$20,800 or BUST!


The title of this post refers to the amount of income a person will gross in a year if they work a 40 hour week and are paid $10 per hour. The “or bust” refers to where our federal minimum wage should be headed, but isn’t. As it stands the federal minimum is $5.15. At that present rate a full time worker grosses $10,712 which is far too low by any reasonable standard of living. The minimum wage should be a LIVING WAGE, not a POVERTY WAGE!

Resolved: There is no good reason to keep the min. wage low and plenty of good reasons to raise it to a living wage.


The best story I have about raising the minimum wage in my neck of the woods happened recently when a tax cutting repub, right-wingnut county executive raised the sales tax to the highest level in the state of New York! At it’s peek, it was set at 9.75%. A couple of months later, it was reported that that this repub tax increase has brought in far more money then the mainstream econowackos estimated it would! This was caused by a large INCREASE in sales at retail stores all over the county. WTF!? This flies in the face of the voodoo economics the phd toting mainstream econowackos have been spewing for years! In econowackoland any increase in the sales tax will result in a decrease in sales for the “sales tax sensitive” retail sector. Further, there was an increase in sales tax receipts in EVERY COUNTY of the state of New York in that same period. The states income tax reporting was experiencing an upswing in amount too! Something magical was happening!

This magic was caused by something the state legislature had done. They had overridden the then repub governor’s VETO of a bill that raised the state minimum wage to above the federal minimum wage level. If this has ever happened before in my lifetime, I don’t remember it! I do however hope in keeps happening. It has been the best thing to happen on the economic front that I have ever seen.

Why did it work out the way it has? Simple. When they gave a raise to the roughly %40 of workers in this county who are paid the lowest. They went out and spent their increase in income on things subject to the sales tax.

Let me state it in an “equation:”

INCREASE in min.wage = INCREASE in retail sales + INCREASE in state income tax revenues + INCREASE in county sales tax recipts

This now makes it possible for both the state and county TO CUT TAX RATES without a loss of revenue! This is the power of what I call DEMAND SIDE ECONOMICS! The supply side has failed us, time to run on the demand side!

If that ain’t enough to convince you, look at the people it effects. The ones who check out your purchases at any store you shop. Is $20,800 a year gross, too high a level of pay for them? I think not!

The telepathic crickets are still sleeping off the party they threw last night to celebrate the “glorious workers revolution” they staged yesterday. One of them woke with a start a few minutes ago and chirped “fair wealth distribution in a demand side economy!” What a coincidence, that’s exactly what I was thinking, and that’s the issue I will cover in my next ClapSolutionary post…

The scientifically impossible I do right away

The spiritually miraculous takes a bit longer



~ by ClapSo on May 23, 2007.

4 Responses to “$20,800 or BUST!”

  1. How right you are. Politicians at all levels, who makes far beyond the average American have no concept of how Americans survive nor do they care. However, they will hurry to vote for their own wage increase. The city and county bean counters have a concept but they don’t really give a hoot, because with working poor are collateral damage.
    These guys seem to miss the link between wages, taxes and spending for the average American. I think we will discovery the missing link in the Lucy chain before these guys understand the economic link.

  2. Wow quite genius… So how can we present it to them in a government document for them to sign? I’m sure if we use shinny paper they will sign it or at least drool on it. I herd their was a book written by a lawyer thats at the bookstore on writing a impeachment bill or something. CHIRP CHIRP Maby if you researched it you could be the hero hercuClapso who knocks the head off the bush hydra.

  3. Increasing the minimum wage does not erase poverty. If higher minimum wages were an effective anti-poverty device world poverty would have been eliminated ages ago.

    The basis of economics is the law of supply and demand. The first fundamental law of demand, to which there are no exceptions, says when prices rise people tend to buy less and when they fall people tend to buy more. The price of beef goes down and we buy more. When mortgage interest rates rise, we take out fewer mortgages. If people didn’t respond that way, sellers could charge any price they wanted to.

    Labor is a product. When labor’s price exceeds its value – what it can produce – employers will buy less of it or find alternatives. Those alternatives could be more automation, customer self-service, or even moving to a foreign country.

    Ask yourself this question. If I were an employer, would it pay me to hire a worker at the federally manadated minimum wage of $7.00 an hour if that worker was so unfortunate to have skills enabling him to produce only $5.15 worth of value? Most employers would see that as a losing proposition and would not hire the worker or would have to let the worker go.

    The true minimum wage is zero. That is what someone earns when the minimum wage exceeds his production.

  4. ClapSo responds to davidonline:

    Your first contention, that min. wages do not ELIMINATE poverty is a half truth. Min. wages set at a living wage level do eliminate poverty for working people. Min. wages don’t eliminate poverty for the unemployed. That’s why I argue in my next post we need to move to a min./max. INCOME system. This will eliminate poverty for all US citizens.

    The actual fed. min. wage currently paid is $5.i5 an hour. It won’t be paid at $7 for two years under current law. I regard this to be too little, too late. The rest of your apology for a failed economic system I will answer by stating the following:

    In the case I stated in my original post. The increased demand created by the increase in the NY state min. wage has caused an increase in hiring here.

    bill gates is not the richest man in the world because his production is worth billions of dollars a year. He is a billionaire because he doesn’t pay the people who do the actual production enough. If he did, he and they would be far better off. So much for the vaunted supply and demand curve as preached by the econowackos.

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