Marie C. Barkovic – 2/5/09

This page was last updated on February 8, 2009.

Jobless benefits should be extended; Marie C. Barkovic; Beaver County Times; February 5, 2009.

Previous letters included a list of talking points and support for SCHIP. Last year Ms. Barkovic told us (here and here) of her displeasure with the war in Iraq and a John McCain campaign adviser.

Below is a detailed critique of the subject letter.

“I do not agree with letter writer Robin Cox (‘No reason to extend benefits for jobless,’ Jan. 28).

[RWC] Ms. Barkovic’s letters are frequently little more than lists of lefty talking points. This is another one.

“The letter stated history showed freedom is the foundation of economic prosperity.

“History also shows a need to enact a minimum wage law to prevent slave wages and unemployment benefits to provide a safety net.”

[RWC] Ah, the emotional plea. The minimum wage and unemployment insurance didn’t appear until FDR’s New Deal. Neither of my grandfathers even attended high school yet both supported their families and they weren’t receiving “slave wages.” Also note this pushes the image of employers as bad people. This seems to be a recurring opinion among the emotion-driven comments. Sure employers look to pay as little as possible for a job. That’s what we all do when we purchase a good or service. Is an employee greedy for trying to get paid as much as he can? In the end, though, it’s the market that governs what an employer pays for a job. If the market for a given job is $5, it’s unlikely an employer will be able to set a wage much lower. Likewise, it’s unlikely an employee will be able to command much more.

The minimum wage is simply another “feel good” law that at best does nothing and at worst is counterproductive. Increasing the minimum wage does not lift anyone from poverty. In general, we are all paid based on the economic value of our work, and the economic value of a job is determined relative to other jobs. When we arbitrarily raise wages for one group, it results in ripples in the rest of the economy. For example, if you currently make $2/hour more than the minimum wage, will you accept the same wage if the minimum wage is jacked up $2? No. As a result, everyone’s wages eventually increase to restore “equilibrium” and this results in higher prices for goods and services. Once the ripples have settled down, the guy “earning” the minimum wage is back at square one. That’s why I refer to this exercise as akin to a dog chasing its tail. This, of course, is the “does nothing” outcome. The real problem is when we arbitrarily raise wages and the increase results in a loss of competitiveness with foreign competitors. Since the minimum wage primarily affects jobs requiring low skills, arbitrary increases result in a loss of jobs to countries with lower wages.

Let’s also remember we increased the federal minimum wage 25% (from $5.25 to $6.55/hr) between May 2007 and July 2008. Mix an artificial 25% wage increase with a slow economy and you get a jump in unemployment at the low end of the pay scale because businesses don’t want to add/keep employees at inflated wages. We’re not done either. The federal minimum wage is scheduled to increase to $7.25/hr in mid-2009. That’s a total of about 38% over two years. This is exactly the wrong thing to do, especially during a recession.

I never wrote that I opposed unemployment benefits. I have no problem with unemployment insurance as long as the benefits are covered by the premiums paid for by employees. Extending benefits beyond those supported by UI premiums, however, is wrong and also provides a disincentive for taking a job.

“The letter did not mention the confiscation of people’s paychecks and pensions that went to Wall Street banks and CEOs’ bonuses.”

[RWC] As I’ve written previously, I’ve always opposed government bailouts or “economic stimulus” for business. As a reminder, the current Democrat president favored that bailout and wants more, as does the Democrat-majority Congress. A majority of Democrats voted for the first bailout bill, while a minority of Republicans voted for it. Regarding the new bailout/stimulus bill, not a single House Republican voted for it, along with only 11 Democrats.

“Considering the massive job losses in the millions that our country is experiencing every day, to suggest that extending unemployment benefits takes away the incentive to get another job is a bit disingenuous.”

[RWC] How?

“And as for eliminating the minimum wage, perhaps people can offer to work for free.”

[RWC] I guess Ms. Barkovic doesn’t believe an employer and potential employee should be allowed to negotiate a mutually acceptable compensation package. Do folks like Ms. Barkovic really believe it’s better to be unemployed from a $7.15 job than being employed for $5.00?

Another thing missed by folks like Ms. Barkovic is the situation of entry-level employees (teens, students, etc.) or anyone looking for part-time, weekend, or summer jobs. In the vain attempt to push for a minimum wage a person can live on (not the min wage’s purpose), folks like Ms. Barkovic make it more difficult for entry-level employees to get a job. Perhaps Ms. Barkovic believes s teen, student, etc. with no job is better than one with a low-wage summer or weekend job.

For your entertainment and as a teaching exercise, below you’ll find the reader comments visible on the Times website at the time I published this critique. They’ll give you an idea of the quality and tenor of some of the comments I receive via e-mail regarding my website’s critiques. I generally don’t publish the contents of e-mail I receive from critics because the sender may consider the message private and I don’t want to embarrass the author. I didn’t critique the comments because there’s nothing new since the comments about my original letter.

trek1 wrote on Feb 5, 2009 6:39 PM:

" When are you dopes going to read? ROBIN COX is a MAN not a WOMAN. "

swoa wrote on Feb 5, 2009 11:04 AM:

" Marie, You are so right again. Robin must have been born with the Silver spoon in her mouth. Has she seen the Times want adds for jobs? There use to be pages and now there a dozen if that most days. Please Robin write back and tell us where all of these jobs are. "

W Horter wrote on Feb 5, 2009 10:55 AM:

" Yes, I gree with the previous poster, unemployment should be extended, if not now, when? So many are out of work for no fault of their own, small wage earners are the basic people in our society, why not help them? I'd much rather tax dollars be spent that way than on "bonus's for Wall St traders who caused most of this mess. "

[RWC] Despite Mr. Horter’s comment that he agrees “with the previous poster,” his comment is the first in this thread. Perhaps Mr. Horter is really referring to the letter.