusted the numbers from the WSJ article I read on the $6,000 increase eating up all of Walmart’s net profits. Given your well justified skepticism, I pulled up the data to do the math. 1.4 million employees in the US. $6,000 each would cost Walmart $8.4 billion a year. Walmart’s financial statements show that their US operations netted approximately $9 billion, so there would have been a bit left over, but nowhere near enough to cover their billions in planned capital expenses next year to grow and replace equipment and facilities. Not to mention very little to pay to share holders as a return on their investment. Yes, there are some big family and executive shareholders, but far, far many more shares are owned by mutual funds and other equity groups. Names like Vanguard and Fidelity and Black Rock, which are found in the 401K portfolios of millions of hopeful retirees. And many millions of shares are owned by Walmart employees as part of their retirement planning. If the stock suffered big losses due to drastically lower profits, it’s Mom and Pop’s 401K which gets hit, and they can afford it far less than Jim Walton. To say that Americans would just have to pony up and pay more for their stuff at Walmart doesn’t take into account the average income of the typical paycheck to paycheck (or unemployment check or welfare check) Walmart shopper, who simply just can’t pay more for their Walmart groceries and clothing. So they would buy less and perhaps critically less for their families’ well being. No facile solutions to this one.
3.) Government has never done a good job with wage and price controls from what I understand. The more government ham handedness with its inherent pork and favors through tax credits or subsidies to cronies and sinecures to those who are well connected, the worse it gets. The more invasive the government is into the markets, the worse the results. Two natural experiments in our lifetime bear that out with exactly the same work force, resources and national culture to start, and vastly different results based almost exclusively on the micromanaging control and corruption of the government. East vs West Germany; North vs South Korea.
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1.) Most people I know in the workforce benefitted greatly from their early jobs. I certainly did. Just learning to show up, get along with co workers, perform per instructions and training, communicate to managers and advance based on hard work are valuable lessons not learned any other way that I know of. Right. Me too. But that was then… this is now. Those “early” jobs are now “grown up” jobs for many people now. Don’t forget what WSJ tells: We have become a service society… at least for this generation. Service jobs are not the old jobs of paper-making, for instance.
Right.
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Very true that it’s a whole new world
Other than paperboy and caddy, my first job was stacking hay bales on the back of a slow moving tractor pulled trailer for less than minimum wage paid in cash on a dairy farm.
Maybe an age exception? It’s the below twenties that suffer the lowest hiring rates and don’t get a good start, so where do they learn those basic skills?
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That is an argument to be sure. But what we all need to do is turn off our TVs go for a long walk without out ear phones and simply think… in a simple way. And here’s what we come up with. Beginning with WWII in 1939 America produced just about everything that Americans needed, including refrigerators, washing machines, TVs and cars (and paper and shoes.) The workers got good salaries for these jobs. They were able to buy houses and cars. Then when the rest of the world got caught up (after 1975 or so) the rest of the world began producing these things… cheaper. So all these jobs are gone. What replaced them are service jobs (people eat out now much, much more than back before 1970.) These service jobs workers are not being paid anywhere near what workers were paid making refrigerators. So they are not very well off. What to do???? Work in the medical field? Yes, that is a big industry now. Become lawyers? Yes, but there is a glut of them already. And besides, you have to have an aptitude… a “bent”… for these jobs, whereas working in a factory didn’t require a “bent.” There is far too much Democrat/Republican responses to this big question. Forget Dems. and Repubs. What is a common sense answer to this big, big problem???
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Great debate. The common sense answer………now wouldn’t that be a fine thing. Unfortunately we cannot forget the Dems or Reps as they chart the course of our country’s future. They haven’t display a lick of common sense in a very long time. It would be fine if more people gave thought to the current state of the states opposed to what restaurant to eat at or which mind numbing TV show to watch.
I fear that as we mount up our grandchildren’s grandchildren’s debt and refuse to see where it is taking us, it will be too late to reverse or change course and we will be in maintenance mode until such time as someone decides to require us to pay up.
I was told Mandarin was a good language to learn a long time ago as it is one of the fastest growing, I believe that now. I wonder when China will close it’s fist and realize they have us by throat?
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I very much enjoy dialogue with Father Joe, who misses nothing and has lost at eighty nothing off the high and tight fastball. I truly love the guy. Not to mention, he was instrumental (literally used by the Lord) in saving our marriage and in our having two more beautiful daughters and now three granddaughters. Today is a work at home snow day and coincidentally our 47th anniversary. But I digress.
As the stage manager in “Shakespeare in Love” was fond of saying, “It’s complicated.” China is a story we will see unfold for the rest of our lives. The smartest guy I ever worked for (Frank Gerrity) told me as a young manager, “When you owe somebody (or somebody owes you) a relatively small amount money, you are a debtor or a debt holder. But when it’s a lot of money (and surely trillions of US bonds are a lot of money), you are partners.” China seems to be moving ever more rapidly into increasingly inextricable trade relationships, somewhat easing their terrible human rights abuses and has a staggering vested interest in keeping the US active and relatively prosperous. I don’t expect they want a bankrupt corpse owing them multiples of almost every other country’s GDP.
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I watched Charlie Rose’s interview with Bill Gates last night. You gotta admit Gates is smart. Usually a person who is very smart in one area is seldom smart in another area. But with Bill Gates he is also getting very smart in the problem of poor countries. He says that what Congress needs to do is hire smart people in every area that needs fixing and follow their advice.
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Bill Gates is another interesting conundrum. Richest guy in the world most days still, I guess, depending on how many hundreds of millions his stock portfolio has moved, yet amazingly generous through the Gates Foundation he runs with his wife Melissa. The Gates Foundation has donated millions to combat malaria in the developing world, and many other good causes. But as Winston Churchill commented famously about Russia being a riddle wrapped in a mystery inside an enigma, so it is with Bill Gates, who is indeed very, very smart. He and his foundation are in partnership with and provide major funding to Planned Parenthood, the largest abortion provider in the country, hacking out in excess of 350,000 dead babies a year. It always is a mystery to me how anyone can support so many good works among the poor, voiceless and defenseless, yet from the other pocket support killing hundreds of thousands of the poor, voiceless and defenseless.
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One common sense view point should also be considered when analyzing the living wage debate which I believe is the route cause of why we are led to some incorrect assumptions. Runaway greed is rampant in our free enterprise capitalistic system. The free market system was supposed to harness this greed for the common good and it still does to some extent. However, when we look at the amount of money that corporate executives demand and receive in annual compensation packages, one can see why the typical example such as Wallmart mentioned above, appears to show that the company can not afford to give the rank and file employees a better living wage. I use JC Penny’s as my example having been in the news lately. A new man (no names need to be mentioned) was put at the helm to lead the company. As CEO he was brought in from another industry with no experience in the “rag” business and compensated at around fifty five million per year, evidently regardless of getting results or not. As it turned out, he lasted a year and sales revenue plummeted the company instead of helping. During that time, thousands of employees were cut to part time so their benefits could be trimmed , many were let go after long terms of employment and the moral of the employees slumped to new depths, completely ignored by the executives running this company. Why so much money for one man? Why such ineptitude ? Because that is pretty much the norm among the good old boys in the board rooms of America. Let’s say we try a new formula where we pay this guy five million a year and divide up the other fifty million between twelve thousand lower level employees. It could be in base salary and also in the form of incentive pay to increase productivity and customer service along with employee moral. To those folks, the chance to make another four thousand or so per year would be pretty exciting. The incentive maximum could actually allow for higher amounts since some would not be as productive and get less. The fact is, corporate America could spread the wealth around and easily raise the pay scales for the folks that do the work but the executives would have to take less. I know it would be tough to get by on five million a year as opposed to fifty five million and one would probably have to limit themselves to three homes instead of six, cut back to a hundred foot yacht instead of two hundred feet, but they could still get by couldn’t they?
I think the government needs to focus on regulating pay scales at the top executive level of publically owned corporations to protect stock holders and to help these companies eliminate such gross inequities in pay scales. If wage scales at the bottom are going to be mandated by the government then regulations are also needed at the top paying jobs to keep the balance sheets in the black. My experience in business since 1973 was with seven different corporations. Six of those companies do not exist today, all of which were publically owned. Many stock holders and employees lost their investments of money and time as these companies were improperly managed and run into the ground. I observed many corporate executives during those years and I think the results of their efforts reflects on their real worth. Many are grossly overpaid.
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Establishing a minimum wage and regulating executives pay are two separate operations. The first is sometimes necessary, the second is an intrusion on privacy that can never be tolerated. Many people who work for minimum wage are also eligible for government hand outs (read: “taxpayers handouts”.) Why should we taxpayers have to “fill in” what is lacking in the minimum wage earner. Let the company they work for do this. We live in a capitalist society not a socialist society.
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Kevin, While I certainly can understand your frustration with incompetent, grandiose and too smooth for the rest of us CEOs with huge paychecks, simply cutting their pay doesn’t fix anything. And I don’t want some government bureaucrat or a dysfunctional Congress setting a ceiling as well as a floor, do you? I agree with Father Joe that they are two separate issues. The farther we drift into EU socialism, the more individual freedom is infringed. And religious freedom, freedom of speech, all of it.
In the last year, Huffington Post and ABC News (among others of the left favoring media) bemoaned the $20.7 million paycheck the CEO of Walmart took home. We can argue about what is appropriate to run a nearly half a trillion dollar business, but if Mike Duke, it’s CEO took a 100% pay cut and distributed it equally among just the U.S. employees, each would get a $15.92 raise. Per year. 31 cents a week. 3/4 of a cent per hour if they are lucky enough to have a forty hour job.
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‘We do not live in a capitalist society and haven’t for a very long time. Face the facts, we live with a blend of both. We are supposed to be progressing towards a better existence for everyone. This requires capitalists and government to work towards common goals. In fact regulating pay at the bottom could be offset by regulating pay at the top and it is all payroll to the stockholders. The only ones that wouldn’t tolerate it are the 2% ultra wealthy. Pretty sad way to be.
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Consider this. The many millions of people who are unable to make a living wage while working hard and diligent at a company like Wallmart or Penney’s in a way, become wards of the state. They are forced to take government hand outs and live in subsidized housing. These are the folks that can’t afford health care etc. etc. etc. They need food stamps, heating assistance, Medicaid and many more programs.They are our fellow citizens and they represent a very large percentage of us. This is the problem and I believe it is because of greedy capitalists running our largest corporations that these folks are pushed on the tax payers for support. It is because of this dependence on government to survive, that they loose there dignity and freedoms. This is exactly what we don’t want for our citizens. This is exactly what erodes our freedom and liberties. It is dangerous when our free enterprise system becomes so sku’d to the very small upper class’s advantage that it leaves the middle class to die a slow painful death. Mike Duke is only one of a hundred in the Wallmart company that are being grossly overpaid. There is a lot more money to redistribute at the top of that company which would still allow the stock holders and top execs. to bring home a lot of beacon. The government is already regulating the floor as you say .and has for a very long time. It seems to me that we should deal with the other part of the problem if any real benefit is to be gained. If these companies would pay a decent living wage to the front line employees, we could get a lot of folks off the many government socialist programs and free of that government control that everyone agrees is a bad way to live. There is nothing better than a young hard working individual that is making it on their own and can believe in the free market system. That was the experience we baby boomers had back in the 60’s and 70’s before it started to change.
K
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Well I can agree with K except for the Government interfering with how much money a company pays their top management. I don’t think Thomas Jefferson would like that. The people at the bottom, however, are a different story. Because we the people are forced to subsidize them with our hard-earned taxes, that gives us a right to legislate their minimum wage.
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Good point, Father Joe, that I hadn’t thought through enough. My one caveat remains a minimum age for a higher rate so as not to discourage hiring of those first entering the workforce where they can learn the “life skills” necessary to help them get started. For the last full year of records kept the Dept of Labor has only 4.4 million employed from 16 to 19 out of 16.9 million people (26.1%), and for the 20 to 24 demographic only 13.4 million employed out of 21.8 million people (61%). Taking out those not in the labor force, the unemployment rate for each group is 24% and 13.3% respectively. Of course, many are still students, but there are still a lot of young people not learning how to show up on time, punch a clock, listen to directions, work hard, enjoy getting a paycheck, being responsible with their own money, get along with bosses and co workers, etc.
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True. That has to be factored into the equation. Since I went to work full time in a paper mill at the age of 17 (I graduated from high school at 17) I learned pretty quick how to function in the work world. There’s a mantra I hear from the political right that reflects what I consider a limited view of our young people.
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A mantra or refrain, I suppose, but nonetheless a valid concern verified by the inexorable numbers. I had breakfast with some friends this morning, which is an enjoyable intermittent habit at 7 on a Saturday. Two own their own businesses and two work for a fairly large international manufacturing company, one of them in a very senior position. All are very bright and well read. We have spirited and informative discussions. One of the business owners, who in the interests of full disclosure, is a serial entrepreneur, a conservative and shares the Catholic faith we all love, stated this morning that the best thing the government and the Federal Reserve could do for the lower wage earner (and I add those of fixed income living off their retirement savings) is to stop printing fiat money by the trillions and inflating the money supply with its profligate alchemy. The resulting deflation would most benefit the lower tier earners as their money would go much farther.
This is not a mean spirited, hard hearted right winger spouting his mantra. He has always been generous to various charities, including building hospitals and missions in the developing world. His latest enterprise that makes him no money, but will benefit many, is his typical creative idea – buying a large amount of local farmland, building year round greenhouses on some of it and leasing it out to farmers – both professional and amateur. His fee for a greenhouse is $1 a year with the stipulation that a third of the produce that grows year round goes to local food pantries and soup kitchens which provide for the homeless and disadvantaged. He has lots of takers. Perhaps his creative eye also sees what a little restraint on government spending would do for the poor and low earner. Just raising wages will drive up costs at places like Walmart, making now barely affordable necessities for many more expensive. There aren’t any simple solutions.
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He just doesn’t seem to understand one of the principles of economics. For a society to work well economically a certain degree of inflation is a necessary component. Thus your assets (your house and land) will increase in value just like your money in the stock market does.
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” a little restraint on government spending would do for the poor and low earner”. Ask him how.
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