Minimum-Wage Hikes Lower Workers’ Prospects

The Times, Saturday, June 9, 2007
by Joe Sinagra

'The following article was written by me in 2007 when running for NJ State Assembly, and published in the Trenton Times.'


The minimum wage is supposed to help those at the lower end of the income scale to make a better living. When the minimum wage rises, in actuality, the exact opposite occurs, resulting in a higher unemployment rate among that same income class. The small businesses that employ them suffer, as well.

With an increase in the minimum wage, the small percentage of people who depend on the minimum hourly rate to live on will fall into a higher tax category and they may lose benefits. Study after study has found that as labor rates rise, job competition heats up, allowing employers to hire workers with better skills.

I do not believe the minimum wage increase has helped anyone – already we are seeing companies laying off workers or closing.

Minimum-wage laws affect ethnic minorities more so than other groups. The unemployment rate for white teens ages 16 and 17 was 17.3 percent in 2005. The same figures for Hispanic and black teens were 25 percent and 40.9 percent, respectively. A rule of thumb established by the Journal of Economic Literature is that a 10 percent increase in a minimum wage leads roughly to a 2 percent hike in teen unemployment – we just had a 40 percent increase. Is it better to have no job at $7.25 an hour or a guaranteed job at $6.15 an hour?

An increase in the minimum wage means that unemployment rates among ethnic minorities and teens will climb higher, giving thousands of currently employed workers a “livable” wage of zero.

Many union contracts have formulas tiered off of the minimum wage. As the minimum wage increase, every union salary level increases, too. The ability of unions to obtain wages above market rate is improved, as the price of competing non-union labor goes higher. Large employers who pay more than the minimum (Wal-Mart being the most recent example) also push for higher minimum wages, making it more difficult for low-wage competitors to keep employees.

As the actual wage increases, so do payroll taxes, unemployment, disability, etc., the “hidden” taxes. Any minimum-wage increase creates a larger burden on employers.

There has been talk of creating a livable wage anywhere from $11 to $16 an hour, along with bringing back jobs to New Jersey. To the contrary, mandatory minimum wage or livable wage increases will force companies to leave the state or the country.

Small businesses account for the bulk of new job growth. Mandating a higher minimum wage means that a small business will either have to let someone go, or not hire the next person who walks through the door. Many small-business owners need a minimum amount of employees to compete against the larger chains. When they are forced to let employees go, they cannot compete. By keeping them, they either absorb costs or lose what little completive edge they have.

When a company is forced to raise its wages, it is also forced to reduce hours, or cut jobs to sustain a profit margin. Higher labor costs tend to replace marginal employees with self-service options or automation. In other words, employers will replace less-skilled employees with machines or reduce services to customers by, for example, automating their telephone receptionists, expecting fast-food diners to bus their own tables an shoppers to scan and bag their own groceries.

A business doesn’t have more money available for payroll because a minimum wage is mandated. As the minimum wage increases, businesses are required to pay their workers more than what they are worth. No one would willingly pay someone $7.25 an hour for a product or service worth $4 and still expect to stay in business. The business would have to lay off some workers to free up enough cash to pay those still on staff. It must either make do with a staff it can afford or go out of business, putting all of the employees out of work and creating more unemployment.

In the absence of minimum wage laws, would employers pay lower than minimum or less? No. Competition in the labor market forces employers to pay the higher wages; many businesses today pay their employees more than the minimum wage. I believe that by eliminating the minimum wage, more job opportunities for the unskilled and minorities will be created and there will be more room for negotiation between employer and employee.

For low-wage earners fortunate enough to survive losing their job, it doesn’t necessarily help them, either.  Employers will react to the higher wages by adjusting other areas of employee compensation, such as health insurance or other benefits.

If small-business owners must face increasing costs, then they must be allowed to form co-ops through which they can purchase low-cost health-care coverage to help offset forced government increases.

When forcing  a business to pay its workers more, the money has to come from somewhere, usually in the form of increased prices for goods and services. Workers who are making more money because of a minimum-wage increase will end up spending more to buy items they need to survive, ending right back where they started. As stated in a recent article, “inflation has eroded the minimum wage’s buying power to the lowest level in about 50 years.”

In the end, as consumer prices continue to rise, so will inflation, and the minimum wage will still be the minimum wage.

Assemblyman Patrick Diegnan sponsors bill putting drunk drivers back behind the wheel

 

After voting in favor of 115 tax increases and his promise to stabilize taxes if he were reelected, one week after winning an election, Assemblyman Diegnan wants to put drunk drivers back on the road.

Over 40% of fatal automobile accidents are alcohol-related. Alcohol-related motor vehicle accidents claim 17,000 American lives each year, which is roughly the equivalent of one death every 30 to 45 minutes. Adults who drank too much got behind the wheel of a moving vehicle about 112 million times in 2010.


Allowing a ‘restricted’ driver a second attempt to kill or maim an innocent bystander because they were lucky enough to get stopped before they had the opportunity the first time, is a game of chance waiting for a tragedy.

Instead of dealing with the horrible economy and tax environment he created, Assemblyman Patrick Diegnan has once again displayed how out of touch he is with his constituents.

http://www.mycentraljersey.com/article/20111128/NJOPINION0202/311280005/Diegnan-wants-give-drunken-drivers-2nd-chance

College Grads want to wipe away their Student Debt . . . after they graduate!

According to the Home News Tribune Editors, President Obama and Congress must give immediate consideration to recovery packages that provide for billions of dollars in student loan debt forgiveness.

“Look at student loan debt forgiveness as the jump start on the economic engine. By forgiving $70 billion in federal student loans immediately, and dedicating stimulus funding to help pay down tens of... billions more in private lending debt, the government can free billions in graduates’ income that can be expected to be put directly into the economy.. . "

So anyone that wants to sign up for college and get a free education is not responsible for paying off their loans? Those who did not have the means or the funds to attend would receive the brunt of this, if that were to happen, guess who would have a leg up on getting a job? That would mean the lesser educated working class would be out of work, so how about debt forgiveness on their mortgages so they don’t lose their homes? What happens to those who worked their way through college to get an education, are they entitled to a refund?

Having Obamacare forced upon the American public is OK, and forgiving debt on those who had the means and ability to attend college would be OK. Those with an education would be able to afford to pay for the government mandated health care, as those who did not go to college or those who did and dropped out because they had enough sense to realize that had to work to start paying down their debt, won’t be able to make mandated payments.

Anyone receiving an education gaining over $50,000 in debt had better make sure they can get a job in their field earning enough to pay it back, before they continue getting deeper in debt.

The article continues to state “. . . graduates can’t shed their student loans, even in bankruptcy. With fewer well-paying jobs available for new graduates, it can be assumed those degrees are worth a tiny fraction of their cost.” Knowing that . . . why would anyone knowingly continue to go deeper into debt?

Those going to college must realize all that debt they racked up needs to get paid back at some point, or are they oblivious to how it is going to get paid off? Or does the realization for graduates only set in after commencement when the first note becomes due?

At what point does a college student realize that it is impossible to pay back what they owe, halfway through their education or just before they graduate?

Perhaps college consultants need to advise students of going to a less expensive college, or the reality of finding a job in their field of study, and the odds of receiving that position due to the competition upon graduation.

Joe Sinagra says Thank You to All

I would like to thank the voters in the 18^th District, who took a few minutes out of their lives to come out and show their support.

It is almost impossible to repay all the dedicated people who believed in our campaign. The unselfishness of all the volunteers who gave up their days, evenings, weekends to work the phone banks, going door to door, and handing out of literature literally leaves me speechless, many who went above and beyond what was asked of them, there are no words that can express my gratitude, and the many friends and family who have given kind words of comfort, along with countless others. I would also like to mention our Treasurer Andria, who did a great job on keeping the finances in line. I can’t forget our Campaign Manager Mandi, who practically lived at the headquarters from the day she was hired. Many thanks to Rick Rosenberg and Mark Duffy.

I also need to thank Assembly Leader, Alex DeCroce for his overwhelming generosity in donating to our campaign. The State GOP who targeted the 18^th district this year and made this a competitive campaign! Lt. Gov Kim Guadagno for making a stop at Edison’s Campaign Headquarters, and Governor Chris Christie for making a detour in his busy schedule to come to Edison to give our campaign a boost. Their help in helping our base with a three day 72 hour GOTV was a much needed shot of adrenalin that kept our voulunteers focused. My only regret is not that I didn't win, is that once more I am unable to represent those who cast their vote in their belief that I could best represent them.

Considering the 18^th District lost Spotswood and gained Highland Park which has a primarily Democrat voter base, the gauntlet was set from the onset. I believe we had a very successful campaign in spite of the outcome, as the odds were in the favor of the opposition due to redistricting, and they of course will have larger margins of win percentages as their voter base is larger.

I don't believe our opponents won anything other than their own voter base. I doubt that a large majority of Middlesex County Republicans voted  to keep the current status quo. I do believe on the flip side there were many Democrats who voted on the Republican ticket this year, and I find it amusing that our opponents spent a massive amount of funds to win their own voter base.

One commercial accused me of being a Tea Party extremist. Before the Tea Party came into prominence, I have always run as a fiscal conservative.  I don't see how wanting to lower property taxes, putting more disposable income back into the pockets of the taxpayers, and creating jobs by giving business owners the tools needed to expand and grow makes one an extremist. As a matter of record it was because of being a fiscal conservative is the reason the Tea Party supported me. 

We were endorsed by the National Federation of Independent Business (NFIB) and I was endorsed by the Commerce and Industry of New Jersey (CIANJ) three times in a row. I would think that our opponents record of voting YES to increase our taxes 115 times is a bit extreme, to say the least.

It says something when the arrogance of your opponents who are so sure of winning, won't take the time to debate the issues.

My counterpart on the ticket, Marcia Silva made it a pleasure to run for office this year, a successful attorney, a single mom raising two kids, a centralist on many of the issues. (Many wouldn’t know that by our opponents commercials and attacks.)  Somehow she managed to run, in my book, a household, a job, a successful campaign and still maintain her sanity. 

To finish out the thank you list I certainly can’t forget my wife, who had the patience in putting up with me throughout the season. I think halfway through the campaign she may have started thinking of me as a renter who was using the garage to store political stuff.

There will be other races, who knows, if the support is there in the future, I may have another campaign left in me . . . after I check with the wife of course.

Joe Sinagra & Marcia Silva Assembly Race: Legislative District 18

Assemblyman Patrick Diegnan's view on holding office as an elected official:
"I'm outraged that every two years me and a lot of other people in this state have to put up with this baloney, I find it personally insulting."  ~ Patrick Diegnan (18th District Assemblyman)__________________________________________________________________________

By Matthew Kassel, November 6

Two hopeful Republicans, Marcia Silva and Joseph Sinagra, are working to unseat the Democratic incumbent Assemblymen Peter J. Barnes, III and Patrick J. Diegnan in the heavily Democratic 18th District.

Barnes has served on the Edison City Council for 12 years and was its president for two. He has been in the Assembly since 2007 and currently is serving as Majority Whip. He chairs the Judiciary Committee.

As a lawyer, Barnes handles litigation cases mostly in the state courts in central New Jersey and is the past president of the Middlesex County Bar Association. “I like to think that I came to the table with a lot of experience before I served in the legislature,” he said.

Barnes was endorsed by the Sierra Club and the Service Employees International Union’s New Jersey State Council. To the Assemblyman, the four most important issues in New Jersey are jobs, property taxes, the environment and helping businesses.

“There’s no question that the recession has really affected New Jersey in a really profound way,” he said.

In the budget committee, Barnes focused on funding transit hubs and making cities aware of grants and programs available. He has sponsored bills to entice businesses to enter New Jersey and for capping property taxes.

Diegnan, his running mate, has served in the Assembly since 2002. He chairs the Education Committee and serves as Deputy Speaker and Parliamentarian.

The most important issue to him is education.

“It’s becoming the hot topic in the state, concerning charter schools, vouchers,” he said. “I think there should be community support for charter schools. I don’t support vouchers.”

Diegnan sponsored a bill, which passed the Assembly on a bipartisan basis, to require that charter schools be approved only after a referendum in each municipality affected.

Like his running mate, Diegnan believes another important issue in the state is job creation.

“We really just have to come together and spread economic growth in New Jersey,” he said. “We have to reevaluate our property tax structure; it is just so burdensome.” Diegnan labeled Silva and Sinagra extremists.

“My opponents have publicly stated support for the Tea Party, and that certitude is not healthy for the process,” he said.

But Silva, who is a public defender, denies this charge.

“The other side has tried to align me with the Tea Party and other groups that I’ve never had anything to do with in my life,” she said. “I’m more of a centrist.”

Democratic East Brunswick Mayor David Stahl endorsed Silva in a surprise move in September and Silva said that has helped her chances.

“The people I’ve spoken to door to door have said to me they’d be supporting me because of the mayor’s endorsement,” she said.

Taxes and creating jobs are her big issues.

Silva is optimistic about her chances. “People should vote for me because I’m different, but I’m ordinary,” she said. “I’m the average person, and I’m not a politician, and I will always put the people first.”

Sinagra works for Miele as a facilities manager, has owned and operated several small businesses and served on the Helmetta Borough Council for nine years. He ran unsuccessfully in 2007 and 2009 for the Assembly and was a congressional candidate in 2005.

Although Barnes cites his small business experience to counter his opponents, Sinagra -- along with Silva -- received the Independent Business Federation endorsement early in October. The Commerce and Industry Association of New Jersey also endorsed Sinagra.

Sinagra’s big issues are taxes, jobs, and the economy.

“I plan to lessen some of the mandates that are placed on business owners and eliminate some of the taxes that place burdens on small businesses, helping them to expand and grow and be able to hire more people,” he said.

Sinagra think he understands the importance of serving others, a quality he feels his opponents do not have.

Said Sinagra, “It seems to me they’re more concerned about holding their own job than representing the people of the state.”

PAT DIEGNAN REALLY NEEDS A VACATION BECAUSE $1.5 MILLION DOESN’T GO AS FAR AS IT USED

By Greg Volpe  -  November 1st, 2011  
18th District Republican candidates Joe Sinagra and Marcia Silva reminded voters that they can wish Pat Diegnan Bon Voyage next week.


Diegnan, who collected more than $1.5 million from eight taxpayer-funded politically-appointed jobs over the last decade when New Jersey lost 156,000 private-sector jobs lamented recently that he didn’t take a vacation this summer.


“I guess $1.5 million doesn’t go as far as it used to if Pat Diegnan had to spend the summer focusing on the many public jobs he holds instead of taking a luxurious vacation,” 18th District Republican Assembly candidate Joe Sinagra said today. “I hope he spent his summer at home learning that drawing multiple public salaries just takes money from people and increases taxes instead of lowering taxes to help the private sector create jobs.”


Sinagra was pointing to answers provided by Diegnan to the Home News Tribune: “Every family has cut back and makes do with less. For example, my wife and I are driving older model cars and we didn’t take a vacation this summer.” Sinagra’s response is posted here: http://www.mycentraljersey.com/article/20111031/NJNEWS10/310310017/Joseph-Sinagra-Republican.

The response from his running mate, Marcia Silva, is posted here:  http://www.mycentraljersey.com/article/20111031/NJNEWS10/310310016/Marcia-Silva-Republican.
“Too many people in New Jersey do not get vacations from the high taxes and high unemployment that were created by the fiscal policies supported by Trenton Democrats like Pat Diegnan and Peter Barnes,” Silva said. “But if Mr. Diegnan really laments his summer at home, voters, who have given him many paychecks over the years, can send him on a permanent vacation from the Legislature next week.”


Diegnan’s latest financial disclosure form can be viewed here: http://www.njleg.state.nj.us/ethics/FinancialDisclosure/DiegnanP2010.pdf.

###



Contact Info:

Greg Volpe 609 989-7300

.