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Greenberg on the Minimum Wage

September 22, 1988

As a longtime statistician, I must say that Greenberg is a master at writing a phony statistical article. At the start of the article he presents six accurate statistics about minimum wage workers. All are irrelevant to the right-wing con that he is selling. He then quotes some erroneous statistics and dares not give their source. There have been objective government studies made every time that the minimum wage has been increased. They have never shown that they increased unemployment, let alone by 3%. For all practical purposes in modern times, major unemployment increases have been caused by the Federal Reserve increasing interest rates.

The proposed changes in minimum wage will change total earnings by less than 1% a year. Earnings have been going up three or four times that fast for other American workers while job growth has been steady. To say that this proposed small (less than 1%) increase in total earnings will create a loss of 882,000 jobs is the height of irresponsibility.

If an employer is faced with a minimum-wage increase he doesn't lay off people. He raises prices. His competitors must also. If Greenberg wanted to make an honest case, he would point out that it would have an impact on the cost of living, but much less than that from the raises that we all get.

This article is an excellent illustration as to the lengths that individuals and businesses sometimes go to get short-term personal gains at the expense of long-term economic gains. This is very dangerous and the extent of our total income that has been transferred to the rich and the upper-middle class is frightening. If you are not frightened take a little trip to Mexico. For years the wealthier classes have been keeping as many dollars as they can from the poor with great success. As a result they have a very narrow productive base that has very few jobs because most goods are only produced for the wealthy and for export.

We have had eight years of going that route with great but not, as yet, fatal success. Taxation of Social Security and unemployment insurance has just begun. There have been giant tax cuts for the rich (many loopholes were left) with tax increases for the lower-middle class to make it "revenue neutral." The problem that must be faced some day is that when you keep money flow away from the masses it decreases money flow to everyone. There is not a money pie, just money flow. Visit Mexico! Educate the economic right wing! They are not starving. It just sounds that way.

CHARLES M. LARSON

Whittier

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