The Fair Wage and Community Revitalization Act (reintroduced)

[Sam Spade]

I will naturally oppose this because of Clause #1.

I see no problems with clause #2 and #3.

If an amendment were brought to strike Clause #1 from the bill, I would be in support of this.

Of course, that probably goes against the Senator's original aims.

Nonetheless, I will propose it anyway.

[Sam Spade]

Aye

[Sam Spade]

Ack! We have a vote already? I've got some questions, actually.

1. To those who argue against increasing it: are you saying that we never need to increase the minimum wage? Or is this a matter of degree rather than in kind? Because inflation does eat away at people's earning power over time, and if you perpetually keep the minimum wage stagnant you will lower its buying potential over time.

2. To those who argue in favor of it: is this the right amount? How will small businesses really be affected by it?

3. To all: would a compromise wherein small businesses receive a tax credit for the extra amount they have to pay in wages due to a minimum wage increase be fair, or a good idea overall, or affordable?

-WMS (currently in Abstain mode)

I've worked in small businesses for a long while. 

Minimum wage increases always hurt small businesses by causing them to have to lay off workers in order to meet those pay requirements.  They also drive up the costs for products and esp. services for normal people. 

Take restaurants for example, one of the reasons why restaurants are such a bargain in the US is because service costs are so low because of minimum wage issues.  If we raise minimum wages now, it will cause your costs in restaurants to go up as well.

I am not saying that I think that the minimum wage should never be raised.  But considering what John Ford has told us about the precarious nature of the economy right now, raising the minimum wage might send us into recession by making small businesses lay off workers in order to meet cash flow estimates.

Small businesses, regardless of what many here would tell you, employ most of the people employed in the US and create most of the new jobs in this country.  If we restrict their ability to create new jobs, we restrict the freedom of individuals as a whole and jeopardize our economic well-being.

John Dibble and Gabu have quoted these two articles earlier.  I suggest that you read them also. 

http://www.freedomworks.org/informed/issues_template.php?issue_id=1163

http://www.heritage.org/Research/Labor/tst042904a.cfm

I have no problems with Clauses 2 and 3.  My problem is with Clause 1, which is the reason why I'm requesting the amendment.

[Sam Spade]

Could you answer my third question, since I'm not sure what you think of that proposal?

Considering that our deficit is already over $500 billion and I really don't like the government giving money directly to businesses, especially since I don't know how we would make this program not become some type of corporate welfare.   I would probably be in opposition of that, WMS, honestly.

Let me clarify that:
Maybe, and only maybe, if this funding were cut out over a certain period of time, like 5 years for example might I support it.  I'd definitely give that some thought.

[Sam Spade]

Could you answer my third question, since I'm not sure what you think of that proposal?

Considering that our deficit is already over $500 billion and I really don't like the government giving money directly to businesses, especially since I don't know how we would make this program not become some type of corporate welfare.   I would probably be in opposition of that, WMS, honestly.

Let me clarify that:
Maybe, and only maybe, if this funding were cut out over a certain period of time, like 5 years for example might I support it.  I'd definitely give that some thought.

Well, tax credits are used all the time, so I figured it might be a good compromise. I wonder if the Treasury Secretary - or the GM - has a good idea how it would impact the budget?

And I'm trying to get a lock on when minimum wage increases are good and when they are not. [OOC: I would like to note that the refusal to raise the minimum wage from 1995 to 2000 was based on ideology, not economics, because the economy was strong but, after the 1995 Congress voted for that increase - a lot of Republicans defied their party leadership on that one - the Republican leadership refused to allow any floor votes on minimum wage increases, because they would likely lose them.

And also: it has been TEN years since the last increase - that's quite a while, don't you think? The thing keeping me from backing the wage increase is that I'm not certain how much damage it would do to small businesses. It does need to go up at some point just to account for the eroding power of inflation, but I want to know when to do it and by how much before I cast a vote. I understand that's a complex answer, but I'm trying to get past ideology. ]

Well, I don't think we're at a point where we need to raise the minimum wage.  The economy is weak, as John Ford has said, and businessmen are nervous after the election fiasco of the last weekend.  Raising the minimum wage right now could push this teetering economy over the edge, imo.

So I guess those are my reasons above for requesting this amendment and I'm sticking to them. 

[Sam Spade]

I have no problem with raising the mimimum wage, in fact I encourage it; but I would much rather wait until after we work out the taxation plan, including for small businesses. If we can provide small businesses with a tax cut to offset the wage increase, then that is the best possible solution-more money in the worker's pockets without the businesses suffering.

Also, how can we ensure that big business won't just ship in, and 4 years 364 days later move to another Rennaisance Zone? The theory is good, but it's open to abuse. How to close it, I don't know, but at this stage I am leaning against supporting this bill.

Ideals are important, but the most important thing is good governance.

I will be willing to listen to what you would do with regards to your tax plan and this endeavor.

In fact, I think the two most important things facing the Senate right now are election and voting reform and developing an Atlasian federal budget and consequent tax system in the next 3-4 weeks.

For that reason, I have postponed my bringing up my larger initiatives that I talked about in my campaign and am just proposing ideas that I think people will easily support without much concern.  Also, I will not propose any more simple acts until we get through these two things above.

Also, I'd like to finish up some legislation that was left over from last term, like Siege's Act and John Ford's two things, which I think are good endeavors.

[Sam Spade]

I agree with clauses 2 & 3, but not one.  Minimum Wage increases only spur on inflation and higher prices.

Then you should vote for my amendment. 

[Sam Spade]

Aye on the new Amendment.

A vote on this one still hasn't been called. Has the vote on the first one even concluded yet?

With MAS voting in approval, the amendment passes 6-2, 1 not voting.

[Sam Spade]

On the correct MAS117 amendment:

"The federal minimum wage of Atlasia shall be increased by 80 cents per hour each year for the next 2 years, until it reaches the level of $6.75/hour."

Nay.

[Sam Spade]

I would also remind those undecided or voting on this amendment, that an increase of the minimum wage is also primarily a tactic that states and regions with higher costs of living (e.g. California, New York, Massachusetts) use as a sort of quasi-protectionism against states with lower costs of living (e.g. Florida, Louisiana, New Mexico).

They use this tactic to keep jobs and money from flowing to areas where growth is high, costs are low and businesses and individuals are not subject to such encumbering taxes and regulations.

Instead, we should encourage these states to cut their taxes, lessen their spending expenditures (even more important) and reduce their stifling regulations on business.

[Sam Spade]

Nay

[Sam Spade]

I'm willing to compromise on things that won't turn the economy downward or hurt the businesses of this country and force them to lay off workers or downsize their worker pools or become more dependent on an illegal labor force.

By the way, this amendment will enact the largest minimum wage increase in the history of Atlasia.

http://www.dol.gov/esa/minwage/chart.htm

[Sam Spade]

The rate increases in 1996 and 1997 did not cause major economic turndown because the economy was in a period of growth than began roughly at the end of 1994, indeed it was probably the largest expansion in a long, long time (at least since the mid-80s, possibly since the mid-60s), buoyed by cuts in spending, cuts in capital gains tax rates, and good corporate reorganization during the early 1990s.

Whenever you're in a great period of expansion like we were then, these type of increases can be easily absorbed and should be encouraged.  I would have supported the increases at that point.  I presently do not think we're in that type of expansion.  If others would think that we are on the brink of that type of expansion now, then that's their opinion and I respect that.

I could go on the other hand and argue that the fact that the minimum wage was not increased did not exactly mean disaster for lower-income workers during the 1980s.  I would argue that raising it certainly did not help during the recessions of 1982-1983 and 1991-1992.

[Sam Spade]

The 1991-1992 recession was the last major recession in the US economy (the period after Sept. 11 was almost a recession, but never became one, at least in terms of GDP).

As I remember very well, the recession cost George H. W. Bush the Presidency and allowed Bill Clinton into office.

I am not saying that this minimum wage increase caused it, not at all.  The 1990 budget, which alienated much of Bush's conservative vote, also raised taxes (remember No New Taxes) and increased spending strongly.

I happen to think that all of these factors, plus some of the downsizing that would have naturally occurred anyway (in order to lead to better American companies) lead to this recession.

The 1982-1983 recession was much worse than the 1991-1992 one.  Of course, most here, including myself don't remember it.

In your graphs, I understand what you are talking about in the terms of its mechanics; I just happen to disagree with its model, mainly because the income that a worker takes home through a minimum wage increase may or may not directly affect the employer.

Most mandatory pay increases or wage (inflation) hikes, as this minimum wage increase does, usually cause the employer to have to shift his costs one way or the other.

His basic material cost is fixed, but his labor costs have grown.  The most logical option to paying for these higher labor costs is to raise the prices of his goods.  Not only does this lead to an inflationary jump in prices for his workers (should they purchase with their newfound monies something of his), but it also leads to an inflationary rise in prices for all of us.

I am willing to predict where we will see this raise most significantly affected in terms of price, will be in base restaurant prices, construction prices, many consumer good prices, et al.  Places where minimum wage workers tend to be a larger part of the workforce.

I will say this, this wage increase is clearly the least odious of the ones that have been proposed before. 

[Sam Spade]

WMS, these are the economic figures that I've been using in my arguments.

They would seem to be more accurate for Atlasia than the mythical United States. 

https://uselectionatlas.org/FORUM/index.php?topic=17967.msg386975#msg386975

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[Sam Spade]

I would like to propose an amendment to Clause 1, as presently proposed:

Clause 1
The federal minimum wage of Atlasia shall be increased by $0.30 per hour over the next two years, until it reaches the level of $5.75/hour.

[Sam Spade]

I would like to draw the PPT's attention to the fact that Supersoulty's amendment has passed and that I have proposed a new amendment which I would like to see brought to a vote.

[Sam Spade]

Aye on Sen. Spade's amendment.

I would like to propose another amendment to this bill.

Clause 4
If at any time within the next 3 years, either one of these two things occur...

1.  Two consecutive quarters of negative GDP growth, as reported by the Commerce Department.

2. Unemployment numbers grow above 7% for two consecutive quarters, as reported by the Bureau of Labor Statistics.

The minimum wage increase proposed in Clause 1 will become null and void and the minimum wage will return to its present level of $5.15/hr.

[Sam Spade]

Nay on Senator Spades Second Amendment.

Anything, like, say, a terroist attack could cause that to happen.  This needs to be drastically ammended to gain my support.  Perhapes a slight drop.  Not a return to the status quo.

Would you be for it if I put in such language to say that a terrorist attack on the US would have to happen in the span of one year prior to one of these conditions being met and defined what a terrorist attack is?

[Sam Spade]

Aye.

[Sam Spade]

Ok, first.  We still have two Senators (MAS117 and "Senator" Naso) to vote on my amendment before this one can be bandied about.  Please do. 

Now onto Super's amendment:

My Ammendement:

Clause 4
If at any time within the next 3 years, either one of these two things occur...

1. Three consecutive quarters of negative GDP growth, as reported by the Commerce Department.

2. Unemployment numbers grow above 7% for three consecutive quarters, as reported by the Bureau of Labor Statistics.

The minimum wage increase proposed in Clause 1 will become null and void and the minimum wage will return be reduced by $0.15/hour every quarter, but shall not be reduced to less than $5.50/hour.  This till continue until either the minimun wage becomes %5.50/hour or until economic GDP growth resumes or the unemployment rate drops.

First, why three consecutive quarters? 

I put in two consecutive quarters, because two consecutive quarters is the financial world's standard definition of a "recession".

Technically, we have not had two consecutive quarters of negative growth since late 1991 or early 1992 (I can't remember).  We also have not had two consecutive quarters of the unemployment rate being above 7% since sometime around then also.

Even the period post-9/11, which was commonly assumed to be a recession, we did not have two quarters of negative growth.

Do we need to say: "Well, y'all are having a recession, but we at the federal government can't be sure that y'all are in a recession until we really, really know you're in a recession."

Second, and this is technical.  If you declare the minimum wage increase null and void, there is nothing for you to lower one bit.  I'd suggest that you strike that wording from the statement, so it comes out more like this:

The minimum wage increase proposed in Clause 1 will be reduced by $0.15/hour every quarter, but shall not be reduced to less than $5.50/hour.  This will continue until either the minimun wage becomes $5.50/hour or until economic GDP growth resumes or the unemployment rate drops.

The compromise I will agree to (though I can't speak for everyone else), is the language above, with the correction of bringing it back to two consecutive quarters of negative growth or unemployment as so stated above.

If you were to add a simple terrorism clause as I mentioned earlier, I would agree to that also.

[Sam Spade]

I cant keep track here, which one do I need to vote on.

Clause 4
If at any time within the next 3 years, either one of these two things occur...

1. Two consecutive quarters of negative GDP growth, as reported by the Commerce Department.

2. Unemployment numbers grow above 7% for two consecutive quarters, as reported by the Bureau of Labor Statistics.

The minimum wage increase proposed in Clause 1 will become null and void and the minimum wage will return to its present level of $5.15/hr.

[Sam Spade]

I assume that soon we will be voting on this actual bill and before we do I would like to make some overall comments, as well as a little speech.

This bill stands before us, on the precipice of being voted on.  We have spent the last week haggling on the extent and depth of a minimum wage increase and absolutely ignoring the other half of this bill, the part that deals with Revitalization Zones. 

I implore the PPT, as Colin Wixted did but two days earlier, to separate this bill out into two sections, as one has completely nothing to do with the other, and I'm not sure will ever having anything to do with the other. 

We've heard tales from certain people in this chamber that somehow these bills are closely related.  Of course, they have yet to provide the proof for such assertations, since most businesses affected by the minimum wage increase won't go anywhere near a Revitalization Zone and most businesses within a Revitalization Zone won't be paying their employees minimum wage either. 

To claim that the two bills are co-related is a farce, a crock and is completely devoid of reality.

Minimum wage increases are always popular with the public, who feels emotionally the scarring pain with which those at the lower end must eek out their existance on a few measly dollars or a few crumbs of bread.

Nothing could be further from the truth.  In the past week, we have seen those who favor a minimum wage increase now argue with emotion and appeals to the heart, while we have seen those who argue against a minimum wage increase argue with facts and truths.

It is my own personal opinion about minimum wage increases that they should be legal and rare, but they should only occur at a time when the economy is at a high point and the inflationary burden they place upon businesses, especially small businesses is at its easiest time to absorb.

Presently I feel, we are not in one of those times.  We run a $500 billion dollar deficit in government; we have a meager growth rate in the last quarter of 1.9%.  Economists are worried, businesses are not very confident.

Last week, we, as a Senate, passed an amendment to get rid of the minimum wage increase in this bill by a margin of 6-2-1.  Then suddenly, the Senate got scared.  What if, around election time, our opponents were to use our votes against the minimum wage against us.  So, we reinstated the minimum wage increase, albeit at a somewhat smaller level and felt good about ourselves for doing the right thing for the "little" people.

Once again, emotion and fear ruled the day over simple truth and fact.

I, myself, have shown a willingness to compromise on this issue, even with a Senate that refuses to acknowledge the data, by agreeing to the $1.00 raise increase so allotted by Senator Supersoulty, if a clause that I request, simply saying that if this raise sends the economy into the tank too much, it will be repealed.

Now, I have been assailed by those for this hike with arguments like: "If the economy goes bad, we'll come back and repeal this minimum wage hike", or "What about if extenuating circumstances exist that causes the economy to go downward?"

First of all, like the Senate has ever repealed any minimum wage hike ever, no matter how terrible the circumstances.  That's like trying to ask members of government to cut spending.  They say they will, and then at the next moment they're adding 10 billion here, a 100 billion there and so on.

Secondly, I have agreed to a terrorist exemption clause in a rewrite of the amendment.  Now that I have agreed to it, it seems to have disappeared and more ridiculous guidelines have been attached.

It now appears that the definition of "recession" is not good enough for members of this chamber.  Now it must be Recession+1, soon it will be Recession+2, Recession+3.  The guidelines keep expanding and the responsible nature of this chamber fades into the twilight.

All of this is the reason why I supported Senator Supersoulty's Waste Reduction Resolution so heartily.   I am hopeful that we can cut wasteful spending here in this chamber, because there is a whole heck lot of it, and bring responsible government to the people of Atlasia, but I am ever suspicious in the back of my mind that the spending that this committee suggests to cut will be met with by more emotional responses, such as the ones we've met during this bill, and more backtracking on the "fiscally responsible" claim that many people seem to forget once they enter this chamber.

And so I come to you, Senators, this evening with my requests, with my arguments, with my good will and with the hope that the Senate will wise up, look past its own self-aggrandizment and vote for the sensible option in this bill, the one that won't hurt small businesses, the one that will correct the mistakes that politicians often make and the one that stands as the correct choice, now and in the near future.

Thank you.

[Sam Spade]

Look, hugh.  If you've got your tax plan to present, I'm certainly willing to get along with it right now.

And Al, while I fundamentally agree with what you're saying in terms of small business, at the time of government running a $500 billion dollar deficit, I do not feel like tax cuts at this time would be appropriate.  It's another reason why I have opposed this minimum wage hike.

If we were to fundamentally alter the tax code that would give some tax advantages to small businesses while at the same time not affecting revenue, I'd be willing to listen then most certainly.

[Sam Spade]

Will the Senator who believes in "getting things done" ("Senator Naso") please vote on this amendment now?