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Labor economics

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Do Taxes Or Minimum Wages Really Cause Layoffs?

Florida Senator Marco Rubio gave a "Republican Response" to the President's State of the Union address. He said that taxes cause employers to reduce hours or lay people off. Others say that raising the minimum wage will mean layoffs. Let's take a closer look at that.

In Wednesday's post, What Do Republicans, Rubio And Rand Have If They Don’t Have Deficits? I focused on one line from Rubio's speech,

One line of Rubio’s stands out: “Because more government raises taxes on employers who then pass the costs on to their employees through fewer hours, lower pay and even layoffs.”

With this Rubio is trying to scare people who are worried about jobs. Business taxes are on profits. Good businesses employ the right number of people, so a company that is making profits isn’t going to reduce staff or hours. That is simply preposterous to anyone who has ever run a business.

I was in a local CVS store today. There weren't enough employees in the store, and there was a long line of people waiting to pay for items at the only checkout register. There was also a long line of people in line at the pharmacy. I saw a one person give up, leave their nearly-full carrier on a shelf, and just leave the store. I saw another person come in the door, take one look at the line and leave. I left without buying anything and went to a different store -- not a CVS, for what I was looking for.

Was this CVS "saving money" by employing fewer people? Or were they being "penny-wise and pound-foolish" and costing themselves business today as well as in the future?

How many times have you seen this happen at a business that is not employing enough people to "save money?? You are at a business, they don't have enough people working, and people give up and take their business somewhere else?

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23 Policies That Would Make It Easier To Save The World

It's been said that the wealthy win because they can always hire half the poor to shoot the other half. Rarely is there a sadder case of this than when it comes to trying to protect the planet that feeds us, clothes us, and generates the only pocket of breathable atmosphere in our solar system.

Baby Weddell seal, by Samuel BlancBecause look, say you're a committed environmentalist, your beloved spouse has treatable cancer, and the only way to save his or her life is to take a job clubbing the last baby seal on the beach. That seal is toast. And so is anything or anyone else that stands between your partner and their chemo.

Don't think the greedy jerks who own everything don't know it; they downright count on it to get their way.

Driving down wages, increasing animosity among the lower classes by scapegoating various segments of also-poor people, decreasing the health and safety of working conditions -- these aren't unfortunate side effects of our current economic incentive structures. They are the point, fueling a vicious cycle where more profits flow to the top while workers are too desperate to do anything about it. The effect, as it was recently said, is this:

The great problem we have today in improving our society, in fixing our economy, is that so many people don't want to give up what they have. . . . [W]hat the past 40 years have proven is this: if you lose your job, you're on your own. If you're in your 40s and 50s and you lose a good job, you'll probably never, ever, have a good job ever again. . . .

People know, they know and they are right, that economic change, in our society, could cost them everything. Their job and any prospect of a good job. Their house. Their marriage. Their health care and even their life.

So they grasp tightly to what they have, and everyone fights to make sure that nothing really changes. Each person, with their little or big piece of the pie, fights viciously to keep it whether it's good for society or not. They are right to do so.

The biggest enemy of our environment, therefore, is mass desperation wielded like a billy club in the hands of the extremely wealthy. The following are some ideas on how to both disarm them and take the next steps towards creating a more awesome society to live in.

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