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J. KARL MILLER: Study the issues before voting or signing a petition

Wednesday, February 8, 2012 | 6:00 a.m. CST; updated 2:13 p.m. CST, Thursday, February 9, 2012

Here it is February and already our legislators and petition organizers are busying themselves with proposed ballot initiatives for the November ballot. As is the norm throughout political history, some of them depend more on playing to voters' emotions rather than that which is factually relevant.

Consequently, the responsible voter must study the issues and research the petitioner's claims preparatory to casting an informed vote. The best interests of the community or the state are not always promoted by proposed legislation and amendments.

Smoking tax

State Rep. Mary Still, D-Columbia, has filed two bills to raise Missouri's 17 cent per pack cigarette tax. The first, a $1 per pack increase, requires voter approval; the second, a 12 cent hike, could be passed by the General Assembly.  

Despite citing Missouri's current cigarette tax of 17 cents per pack as the nation's lowest, lauding the $570 million or $68 million in new revenue depending on which route is chosen and claims that smokers "owe" the health care system millions, the proposed new taxes remain an unfair bullying of a minority — smokers.

To single out an increasingly small segment of society for added taxation because it engages in an unpopular activity and because there is little in the way of political risk in so doing is patently discriminatory. Moreover, to cloak the tax as "morally upright" as it is designed "for the smokers and society's good" in that it will decrease the use of tobacco is utter hypocrisy — it is all about revenue.

The oft repeated estimate that smokers cost the state $641 million in Medicaid annually is suspect. Studies by Action on Smoking and Health and the University of California Berkeley Wellness Letter 2000 offer disclaimers — the former reports the life expectancy of a 30-year-old smoker as 30 more years while the nonsmoker will live 53 years longer.

That and similar tests prove the fallacy of assessing health care costs per smoker without considering the obvious savings due to a reduced life span. I do not smoke, and I will vote no on piling additional taxes on smokers.

Minimum wage increases

"Give Missourians a Raise" has a petition calling for an increase in the minimum wage from $7.25 to $8.25 per hour, one which is supported by other organizations as "Missouri Jobs with Justice." The struggling economy, the needs of working families and that some 75 percent of the population supports the hike in pay are some of the reasons advanced for the measure.

However, contrary to the oft repeated claims of former Labor Secretary Robert Reich, 40 percent of minimum wage workers are not the sole source of income for their families. In reality, in 2005, the last time the minimum wage was under consideration, only 1.9 million Americans were earning minimum wage — a figure that included but 2.5 percent of all workers on hourly wage schedules and 1.5 percent of all U.S. employees.

More than half of those earning minimum wage are between the ages of 16 to 24 and living at home — likewise, many are housewives or househusbands earning a second income. For example, only 2.8 percent of workers on minimum wage were single parents and only 1.2 percent of all minimum wage workers were adult heads of households with incomes less than $10,000.

The good intentions notwithstanding, elevating the minimum wage is an entry level job killer. Hit also with increasing costs, the businessman is faced with four choices to cope with a minimum wage increase: Increase the cost of the product, decrease the size or quantity of the product, go out of business or hire fewer employees.

This was demonstrated when the current $7.25 mandate took effect and approximately 300,000 jobs disappeared in the first three months, most of them for teenagers. Before the current minimum wage took effect in 2006, teenage unemployment was 4.4 percent. By 2009, it was 10.2 percent.

When considering a vote to raise the minimum wage, one must realize that the seemingly overwhelming support (75 percent in favor) does not include those who will pay the higher salaries. One must also recognize that increasing the cost of employment does not create jobs. In reality, the reverse is true, e.g., Economics 101's Law of Supply and Demand.

Wages should be defined by the marketplace. Sadly, we have strayed too far from reality to expect to return.

J. Karl Miller retired as a colonel in the Marine Corps. He is a Columbia resident and can be reached via email at JKarlUSMC@aol.com.


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Comments

Christopher Foote February 8, 2012 | 3:24 p.m.

Raising the minimum wage in 2006 did not cause an approximate 6% jump in the teenage unemployment rate by 2009. To imply as such is to be either naive of the steepest economic decline in 70 years or disingenuous. Perhaps Mr. Miller could clarify his statement, as I doubt he would want his readers to think him ill-informed or dishonest:
"...elevating the minimum wage is an entry level job killer...This was demonstrated when the current $7.25 mandate took effect and approximate 300,000 jobs disappeared in the first three months, most of them for teenagers. Before the current minimum wage took effect in 2006, teenage unemployment was 4.4 percent. By 2009, it was 10.2 percent."

(Report Comment)
frank christian February 8, 2012 | 4:00 p.m.

Chris - "Raising the minimum wage in 2006 did not cause an approximate 6% jump in the teenage unemployment rate by 2009." Wouldn't one seeking some credibility at least suggest a clue as to the real reason?

Teen unemployment is now 32.7% in MO.
http://epionline.org/teen.cfm

You could touch on that as well.

(Report Comment)
Michael Williams February 8, 2012 | 4:26 p.m.

If Joe Doaks gets more money, who gets less money?

(Report Comment)
Christopher Foote February 8, 2012 | 5:59 p.m.

@frank,

The unemployment rate increased considerably for every demographic group due to the financial collapse. To ascribe one demographc's increase to raising the minimum wage is disingenuous.

@MW
Does that calculus also apply to CEO pay ($11.4 million avg. annual pay for large companies) or only to those earning $7.25 an hour?

(Report Comment)
Michael Williams February 8, 2012 | 7:51 p.m.

Chris: I asked first.

(Report Comment)
Christopher Foote February 8, 2012 | 9:48 p.m.

OK MW,

Depending on the size of the company, shareholders.
For smaller businesses, the owner.

(Report Comment)
Michael Williams February 9, 2012 | 12:08 a.m.

no, Chris.

The consumer.

For both.

You really think neither will raise prices, don't you....

Price follows money. Always. Unless you desire price controls, too.

(Report Comment)
Gregg Bush February 9, 2012 | 6:53 a.m.

Saving consumers
Money through poverty pay
Of their employees.

Cotton was cheaper
Before Emancipation
Proclamation, too.

(Report Comment)
Mark Foecking February 9, 2012 | 8:06 a.m.

Michael WIlliams wrote:

"The consumer"

Yes. That's what happened in the last increase.

I looked around a bit last night for some numbers that would give a good example of the impact of this raise on a typical national fast-food franchise with 30-40 FTE minimum wage employees (I know there might be more physical employees than that - I'm just looking at costs per hour). I didn't find one, but this raise is about 15%. I found a credible source stating that one wants the labor cost of a business like that to be in the 20-30% (of after-tax income, and this assumes all of the labor cost is min wage employees, which is likely not true). So you'd be looking at having to raise the price of your products by 3-5% in order to pay the workers more, all else being the same.

I don't think that's a huge impact, myself (9 - 15 cents on a $3 burger). It might make a few more marginal employees lose their jobs (ones with poor attendance, poor attitudes, etc.). Some businesses took the opportunity to revamp their menus and roll the last increase into new prices. However, since the effect of minimum wage employees on the economy is so minor, I suspect relatively small changes in the minimum wage will also have pretty minor effects.

In other words, I'm not sure if it matters that much.

DK

(Report Comment)
frank christian February 9, 2012 | 8:40 a.m.

Chris - To acknowledge a "financial collapse" in which all our business,(except, somehow our bankers) are having to find cost savings anywhere and everywhere they might find them, yet refute remarks that a governmental mandated salary minimum has much to do with the lack of hiring is "disingenuous" imo.

Imo, as previously stated, the time for debate about the changes being foisted upon us by liberal Democrats is over. They must be removed from majorities in our government.

You, opposing this solution, I'm sure will happily read the following, which indicates the difficulty we face. I just finished a visit with two retired governmental employees Democrats, always. They gave new "information" on the problems with our government. It is the Mormons in our government! "Those Mormons want to take over our gov't." "There are more Mormons in that WH than you could ever know." Then the snapper! "Romney is a Mormon!" They live closer to Salt Lake City than here, but give credence to my time proven adage, "A liberal may blame anyone, but will never blame a Democrat for anything".

(Report Comment)
Mark Foecking February 9, 2012 | 9:07 a.m.

frank christian wrote:

"remarks that a governmental mandated salary minimum has much to do with the lack of hiring"

Since minimum wage employees only make up 2.5% of our hourly employees, any lack of hiring due to this relatively minor increase wouldn't even show under the normal monthly variation in hiring.

This doesn't matter. Let's let the voters decide what they want to do.

DK

(Report Comment)
frank christian February 9, 2012 | 9:51 a.m.

"Since minimum wage employees only make up 2.5% of our hourly employees, any lack of hiring due to this relatively minor increase wouldn't even show under the normal monthly variation in hiring.

This doesn't matter." Yeah, Right! Only matters to the 32.7% (record high)unemployment among our MO teens. "Now, adults are accepting low-paying, low-skill jobs once filled by teens."

"Let's let the voters decide what they want to do." = "They must be removed from majorities in our government."

(Report Comment)
Mark Foecking February 9, 2012 | 10:15 a.m.

frank christian wrote:

"Yeah, Right! Only matters to the 32.7% (record high)unemployment among our MO teens. "Now, adults are accepting low-paying, low-skill jobs once filled by teens."

This is more a consequence of the continued poor economy than the minimum wage. Teen unemployment was 25.8% in 2010, and the minimum wage was $7.25 both years. Normal turnover, and fewer prospects for adult wage earners, create what you're taking about, not a higher wage per se. Once the economy picks up again, this will fix itself.

"Let's let the voters decide what they want to do." = "They must be removed from majorities in our government."

Let's not remove the voters from government just yet, Frank.

I think you and I both know that a petition to roll back or eliminate the minimum wage wouldn't go very far.

Let the voters decide. You won't notice the difference either way.

DK

(Report Comment)
frank christian February 9, 2012 | 2:08 p.m.

Mark - Your continued presentation of static numbers which never refer to any changes in spending habits of our lawmakers or of natural movements of our people seem to indicate your content with our status quo.

"the continued poor economy" seems to be a given in your formulae as expressed here. You will not consider that changes in Administration and Congress can restore a healthy economy that should have been restored months ago. While you wait for "Once the economy picks up again," our teens are denied the habits of work, punctuality and appearance, as well as the rewards.

The way this recession has been handled since 2009 is reason for all the new records that have unfortunately been set with our work force. A new control of our Federal government (you look to petitions when change in personnel is the answer) will create a new atmosphere and economy and everyone will notice the difference.

I'll try it this way: ""They must be removed from majorities in our government." = "Let's let the voters decide what they want to do."

(Report Comment)
John Bliss February 9, 2012 | 2:59 p.m.

Colonel I wonder if Still or her family smokes? It is easier to propse a law thaT you won't have to pay for!

(Report Comment)
mike mentor February 9, 2012 | 4:58 p.m.

In 2008, Gov. Martin O'Malley of Maryland pushed through his own version of a millionaires' tax. He contended that his plan for income redistribution would produce an additional $106 million in revenue. In fact, state revenues went down by 25%. What happened? One-third of Maryland's high earners left the state. The Wall Street Journal estimated that O'Malley's "soak the rich" attempt cost his state almost $1 billion in revenues.
____________________________________________________________

Dems seem to have a hard time with this whole follow the money idea. They seem to think that people will behave the way they want others to behave instead of how they behave themselves...

(Report Comment)
Derrick Fogle February 9, 2012 | 5:12 p.m.

In the end, the consumer pays for everything. But I wonder... how does the consumer do that? Don't bother answering that question, either; it's a snarky, rhetorical, "playing dumb" question. We all know the answer: Work/employment, for all but a tiny fraction of a percent of people.

If raising the minimum wage reduces employment, does lowering it increase employment? This too, I suppose, could be considered a "playing dumb" question, but it's exactly what some people here are implying, and I disagree.

My reasoning is based on the fact that virtually every business owner / employer will tell us that demand is what drives staffing decisions. If labor costs are reduced 10%, no sane business owner is going to go hire another person for every 10 they already have, just because they can now afford it.

The arguments about this keep going around in a circle, because money flow in our economy actually IS a circle. But the only real decisions are exactly how, and how much, to shrink or expand the circular stream.

(Report Comment)
Derrick Fogle February 9, 2012 | 5:16 p.m.

Despite all the larger economic arguments surrounding the issue, Dooberheim is absolutely correct that the minimum wage issue is little more than a drop in the bucket. Minimum wage is already dead, killed by inflation.

And you though inflation could only do bad things?

(Report Comment)
frank christian February 9, 2012 | 9:25 p.m.

Minimum wage is not dead. It will not be increased in MO in 2012, being indexed to "consumer price index".

"President Obama has backed raising the U.S. basic wage from its current $7.25 an hour to $9.50 and indexing future automatic increases to inflation."

"My reasoning is based on the fact that virtually every business owner / employer will tell us that demand is what drives staffing decisions. If labor costs are reduced 10%, no sane business owner is going to go hire another person for every 10 they already have, just because they can now afford it."

A recitation of the false liberal theory that only "demand" can create financial activity. This gives their gov't the incentive to release a few bucks to the "middle class" (as W. Bush accepted and used)to show they were "trying". When these show no effect, they turn to the many other "jobs programs" and other "incentives" which direct Billions, Obama, Trillions, (Saw a good sign carried by demonstrator on TV. Said, "Don't tell Obama what comes after a trillion!") to the supporters of the progressive, liberal Democrats in control.

Investment will always be the instrument to restore ours and every economy on earth. Tax Cuts give those willing to risk their dollars on new projects, new products, and new ideas, the dollars to do that, rather than feed them to a bloated government designed to prevent just such activity from occurring. I have mentioned those controlling our bloated government and named them, progressive, liberal Democrats. They must not be allowed to longer control Us.

(Report Comment)
Mark Foecking February 10, 2012 | 3:44 a.m.

frank christian wrote:

"Investment will always be the instrument to restore ours and every economy on earth."

Except in many cases it makes more sense to invest the money in other countries. This isw why we don't get as many jobs as we did in the past.

And please don't tell me that this is government's fault. High wages, workplace safety, and environmental protection are there because workers, and the general population, demanded them. No one in the country wants to choke on smog, get their body mutilated in factory machinery, or look out over a dead lake (like Erie used to be when I was a young kid in Cleveland). And they certainly don't want to work for $15/day.

Derrick touches on a point, and that is that putting more money in people's hands results in more economic activity - they spend it, or it offsets later debt (like saving for college). So there's a balance between higher costs for products from affected businesses, amd perhaps higher unemployment, and the increased buying power of the workers getting the raises. This further dilutes any deleterious effect of a minimum wage increase.

DK

(Report Comment)
Don Milsop February 10, 2012 | 7:20 a.m.

Maybe we should talk to VP Biden and Pres. Obama about paying their fair share too. By Biden's definition, they're not patriotic. I still haven't figured out the Obama's self-employment tax deduction for CY 2009, filed in 2010 for $118,281. Perhaps somebody can explain that one. Since their adjusted gross income that year was $5.5 million, wouldn't it have been more patriotic to pay the $118,281?

And how about that Joe Biden's generosity to charity! Average of $368 a year for 10 years. Liberals seem to be very good at using other people's money for charity, but darn stingy with their own.

(Report Comment)
Ellis Smith February 10, 2012 | 7:28 a.m.

@ Mark Foecking:

I hadn't realized you lived in Cleveland. Due to a career change our family moved out of South Euclid not long before the Cuyahoga River caught fire and burned(!). My understanding is that Lake Erie, which had become a dead fresh water lake, is now well on the mend.

Did your family live in Cleveland proper or one of the suburbs, middle class (like South Euclid) or wealthy (Shaker Heights, Pepper Pike, Gates Mills).

On the way to Chagrin Falls and by the Chagrin River is Metropolitan Polo Field. On Sunday afternoons in season we used to pack a picnic and a blanket and watched some of Cleveland's movers and shakers play polo. It was allowed, and free, and our then toddler daughter became the object of affection of some wealthy socialites. :)

I really like Geauga County, Ohio, the next county to the east.

(Report Comment)
frank christian February 10, 2012 | 8:26 a.m.

"And please don't tell me that this is government's fault. High wages, workplace safety, and environmental protection are there because workers, and the general population, demanded them." Yeah, that wasn't hard to write, I didn't think it would be.

Here is a sample of the protections our people "demand" We haven't built an oil refinery in over 20 years. Silent Spring Institute (first one I saw) writes,"Oil Refinery Toxics Found in Air of Nearby Homes", "“We found that living near an oil refinery adds exposures that may be hazardous to your health,” said Julia Brody, PhD, lead author of the study and Executive Director of Silent Spring Institute." This study was done because Chevron wanted to expand a refinery in Calif.

Now, please, on Google Earth or whatever, look at Sinclair WY. It is the community living within city Blocks of the actual refinery, owned by Sinclair oil co. since the original depression in 1930's. Google automatically pinpoints the elementary school and the public library.

Why does every person in U.S. not having first hand knowledge of a refinery believe that NIMBY prevails in this country? Because Democrat legislators paid by environmentalists load our news media every time Any industrial improvement is suggested.

"Derrick touches on a point, and that is that putting more money in people's hands results in more economic activity" He did not touch on the number of jobs created by W. Bush's attempt to create a "demand". Was it 150B$ down the drain? Geo. McGovern wanted to give every American $50. during his futile Pres, campaign. Everyone thought he was "nuts". We have become much smarter now.

(Report Comment)
J Karl Miller February 10, 2012 | 9:28 a.m.

Perhaps along with increasing the minimum wage we should consider adopting the Secretary of Agriculture's (Tom Vilsack) harebrained assertion that "food stamps stimulate the economy and bring down unemployment."

(Report Comment)
Don Milsop February 10, 2012 | 4:43 p.m.

Ellis, two years in Shaker Heights was enough to drive us east. All the way to Chardon. It's not the little town of 500 it was 60 years ago. Now it's ballooned into this metropolis of 5,500 people! All because JFK had to visit in 1960. Made the Maple Festival take a back seat.

(Report Comment)
Don Milsop February 10, 2012 | 4:51 p.m.

Military planners were told to come up with a plan to target Mecca in case of all out war with the Muslim world. A liberal in the DoD strategic weapons planning section was confused, but went ahead and targeted the middle of the causeway on Mosquito Creek Lake, north of Youngstown, OH.

(Report Comment)
frank christian February 10, 2012 | 8:57 p.m.

Don M. - I've been wondering,are you actually acquainted with Ellis Smith? I've only been reading him a few months around here.

He is a well educated engineer and seems to have worked hard all his life, but have you noticed his problem with job retention? He writes of great jobs and projects, but then we have to note that he soon is moving across country or even around the world, looking for a new job. Is he a "job hopper", or is there some problem with his performance? He seems, even now, quite willing to drop everything to tell us a story (that's how we know of his problem with job stability). The infamous Rush Limbaugh claims to have been fired 7 times. Ellis must have eclipsed this record long ago. I just wonder.

Just kidding Ellis, I love your comments as do we all. Just a slow night (the natives strangely quiet) and I had been thinking about all your great experiences in this context. Hope you will laugh with me.

(Report Comment)
Mark Foecking February 11, 2012 | 4:59 p.m.

Ellis Smith wrote:

"I hadn't realized you lived in Cleveland."

Yes - I was born there, and we relocated to Florida when I was 12. We were west-siders.

We lived in North Olmsted for a while, and moved to Rocky River. My father worked for Union Carbide - Eveready - as an engineer (he worked on alkaline and nickel-cadmium battery designs). One of my better childhood memories was walking the wildflower trails of what's now known as the Metroparks (we just called it "the valley" - the Rocky River valley - when I was young). I still have several relatives there, and have visited several times as an adult.

I had an uncle. with 13 kids, (my family is very Catholic) that lived in Gates Mills, and we'd occasionally visit him on weekends. Nice place.

It was also of interest that when I got to Florida, and was put in Catholic school there, that I was 1/2 to a full year ahead of my class in most subjects, and this from attending a garden variety Catholic school in Fairview Park (close to the house in Rocky River).

I have an aunt that lives on Lake Erie (Lakewood area), and it has made an amazing comeback. The last time I was there I saw people water-skiiing and swimming.

Nice place in general. I've thought about relocating there when I fully retire.

DK

(Report Comment)
Mark Foecking February 11, 2012 | 5:13 p.m.

Oh, and we left 4 years before the Cuyahoga caught fire. It was really bad then - I was in a youth group called CYO, and we would hike in the Metropark along the river in the summer. I recall one place where a laundromat drained its sewer directly into the Rocky River, and I could see blobs of detergent foam on the river from that (this was 1963 or so).

One of my earliest memories from that park was my father showing me how to catch crawfish. By the time we left, there we few crawfish to be found. I'm told they're back, big time.

DK

(Report Comment)
Ellis Smith February 13, 2012 | 3:25 p.m.

I'm going to try to take care of three responses with one reply (I've been to the Frozen North and am running behind):

Don Milsop: I still get my maple syrup annually from Richards (just west of Chardon on the south side of US 6). Of course I don't drive up there to pick it up! My favorite place to stay is Red Maple Inn in Burton: fireplace in every room, and heart-shaped jetted tubs in all bathrooms. The tubs are used more by weekend customers; they actually draw business clientele Monday through Friday (people doing business in Lake County or at ASM's Materials Park).

DF: My late wife and I wanted to find a house in Chagrin Falls (population ~4,000). My boss at ONCO lived there. However, we decided that to come up with the money we'd have to start robbing banks, and we didn't think America needed a second Bonnie & Clyde. :) If you ever go up there and want the name of a great restaurant in Chagrin Falls, let me know. This isn't something I remember from decades ago; I was there again less than two years ago.

Frank: Thank you for the kind words. My life and career, such as both have been, are a true dichotomy. On one hand I received one of the best technical higher educations available, which should have put me on easy street, but I am not very bright, thus I have had to had to work hard to make up for that deficiency.

(Report Comment)
Derrick Fogle February 13, 2012 | 6:38 p.m.

I think you meant to address that to DK, not DF, but I'm delighted to know you're thinking about me, if only subconsciously. ;-)

(Report Comment)
Derrick Fogle February 13, 2012 | 10:55 p.m.

Aggregate demand explains high unemployment: an abstract of NBER working paper: http://papers.nber.org/papers/w17830#fro...

(Report Comment)
frank christian February 14, 2012 | 8:25 a.m.

"Aggregate demand" assumes people are sheep. They are not.

Laffer curve explains Low unemployment and much more.

http://www.heritage.org/research/reports...

(Report Comment)
Don Milsop February 14, 2012 | 3:42 p.m.

"I had an uncle. with 13 kids, (my family is very Catholic)"

About 10 years ago my wife and I were attending mass in Vancouver, BC with my wife's best friend from Italy. There was a visiting priest from Quebec conducting the mass. During the sermon he said that he was one of 22 children, that included three priests and four nuns. He said he once asked his father, "Why 22 children?"

His father responded, "Son, you must understand. Back then we had no birth control, we had no self control."

(Report Comment)
Don Milsop February 14, 2012 | 3:45 p.m.

As long as the administration and their willing accomplices in the media continue to cherry pick facts, the pile of manure that is the economy will continue to display signs that it's a bed of roses. The GOP is doing little better in stopping the mess by caving in constantly. All I can say is that I'm glad that when the poop hits the fan, I'll be 2,600 miles away from the worst of it.

(Report Comment)
Ellis Smith February 15, 2012 | 6:18 a.m.

Mark Foecking & Don Milsop:

It's very difficult to relate to such large families. My father was an only child (mom had just one sibling, who never had children). I am an only child. My daughter is an only child. Daughter and her husband "splurged" and had two children.

Our family has never needed to rent a hall to hold a reunion. :)

(Report Comment)
Don Milsop February 15, 2012 | 2:43 p.m.

Ellis, my mom just turned 90 last week. She is the last of 9 older brothers and one older sister. They managed to make it through the depression without the government's help. Today, government would not allow them to be hired without all the extra associated costs which employers must endure. However did we survive without the government looking at our every move?

(Report Comment)

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