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Minimum-wage millionaires? Joseph Farah shows employees how to retire wealthy
WorldNetDaily.com ^ | Friday, April 30, 2004 | Joseph Farah

Posted on 04/30/2004 1:28:25 AM PDT by JohnHuang2

Ben Affleck came to the Capitol today to testify on behalf of Sen. Ted Kennedy's bill calling for a hike of $1.85 in the nation's minimum wage.

This was Affleck's greatest role to date – playing an economist.

Affleck explained that raising the minimum wage by this much was a good idea because "no one is going to get rich" because of the action.

Why would that be a good thing?

Doesn't the rich actor want people to get rich like him?

Why would we want to support legislation that will keep people impoverished?

Of course, Affleck reiterated what we hear so often about the minimum wage at whatever level it might be set: No one could live on the amount.

That's the same nonsense we hear from Kennedy, Tom Daschle and Hillary Clinton.

I'm not here to argue against a minimum-wage hike today. That would be too easy. It's clearly unconstitutional. The federal government has no business mandating wages. It's counterproductive and actually serves to create a new serf class. It actually destroys the jobs of many it is designed to help. Such concepts as the minimum wage are antiquated vestiges of Soviet-style, command-and-control government that empowers the powerful at the expense of the little guy.

Instead, I want to illustrate to you just how liberating it would be for the lowest wage earners if government actually got off their backs – cutting taxes, eliminating programs like Social Security and ending wealth-redistribution programs of all kinds – including the minimum wage.

Let's assume one earns the minimum wage of $5.50. Let's assume that person never earns more than $5.50 an hour – an almost ridiculous assumption, but one I'll make for the purpose of illustration only.

If that person works 40 hours a week, he or she will earn $220. Over 50 weeks a year, that equals an annual salary of $11,000. Saving only 15 percent of that income – less than the amount taken from an employer for Social Security – he or she will have saved $1,650 a year.

Not much, you say?

After 40 years of saving $1,650 per year, at only 6 percent interest, that person would have $266,000. At 8 percent interest, that person would have $462,000. At 10 percent interest, that person would have $830,000. At 12 percent interest, the accumulated wealth would reach a staggering $1,560,000. That's how easy it would be for a minimum-wage earner to become a millionaire.

All this is possible if only the worker has the right to invest the money currently grabbed from him by the government for Social Security in a private, interest-bearing account.

It shows us what an absolute rip-off Social Security is.

It's not a generous program. It's not a program designed to benefit working people. It's not charitable. It's not progressive. It's not compassionate. It's a program designed to keep them under the government's thumb – and nothing else.

Furthermore, the government uses it to invade our privacy, to destroy our individual rights, to track us and to squander our wealth.

Imagine a country of 300 million millionaires. It's possible in America – only in America – if the government just got off our backs.

Social Security, thus, doesn't help the hard-working poor. It is, like any other government program, a trap for them.

Yet, so conditioned have so many Americans become to this idea that Social Security is sacrosanct – a benefit, a right, a real meaningful perk of living in America – that there is literally no political movement to destroy it, once and for all.

Obviously, I feel for people who have been denied opportunities like this. They are already nearing 65 or they are past that age. Special accommodations need to be made for these victims. But what about the next generation? What about kids getting out of school today? Why do they need to be trapped in this class system designed to keep them from the pursuit of happiness?

Those who want to preserve the status quo will argue that Americans can't be trusted to take care of their own needs. They need government to watch out for them. With the paltry return on Social Security investment, can anyone honestly say the government is taking care of anyone's interest other than the government's?

Sure there will be people who can't discipline themselves to save. Sure there will be people who are unable to work. Sure there will be people, who through no fault of their own, don't reach the target.

But, under the free-enterprise plan, America will be a much wealthier and freer country – one that will have more money to spend on charities that work.

Do I expect Ben Affleck, Ted Kennedy, Tom Daschle and Hillary Clinton to embrace such a plan? No way. Kennedy, Daschle and Clinton would lose their political constituency, which is based on fear and coercion. Affleck, meanwhile, would probably never work in Hollywood again.

But I do expect Americans who still believe in freedom to embrace such a sensible plan. It just needs to be put on the political agenda in terms people can comprehend.


TOPICS: Editorial; News/Current Events
KEYWORDS: minimumwage; payrolltax; socialsecurity

1 posted on 04/30/2004 1:28:26 AM PDT by JohnHuang2
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To: JohnHuang2
right on.

Sounds like Walter Williams doesn't he? Except he didn't mention making his wife wash his car or anything.

2 posted on 04/30/2004 1:34:19 AM PDT by GeronL ("We are beyond right and wrong" the scariest words from the radical left.)
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To: JohnHuang2; Modernman
Raising the minimum wage seems like a nice warm-hearted thing to do since it would 'uplift' the masses who 'toil' in low-wage jobs and give them extra cash in their pocket, but if you erase 'feel-good economics' and stick to real-world economics, mucking with the minimum wage is a bad thing. Most economists would show how raising the minimum wage would lead to mroe hurt than benefit, but this is a political issue, and it seems to make sense, hence no one will care about the true ramifications.

Basically the minimum wage is a veritable price-floor, with the product being labor. That would pollute the economic equilibrium, and lead to less demand for labor. Hence those employed in minimum wage jobs would indeed get paid more, but there would be many that are either let go or not employed in those same jobs.

Why not try something radical! For example ....umm......letting the MARKET take care of things?

Sadly politicians love such issues ......they strike at the heart and not the head, and this is a perfect case example (outsourcing is another). I am sure Lou Dobbs will be salivating over this.

3 posted on 04/30/2004 1:39:25 AM PDT by spetznaz (Nuclear missiles: The ultimate Phallic symbol.)
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Comment #4 Removed by Moderator

To: spetznaz
Raising the minimum wage seems like a nice warm-hearted thing to do since it would 'uplift' the masses who 'toil' in low-wage jobs and give them extra cash in their pocket, but if you erase 'feel-good economics' and stick to real-world economics, mucking with the minimum wage is a bad thing. Most economists would show how raising the minimum wage would lead to mroe hurt than benefit, but this is a political issue, and it seems to make sense, hence no one will care about the true ramifications.

Political solutions to economic problems are bad medicine. The market should take care of itself.

Minimum wage laws must be abolished.


A.K.A. Sleepy Brown

5 posted on 04/30/2004 2:29:05 AM PDT by rdb3 (Let others praise ancient times; I am glad I was born in these.)
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To: JohnHuang2
I really get tired of listening to these Hollywood dolts.
Here we have another actor that has never held a job other than acting with barely any education beyond high school addressing the congress of the United States. What amazes me is that through acting one can become a expert authority on everything from foreign policy, economics,health care and all things political. Another Teddy (splash) barf alert.
6 posted on 04/30/2004 2:38:37 AM PDT by gakrak
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To: tantric
"The problem with Mexicans is that they are here reaping the benefits and paying nothing..."

That is why they should be legalized under the Bush plan.

"Meanwhile... the MEXICANS breed like rabbits under an AMERICAN subsidy and the ordinary American is lost in the process."

That is racist nonsense. Do you know what the Mexican birth rate is? Hint: it is below average and is at a healthy level. Not every group has a birth rate of 1.3.

"What does it mean to be an American?"

To live in a free country that is democractic and guarantees equal rights for all, where you can be as rich as your talent will allow you.

"Cross the border and unless your a terrorist, you get afforded EVERY right of an American without actually being one."

So what? It has always been like this. Immigration just wasn't selective in the past. The US had de facto open borders for most of its history.

7 posted on 04/30/2004 2:49:22 AM PDT by ScarTissue
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To: JohnHuang2
Ben Affleck came to the Capitol today to testify on behalf of Sen. Ted Kennedy's bill calling for a hike of $1.85 in the nation's minimum wage.

If he’s just a rich Hollywood type, what can he possibly testify to? Will he swear that his maid, chauffer, bodyguards, groundskeepers etc. are grossly underpaid?

8 posted on 04/30/2004 2:58:54 AM PDT by R. Scott (Humanity i love you because when you're hard up you pawn your Intelligence to buy a drink.)
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To: ScarTissue
Mexixans are not a "race". Sorry.

Ignorance is found in all races. Including the ScarTissue race.

9 posted on 04/30/2004 3:06:15 AM PDT by bvw
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To: JohnHuang2
I sent the following to Farah -- be interesting to see if I get a reply.

Carolyn

One more point re minimum wage -- take the # of people who are on minimum wage times the dollar amount of the proposed increase. Then multiply that answer by 2080, which is the number of working hours in a year. Take that answer and multiply by 15.3%. That is the increased amount that the government can expect to take in for FICA and Medicare.

You may be surprised how large it is. I figured it out once -- but don't have my almanac handy that gives me the number of workers on minimum wage.

You see, an increase in MW doesn't really help the employee, because prices will go up correspondingly and things will level out again. But it really helps government by putting more money into their coffers.

Also, when the minimum wage is raised, other employees usually get an increase because it's "not fair" that the new people make close to what the current employees are making. So across the board, the only beneficiary of the minimum wage increase is government.

I would be interested in hearing your take on this.

10 posted on 04/30/2004 3:22:32 AM PDT by CDHart
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To: JohnHuang2
Now that Arnold left, Affleck is Ted's new dog.
11 posted on 04/30/2004 4:43:20 AM PDT by kdot
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To: JohnHuang2
ugh, the stupidity among the left never stops...

Some big leftist arguments get debunked very nicely at the links below. I don't want to advertise but we could always use a few more Freepers to debate the DU morons who have infiltrated this board. Check these threads out.

economics

http://www.conservativeunderground.com/forum/phpBB2/viewtopic.php?t=4566&sid=42591f9597b5006af06bd63e368bfbe6

minimum wage

http://www.conservativeunderground.com/forum/phpBB2/viewtopic.php?t=4651&sid=42591f9597b5006af06bd63e368bfbe6
12 posted on 04/30/2004 4:49:59 AM PDT by Capitalism2003 ("Greedy capitalists get money by trade. Good liberals steal it." David Friedman)
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To: JohnHuang2
Why don't we knock out the 7.5% FICA tax along with the employer's 7.5% matching "contribution" which comes directly out of people's paychecks? Every worker in America would get an instant 15% raise if we did this. How would that help with your retirement savings?

I recall reading an interesting book a while back..It had some statistics in it about what the average person COULD have had they not been forced to 'contribute' to social insecurity throughout their workinglife. Assuming you make an average salary of $20,000 from age 16-65...adjusting for inflation, had you invested your social insecurity taxes in a conservative mutual fund averaging 10% a year, at retirement you would have a private account worth roughly 1.2 MILLION DOLLARS. Drawing 5% interest on this account would equal a $60,000 annual pension, and you will NEVER touch the principle!!! Every penny in the account could be passed to your children or to charity. Of course, if we were to do this, every worker in America would be better off. They would OWN their retirement, rather than relying on government handouts. People would be completely independent, and a major piece of the welfare state would no longer be needed...an absolute NIGHTMARE for the socialist left.
13 posted on 04/30/2004 5:02:08 AM PDT by Capitalism2003 ("Greedy capitalists get money by trade. Good liberals steal it." David Friedman)
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To: GeronL
Sounds like Walter Williams doesn't he? Except he didn't mention making his wife wash his car or anything.

LOL!

14 posted on 04/30/2004 5:05:12 AM PDT by Aquinasfan (Isaiah 22:22, Rev 3:7, Mat 16:19)
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To: gakrak
through acting one can become a expert authority on everything

That stuff always reminds me of Ginger on Gilligan's Island: "I was in a movie once, and we faced a problem just like that! What we did was ..."

15 posted on 04/30/2004 5:28:57 AM PDT by ClearCase_guy (You can see it coming like a train on a track.)
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To: CDHart
"So across the board, the only beneficiary of the minimum wage increase is government."

Aside from government, the only other group that benefits are union workers who already have secure jobs. By increasing the cost of labor, they seal out potential competition who are willing to work for less. Those who the libs supposedly want to help (low skilled, unexperienced workers) are the ones who don't get hired because of bad legislation like this. Employers only hire skilled workers...the overall labor force decreases, and the result is the same with every supply/demand situation. Fewer workers = greater pay for those lucky enough to keep their jobs. Those who DON'T get jobs they would otherwise have are the invisible victims of this legislation.
16 posted on 04/30/2004 5:42:34 AM PDT by Capitalism2003 ("Greedy capitalists get money by trade. Good liberals steal it." David Friedman)
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To: JohnHuang2
I like the idea of portraying victims of social security.
17 posted on 04/30/2004 5:48:07 AM PDT by DC Packfan (The Kennedy's, ya can't live with 'em and ya can't kill 'em...err a, well, ya can't live with 'em)
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To: spetznaz
Why not try something radical! For example ....umm......letting the MARKET take care of things?

What, you thought this was still a capitalist country?

18 posted on 04/30/2004 6:28:03 AM PDT by Modernman (Work is the curse of the drinking classes. -Oscar Wilde)
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To: Capitalism2003
I recall reading an interesting book a while back..It had some statistics in it about what the average person COULD have had they not been forced to 'contribute' to social insecurity throughout their workinglife.

Social security is a terrible investment. If we want to ensure that everyone has money saved up for retirement, we would be much better off scrapping SS and expanding the 401(k) program. The money I put in my 401(k) grew nearly 20% last year. I would have loved to have been able to take all of the money that was sucked out of my paycheck and put into SS and put it into my 401(k) instead.

19 posted on 04/30/2004 6:40:00 AM PDT by Modernman (Work is the curse of the drinking classes. -Oscar Wilde)
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To: CDHart
"You see, an increase in MW doesn't really help the employee, because prices will go up correspondingly and things will level out again. But it really helps government by putting more money into their coffers."

I had a guy with a PHD in Economics explain it to me with the best analogy to date dealing with the futility of raising the minimum wage to help those on minimum wage.

"Raising the Minimum Wage so as to bring prosperity to those receiving minimum wage is akin to attempting to raise the water on just one side of the bathtub."

20 posted on 04/30/2004 6:47:16 AM PDT by Mad Dawgg (French: old Europe word meaning surrender)
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To: JohnHuang2
bump!
21 posted on 04/30/2004 2:17:19 PM PDT by Capitalism2003 ("Greedy capitalists get money by trade. Good liberals steal it." David Friedman)
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To: Capitalism2003
bttt
22 posted on 04/30/2004 11:04:33 PM PDT by Capitalism2003 ("Greedy capitalists get money by trade. Good liberals steal it." David Friedman)
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