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Bachmann Thinks Ending Minimum Wage Would Eliminate Unemployment

Bachmann Thinks Ending Minimum Wage Would Eliminate Unemployment

 

Presidential hopeful Michele Bachmann has figured out how to solve our jobs crisis.

More low wage jobs.† Really low wage jobs.

Via Think Progress:

In 2005, Bachmann told the Minnesota state Senate that abolishing the minimum wage could “wipe out unemployment completely.” When Good Morning America’s George Stephanopoulos asked her for evidence to back up that claim today, Bachmann struggled to find an answer, initially dodging the question before finally referring to the minimum wage as a regulation that is “inhibiting job growth” and saying it needed to be examined:

STEPHANOPOULOS: Let me try this one more time. So you’re saying the minimum wage is one of those regulations you’d take a look at? You’d try to eliminate it?

BACHMANN: Well, what I’m saying is I think we need to look at all regulations. Whatever ones are inhibiting job growth, that’s what we need to look at.

STEPHANOPOULOS: And the minimum wage is one of them?

BACHMANN: All regulations, George. I think every department, we have just too much expansion of government, and what we need to do is tamp that down so the American people can keep more of what they make.

 

Ok, let’s actually take Bachmann’s concept at its literal meaning.† The exact quote being referenced is “Literally, if we took away the minimum wage — if conceivably it was gone — we could potentially virtually wipe out unemployment completely because we would be able to offer jobs at whatever level.”

So say we have a business in Bachmann’s own Minnesota that could hire someone to work in their plant, but they only can allocate $5 an hour to pay that person without cutting into their profits more than they care to.† Federal minimum wage is $7.25 an hour.† State minimum wage is $6.15 an hour, although companies have to pay the federal level since that is higher (Minnesota is one of four states with a minimum wage lower than the federal level).† Bachmann is stating that because the company cannot “afford” the $7.25 an hour, they will simply not hire a new employee, asking other employees to cover or finding some other way to make due without the needed hire.

Now, if companies did not have to follow minimum wage laws, the plant could hire someone for $5 an hour, giving that person a job and bringing down the unemployment rate.† Even better, if the company could hire a person for $2.50 an hour, they could hire two employees, cutting the rate even more, logic would say.† Right?

But here’s where it all falls apart — people cannot live on $5 an hour jobs.† Not real people who need health care, or have to pay rent, or have children, or student loans, or even need a car or bus to get to work.†† If that newly hired worker is making $5 an hour for 40 hours per week, he or she is making $200 a week pre-tax, or $800 a month. That employee will be taxed at 10 percent, leaving about $700 or less after state and federal taxes, Social Security, etc. To get to and from that job on a Minnesota bus costs $4.50 cents a day, assuming the employee is traveling during rush hour, for $85 per month.† A two bedroom apartment shared with a roommate is at least $300 per month per person, and just electricity, water and gas would cost at least another $100 per person total.† Your employee now has $200 a month left for food, clothing, any illnesses that need to be dealt with since he or she isn’t getting health care from his or her employer (and if the employee is getting health care that is probably another $50-$100 a month from the paycheck).

In Bachmann’s own district, it is projected that a single person requires a living wage of $9.63 an hour simply to get by.† A single adult with a child needs nearly twice that.† In order to work $5 an hour jobs and be able to survive financially, a worker would need to hold two of these magical $5 an hour jobs that would end unemployment forever.

Allowing companies to hire for less than minimum wage will never fix the unemployment problem, because those who try to live on those jobs will need more than one to survive.† All it can ever do is line corporations’ pockets with extra profits.

Photo credit: Photo: http://www.gnu.org/copyleft/fdl.html via Wikimedia Commons

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179 comments

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2:38PM PDT on Nov 1, 2011

This woman is a total idiot. She apparently has never read history. If there is no minimum wage law then the employer can pay any thing he wants to pay. We could all go back to piece work. Maybe he can only make a profit and stay in business if he pays $2.00 hr. and no benefits. Doen't she and the rest of the Republicans want to take away all of the other regulations also? She and Palin want to take women's rights back to the dark ages. I think she should practice what she preaches. Go home get in that kitchen start cooking and cleaning and making sure she is there to meet her hubby's every need. In those days they might have actually had her committed for thinking that a woman could run for President.

8:10PM PDT on Jul 8, 2011

EVERYTHING BACHMANN SAYS MAKES ME WONDER HOW SHE EVEN MADE IT THROUGH JUNIOR HIGH SCHOOL.

3:13PM PDT on Jul 2, 2011

Have these GOP Tea Party people gone off their rockers, or are they serious about the ending of the Federal Minimum Wage? If they're serious, then they have NOTHING to offer this country but a bunch of trash for us Middle Class and Poor and Diamond Jewelry to the Rich and Corporations.

Why ANYONE in their right mind will vote for ANY of these GOP Tea Party candidates in 2012 would be Pure Insanity!

4:25PM PDT on Jul 1, 2011

Is she related to Palin or something?

1:16PM PDT on Jun 30, 2011

" According to data from the National Association of Budget Officers, 18 states cut spending for both K-12 instruction and higher education in fiscal 2011, by $1.8 billion and $1.2 billion respectively. But proposed cuts for the next fiscal year are much steeper: They total $2.5 billion for K-12 schools--and more than $5 billion for higher education."

No doubt a minimum wage worker (not even considering reduced minimum wage) will be able to send his/her children to college. If we make it unaffordable, we can guarantee a permanent minimum wage working class. Oh, wait, the republicans have already beat us to that idea.

5:59AM PDT on Jun 30, 2011

The statement that the educated, productive worker will get hired at 'fair' or 'going rate' wages and unemployment will go away is simply nonsense. There are plenty of degree-holders doing menial jobs and I seriously doubt it is because that is their goal in life. There is no shortage of educated, motivated workers We have already seen the 'we have to pay high wages and huge bonuses' in order to get, and keep, the 'best' argument during and after the economic collapse. It is nonsense to believe that we have to pay bonuses to people who cause collapses, because, if we don't, they might go work for our competitor. WOW! You would think you would be trying to get them to work for your competitor. BUT, the competitor is not going to hire them because they have their own CEO who is just as dumb and greedy and who will simply cut jobs and ask for government handouts to get the business back on truck.

3:21AM PDT on Jun 30, 2011

I know! Let's plunge the global economy into a recession SO vast that the only way out of it is to return to pre-Victorian social norms! Let's rely on charitable hospitals for those who can't afford health insurance (or can't claim on the health insurance they've been paying for the last 20 years)! Let's not bother educating our children - they'll be going out to work at the age of 10 anyway! Let's remove ANY and ALL rights to collective bargaining and tell people they should be thankful they have got a job (but no job security/pension and a wage that they can't actually survive on)!

Let's do all that so that the 1% of people who own all these businesses that 'can't afford' to pay minimum wage (let alone a LIVING wage) despite making record profits YEAR ON YEAR! Let's do it so that even more >£1m houses can be available on the market, but not housing for those 55,000 children in LONDON ALONE who live in temporary accommodation (and this doesn't include those living on the streets or squatting).

Let's do that by convincing everyone that debt is GREAT and the BEST thing you can do is to buy on credit or lease EVERYTHING! Let's do it by creating a market based on such concepts as "If you don't have an iPhone...you're a piece of crap!" Or "This car: SO much better than YOURS!" "MUST keep up with the neighbours!"

I hope she dies in poverty!

2:51AM PDT on Jun 30, 2011

We need minimum wage BUT we DONT need illegal immigrants!!

BIG FINE for compagnies who use them and the unemployement who be less!

2:01AM PDT on Jun 30, 2011

So would slavery Bachman. But then you are forcing people into an economic slavery anyway when you take away rights altogether. All these policies will only serve to make a few people richer and make everyone else a pauper.

i hope more and more Americans come to realize how their govenment took them for a ride this past decade. while they were busy taking pride in destroying three countries simultaneously and really thinking that the American empire would grow, the Government (under cover of war) was striking deals with Oil comapanies and Minerals extraction mining companies for a few large domestic corporations.

And before Americans even caught on to the idea (and some of them still haven't), the government yanked the rug right out from under them. Adding insult to injury,not only were the Americans given the bill for the war which came to 7 trillion dollars that had to be paid with thier taxes, raising the debt ceiling further increasing interest and creating more debt; More debt means more slavery for the average American. Then the government intituted budget cuts such as on education and cut short social security, medicare and so on. And as if that wasn't enough it compunded the problem with unemployment and lower pay. Now unemployed benefits need to go under the knife too. THE AMERICAN DREAM will soon be reduced to dreaming about getting basic needs met and even that will remain just a dream.

I say it would still be generous of some of these Americans to just co

9:03PM PDT on Jun 29, 2011

I can't decide what eliminating the minimum wage would do best, increase poverty or illegal aliens.

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