By Scott Tibbs, January 8, 2007
Now that Democrats have taken over the United States Congress and the Indiana House of Representatives, there is little shyness about advancing their agenda. (Republicans still dominate the State Senate, so Democrats will have a harder time getting things done at the state level.)
Democrats in Congress have adopted "pay as you go" rules, meaning all tax cuts or spending increases must be "paid for" elsewhere in the budget. The Washington Post points out that those rules could jeopardize tax cuts that "expire" in 2010.
The problem with this is that "extending" a tax cut simply maintains the status quo. Allowing a tax cut to "expire" is in effect a tax increase, and the Democrats know it. Indiana Congressmen Baron Hill and Brad Ellsworth both support "pay as you go"; does this mean Brad Ellsworth and Baron Hill Will support future tax increases?
One of the sillier proposals in Indianapolis is a bill filed by State Representative Phil Hoy. Representative Hoy wants to increase the minimum wage in three steps: $7.50 on July 1, 2007, to $8 on July 1, 2008, and to $9 on July 1, 2009. Following is an email I sent to Mr. Hoy:
I wanted to express my concern regarding the bill you submitted to raise the minimum wage to $9 per hour, taking full effect in less than two and a half years. I am especially concerned with the provision in HR 1040 to increase the minimum wage by $2.35 in July of this year. That is less than six months away, and I do not believe it is reasonable to increase the state minimum by that much in such a short amount of time.
Where this will impact the most is in the retail segment of Indiana's economy. The grocery industry, for example, earns about a one percent profit margin. Those working will be paid a higher hourly rate, but their stress levels will increase as fewer people do more work. Others will see their hours cut or might even be downsized. This will also impact customer service, especially at the front end, as lines get longer.
I question the concept of a minimum wage altogether. Should legislators in Indianapolis insert themselves into a work-for-wages agreement made by consenting adults? Is it the role of government to mandate that a courtesy clerk be paid more than the market value of his labor?
I urge you to withdraw this harmful legislation. I also urge the state representatives from Bloomington, Matt Pierce and Peggy Welch, to vote against this unwise legislation.