How Minimum Wage Destroys the Poor and Middle Class

If you've listened to "Tyranny & Payoffs," then you're ready for this piece. If not, keep reading anyway and prepare to be outraged at how you've been swindled.

Have you ever noticed how after every election cycle when Democrats win they propose an increase in minimum wage? They call it a "Living Wage" increase like they're trying to help families supported by minimum wage holders. If only that were true. Their motives are a little different. One thing they will never admit is the real economic impact of the increase and its real results on the poor.

Let's start with the basic math. It wasn't all that long ago that the state of Illinois increased the minimum wage by two dollars over a two year period. For ease of calculation, let's use an increase of one dollar. It's an easy number to work with and I want it so simple a congressman can understand it.

We're going to use man-hours to figure the impact because it isn't dependent upon the number of people who work those hours. For example, a 40 man-hour week could be one person working full time or four part timers. I'm sure most of you know that, but again, simple enough for people who never had a real job to understand.

First the obvious; a one dollar an hour increase in minimum wage increases the cost for an employer of around $40 a week. Add 12% for employment taxes and another 2.5% for workman's comp (a good rate for retail or fast food) and you have a weekly increase of $45.80. That's not too bad, right? Surely anyone can afford to pay an extra forty-five bucks a week.

Okay, let's do more math since we know that people work more than one week a year. So, now we need to multiply that by 52 giving us $2,381.60 for one year. Still not too bad right? The problem is that it adds up quickly. Only the smallest of business can operate on forty hours a week of minimum wage employees.

Let's go to a typical minimum wage paying employer, a fast food restaurant. Most of them have around 25 to 30 employees making minimum wage. We'll use 30 for easy math and assume they work 20 hours a week each. That's essentially 15 people working 40 hours a week. When we multiply that earlier figure by 15, we get a much more significant sum of $35,724. All of a sudden, we have the wages of a full time person or three to four part time people. The math really adds up.

We do need to look at a larger employer. In this example, we'll examine a large retail store with close to 150 employees with approximately 120 of them making minimum wage. We'll make the same assumption we did for the fast food restaurant that they work 20 hours a week each giving us 60 equivalent full time employees. Now we're getting into real money. The cost for a large employer comes to a whopping $142,896. Holy jumpin' cats.

To recap, a typical fast food restaurant sees an increase of almost $36k for each dollar increase and a large retailer around $143k. This is a lot of money for businesses to absorb in a year. Most minimum wage employers operate on a relatively small profit margin relying on volume to make a profit. Even small cost increases impact the bottom line in very large ways.

Why do employers pay minimum wage? Because there are people who will work for it. It's just that simple. If a job requires more skill or education then it pays more. That's how the free market is supposed to work. If you do a good job, even at a minimum wage company, you get a raise. What happens when the minimum wage goes up with these people who make a little more but not as much as the increase? They go up to the minimum again. Most businesses do not increase wages across the board because they simply cannot afford to. This isn't a wage increase because the market demands it or because revenue improves. It's forced by an outside entity that doesn't care one whit about the real impact on the on the economy. When wages are forced to increase, everyone who has worked hard to do better loses their gains. That's incentive to work hard and be good at what you do.

This brings us to the economic impact and the effect on the people it purports to help. As I stated earlier, that money has to come from somewhere. There's only one of two ways for a business to handle the increase in cost. One, employ less people and cut hours for the ones you do keep. Have you ever noticed how the lines are getting longer at the local WalMart because there are fewer cashiers? There could be a reason. It's also why a lot of large retailers have added self-checkout lines. Customer convenience has nothing to do with it. It's all about cutting costs. Less hours, less people, and fewer new hires means that there's more unemployment and fewer entry level jobs available. They're helping! Really they are!

Sometimes cutting costs isn't enough. Staffing can only be cut so low before the business doesn't have enough people to operate. That triggers the other remedy for cost increases that are not dictated by the market forces which is to raise prices. That impacts all of us.

Wages in raw dollars really don't mean much from an economic perspective. What really matters is buying power. In other words, how much your wages can actually purchase. Wages are static in most cases in the rest of the working world when minimum wage goes up. When a business raises prices on their goods and services because of this government interference, the buying power of the rest of the population (that would be us) drops. We all receive a net effective pay cut. How's that for fun and helping?

Look, if a madman from Peoria can figure this out, surely someone out there has too. Heck, my oldest son at the age of 20 was able to figure it out when he was a crew leader at a fast food place. Why don't we hear about it? If this really doesn't help anyone, why do it? The answer is very simple. Someone benefits from the increase. It's not the poor, it's not the entry level worker, and it surely isn't the bulk of the middle class. Who is it?

Let's think about this for a minute. Everything a Democrat does benefits some group that helps keep them in power. The poor make up a large power base for them but we've already seen it hurts them. Of course, they believe the lie because there are no voices they trust telling them the truth. The lie is of some benefit of course but not enough to actually damage the economy for political benefit.

Who gets the dough? Unions. Plain and simple. Many unions, including the SEIU, have their wages tied to the minimum wage. It's a minimum wage plus a certain number of dollars based on seniority. So, every time minimum wage goes up, the unions get a pay raise. Can you say payoff? I knew you could.

Are you mad yet? Are you outraged? You should be. You get a pay cut every time the unions get a pay raise. If you protest, then you're labeled as being against the poor and working Americans. Never mind that only about 8% of the working population is actually helped by the increase and the rest of us working Americans get hurt. That just doesn't matter.

We Can't Become Them

I know I'm bucking the trend with this post. If you've listened to "Primary Issues," you know I'm concerned about how the campaigns are conducted.

Conventional wisdom among pundits, strategists, and other political types is to ride the voter's anger to electoral victory. By all appearances, this strategy is being used to a lesser degree in the GOP primary. Some candidates are doing this more than others.

Liberals are, generally speaking, bitter, angry, and thin skinned. Their first response is almost always outrage and to attack anything that doesn't fit into their worldview. Every survey about life habits, happiness, and general satisfaction with life indicates that conservatives are far happier and more optimistic than our liberal counterparts. This is, of course, contrary to how the MSM portrays us.

Remember the tactics used by the left. Demonize your opposition and accuse them of being exactly what you are to inoculate yourself against these same attacks. This is the root of the baseless accusations of violence, ignorance, and outrageous conduct just to name a few. Liberals seek governmental control of society but are the first to call conservatives fascists in direct opposition to our beliefs.

The only real tactic the left has is the personal attack. They know that their ideas do not stand up to the light of truth and are in direct conflict with the Constitution as written. So, instead of actually countering the ideas, they call us stupid, brainless, evil, and a whole bevy of other names to silence us and end the debate. Without actually providing a counter argument, they merely call our ideas nutty or just shout their soundbites louder in hopes of intimidating their opponents.

Personal attacks have served them well. They rode Bush hatred into 2006 and 2008 electoral success. Because they were louder and make up the bulk of the MSM, they we able to cover up all of their fault in our current economic problems and place all of the blame on Bush and Republicans. Anger worked for them. This is one of Alinsky's basic principles.

However, anger fades. Worse, it will turn on its head and direct its ire back upon the ones who stirred it up to begin with. I'm beginning to think that's where we are right now. I've been listening to the rhetoric from the GOP camps and from their supporters. I don't like what I hear.

It wasn't long ago that I was listening to a national radio program. I'll leave out the name to protect the perp but let's just say that his name rhymes with yawn. He was wondering if the anger with the current administration could kept up until the election and how he could help. This is not a strategy I can endorse especially since the anger is currently being used to attack primary opponents in the GOP.

The anger and the rage are starting to take over the conservative movement. We are becoming everything we are supposed to hate. I cannot stand by and not speak at this juncture.

Anger will not lead to victory in the long run. I know it's tempting to use the tactics of the left given the recent electoral successes our side has seen using them. However, seeing the left turn their backs on the President for not being liberal enough proves that rage, once deployed and kept in play, will eventually lead to problems with the ones who are supposed to support you. Anger always leads to mistakes and division.

We do not want to become like the liberals. If we continue on this track, we will lose. Sure, we might win in the next election cycle but rest assured, we will lose the war. If you want to see our nation restored to the level of freedom and prosperity we once enjoyed, we must act in a manner that reflects that greatness.

I know this is difficult. I understand the anger very well. Every time I read the news and all the lies from the left I see red. But also when I read the Twitter feed and all the bile from my allies against those who are supposed to be on the same side but have chosen a different candidate. I am angry that we are becoming divided over something as foolish as a single election.

I am convinced that if we want to win the war we must be statesmen who are above the name calling, muckraking, and other political nonsense. I am not referring just to the candidates either. We must also be above the foolishness. Truth, honor, integrity, and respect must be our watchwords. This is especially true when directed at those who are needed as friends and allies.

Love Ron Paul? Fine. Stop calling people who support anyone else brain-dead. Hate Ron? Same thing applies to you. If we are to keep this movement alive and win consistent victories we will need each other to work together. In reality, the candidates are secondary to their ideas and the probability of implementing them. Let's face it, on most issues, the front runners all agree.

If we start acting like statesmen and reasonable men and women, we will demonstrate to the American people that honor still exists. Honor will win the day. Remember, we're all on the same side. Yes, vet your candidates and their beliefs. Don't attack people who choose differently. We will win and will continue to win because our ideas are based on truth and have the light of history to back them up. Truth will win the day.

Anger Cannot Last (Why The Show Is On Break)

There comes a time when questions must be asked. A couple of weeks ago that time came for me.

I had to ask what motivated me to do A Madman in CrazyTown. What drove the format? How did I sound to my listeners. It was a complex set of questions to ask. In many ways, it spoke to the core of my being.

My wife had been telling me from the beginning that I sounded too much like Michael Savage. For many of you, that's a compliment. Coming from my wife it wasn't. Even though she agrees with him on the issues, she hates his program and his delivery style. She has repeatedly said, "I can't stand all the shouting!"

So what did I do when I went back on the air as the Madman? I shouted. I ranted. I raved. I released all my anger, indignation, and outrage over the cyber airwaves pointing out the errors and deceit of the left. I thought I was being funny but after listening to some archived programs, I came across like a sarcastic jerk.

Anger was at the root of the show. I am truly outraged at the flagrant disregard for liberty, freedom, and morality. Throwing out the founding principles of this nation makes me crazy. I am very much in love with our country and the liberty it has historically afforded us. I believe in the Constitution as written and in the intent of those who wrote it and founded this great nation.

That said, above all of that I am a follower of Christ. The Bible is my ultimate reference and source of all that I hold dear and believe. As I evaluated the past programs, one question rose above all others, "Is the way I'm doing this honoring to God?" When it came down to it, the answer was "no." In that light, I have to wonder how effective I was the way I was doing it.

At the end of the day, I need to honor my God above all things. That means something must be changed from the current format. I will be returning to the airwaves soon but with a new tone. My views and opinions haven't changed in the slightest. I still want the program to be fun and filled with humor. Many of the best elements are going to continue with the show including the Lens of Truth. I am still a proud Christian Conservative. One key thing is going to change.

I must remove the anger. If we are to win the hearts and minds of our fellow citizens I believe it is through reason and truth not rage. Yes, the founders began with a strong sense of outrage but it eventually subsided into a firm resolve based upon truth and reason. They won the people to the idea of liberty from impassioned yet logical arguments for independence from England.

I believe we must to the same. The truths we hold are indeed valuable and worth fighting for in every possible arena. If we are to win, we cannot play into the stereotypes that the left fosters upon us. We must be above the label of "bitter clingers" and other names used to demonize us and our beliefs. We cannot use the same tactics they use against us. I know it's tempting. Our human nature is to attack when we are attacked and attack some more. If the leftists want to work from the mud let them. We cannot.

There is a Biblical principle of giving honor where honor is due. It is repeated often in a number of ways throughout the Scriptures. Paul admonished the church at Rome to honor and respect those in authority as God's ministers. I'm not going to give you an in-depth history lesson here but one note so that you are clear about how critical this was. Romans was written either late in the reign of Claudius who was considered to be an incompetent or the early years of Nero. The madness of Caligula would have still been fresh in their minds.  I think that even with the lack of historical education in this country that Caesar Nero's name still means something. We have never had anyone as bad as Nero or Caligula here.

Given this, how can we say we honor God when we dishonor those He put in authority? We don't like the policies of the administration at all. That's absolutely acceptable and in this case necessary. However, we cannot engage in the personal attacks and demonizing language used by our political opponents. We must be different. We can show respect to our opponents while pointing out the errors and lies of their words and policies. I believe there is a desire in all of us for the truth to be spoken in love just as the Word of God commands. If we are to win the day in the long run and return our nation to its original course, we must take a patient and honest approach. We didn't get to this meshing of secular humanism and socialism overnight. It will take more that a couple of election cycles to pull us out. Take a long view and educate, inform, and challenge not from anger but from truth and gentleness. "A gentle answer turns away wrath."

We can do this. I at least must do this. I will return only when I am ready to follow the principles laid out in Scripture and speak truth with passion and respect. I hope you will join me.

I'll be back on the air soon. You can count on it.

The Real Man Creed

In honor of National Man Day, here is the creed of a real man:

Real Man Creed

I am a Real Man

I do not have a feminine side

I do not whine

I do not flinch from pain

I do not do crochet

I do not get manicures

I do not lie

I do not cheat

I do not give up

I enjoy watching stuff explode

I have manly hobbies

I have honor

I have integrity

I will love my wife

I will protect my family

I will raise my sons to be Real Men

I will guard the virtue of my daughters

I will use my tools to keep my house in order

Why? ‘Cause I'm a Real Man

That’s why

©2011 Mike Kerby & To The Kerb Productions

Feel free to send the link to this blog to all the men you know!

Why I Do This

I've had more than one person ask my why after ending my last program, Foundations, I'm back on the air with a different program. Some are asking why I didn't just restart the old program. Others want to know why go back on the air at all with all the great talkers out there already.

I'll answer the second question first. I have followed politics for well over twenty years and studied history even longer. I attribute my love of history and patriotism largely to two men both of them history teachers. The first was my Eighth-grade teacher back in Oswego, Mr. Thompson. Not only did he love history to the point that he was a Civil War Reenactor, his passion came through in his teaching. Of all that he taught me, one statement stood out. He asserted that American history began in 1066 when William the Conqueror won the Battle of Hastings. That took me to places in history where the foundations of liberty were laid by visionaries well before their time. The other was Ron Lowry, my high school history teacher at Dunlap HS. He was an army veteran who had lived history. His patriotism was evident even to a the teenage punk I was at the time. He was central to my decision to enlist in the Navy after graduation.

That's a lot of words to not answer the question. Besides my absolute love of radio since I was a kid, I can think of no other reason to go back on the air than the fact I have something to say. Several friends lamented that I removed all political content from Foundations back in the beginning of 2010. I lost a lot of listeners when I stopped mixing politics into the program schedule. I needed to do it at the time because politics was getting in the way of my relationship with God and the constant attention to it was making me harsh and critical in my personal life. I have since begun to find a good balance. The key ingredient is that I don't listen to other talk shows. Despite learning a lot from the greats not only about liberty and politics but about how to do a program well, I can't listen without getting angry.

That still doesn't answer the question, does it? Ok, here it is. I am different from anyone I've ever heard. One, my study of history goes back thousands of years not just hundreds. I've seen it done right over the centuries but, more importantly, I've seen it done wrong and the results of the wrong decisions by leaders and governments. I strive to bring that perspective to every program and the modern issues we face. Human nature hasn't changed since the bite of a piece of fruit in the Garden so how people are best governed hasn't changed either.

Ultimately, the Lens of Truth is what sets me apart. Many hosts have pieces of it but few if any have all of it. Everything I read passes through the three part filter of The Bible (as written without any other so-called holy books to filter it through), The U.S. Constitution (along with the other founding documents), and a lifetime of historical and economic study. I know that kinda makes me a geek to read this stuff for fun but, hey, I'm good with that label.

My humor is also different. I make a lot of jokes during the course of the program. After all, I am a comic. However, one of the lessons I learned doing Foundations is that honor must be given where honor is due. (That's in the Bible, by the way.) No matter how outrageous the behavior of an elected official, I will never mock them personally. I may point out the stupidity of their behavior or humorously knock their ideas but I will never use derogatory language or nicknames. Whether we like it or not, all authority comes from God even the ones we didn't vote for. We have to treat them with the respect their office deserves no matter how much they are perverting the country. Their character can be questioned, their policies challenged, and their ideas demolished but never can they be personally ridiculed. Disagreement does not have to lead to hate.

As to the first question, Foundations needed to end. It was a program directed specifically at a Christian audience. It was a mix of teaching and commentary on the church and our role in culture. Over the last year, I have been less engaged in talking to the church and more engaged in reaching beyond the four walls. If I'm going to do a program, it must appeal outside the church. The new program is not under the not-for-profit corporation but is completely separate. Not only does that help spread the potential reach of the show but it removes the limitations on free speech that are enforced on religious not-for-profits. To do Madman in CrazyTown right, there can be no restrictions.

Maybe that answers the questions. The bottom line, I've got something to say and if I keep quiet, I will lose my mind. Some say I already have lost it but I'm ok with that. Just keep listening and keep reading!

Economics: Foundations and Fallacies

Americans do still have some common sense. Granted, it's diminishing, but it's still there. The people know that the economy stinks on ice and is getting worse. Of course, the administration and their allies in the press haven't quite figured that out. All their rhetoric won't change the reality.

How do they make their claims that the recession is over? What is all this talk about a "double-dip" recession? What does it mean? How does it feel to have them try to pull the wool over your eyes because they know that the basics of economics aren't taught in school anymore?

Here's the scoop. Recessions are measured by increases and decreases in the Gross Domestic Product (GDP). This you may already know because they talk about it. They are telling the truth when they say that the GDP has gone up so, by this measure, the recession did indeed end. Unfortunately, the GDP is not the best barometer of real economic performance. The reason for this can be found in the formula. Math is at the root of the deception behind the stories.

GDP has a complex and almost incomprehensible formula. Only the greatest mathematical minds in the country can comprehend its calculation. Here is the formula:

C + I + G = GDP

I know it's difficult. The variables are Consumer Spending (C), Business Investment (I) and Government Spending (G). As a matter of explanation, business investment is spending money to purchase equipment, expand operations, or other use of available resources. It is not the stock market. To an economist, the stock market is savings not investment.

Ok, now here's the tricky part. Let's take a look at some real world applications for the formula. What would happen to GDP if, just for the sake of argument, that C goes down by 15%, I goes down by 15%, but G goes up by almost 100%? Assuming that G is a large component (which it is), GDP would go up despite the fact that the two private sector components decreased. This is pretty much what happened.

In the real world where most of us live and work, the economy still stinks and we see no benefit from the increased GDP. That means the so called recovery is bogus. It is an artificial creation of the government to fool us into thinking they did something. The only people who have benefited have been the ones receiving federal assistance (at the highest percentage of the economy in U.S. history) and the special interest groups of the Democrat party.

Given this, there isn't going to be a double-dip recession. We never really came out of one in the first place. The government and their allies in the press are making a lot of noise lately that the private sector hasn't stepped up to the plate after the government did it's job. If you actually believe the stimulus package worked, then the private sector would have seen the growth. Consumer spending and business investment would both have seen an increase. We know that they did not. Hmm. Did it work? You tell me.