One more hour of broadcast excellence to go today.
Rush will be back on Monday, tanned, rested, and ready.
And he's at the AT ⁇ T Pebble Beach Tournament in Monterey, and beautiful weather here on the West Coast for that.
We're basking in 70s and 80-degree temperatures.
As New York, Philadelphia, Washington, Boston being targeted with 12 inches of snow this weekend.
Wow, what a difference.
So anyway, Rush is out on the left coast, and you can see on rushlinbaugh.com all the round one activity, and they have the TV schedule on there for what cable channel, what network and so forth is showing the AT ⁇ T Pebble Beach tournament.
And also the interview with Neil Cavuto from Fox is also on RushLimbaugh.com, so you can check that out.
Phone number to reach this program today and every day, 800-282-2882.
And I was just, my real life is I'm a financial guy, and so I take a lot of time to study the world of finance and money.
And ladies and gentlemen, boys and girls, this minimum wage thing, I just want to arm you.
I mean, that's what Rush does so well is this program gives you armament.
It gives you ammunition, gives you information, gives you the truth instead of the emotional hysteria that we deal with so much in this country.
And when it comes to financial matters, there's an awful lot of this.
And I really stop and wonder sometimes whether or not our elected representatives are financial Neanderthals or whether they know what they're doing and are just doing it for their political gain.
Because they act in ways that are absolutely adverse to any well-known economic fact.
And we've got that when it comes to taxes.
We've got it when it comes to minimum wage.
Let me start this hour by giving you some minimum wage stuff.
And I've got quite a bit, so let me just charge into it here.
Everybody knows that minimum wage is something that is used as a wedge item during election years.
It comes up every time there's an election, no matter where you are.
And it sounds so compassionate.
It sounds so wonderful.
And I think all of us are willing to help those who are less fortunate because of not through any fault of their own.
I'm willing to reach out.
You are.
You write checks to charity, whatever it might be.
But at the same time, when it comes to minimum wage, everybody just nods their head and goes, well, that's nice.
They need to have an increase because these are people that are truly not keeping up.
They are in the lowest bracket of income and they are truly not keeping up.
Everybody else in every bracket of income is seeing their income go up dramatically.
Last time I was on the program, I went through this whole bit about how we have seen every level of income dramatically increase over the last five years, 10 years, 20 years, 30 years, you name it, we go back.
It's constant with one exception.
And that is the lowest bracket.
And that is the 5,000 and below annual income.
Those people are not keeping up.
Those people are not getting a boost.
So they are financially upside down.
Why they're there, well, that's another whole show.
But minimum wage hikes actually hurt them more than help them.
And this was brought to my attention by a guy who writes for the major Sacramento newspaper, Dan Weintraub, does a great job.
He's got something called the California Insider.
And he stumbled across this study published in 2000 by the Public Policy Institute.
I have done my duties as a talk show host to dig in to the background of the Public Policy Institute and find out what their agenda might be, where they get their money.
Are they a leftist group?
Are they a right group?
Where are they?
Where do they fit on that spectrum?
And I'm telling you, I can't find it.
This group is about the most down the middle when it comes to doing just analytical work.
Almost as pure as the Sullivan Group, just about when it comes to doing analytical work.
But they found the minimum wage.
Well, first of all, there is solid evidence in their report.
And you can pull this up, I think, at their website, Public Policy Institute.
There is solid evidence that the minimum wage is, at the very best, a terribly inefficient tool to fight poverty.
The higher wages clearly help out some of these low-income people.
But the net effect is it hurts poor families more than it helps, and it actually benefits some of the wealthiest families in society.
And the reason for this is that the minimum wage, which usually is associated with politics and public with poor people, is not exactly who's getting the benefit from the minimum wage.
This study, this Public Policy Institute, found that only 11% of the additional money from a minimum wage increase went to families with children in poverty.
What they also found is that the higher the minimum wage, along with that increase, was almost the increase was as likely to go to families in the upper income brackets as much as it was in the lower income brackets.
The numbers are this.
When you go to the low income brackets, 40% of the families with the lowest income in this nation received 43% of the benefit.
While 40% of the families with the highest incomes, not just upper income, I'm talking about the highest incomes, they receive 34% of the benefit.
Not quite as much, but almost.
So it's about a split between the wealthy and the poor when you go through this whole number.
And 21% of the wage increase never reached the recipients, but is paid in higher taxes to the government.
I mean, you can go through this.
They've done a fabulous job of going back, and they're not the only ones.
Public Policy Institute is just one that talks about how it helps the poor as much as it helps rich.
And I'm not talking, where's the middle class in here?
They're left out of the whole game, other than the fact it costs you more money.
The amount that it costs our society, federal increase in minimum wage costs $133 per year for goods, for stuff that you and I buy.
And see, $133 more per year on the last minimum wage increase was maybe not a big deal for somebody that makes $50 million, but it's a big deal for somebody that makes $5,000.
So the Detroit News had this editorial the other day about the fact that state Democrats in Michigan, along with the backing of the governor, Jennifer Granholm, and with the backing of organized labor, that they are going for a big petition drive to get a higher minimum wage on the ballot for you folks in Michigan to vote on this fall.
And in fact, she even mentioned this, governor mentioned this in her state of the state address.
Well, Nobel Prize-winning economist Gary Becker, so we've got the Public Policy Institute, we've got a Nobel Prize-winning economist.
He put it this way: hike the minimum wage and you put people out of work.
Tom Soule, who is a well-known economist in his book Basic Economics, cites a survey on the proposition that higher minimum wages increase unemployment among low-skilled workers.
And he also points out that 90% of U.S. economists participating in the survey agreed with that view.
So why is it if it's such an economic and by the way, economists are as political as politicians, if not more so, to try to get 90% of economists to agree on anything is phenomenal.
Another one, Cornell economist Richard Burkhauser and Joseph Sabia, 2004 study, estimated that a 10% hike in the minimum wage would cost an 8.5% decrease in the employment of young African Americans, a 6% decrease in the employment of teenagers, a 9% drop in the employment of workers without high school diplomas.
So what is the attraction for a higher minimum wage?
So the Detroit News went out and they talked to some people around the Detroit area.
Mark Mitra owns several Arby restaurants.
And he told the newspaper that higher minimum wage would have a ratchet effect.
He said it would be an unaffordable proposition for me.
And he said, if a new small, well, the Detroit News said, if a new small business isn't opened because of higher labor costs, it's an example of what a 19th century economist called the seen and unseen effects of economic policy.
A higher minimum, the seen and unseen is this.
A higher minimum wage for one worker would be seen.
The failure of a business owner to open a new firm or hire a new person that he never hires, causing a loss of several jobs, would be unseen.
So where's this?
See, this is where we get into this name-calling, where we get the people on the left that say, you people on the right are you're just a bunch of meanies.
Don't you have any compassion for the poor?
We want economic justice.
Well, if you want economic justice, why don't you learn about what the 90% of economists say, which is when you raise the minimum wage, you hurt poor people more than anybody else?
You help some, but you hurt more than you're helping.
And you also, which I don't have any problem with, you're helping the rich kids too.
It doesn't do what you think it's going to do.
So I'm not finished.
I need to take a break.
When we come back, I'm also going to talk about this business, about Congress, and there's going to be a lot of stink about that this year as we get closer to an election, the mid-year election, midterm election, I should say.
Is this business about the fact that we have these tax laws that were put into effect on a temporary basis in 01, 02, and 03, and they're going to expire.
And I'll tell you what happens when we've done this in the past.
What's the definition of insanity?
To try and do the same thing you did before and have a different outcome?
So history, folks, is important, especially when it comes to money.
The phone number to join the program, 800-282-2882.
My name is Tom Sullivan.
This is the Rush Limbaugh Radio Program.
Welcome back.
It's Tom Sullivan sitting in for Rush.
Rush will be back on Monday.
You can check out when he's going to be on TV and also some photos from yesterday's AT ⁇ T on the RushLimbaugh.com website and also the interview with Neil Cavuto from Fox that he did.
It was a great interview.
So taxes, so they passed these tax laws.
And has been said by many people in this country, it's not a revenue problem, it's a spending problem.
And I am the first to stand up and yell at the Republicans about their spending.
And I've heard all the excuses, and I've heard Katrina, and I've heard Iraq, and I've heard all these other things.
But I mean, that's, you know, we all have to make contingency arrangements, keep some money for emergencies and so forth.
We just have to.
They've been doing a lousy job of fiscal management in Congress.
And as we get closer to November, you will hear more and more of the chorus from the left talking about how all of a sudden they're going to become born-again balanced budget people.
Now, they never were when they were in charge, and the people in charge now are not either.
So, but just be careful when you hear them talking about balanced budget people, because what they're talking about is balancing the budget.
And I don't have a problem with that argument.
The problem is their argument never addresses, they never say, they never mention, they never speak the word spending reductions.
They never say that.
They don't ever approach it.
They say, we need to have a balanced budget.
And what they're not saying, because they know that they can't say this, is they want to, you either have to cut spending or raise taxes.
One of the two.
So the Congress did go along with the president's tax cuts to get our economy, which went into a recession the first quarter after Bush walked into the White House.
It was handed to him when he walked in.
It kept it short and it kept it shallow by the fact that they did do tax cuts.
And what it did was it gave the Treasury a lot more money.
And then they went through and did some other targeted tax cuts.
And those tax cuts, ladies and gentlemen, boys and girls, were all passed only because of the fact the Democrats said, well, we don't want to make this permanent.
We want to have this expire.
There's a lot of problems with this.
When you're trying to do some planning, some financial planning, whether you're trying, you've got kids that are going to be going to college in a few years or whether you've got a retirement coming up in a few years, you try to think in terms of your money and financial planning as further out than next six months.
You think of the next five to 10, 20 years maybe.
So what you need to make sure of is that you want to have some planning on taxes and what the tax rate, how much they're going to be dipping into your pocket for their money.
Well, the Wall Street Journal had a great piece on this from February 3rd.
And their point is, it says, the latest statistics on capital gains tax collections recently released by the Congressional Budget Office and receipts are not down.
They are up, and they are way up by 45% to be exact.
And it was all because of the 2003 investment tax cut package that the President put to Congress and they passed.
And that's where the capital gains tax was reduced from 20% down to 15%.
Stick with me on this for a minute.
Now, the people that were opposed to this says, oh, man, you caught you.
You're cutting the taxes for the rich.
That's what you're doing.
You're cutting the taxes for the rich, and what that's going to mean is less money.
Oh, man, you're going to make the deficit even worse.
Well, the deficit would have been worse if they had not passed this, because here's what happened.
This 45% increase in capital gains taxes that came into the Treasury.
There was a reduction in the penalty that you have to pay when you sell an asset that has a capital gains tax attached to it.
So during this period of time, in 2002, our government brought in $269 billion worth of money from capital gains transactions, $269 bill in 2002.
This past year, $539 billion in 05.
And this, by the way, is not only just the Federal Treasury, this is also something that you'll see in many, many of your state treasuries as well.
But it also unlocked a lot of investors who have been waiting, waiting, waiting, saying, I'd like to sell this, I'd like to sell that, but I don't want to do so if I'm going to get taxed.
The Congressional Budget Office also found that total tax collections from all non-withheld taxes, namely, this is dividends, clear, clear, clear.
That money was up 32% into the Treasury because Congress cut the tax rate on dividends paid out to shareholders from a high of 39.6% down to 15%.
And everybody screamed about that, saying, oh, man, this is going to kill us.
American companies have tripled the amount of dividend payouts to shareholders, and the government gets 15% of those larger payouts, which sure beats 39.6% of nothing.
So it's an economic model, and I can go through it in detail, that has worked over and over and over and over.
It's not the taxes.
We don't need to raise taxes.
We can let these laws become permanent.
We need to cut spending.
It's just that simple.
There's nothing that hard about this.
And it shows up in your state as well.
The states are going through the same example.
Senate Republicans would be wise for their Wall Street Journal says for their own revenue's sake to vote quickly to extend permanently the capital gains and dividend tax cuts and make them permanent while you're at it.
Instead, they just extended them out a few years over on the House side, and the Senate's still talking about it.
That's where I think we need leadership in the Senate and the House to make these permanent.
You're in charge.
What are you waiting for?
The evidence is clear.
Welcome back.
Tom Sullivan sitting in for Rush.
Rush will be back on Monday and again at the AT ⁇ T Pebble Beach Tournament today, tomorrow, and maybe Sunday, depending upon how he and his team do, talking to minimum wage and also taxation and just some data that you can't refute.
Amy in Toledo, Ohio.
Hello, Amy.
You're on the Rush Limbaugh program.
Hi, thanks so much for taking my call.
You have a very nice voice.
I've never heard it before.
But if you believe Marshall McLuhan and the medium is the message, the medium of your voice is a very nice, attractive voice that could make anything sound reasonable.
However, I am afraid of the money.
Here comes the big butt, though.
That's right.
I am a liberal from Toledo, Ohio, which is an urban working-class place.
And the minimum wage would definitely help increase, would definitely help the people of Toledo.
I believe that inflation has risen by so many percents every year, and they could benefit from having an increase to it.
Their attitude might be different also.
And also, I don't think too many people on minimum wage are doing financial planning.
However, I do want to say something else, and that is about the levies that you were talking about earlier.
And that is, you said you didn't understand the fuss about the story today.
Well, I'm going to tell you what the fuss is about, and then I'll probably never be on a radio show again.
But the fuss is that the Bush administration knew on Monday night that the levies had broken, yet they did nothing until Thursday to help people, and that 1,300 lives were lost.
And that's the message that was there today.
Not that they knew that the levies were going to break, but they had broken and they didn't do anything.
Yeah, how many people?
Well, listen, I'm not going to get into the debate about all of that.
My point about all of that, Amy, was that the government is not the first responder, the federal government.
I just don't believe that.
And I don't want to go down that path, but you and I can agree or disagree on that.
But let me bring you back to this minimum wage here.
It seems logical for you to say what you said, that if somebody is in the lowest income bracket, gosh, just an extra 50 cents an hour would seem to be helpful, wouldn't it?
And it makes all the emotional, logical sense that you can possibly muster.
My only point in bringing this information to you is I'm not trying to be political.
I'm trying to depoliticize this.
I'm trying to say, look at, we have had economist after economist after economist point to what really happens when you change something economically.
And economics is actually, it is fairly emotional.
What happens is you and I are wired to seek pleasure and avoid pain.
It's just the way we're made.
Economics is the same thing.
There's economic pain and economic pleasure.
If you do something that makes you a big pile of money, you're going to do more of it if that makes you happy.
If you keep losing money doing something, you're going to not do it anymore, economic pain.
And so as we go through this, there are anecdotal stories where you can find somebody who is now able to put food on the table for their family that otherwise they were not able to make ends meet by the end of the month.
And I know there's a lot of people in that situation that are poor.
But my point to you is you've got to cut through all the emotional stuff about it and get to the facts of what happens because we have plenty of history of what happens when you raise the minimum wage.
And these economists, when you get 90% of them to agree that it hurts the poor more than it helps them, it's got to make you stop and think, I better check this out some more.
Well, thank you so much for your gracious reply and for letting me speak on your show.
I appreciate it.
I know, but I do want your response.
I mean, I well, I'd have to do the studies myself.
I mean, I don't trust everything I hear on the radio.
I'd have to check into it myself to find out if that's so.
If it's so, of course, it looks as though It wouldn't be a benefit, but I can't answer that specifically now without doing that.
You just made me the happiest little talk show host in the world.
You know why?
Why is that?
Because you're willing to go find out the details and find out the facts.
Yes, I am.
That's all I try to do.
And if you're going to do that, I suspect because of the fact that the evidence is overwhelming, I think you're going to find a little surprise.
And Amy, I don't know, you sound like you're a young woman, but been around enough to know that sometimes you go through life thinking something is A when all of a sudden you find out it's B.
And that's what this is.
That's what this is.
I'm going to do more research, and maybe I'll talk to you again someday.
Great.
Thanks, Adam.
You bet.
Of course I, yeah, of course.
I mean, she was so sweet to me.
How could I possibly not?
Art in Shepard, Montana.
You're going to be sweet to me, Art?
Hi, Tom.
One thing you've forgotten is that every labor union contract in the country is tied to the minimum wage.
So if the minimum wage goes up 75 cents, every labor union contract in the country goes up 75 cents.
Yeah, and that's the best health benefits are tied to it.
And the other thing is, is that places like McDonald's, which might let you work 30 hours a week and instead require you to work 50 hours a week, they'll pay you the time and a half to avoid paying benefits.
You know, people that do pay benefits will make you work 50 hours instead of 35.
Well, and you're describing what is called the ratchet effect.
And there's no question there is a ratchet effect, especially for the person.
And here's the other poor person that is getting hammered by this deal: if you're making 50 cents more, you got a job, you don't have any skills, or you're a low-skilled worker, so you get a job, and you know what, you're pretty good, and you seem like you've got the ability to be trained and work your way up into the company, maybe become a supervisor or something along those lines.
So they give you a 50 cent or a dollar or $1.50 an hour wage hike, and they raise the rate right below you.
Now what happens?
Now you're not going to, you want to stay that $1.50 ahead of the person that just came in the door because now you've got some experience and you've got some talents.
It's a ratchet effect.
It goes all the way up.
So even though that person maybe isn't minimum wage, they're not that far above it to where they're in any shape of financial strength.
So they're getting hurt too.
And one thing, you mentioned your brother was Rush's data tabulator.
Yeah, yeah.
Well, Rush always says that only 42 other men occupied the office with George W. Bush.
Well, actually, only 41 men occupied it because Cleveland was both the 22nd and the 24th president.
Oh, I'm glad you taught my office.
I'll call Floyd and tell him.
Take care, Tom.
Thanks for the help.
I need all the help we can get on making sure that we keep fresh accurate.
I'll tell you, he's going to hear about this.
What did Sullivan do?
Jack and Louisville.
Jack in Louisville.
Hi, Jack.
You're on the Rush Limbaugh program.
Tom, it's good to be on.
Let me say up front, I'm not anti-police and I'm not anti-government, although I am a truck driver, so you make of it what you will.
But I strongly, strongly disagree with your assessment, and we don't have enough cops.
And believe me when I tell you, we have an army of law enforcement out here.
The question is, what are they doing?
What are we getting for our money?
Let me ask you, though.
I mean, when the California Highway Patrol says they have just under 7,000 CHP officers and they had just under 7,000 CHP officers in 1970 and the population of the state's almost doubled, you've got to do the math on that and go, something's wacky.
You know what the math tells me?
They had twice as many as they needed 30 years ago.
I knew you'd say that.
No, I'm serious.
You would only have to spend a lot of time.
No.
Out here, you know what I'm talking about.
Hey, listen, two things.
I've got a bias.
First of all, I don't know if you've heard me before on this program, but I usually do the, I've done a number of the year-end shows.
I was a highway patrolman.
I worked through graduate school chasing speeders and drunks at night and went to school during the day.
So I was a highway patrolman for four years, and I know what the job involves, and I know what it entails.
And I also know that nobody likes to see a lot of police cars out there when you're driving along and you're trying to do 75 and a 65 because you don't want to get a ticket.
But when your wife or daughter or son or brother or mother or somebody is getting attacked out there on the road and you go, where are they?
And you find out that they haven't added a single solitary police officer in 30 years, you go, come on, government, would you pay attention to the basics?
That's my point.
Fundamental structure of the government.
The whole debate about talk radio is what do you want your government to do?
What do you want your government to do?
And so you and I, we get in here and we debate it and we argue it.
We disagree with each other.
We agree with each other.
But when it comes down to the bottom line, there are some fundamental things that I think 99.9% of citizens in this country want.
One of them is a national defense.
Have a military to defend us from people who want to do us harm.
And that defense is not only federal, but it's also state and local.
And that means state and local police and fire.
Public safety should be job one.
But I'll bet you if you look through the line items of most cities and counties and townships and states' budgets, you will find that those numbers are always put last.
Public safety is always last when it comes to politicians because they've got all these special interest groups that are coming around.
And see, nobody goes in.
I'm one of these fools that says it out loud.
Nobody goes in and says, I want to spend more on police.
I want to spend more on fire.
But isn't that what makes a community great is when you have lots of police and fire protection?
I think so.
Short break.
Welcome back.
Phone number 800-282-2882.
My name is Tom Sullivan.
This is the Rush Limbaugh Radio Program.
Tom Sullivan in for Rush.
And, you know, I know that a lot of people are going, what?
How could this possibly be?
And so it is, so it is normal to scratch your head and like Amy in Toledo said.
Are you sure that minimum wage hurts poor people more than it helps them?
Yeah, I am.
I am so positive.
And it's not just me.
They're economists from the left, from the right, any economist worth his or her salt.
Studies over and over.
It's not like we haven't seen minimum wage hikes before.
So we have plenty of studies to say, all right, what happened after they changed the minimum wage?
And the answer is it helps a little bit to some poor people, and it helps a little bit to some rich people, and a whole bunch gets left on the table.
But the poor actually wind up, because of the increase in cost, costing them more than the increase in what they're getting.
It hurts them more than it helps them.
Tom in Savannah, Georgia.
Hello, Tom.
You're on the Rush Limbaugh program.
Yeah, thanks for putting me on.
I operate a small business.
We have like 10 employees, and for every 50 cent raise, that cuts one person's job.
And I know a lot of businesses in the area that depend on the minimum wage, especially in the hospitality industry, the industry.
Yeah.
Where every 50 cent raise, you've got to cut a person because you only got X amount of dollars to work with.
You can't go out and make that extra sale.
Sales.
Yeah.
Your fixed income or whatever.
I'm just looking through my stack of stuff here because there was, you know, what you're talking about, and I think this is the key point you have to drive home, is that what you're talking about is you're hiring people that are low or no skilled employees.
Correct.
And so, you know, when I was a kid, I don't know what you did, but I got a minimum wage job because I was a kid and had no experience and no skills to go do something.
I was still a kid in school.
Yeah, and so then, you know, you work your way up and you learn and you get some experience and you learn how to do a job and you learn to have a little bit of a skill.
It's not designed for, I mean, and for the people that, the few people that get stuck at minimum wage are people that need to go get a skill.
I mean, what more can you get out of this message than, gee, you mean if I got more experience or got some more education, I would actually make more money?
Yes.
Well, I don't know why they don't.
I'm not sure the economist.
I can remember the last time the minimum wage was raised.
They said that one out of every eight jobs was lost.
Yeah.
No, it's it is a it is a negative, and the jobs that are lost are not the jobs that people in the middle class or upper upper income class lose.
It's the minimum, it's the low-skilled, low-wage jobs.
And so here are people that don't have any money, and now they don't have a chance of getting a job.
And like the one I think the gentleman said before, the lady from Toledo, instead of working for 30 hours, now you've got to work 40 or 50 in order to compensate for the same thing.
Yep.
I'm looking at my stack of stuff.
I saw this.
I had a list.
I can't put my fingers on it right now.
I had a list of the top jobs in demand right now.
And they are tech jobs.
But they're not jobs that require a Ph.D.
They don't even need a college education.
This job's working in various places in the tech sector.
And these jobs, the top 10 job demands, pay anywhere from 80 grand to 160 grand a year.
And those are the top 10 in demand.
I can't put my fingers on it right now to give you the names of these things, but it ranges from people that have some high skills to some middle to high skills.
But the point is, so if you can make some really good money by getting some skills, why don't you go get some skills?
In the meantime, at least you can help a little bit by getting a job that pays something to put something on the table until you can get out of school and get more education or get more experience on the job.
It's that simple.
It's not that hard.
This is basic.
Hey, Tom, thanks so much for the call.
I appreciate it.
Short break.
It's true, folks.
Minimum wage hurts poor people.
Don't let anybody tell you different.
We'll be back.
Tom Sullivan setting in for Rush.
So I found my list.
This is from PC Magazine.
I presume their current edition.
And the top 10 jobs, the Yo Index of Technology.
Yeah, Yo.
It's YOH, YOU Index of Technology Wages.
Here's a clinical research associate.
Doesn't say doctor, doesn't say director, it's just a clinical research associate.
It is number one on the list of jobs that they're trying to fill out there.
$38.52 an hour.
You always take the hourly and multiply it times $2,080 to get to the annual, and that's $80,000 a year.
Here's a CRM project manager, $129,000 a year.
Here is a database administrator, $55.82.
What's that about?
$115,000 a year.
So, I mean, you know, you go out and you get some skills, and then you get a job that has those skills, and you then get experience in that job, and then you become a manager or an engineer or an associate or whatever it might be.
And this was, I'm telling you, this is the way you solve this problem.