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Politics and economics (UPDATED)
Posted by: McQ on Friday, January 26, 2007

I pointed out yesterday that Sen. Edward Kennedy, among other Democrats, were complaining that Republicans were "blocking" the minimum wage bill and refusing to pass what they termed a 'clean bill' with no amendments attached:
Senator Edward M. Kennedy, Democrat of Massachusetts, expressed disappointment over the Senate vote. "Our colleagues in the House came together — Democrats and Republicans — and they passed a minimum wage bill with no strings attached," he said.
Of course the "strings" mentioned have to do with tax breaks given to small businesses who will feel the most impact from any raise in the minimum wage. The obvious intent is to lessen that impact and thus provide the ability (and incentive) for small business to continue employing workers at the new wage.

Democrats have taken the position that this weakens the bill. Funny, that's not how they felt the last time this came up. From the Congressional Record and other sources, Democratic thoughts on tax breaks for small business and the minimum wage:
SEN. ROBERT BYRD (D-WV): “This Bill … Will Provide Needed Help To Small Businesses.” “I believe certain provisions can and should be improved in this bill, overall it is a victory for American workers and will provide needed help to small businesses.” (Sen. Byrd, Congressional Record, 07/09/96, p. S7449)

SEN. KENT CONRAD (D-ND): “To Offset The Effect On Small Businesses, We Have Included Many Provisions To Help Small Businesses.” “I think I understand very, very clearly the pressure that an increase in the minimum wage puts on small business owners. I have evaluated it very carefully, and think I fully appreciate its effects. …To offset the effect on small businesses, we have included many provisions to help small businesses. I am strongly supportive of those provisions.” (Sen. Conrad, Congressional Record, 07/09/96, p. S7462)

SEN. JOHN KERRY (D-MA): “I Just Voted For A Bill Giving Small Businesses A Huge Tax Break.” “I just voted for a bill giving small businesses a huge tax break. It will be signed tomorrow by the president when he raises the minimum wage, something I voted for...” (Sen. Kerry, 1996 Senatorial Debate, Boston, MA, 08/20/96)

SEN. BARBARA MIKULSKI (D-MD): “I Also Want To Mention My Support For The Small Business Tax Package…” “I also want to mention my support for the small business tax package that will become a part of this legislation if it is passed. I am pleased that we have a bipartisan agreement on a tax package that will provide some needed tax changes.” (Sen. Mikulski, Congressional Record, 07/09/96, p. S7445)

FORMER PRESIDENT BILL CLINTON: “I’m Going To Sign The Minimum Wage Bill, Which Has Even More Tax Relief For Small Business In It, Tax Relief I Have Strongly Supported From The Beginning. We Can Cut Taxes.” (CBS News’ “60 Minutes,” 08/18/96)

FORMER PRESIDENT BILL CLINTON: This Bill “Helps Small Businesses.” “This is a truly remarkable piece of legislation. It is pro-work, pro-business, and pro-family. It raises the minimum wage. It helps small businesses in a number of ways that I will explain in a moment, including retirement and incentive to invest.” (President Clinton, Remarks At The Signing Of “The Small Business Jobs Protection Act Of 1996,” Washington, D.C., 08/20/96)
It is things like this which make you wonder how serious Democrats are about the economics of the issue. There's no doubt they want to pass this for the political rewards it will bring, but to a close observer of their shennanigans, this sort of economic duplicity (and apparent willingness to ignore what they found vitally important last time) is hardly impressive.

UPDATE: As noted Wednesday, the House passed its version of the minimum wage bill with the provision exempting American Samoa still in there despite their promises to end the exemption.

Now Sen. Reid, the Senate Majority Leader is calling for cloture on the Senate's version of the Minimum wage bill today, yet — despite Democratic promises that it would not be — American Samoa is still exempted from the bill. If Reid succeeds with cloture, that would prevent American Samoa from being included in the bill. (Sen. DeMint is planning to offer an amendment to include American Samoa).

For the Republicans, the "Democrats speak with forked tongue" meme seems to be building quite nicely - and they're not even having to help it along.
 
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Previous Comments to this Post 

Comments
The problem with the idea of small business tax breaks is that the ability to pay minimum wage isn’t a function of the size of the business, but the profitability of the business. There are some small businesses with 20% operating margins that could easily afford to pay their dozen or two dozen minimum wage employees more. And there are some large businesses that make little or not profit and simply don’t have extra money lying around to pay their zillions of minimum wage employees more.

If you have to bail out businesses in order to raise the minimum wage, you might consider not raising it. Duh.
 
Written By: Adam Herman
URL: http://francoisworld.blogspot.com
Well of course, Adam, you’re right, but obviously that’s not going to happen (i.e.not passing the minimum wage). So that means that it is important to minimize the impact in those areas you can.

Small businesses comprise, I believe, about 80% of the businesses out there (if I remember my numbers correctly). And although your point is well taken concerning size and profitability, no one, not even Republicans are going to support something which gives all businesses a break (because then we get into doing so for the demonized "multi-national corporations" - and Dems in the House just shut down breaks for the oil industry - so it won’t fly).

Realistically and politically, this is probably the best the Reps can get.
 
Written By: McQ
URL: http://www.qando.net/blog
The problem with the idea of small business tax breaks is that the ability to pay minimum wage isn’t a function of the size of the business, but the profitability of the business.
Actually, it’s not even that. It’s the kind of work the employees do, and how much value they add to the company from their labor.

A small company of 10 software engineers isn’t going to be paying anyone minimum wage. A large company of floor sweepers likely will be. The difference is the software engineers perform services that are more valuable than sweeping the floors.

One part of the issue completely overlooked is that employees in positions that are traditionally tipped (servers, for just one example) tend to make a lot more than minimum wage once tips are counted. So, by raising the minimum wage, we’re just increasing the income of people who already make much more than that.
 
Written By: steverino
URL: http://steverino.journalspace.com/
It is things like this which make you wonder how serious Democrats are about the economics of the issue.
I don’t wonder about that.... never have.
They’ve never been serious about it.
 
Written By: Bithead
URL: http://
...thes are really american probelms! ;-))

Look to Germany, we are trying to get less wages, cause the eastern part of Europe work for less.....
 
Written By: Stefan
URL: http://www.apotheken-nachrichten.de
Stefan,

and in Iran there were strikes AGAINST the minimum wage.
 
Written By: Harun
URL: http://
McQ,
no one, not even Republicans are going to support something which gives all businesses a break
Kevin Drum seems to be willing to do so, so maybe there is some hope.
 
Written By: Lance
URL: http://asecondhandconjecture.com
Well of course, Adam, you’re right, but obviously that’s not going to happen (i.e.not passing the minimum wage). So that means that it is important to minimize the impact in those areas you can.
Is minimizing impact wise?

Shouldn’t we bear full impact from dumb policy, so we can all learn it is a dumb policy?

 
Written By: Don
URL: http://
Shouldn’t we bear full impact from dumb policy, so we can all learn it is a dumb policy?
You could look at it that way, it’s perfectly valid.

Alternatively, it’s not much different from cutting your arm off now so that you don’t cut it off later. Minimizing the damage from taking an knife to your arm might be the best course at this time.

(Remind me to take my tongue out of my cheek.)
 
Written By: steverino
URL: http://steverino.journalspace.com/
Shouldn’t we bear full impact from dumb policy, so we can all learn it is a dumb policy?
I must admit I rather like that idea. However, it’s predicated upon the idea that people will actually learn that it’s a dumb policy. Really, what do you think the chances of that are? The minimum wage is just something that people intuitively love. Couple that with our socialist media and any useful lessons will quickly vanish into the ether.
 
Written By: Jordan
URL: http://
Shouldn’t we bear full impact from dumb policy, so we can all learn it is a dumb policy?
Yes. YES! YES!!

Let the Democrats be Democrats!!!

And let the people understand just who the Democrats are.
 
Written By: shark
URL: http://
Alternatively, it’s not much different from cutting your arm off now so that you don’t cut it off later. Minimizing the damage from taking an knife to your arm might be the best course at this time.
Perhaps. But perhaps a $20/hr minimum wage would show that you can’t vote your way to prosperity.
I must admit I rather like that idea. However, it’s predicated upon the idea that people will actually learn that it’s a dumb policy. Really, what do you think the chances of that are?
Given by the continuing existance of socialist nonsense in France, German, Spain, and England, as well as places such as Canada, and the failure to learn from it, you are probably right.

It’s like the healthcare debate: a little bit of socialism has harmed US healthcare, and the Democrats propose more socialism to fix it.
 
Written By: Don
URL: http://
Shouldn’t we bear full impact from dumb policy, so we can all learn it is a dumb policy?
That is sorta what has happened in the last election. People like me got tired of the Republicans being Dem lites. If we are going to get screwed then lets get it good and hard. Maybe, people will learn that the socialist policies don’t work tho I doubt it. At the least, it will be over fast instead of a long drawn out process.
 
Written By: SkyWatch
URL: http://
Maybe, people will learn that the socialist policies don’t work tho I doubt it. At the least, it will be over fast instead of a long drawn out process.
Yeah, because as we all know, once Bigger Better MORE EXPANSIVE gubmint is in place, it’s so easy to get rid of. Right?

If we are going to get screwed then lets get it good and hard.


I’m sorry, but that’s just ridiculous and sadistic. Please tell me you’re not a rape counselor. Please enlighten me: how will a more socialistic bunch of politicians turn the country more libertarian?
 
Written By: Come on, Please
URL: http://
Please enlighten me: how will a more socialistic bunch of politicians turn the country more libertarian?
I never said it would. What I am saying is I am done voting for the lesser socialists (Republicans) even tho that means that I will in effect be giving the Dems power since my 3rd party candidates will not win.

 
Written By: SkyWatch
URL: http://
That is sorta what has happened in the last election. People like me got tired of the Republicans being Dem lites. If we are going to get screwed then lets get it good and hard. Maybe, people will learn that the socialist policies don’t work tho I doubt it. At the least, it will be over fast instead of a long drawn out process.
Perhaps a better example is ’92-’94, when the Dems controlled everything. The current divided government might result in moderation that prolongs the agony.
 
Written By: Don
URL: http://
Your right Don,

The perot vote put Clinton in charge and also put the Dems in complete control.

I kinda liked his pie charts. Call me a simplton.
 
Written By: SkyWatch
URL: http://

 
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