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House Readies To Pass Stimulus After Minimum-Wage Hike Falls Flat

Large corporations may not legally have to increase the minimum wage, but Democrats seemingly want to come up with some incentive for them to do so anyway.

Or as explained by MSN: “Senate Finance Committee Chairman Ron Wyden (D-Ore.) on Friday announced Democrats’ ‘Plan B’ to raise the minimum wage after the Senate parliamentarian ruled that an earlier proposal from House Democrats to raise the federal minimum wage to $15 an hour did not meet special budgetary rules.”

The current federal minimum wage is $7.25 an hour.

“As chair of the Finance Committee, I’ve been working on a ‘plan B’ that would make big companies pay for mistreating their workers,” Wyden said in a statement. “My plan would impose a 5 percent penalty on a big corporations’ total payroll if any workers earn less than a certain amount. That penalty would increase over time.”

Wyden added the plan would include safeguards to keep companies from avoiding the penalty by outsourcing jobs.

“For example, if a profitable mega corporation like Walmart fires a store’s security guard and replaces him with a contractor who makes far less, my proposal would still require that Walmart pays a penalty,” Wyden said.

The House is set to pass another stimulus after the proposed minimum-wage hike was dealt its latest blow.

“Friday’s vote in the House will bring most Americans one step closer to receiving $1,400 relief payments and move action to the Senate, where disagreements among Democrats over the minimum wage had been the biggest obstacle to turning the pandemic relief plan into law,” Bloomberg reported.

Written by Sam Amico

Sam Amico spent 15 years covering the NBA for Sports Illustrated, FOX Sports and NBA.com, along with a few other spots, and currently runs his own basketball website on the side, FortyEightMinutes.com.

17 Comments

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  1. The minimum wage doubling is so counter to basic economics its staggering. Every time a proponent of this hike brings it up, just ask them this simple question:

    “If you pay the entry level employees at McDonald’s $15 an hour, what do you pay their manager?”

    And presto, the magical, end-poverty-now $15 minimum wage argument goes up in smoke.

      • The effects of this would be catastrophic. Far beyond inflation due to artificially raising everyone’s income. If you double the cost of unskilled labor, everything in the supply chain gets more expensive. Food, oil, clothing, anything where there is a domestic labor cost attached. Any increase in cost is then borne by the consumer, which will eat up that “extra” income that is supposed to solve poverty.

        Larger companies can build in this buffer to absorb the cost, but jobs will be lost. Nobody is going to keep a full labor force when wages double. Small businesses do not have this buffer, so they go away, taking those jobs with them. Unemployment rises, revenue decreases. And viola, more poverty than before.

        Then there are retirees and others living on a fixed income. Pensions, SSI, 401’s don’t double as a result of this. So your $1 million (just a number) you have in that 401 is now worth $500k-700k. All because a bunch of progressives think they can legislate around economics and basic market forces.

        But what do you expect from the far left who thinks the best way to pay off a deficit is by printing more money.

    • Putting the basic-economics-be-damned issue aside- The idea that the government is going to outsmart a company like Walmart is laughable.

      This Wyden guy has probably never been responsible to making a payroll in his life.

    • Jake, as a retired Economics instructor I did a great job of teaching about Free Enterprise and especially the fallacy of the minimum wage. The problem was the students then went to their Government, English and Science teachers where I was alluded to as a Radical, Racist, etc. I saved a lot of kids but most were lost. Kruschev and Alinsky were correct, “we will win using the schools”.

  2. As a director at a small/medium business I can promise you the emails about automation and labor force reduction have been flowing fast and furious all week.

    Now one could argue that the result will be to reduce profit and squeeze management salaries and that jobs building automation will replace our labor reduction, but I think you’ll see a lot of casualties caught in that transition, and the people you’re ultimately helping won’t be the people you purported to serve with this legislation.

  3. Legislating runaway inflation. Until recently, most of your portfolios are fat and giddy. Hope you aren’t feeling too rich because in about five years your “wealth” will be worth about half and won’t go anywhere close to covering your retirement. If you originally planned to retire at, better change that to 72 because the Democrats are getting ready to torpedo your nest egg.

  4. I think everyone agrees $15 is too big of a jump probably, but how did we land on 7.25? I feel food, rent, and utilities are all more expensive at this point than when the 7.25 was established and reasonable minds can agree it could use a bump based on our country’s wealth. I feel $9-$10 would be reasonable. Right now businesses can also get away with under paying for skills they normally would pay more for because of J1 and visa work programs so that could help too. And the wage hike should probably only apply to 18 year olds employees I would think.

    • Our country’s wealth? Have you looked at the debt and deficit numbers? Read Thomas Sowell. The market sets wages. And this “living wage” drumbeat is bullshit, too. The minimum wage was never set to replace traditional HH income. It was meant for what it is – to subsidize an entry-level, low-skilled job, likely a person’s first job, which teaches them the basic requirements needed to be a responsible employee (show up on time, learn to work with others, understand the value of work, etc.). It’s interesting how everyone not making a payroll has an opinion on what the minimum wage should be.

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