Tag Archives: Nevada minimum wage

Spooks, Haunts, and other Scary Things in the Nevada Legislature

Nevada Legislature Scary Things

The GOP controlled Nevada Legislature is haunted. Specters and spooks dog the steps of the members of the Assembled Wisdom, wraiths point toward things of which we must be afraid, very afraid.

We must be afraid of voter impersonation fraud.  The fact that it hasn’t happened doesn’t mean that we ought not to writhe in terror at the prospect.  Speaking of ghosts of elections past, we have Sharron Angle to add her wail to the cries of alarm:

“Former Assemblywoman Sharron Angle, who lost the 2010 U.S. Senate race to Harry Reid, testified for the bill, saying “we do have a voter impersonation problem across the country.”  Anderson asked if she has found examples of voter impersonation in Nevada in her investigations. Angle said no, but that there is “anomalous activity that goes on in Nevada elections that is not easily explained.” [LVRJ]

One might reasonably guess that “anomalous activity” is one of those terms which might be analogous to the Spectral Evidence allowed in the Salem Witch Trials?   However, we might just as well place this within the glossary of meaningless phrases, which while sounding erudite, mean almost nothing, such as “stocks are down on profit taking,” or “there’s lots of cash on the sidelines.” [Ritholtz] Or, such unverifiable and empty notions like “highway miles.”  Or, those gratuitous and equally meaningless phrases which appear in job opening announcements, “self starter,” “team player,” and “highly qualified.”

The point being is that bills like SB 169 (photo ID) are necessary to solve the Republican problem of not being able to win elections if lower income, non-white, young people, and the elderly are allowed to vote.

We must be very afraid of criminals.  Not only must we quake in alarm, according to the GOP Gun Club we must arm ourselves and await the day when we will be called upon to open fire on the evil-doers in our midst. Unfortunately, this serves to remind us that one person who tried this at the Las Vegas Wal-Mart ended up as a victim. [SFgate] No matter, by the lights of the Gun Club we must all be allowed to carry concealed weapons – anywhere – unless maybe not on school grounds.  (AB 148) 

As of 2013 there were 2,790,236 people in the state of Nevada.  There were 16,496 violent crimes reported.  We should put this in some perspective.  First, if we divide the number of violent crimes (victims) by the total population the result is 0.00591.  Shift the decimal to create a percentage and we have 0.59%. [TDC]  Is the likelihood of victimization in a violent crime in Nevada so high that all the dangers associated with carrying a concealed weapon worth the effort? Secondly, there were 163 murders, 1,090 rapes, 5,183 robberies, and 10,060 assaults in Nevada as of the 2013 reporting period.  [TDC]   The numbers don’t suggest a need for a proliferation of arms among ordinary citizens.

But but but… What if the criminals think there will be armed opposition to their nefarious endeavors! That will prevent them from carrying out their heinous designs! Really?  The armed robber already has his or her gun in position, ready to fire. The gun in my purse or holster is going to take a moment to get “into position.” Thus, the obvious outcome is that the robber gets the money, and the firearm.  Then there is the “collateral damage” consideration.  What if the “burglar” isn’t a criminal after all, but some family member who has lost a key?  In public spaces, how does Our Concealed Carry Hero determine if another Concealed Carry Hero is, or is not, a perpetrator of the shooting? The questions go on, but the bottom line is that in the fanciful world of the gun enthusiasts every hero can make practical decisions at 2 in the morning, make every shot count, and insure that every shot is aimed at and will hit the criminal.  It’s a scenario right out of the made for TV melodramas. Legislation should be crafted upon a foundation of facts and rationality, not the fevered imaginings of the frightened.

We must be afraid that someone somewhere is taking money away from us, and that every accumulation of government revenue is robbery, and every public service employee is unworthy.  Those comfortably ensconced in the upper 0.01% of income earners may very well be able to buy all the books they want (therefore there is no need for public libraries) or to spend a vacation on a private island or in a private resort (therefore there is no need for any public parks), and they may elect to spend money on private security, or pay for service firefighting, or pay the tolls on roads and highways, or send the kids to private schools.  When money is no object, other people’s money is little more than a object of attraction. 

Unfortunately, the upper 0.01% has been effective over the last three decades in convincing ordinary people earning $50,000 per year that a public school beginning teacher earning $37,000 is a Pig At The Public Trough.  The median wage of an employee of the State of Nevada is currently $46,590.  Hardly a figure, when agency heads are included, to describe an opulent living.   Yet, public employees are taking fire in this edition of the Legislature.

However, it’s not just the public sector employees who are drawing the attention of the Needy Greedy.   State Senator Joe Hardy (R-Boulder City) wants to repeal the state’s minimum wage.  Hardy’s SJR 6 (pdf) would repeal Nevada’s minimum wage provisions and let the legislature determine if an employer is providing health insurance if the cost is not more than 10% of the employee’s gross taxable income.  Here’s a thought – How about, instead of allowing more employers to pay less than $8.25 per hour, Nevada enacted an increase in the minimum wage? Period.

Want to see fewer people have to rely on housing subsidies to keep roofs over their heads? Raise the minimum wage.  Want to see fewer people have to resort to the SNAP programs? – raise the minimum wage. Want to see fewer individuals have to avail themselves of Medicaid assistance? Raise the minimum wage. 

For too many years we’ve been told the people (including the disabled and the elderly) aren’t working hard enough.  They should get more education (despite the costs and time involved), get more gumption (this in the face of a 5% multi-job rate), work more hours… take individual responsibility!  This is all lovely palaver from the heights, the concepts tend to disintegrate when applied in the real world.  The question could as easily be reversed. For example, the Las Vegas Sands Corporation, with sales and revenue reported as $14.58 billion in 2014, and net income of $2.84 billion, couldn’t spring for more than a paltry $8.25 per hour?  The question ought to be why can’t employers pay more than $10.10 per hour, or a living wage of $15.00?

In the real world most employers do pay more than the minimum already.  Minimum wage workers comprise about 4.7% of the total employed workforce.  The chart shows national trends for minimum wage workers:

Minimum Wage workers

“Leisure and Hospitality,” where have we seen that category before? L&H is the largest employer in the state, accounting for approximately 398,000 jobs earning an average annual wage of $31,600 (net of benefits.)  So, here we sit in a state in which most employees are engaged by a sector most likely to pay earnings at or below the federal minimum wage – and we can’t figure out that those who need housing or SNAP assistance might not fall into those categories if the wages were increased? So, let’s ask again: Why are Nevada employers unwilling to pay wages which would support their employees above the rate at which they are eligible for public assistance?

There are some things about which we should be legitimately concerned, those just don’t seem to have made it into the consciousness of the Legislature’s majority. Here are two examples:

Nevada has an income inequality problem.

“The states in which all income growth between 2009 and 2012 accrued to the top 1 percent include Delaware, Florida, Missouri, South Carolina, North Carolina, Connecticut, Washington, Louisiana, California, Virginia, Pennsylvania, Idaho, Massachusetts, Colorado, New York, Rhode Island, and Nevada.” [EPI] (emphasis added)

This situation is economically unsustainable.  As middle income and lower income earners tighten their belts and shave their budgets, there are simply not enough high income earners to create the demand for goods and services over time.

Nevada has infrastructure issues.  Only in the categories of waste water and solid waste does the state of Nevada get a ‘good’ grade, a B, from the ASCE.  We seem to be handling the excremental elements of our state rather better than our school buildings and our dams.

If the Legislature can move past Guns Galore!, Labor Bashing, and Vote Suppressing, we might want to address these and other pressing issues in the Silver State.

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Filed under Crime Rates, Gun Issues, Nevada economy, Nevada legislature, Nevada politics, Vote Suppression, Voting

Thinking Minimum and Waiting For Yes

The minimum wage in Nevada is $7.25 per hour if the employer sponsors group health insurance policies, or $8.25 if health insurance is not part of the compensation package.  This doesn’t mean a person will automatically receive those wages because some employers are taking advantage of loopholes in current statutes [LVRJ] There are other elements which are the subject of FAQs on the Labor Commissioner’s web site. 

However, the bottom line is still that the minimum wage in Nevada is not a living wage.  The point is driven home in the realm of fast food operations, and there is talk of a bill in the upcoming session of the state legislature to raise the minimum wage to $15.00 per hour.   Because minimum wage levels are a topic inserted in the state constitution, the raise would have to pass in two sessions and go to the voters. [LVRJ]  The second important point is that Nevada job growth is showing in sectors which employ a high number of minimum wage workers – in the sector we are pleased to call “leisure and hospitality.”

Nevada Job Growth 2014

The median wage for a fast food cook in Nevada is $18,890 per year.  [DETR]  A counter attendant can expect median annual wages of $20,990. [DETR]   Now, look at the 2014 Federal poverty guidelines:

Federal Poverty lines 2014

Obviously, there’s ample evidence from the charts above to support the contention that if employers pay sub-living level wages, then the state and local governments must make up the difference in the form of social safety net programs. In short, the taxpayers are subsidizing the businesses. 

But, but, but…  Spare me the noble story of How I Started Mowing Lawns in the 7th Grade And Worked Up To….  Only about 7% of the low wage work force in this country is composed of teenagers.  This means 93% of low wage workers are adults.  Women make up about 60% of the low wage work force, and a growing number of low wage workers are men. [LWW]

But, but, butgranted that wages are low in retail and fast food sectors but this is insufficient to raise the minimum for everyone… yes, fast food work considered nationally makes up about 5% of low wage employment.  However, we’re forgetting about data entry operators, bank tellers, child care workers, teachers’ aides, home health care providers, maids, cooks, porters, cashiers, pharmacy assistants, parking lot attendants, ambulance drivers, dry-cleaning workers, hotel receptionists, and a plethora of other low wage occupations.   The median annual wage for a home health care provider is $26,170; for a bank teller $24,940; for a grocery cashier about $21,370.  None of these jobs would get a person with a family of four above the federal poverty line.

But, but, butif we raise the minimum wage that will actually destroy jobs… this bit of mythology has been around since time out of mind.  It’s purely theoretical, rising from the minds of well paid lobbyists from the United State Chamber of Commerce, and at least five academic studies have debunked it:

“A significant body of academic research has found that raising the minimum wage does not result in job losses even during hard economic times. There are at least five different academic studies focusing on increases to the minimum wage—including increases ranging from 7 percent to 12.3 percent made during periods of high unemployment—that find an increase in the minimum wage has no significant effect on employment levels. The results are likely because the boost in demand and reduction in turnover provided by a minimum wage counteracts the higher wage costs.

Similarly, a simple analysis of increases to the minimum wage on the state level, even during periods of state unemployment rates above 8 percent, shows that the minimum wage does not kill jobs. Indeed the states in our simple analysis had job growth slightly above the national average. […]

All the studies came to the same conclusion—that raising the minimum wage had no effect on employment.” [emphasis in original] [TProg]

But, but, butthink of the Mom and Pop store… which we would except for the fact that 2/3rds of low wage workers don’t work at the corner bodega. 2/3rds of our low wage workers labor for large corporations.  For example, WalMart has seen profits grow by 23% since the Recession, Yum! Brands by 45%, and McDonalds by a hefty 130%, with help from U.S. taxpayers supporting their personnel.  [TP]  From the April 15th edition of Forbes we learn that WalMart workers cost U.S. taxpayers approximately $6.2 billion in public assistance.  One certainly wouldn’t want to disparage the efforts of the Walton’s to create a successful business – but on the other hand there’s no reason to give the ultra-rich family gifts from the taxpayers.  McDonald’s cost the U.S. taxpayers some $1.2 billion in public assistance. [HuffPo]  A billion here, a billion there, and soon, as the late Senator Everett Dirksen opined, it starts to add up to real money.  That would be real money Mom and Pop are paying in taxation to support their competition.

And then there’s the concept – repeated to the point of redundancy – that increasing wages increases aggregate demand, and increased demand produces increased sales, and increased sales yield increased profits – for any business, large or small.

We should be asking Nevada politicians who are out seeking our votes this season: Do you support raising the minimum wage in Nevada to $15.00 per hour?  If what comes back is a “No” qualified by the standard talking points – it’s just kids, or it’s just a few jobs, or it’ll kill employment – then the politician in question is simply regurgitating the corporate line, the big corporate line.  The big corporate lie.

We’re waiting for Yes.

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Filed under Economy, Nevada economy, Nevada politics

Can’t Sleep In The Beds They Make, May Not Be Able To Sleep In Their Own Either

The median hourly wage of a housekeeper or maid in Nevada’s “traveler accommodation” sector is $15.71.  [DETR] We know what medians are — half the wage earners are above this level, the other half below.  So, if our median wage earning housekeeper works 40 hours per week, for 50 weeks per year the gross earnings would be $31,420.  The actual median annual income is reported as $32,680. [DETR] Again, we know that half are earning below this amount.  Let’s compare these numbers to the living wage required in the community most likely to employ housekeepers — Las Vegas.

A single person with no dependents would need to earn $20,036 to make the living wage level in Las Vegas.  A person supporting one child would need annual earnings of $43,001. [MITedu] The median annual earnings of a housekeeper in Las Vegas obviously don’t reach this level.  Why are we looking at these numbers?

Because — the Economic Policy Institute released a report yesterday demonstrating that people working in the accommodations sector can’t afford to sleep in the beds they’re making.  At one point, back in the 1960’s and 1970’s a housekeeper could afford a room, but the current wage stagnation in the sector now means that the housekeeper can only afford 78% of the average room cost ($106/day).   Once more, why does this matter?

It’s not like the Department of Labor hasn’t been trying to tell us, ” A review of 64 studies on minimum wage increases found no discernible effect on employment,” but the myth remains that raising minimum wages cuts jobs is still recited like a mantra among business interests in spite of every solid study to the contrary — and there’s another study rejecting the mythology this morning.

“In April, the Paychex/IHS survey, which looks at employment in small businesses, found that the state with the highest percentage of annual job growth was Washington — the state with the highest minimum wage in the nation, $9.32 an hour. The metropolitan area with the highest percentage of annual job growth was San Francisco — the city with the highest minimum wage in the nation, at $10.74.” [WaPo]

Harold Meyerson’s analysis repeats what advocates of increasing minimum wages have been saying all along:

“What critics of a higher minimum wage ignore is that, by putting more money into the pockets of the working poor — a group that necessarily spends nearly all its income on such locally provided basics as rent, food, transport and child care — an adequate minimum wage increases a community’s level of sales and thereby creates more jobs.” [WaPo]

But, but, but… sputter the opponents of any increase in the minimum wage, Singapore has no minimum wage and look how well those people are doing.  Easy now. That evidence comes with some significant caveats.  First, their budget provides public funds to subsidize private company worker’s pay, and secondly the Singapore government is the largest shareholder in Singaporean companies, to the tune of some 54% ownership. [AXW]  I’m not at all assured that U.S. companies would be eager to adopt a system in which in exchange for wage subsidies the company would agree to make the government a major shareholder.

Another reason for looking at minimum wage and living wage issues is the recent action by the House Appropriations Committee which would slash HUD funding for housing assistance.

“The House Appropriations Committee this week approved a fiscal year 2015 funding bill covering the Department of Housing and Urban Development (HUD) that makes disproportionately deep cuts in housing assistance for low-income families.” [CBPP]

Here’s a graphic representation of what this would mean for low income families.

Housing cutsNot to put too fine a point to it, but the House appears determined to cut programs for low income families while they are singularly unresponsive to any and all calls for closing tax loopholes and gimmicks for the upper 0.01% or eliminating subsidies for the Oil and Gas Giants.

Meanwhile, the housekeepers cleaning up after the Memorial Day weekend revelers in Nevada, continue to try to make financial ends meet, as the House of Representatives pursues more ways to make life even more difficult for struggling American families.  If this pursuit continues our housekeepers may not only be unable to rent a motel room — they may not be able to sleep in their own beds.

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Filed under Economy, Nevada economy

Income in America – The Hurrier We Go The Behinder We Get?

The average worker’s pay in the state of Nevada is $35,206 per year. The average CEO pay is $5,130,077.  That’s a ratio of 146-1 in favor of the CEO, a figure which rockets up to 299-1 if CEO compensation is compared to our minimum wage earners.   [Paywatch]  If we look to the 89101 Zip code specifically, the median annual compensation for a CEO is $736,318 or 21 times the earnings of the average worker.  The range in that area goes from $396,391 to $1.059,652. [SalWiz]  If we look north, the average CEO compensation in the 89501 Zip code is $732,846, with a range of $394,522 to $1,054,657. [SalWiz]  The problem isn’t that some individuals are paid more than others — the core issue is that there are economic pressures which continue to put a drag on our economic recovery, and some of these are the result of wage and tax policies which favor financialism over good old fashioned capitalism.

The first argument launched from the conservative side of the spectrum is that these numbers are necessarily flawed, and therefore of little utility in debate about wages, salaries, and compensation in general.  However many issues the Center on Executive Compensation , allied with the U.S. Chamber of Commerce, and the National Association of Corporate Directors, may have with the methodology, and with the proposed SEC rules on ratios, [Blmbrg]  the points remain — (1) Multinational and other large corporations really don’t want to disclose their CEO pay packages, and (2) They really don’t want the issue of executive compensation tied into the discussions of tax equity and fairness.

This is an interesting line because corporations generally have no problem reducing almost any issue by quantification, be it allocation of purchasing orders or labor costs and productivity.  One easily reached conclusion is that the quantification called for by the SEC under the terms of the Dodd Frank Act isn’t something the corporations want to do.

The second common assertion is that these are the “job creators,” and therefore should be immune from any additional taxation, and certainly from any increase in the taxation of capital gains.  We are continually told that any attempts to adjust the inequities via minimum wage increases or tax policy will have dire effects on small business.  Testing this contention requires looking more carefully at the old common ‘wisdom’ that small companies are the driving force in job creation.  There’s some evidence this may not necessarily be the case.

While it’s still true that businesses with 49 employees or less create the most jobs, the trend since 1990 indicates that large employers (over 500 employees) added 29% more workers between 1990 and 2011, while those with 50 or less added 10.9% more. [NYT BLS]  In short, what the large corporations do in terms of compensation of CEOs and employees is important, and become more so as additional jobs are the result of hiring decisions made by large firms.

Practical Matters

## As a practical matter, income inequality only becomes a problem when such a large portion of wealth is tied up in the hands of so few that the savings capacity of individual workers is reduced.  Obviously, at the theoretical level, the more workers save the more money becomes available for investment.  Practically, the more workers are able to save the less reliance there is on social safety net programs, and the more savings accounts of all varieties are available for (a) consumer spending — such as in retirement, and (b) investment by the banks and mutual funds which hold them.

One way to observe this in the real world is to look at what people are doing with their 401(k) accounts.  Now that housing isn’t the most apparent source of income, individuals and families are increasingly tapping their retirement accounts to meet necessary expenses.  In 2011, for example, Americans withdrew about $57 billion from their retirement accounts while home equity loans were down by 38%. [Blmbrg]*

At the consumer debt level, the Federal Reserve’s report on Household Debt Service and Financial Obligations ratios shows consumer debt which bottomed at 4.97 in the first quarter of 2012 is now back up to 5.14.  People who are borrowing aren’t saving, and if they aren’t saving then those funds are not available for investment.

Our debt levels are back up and our personal savings rates are headed back down.  The Federal Reserve chart shows an increase in personal savings during recessionary periods, a spike in December 2012, and then back down we went.

Personal Savings RateNothing says “squeezing the middle’ quite like watching (a) dipping into retirement accounts, (b) increasing consumer debt, and (c) declining personal savings.

## Income inequality becomes a problem when the funds which should be invested in the expansion or improvement of capital projects is diverted into ‘manufacturing’ financial products which add wealth to their holders and traders, but do not add assets, fixed or short term, to corporate enterprises.  Look at the following chart showing the trends in how banks earn their income:

US investment banking fee composition

(See Capital Markets Outlook – Deloitte Israel, Global Investment Banking Review – Thomson Reuters, both in pdf)

Trading in “equities” is earning a larger portion of banking revenues in recent days, from 17% to 48%, while loans have contracted since 2005.  And bonds, the old staple of the investment banking sector? Improving, but not as well as the equities column of the ledger.

If the tax on capital gains is only 15% then what incentive does an investor have to invest for the long term in manufacturing capacity?  For that matter, if funds are in the hands of institutional investors what incentive is there for long term investment instead of seeking short term gains?  In 1995 institutional investors held 140.8% of our GDP, in 2011 that number had increased to 211.2%.  In 1995 institutional investors held $11,223 billion in financial assets, by 2011 that figure stood at $24,220 billion. [OECD pdf]  And then there’s this chart — notice the increase in the column representing investment funds compared to that of pension funds:

Investment Institutions by typeIt isn’t a stretch to conclude that recent trends indicate there are more institutional investors and those investors are increasingly in the form of ‘investment funds.’  The small chart below shows the the increase in the number of hedge funds since 2000:

Hedge Funds

 

 

 

 

 

And, as we might guess, the smaller, newer funds are doing well, but they’re also more likely to ‘blow up.’ [FTAlphaville]  It’s necessary to remember that what’s good for the hedge funds and asset managers (short term gains) is not necessarily good for the rest of the economy (long term stable prosperity).   The focus of the money managers is, predictably, money. Money becomes the ultimate measure of wealth, not the fixed and other assets of other enterprises.

If we’re looking for the barriers to economic growth in the U.S. some attention needs to be paid to (1) the growing income inequality which puts pressure on individual and family saving capacity; (2) tax policy which rewards investment for the sake of ‘money’ rather than investment for the sake of long term corporate viability; (3) the role of institutional investors and their agendas in the financial markets; and (4) the declining role of retirement funds for their original purpose (retirement) and in the overall institutional investor landscape.

We’ll do better when we can return to the traditions of capitalism — in which wealth is measured not only by bank accounts, but by what those bank accounts can provide for the businesses and industries who build them.

* See also: Angry Bear Blog “Americans Raid 401(k)s” May 8, 2014; EPI, “The State of U.S. Retirement,” March 12, 2014; Naked Capitalism, “Even Harsh Frontline Program on Retirement Investments Understates How Bad They Are,” April 24, 2013.  CAP “What Can We Do About Retirement Fees Straining Middle Class,” April 15, 2014.

 

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Nevada’s Job Trap and the Minimum Wage

The Nevada employment report was encouraging last round. [DETR] Remember when the press release read:

“Total employment in Nevada’s economy is projected to grow by about 61,000 jobs through 2015 to reach an average of 1,218,700; this represents a 5.3 percent increase. Specifically, growth rates of 2.5 percent for 2014 and 2.7 percent for 2015 are expected. Some of the fastest projected growth will occur in accommodation and food services, construction, and retail trade.  Together these three industries are expected to account for over 55 percent nearly 34,000 of all new jobs during this period, Anderson noted.”

This almost mirrors the latest commentary from the Bureau of Labor Statistics on the jobs report.

Total nonfarm payroll employment rose by 288,000, and the unemployment rate fell by 0.4 percentage point to 6.3 percent in April, the U.S. Bureau of Labor  Statistics reported today. Employment gains were widespread, led by job growth in professional and business services, retail trade, food services and drinking places, and construction.

If we are projected to see jobs increase in (1) accommodation and food service, (2) construction, and (3) retail trade, then what does the current debate about raising the federal minimum wage tell us about the capacity for economic growth in Nevada.

Specifically, the median annual income for a person working in a retail clothing store in Nevada is $21,660.  An employee in a grocery store can expect $23,560 median annual earnings.   A worker in a sporting goods store?  He or she can expect median annual earnings of $21,420. [DETR]    The  median annual earnings number for wait staff in the accommodation/food service category is $19,310. [DETR]  The median hourly wages for construction workers? About $16.40 per hour.

Not to put too fine a point to it — BUT when 55% of the employment growth in the state is projected to occur in jobs which don’t often pay a living wage, then the state is asking for trouble.  Either the wages have to improve, or the state has to pick up more of the slack to insure people aren’t falling into unsustainable poverty conditions in which they can’t afford housing, adequate food, and basic utilities.

One of the sputtering arguments against raising the minimum wage is the Inflation Argument.  Gee, if we raise wages then things will just cost more and if they do then the increase won’t be meaningful and “won’t solve the problem.”   What problem?

The Inflation Argument is the essential position of the banking sector.  No inflation is good inflation.   The old saw said debtors liked inflation, while bankers (creditors) preferred stability or deflation.  If our “problem” is that we don’t have enough economic growth (read: more aggregated demand for goods and services) then there are some ideas which need more examination, beyond the recitation of old truisms.

What happens, for example, when the level of deflation is such that it actually increases the burden of the debt and reduces the cash flow necessary to service that debt?  The obvious answer is that the debt becomes uncollectable.  People declare bankruptcy. People down-size their living arrangements; people avoid major expenditures in housing, goods, and services.  That’s not a way to grow an economy — at the state or federal level.

Another notion which hasn’t been explored very often is that during periods of stagnation it makes some sense for enterprises to sit on their cash.   If, however, an industrial or commercial business believes that there is some likelihood of moderate inflation, then the decision to spend money now as opposed to waiting until “things” get more expensive kicks in.

Would we come closer to solving our “employment problem” if commercial and industrial businesses expected that a moderate level of inflation would mean they could get more for their expansion or upgrading money now, as opposed to waiting?

The second sputter often sounds something like — but, but, but do we want the government determining the value of a worker’s labor? Shouldn’t the “market” do that?  This is lovely at the ideological and theoretical level, but doesn’t exactly provide a road map for Nevada business enterprises.

If our sporting goods store employee can expect $21,420 annually, but there is no ‘floor’ under that median, then if there is no minimum standard how do we prevent a race to the bottom, a race in which the big box stores reduce wages to the lowest possible common level?  If there is competition based on who can reduce prices by reducing wages, then where does this stop?  A related question is: At what point does the sustenance provided by the state for the protection of general living conditions become a subsidy for the corporate employers?  Barry Ritholtz’s article for Bloomberg News, “How McDonalds and Wal-Mart Became Welfare Queens,” illuminates this issue.

If there is a state in this union which could benefit from an increase in the minimum wage it’s Nevada, with its projection of most employment rising in retail, accommodation/food service, and construction.  Further, if the inflation argument is demonstrated to be informed by economic feedback from inflationary pressures, and in the real world there are benefits to be gained from moderate inflationary pressures, and if we do not want to create a situation in which major employers are subsidized by taxpayers, then it’s time to support setting the minimum wage to at least $9.80/hour, or $10.10 — or what about $15.00?

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Filed under Economy, Nevada economy, Nevada politics, Politics