Chanting Points Memo: Ryan Winkler, Brezhnev-Style Economist

Conservatives joke that liberals just. Don’t.  Get. Economics.

We joke, at times, that at some point a liberal is going to push for a “living wage” statute calling for a $100/hour minimum wage as a means to end poverty, followed by a bill barring any layoffs and banning bankruptcy.

It’s a joke.  Some liberals shake their heads and go “yeah, yeah, we’re not nuts”.

And then something comes a long to prove that they really, really are that dissociative.

Rep. Ryan Winkler (D St. Louis Park), also known as “The Eddie Haskell of the House” – is introducing a “Kill All” amendment to House File 92 that bars businesses from laying off workers, cutting hours or benefits due to minimum wage increases. 

I’m going to write that again, just to let it sink in.

Winkler’s bill would make it illegal for businesses to lay off workers, cut hours or benefits due to minimum wage increases.

No, I’m really not making it up; I’ve added emphasis to the original:

(c) Notwithstanding paragraph (b), during the first 90 consecutive days of employment, an employer may pay an employee under the age of 20 years a wage of :

(1) $6.07 per hour beginning August 1, 2013;

(2) $7.24 per hour beginning August 1, 2014;

(3) $8.41 per hour beginning August 1, 2015; and

(4) the rate established under paragraph (d) beginning January 1, 2016.

2.11 No employer may take any action to displace an employee, including a partial  displacement through a reduction in hours, wages, or employment benefits, in order to hire an employee at the wage authorized in this paragraph.

(UPDATE: Commenter Master Of None points out, the above section refers to a training wage – a wage that employers may pay for up to 90 days – and says it’s not quite as dire as I’d made it out to be.   I disagree; Winkler’s bill raises the already existing training wage, causing all the same problems that raising the minimum itself does, which negates most of the utility of a “training wage”, as well as starting some sort of enforcement mechanism to painstakingly adjudicate all disputes related to training and minimum wages.  Because Minnesota businesses needed more niggling regulations)

And as the Obama Administration launches into permanent quantitative easing, Winkler wants to key the minimum wage to inflation, ensuring that no wages will ever keep up with inflation:

2.14 (d) No later than November 1 of each year, beginning in 2015, the commissioner  shall determine the percentage increase in the rate of inflation, as measured by the Consumer Price Index for all urban consumers, United States city average, as determined by the United States Department of Labor, during the most recent 12-month period for  which data is available. The minimum wage rates in paragraphs (b) and (c) are increased by the percentage calculated by the commissioner, rounded to the nearest cent. The new minimum wage rates determined under this paragraph take effect on the next January 1

In other words: Ryan Winkler wants to…:

  • arbitrariliy set wages (higher than the federal minimum, no less!)
  • bar business from compensating for the arbitrary change in labor costs in any way but by increasing revenues in the middle of a crap economy (which Dayton’s business service taxes and Obamacare are making worse by the day).

It’s the sort of thing any Economics 101 student knows is madness if he or she wants to get better than a “C”.

Bonus Question:  Do you think Rachel Stassen-Berger, Tom Scheck, Tim Pugmire or John Cronyn will bring any of this up with Winkler or the leadership that enables him?

21 thoughts on “Chanting Points Memo: Ryan Winkler, Brezhnev-Style Economist

  1. Mitch, I don’t think you read the last line of 2.11
    “in order to hire an employee at the wage authorized in this paragraph.”
    You can cut staff, hours, etc, you just can’t do it so that you can hire people at the training wage. Still a big intrusion into my business, but not quite as dire as you make it out to be. Although depending on how rigorous they choose to enforce this it may end up having the same effect.

    The tie to inflation is much worse. Connecting any kind of price or wage increase directly to inflation actually worsens inflation

  2. QUOTE: “The tie to inflation is much worse. Connecting any kind of price or wage increase directly to inflation actually worsens inflation.”

    What the minimum wage is, is a response to other bad policies that cause asset bubbles and inflation. It just makes a bad situation worse.

    We need a leader in D.C with the brains and the balls to fix the economy. Then no one would even think about it.

  3. MON,

    I added an update to address your comment.

    TFS,

    He went to Harvard, and his day job is at Skip Mondale’s company. I’d call that the Minnesota Mandarin Track.

  4. It still is that bad. If I hire somebody and have to pay them an arbitrary wage and they turn out to be a dud, I WANT to be able to “reduce” their participation in my business precisely because I want to add somebody that IS (potentially, at least) worth what Rep. Winkler thinks they’re worth. We long ago passed the point where MY opinion and judgement on what they’re worth matters.

  5. I hadn’t even thought about it in HR terms.

    Any time an employer fires a bad employee, he’s gotta think they’re going to run to the Wage Police, along with the EEO Police and the Sexual Harassment Police.

  6. Regarding the training wage point, the reality is that if you raise the training wage above the national minimum wage, you’ve effectively established a new minimum wage, and then as others note, you’ve made a legal case out of any attempts to cope with the cost.

    It is as dumb as portrayed. It reminds me of Sobran’s (or was it Sowell’s?) comment about some ideas being so dumb, they can only prosper in the halls of academia.

  7. Pingback: The Dayton/Winkler/DFL blueprint for disaster

  8. This country has too many Mandarins that have too much power and do effectively NOTHING, telling others they ought to be doing dumb, unproductive stuff all the while our GDP / unfunded liability disaster get worse with no end in sight, because we are so unproductive.

    How does this happen? Fed easy money.

    Also on top of that we have been goosing the economy with debt–consumer, houses, government CONSUMPTION—since WW2 and now the party is over. That damn GDP number has gotten phonier and phonier for decades (for other reasons too: Boskin Commission.) and now we are going to pay, big time.

  9. Mitch, you’re assuming the employer can’t pass through the costs to customers because customers will choose not to buy as much product at the now-higher price. All that proves is the bill is incomplete: we need an amendment requiring customers to continue buying from the merchant at previous levels of consumption despite price increases to pay the higher training wage, or to pay a tax equal to that amount. There’s precedent in Obamacare and we already know it’s Constitutional so there you go . . . problem solved!
    .

  10. Lessee….the next step for Winkler is to say that the business cannot close due to the extra costs. Because rich people can afford to subsidize money losing businesses in perpetuity. That’s why they’re rich, after all, because they’re stupid with money.

  11. The wording in 2.11 is problematic. I will always have to look over my shoulder to see if there’s anyway that changing store hours, scheduling, hiring/firing etc would expose me to a penalty under this section.

    I probably would never hire anybody under the training wage regulations. It’s not worth the risk.

  12. You all seem to believe that since small businesses provide the most employment, government should help small business, or at least not hinder it.

    Hillary proposed Hillarycare during Bill’s term. In response to objections it would drive employers out of business, she famously replied: “I can’t be responsible for every under-capitalized small business in America.”

    So that’s your problem, folks – lack of capital. You’re not rich enough to have your own business. Peasant. Go back to eating cake.

  13. Mitch, you’re assuming the employer can’t pass through the costs to customers because customers will choose not to buy as much product at the now-higher price.
    Emery posted a link to this paper the other day:
    http://www2.gsu.edu/~ecobth/IZA_HKZ_MinWageCoA_dp6132.pdf
    It deals mostly with MW wage hikes for fast food workers. The authors tried very hard to find out just where the money goes — how franchise FF restaurants deal with forced wage increases.
    To make up for the labor cost increase cost savings are achieved in a number of ways, one of the most important being increased efficiency in use of resources. This means they use less materials to produce the same output, i.e., reduction of food waste and fewer give-a-ways of things like ketchup packets, your order is placed in fewer bags, etc.
    This inevitably has effects down the supply chain as there is less demand for the products that are used more efficiently.

  14. “Any time an employer fires a bad employee, he’s gotta think they’re going to run to the Wage Police, along with the EEO Police and the Sexual Harassment Police.”

    Being in business gets harder every day. And wait until Obama and the Democrats get their “pay equity” law. You have to pay your female employees the same as your male employees, no matter education, training, job titles/work, senority, work ethic, skills, locations, night vs day shifts, etc.

    So the railroad engineer (who tend to be males) who works odd shifts, overnights, is rarely home, works outside in rain or 30 below weather, will be paid no more than a female office employee who works 9-5 M-F in a fixed inside location near her home.

  15. When Hawaii was going to pass a bill to lower the price of gas that gas stations could charge……it was said the Hawaii was going to repeal the law of supply and demand.

  16. Funny, isn’t it Chuck? Obumbler has several females on his staff that are just window dressing, to be seen and not heard, you know, like the police and fire fighters that he used as props in one of his recent scare speeches. These libidiot women glady prostrate themselves to serve his excellency for as much as 20% less than he pays his fraternity of elitist mongrels.

  17. Boss, you know that “libidiot” can be derived from “libido” as well as “liberal”, right? Or did you intend that? I’m thinking that the term might be better reserved for women, um, “involved in” the Clinton administration. :^)

    Speaking of Clintons, Hillary’s comment reminds me that smart businessmen also try to avoid burning their capital on recurring costs if they can avoid it–using “cash flow” to fund “paychecks,” for example. However, such “minor” distinctions don’t appear to be important to the left. They’ll just impugn those who don’t make it because of their regulations in yet another abuse of social Darwinism.

  18. Joe Doakes: we need an amendment requiring customers to continue buying from the merchant at previous levels of consumption despite price increases to pay the higher training wage, or to pay a tax equal to that amount.

    A friend notes that we’re halfway to point 1:

    Point 1 of directive 10-289: “Point One. All workers, wage earners and employees of any kind whatsoever shall henceforth be attached to their jobs and shall not leave nor be dismissed nor change employment, under penalty of a term in jail. The penalty shall be determined by the Unification Board, such Board to be appointed by the Bureau of Economic Planning and National Resources. All persons reaching the age of twenty-one shall report to the Unification Board, which shall assign them to where, in its opinion, their services will best serve the interests of the nation.

    –Atlas Shrugged

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