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    Raising the Minimum Wage Will NOT Hurt Good Businesses

    As demonstrated in Washington, the fear of losing revenue and small storefronts going under is just that, fear, and nothing more.
    ************************************************** **

    For $7.93 an Hour, It’s Worth a Trip Across a State Line
    By TIMOTHY EGAN
    Published: January 11, 2007

    LIBERTY LAKE, Wash., Jan. 9 — Just eight miles separate this town on the Washington side of the state border from Post Falls on the Idaho side. But the towns are nearly $3 an hour apart in the required minimum wage. Washington pays the highest in the nation, just under $8 an hour, and Idaho has among the lowest, matching 21 states that have not raised the hourly wage beyond the federal minimum of $5.15.

    Nearly a decade ago, when voters in Washington approved a measure that would give the state’s lowest-paid workers a raise nearly every year, many business leaders predicted that small towns on this side of the state line would suffer.

    But instead of shriveling up, small-business owners in Washington say they have prospered far beyond their expectations. In fact, as a significant increase in the national minimum wage heads toward law, businesses here at the dividing line between two economies — a real-life laboratory for the debate — have found that raising prices to compensate for higher wages does not necessarily lead to losses in jobs and profits.

    Idaho teenagers cross the state line to work in fast-food restaurants in Washington, where the minimum wage is 54 percent higher. That has forced businesses in Idaho to raise their wages to compete.

    Business owners say they have had to increase prices somewhat to keep up. But both states are among the nation’s leaders in the growth of jobs and personal income, suggesting that an increase in the minimum wage has not hurt the overall economy.

    “We’re paying the highest wage we’ve ever had to pay, and our business is still up more than 11 percent over last year,” said Tom Singleton, who manages a Papa Murphy’s takeout pizza store here, with 13 employees.

    His store is flooded with job applicants from Idaho, Mr. Singleton said. Like other business managers in Washington, he said he had less turnover because the jobs paid more.

    By contrast, an Idaho restaurant owner, Rob Elder, said he paid more than the minimum wage because he could not find anyone to work for the Idaho minimum at his Post Falls restaurant, the Hot Rod Cafe.

    “At $5.15 an hour, I get zero applicants — or maybe a guy with one leg who wouldn’t pass a drug test and wouldn’t show up on Saturday night because he wants to get drunk with his buddies,” Mr. Elder said.

    For years, economists have debated the effect that raising the minimum wage would have on business. While the federal minimum wage has not gone up for 10 years, 29 states have raised their wage beyond the federal minimum.

    These increases, according to critics like Brendan Flanagan of the National Restaurant Association, are a burden on the small, mostly family-run businesses in fast food and agriculture that employ workers at the lowest end of the pay scale.

    “We see the political momentum for this,” said Mr. Flanagan, a vice president at the association, “but we cannot ignore what our members are telling us, which is that it will lead to job losses.”

    But the state’s major business lobby, the Association of Washington Business, is no longer fighting the minimum-wage law, which is adjusted every year in line with the consumer price index.

    “You don’t see us screaming out loud about this,” said Don Brunell, president of the trade group, which represents 6,300 members.

    “It’s almost a no-brainer,” Mr. Brunell said, that the federal minimum should go higher. Association officials say they would like to see some flexibility for rural and small-town businesses, however.

    Washington’s robust economy, which added nearly 90,000 jobs last year, is proof that even with the country’s highest minimum wage, “this is a great place to do business,” Mr. Brunell said.

    During a recession five years ago, the same group had argued that Washington’s high minimum wage law would send businesses fleeing to Idaho. The group sent out a news release with a criticism of the law from John Fazzari, who owns a family-run pizza business in Clarkston, Wash., just minutes from the Idaho town of Lewiston.

    But now Mr. Fazzari says business has never been better, and he has no desire to move to Idaho.

    “To tell you the truth, my business is fantastic,” he said in an interview. “I’ve never done as much business in my life.”

    Mr. Fazzari employs 42 people at his pizza parlor. New workers make the Washington minimum, $7.93 an hour, but veteran employees make more. To compensate for the required annual increase in the minimum wage, Mr. Fazzari said he raises prices slightly. But he said most customers barely notice.

    He sells more pizza, he said, because he has a better product, and because his customers are loyal.

    “If you look 10 years down the road, we will probably have no minimum wage jobs on this side of the border, and lots of higher-income jobs,” Mr. Fazzari said.

    Job figures from both states tend to support his point. While Idaho leads the nation in new job growth, it has a far higher percentage of minimum-wage jobs than Washington. Minimum-wage positions make up just 2.4 percent of the jobs in Washington, while about 13 percent of the jobs in Idaho pay at or less than the proposed federal minimum wage, according to a study done for the state last year.

    Part of the difference could be accounted for by a lower cost of living in Idaho and the higher percentage of technology, manufacturing and government jobs in Washington, economists say. Still, it is hard to find a teenager in Idaho who lives anywhere near Washington who is willing to work for $5.15 an hour.

    “Are you kidding? There are so many jobs nearby that pay way more than minimum wage,” said Jennifer Stadtfeldt, who is 17 and lives in Coeur d’Alene, which is just a few minutes from Washington. She pointed out that Taco Bell, McDonald’s and other fast-food outlets in her town were posting signs trying to entice entry-level workers with a starting pay of $7 an hour.

    The House today passed a bill increasing the minimum wage, and about 13 million workers would see a pay raise if the Senate and President Bush approve it. Mr. Bush has said he would approve the wage increase so long as concerns of small-business owners were taken into account; the Senate has not yet taken up the bill.

    Several studies have concluded that modest changes in the minimum wage have little effect on employment. A study two months ago by an economist at Washington State University seemed to back the experience of Clarkston and other border towns in Washington. The economist, David Holland, said job loss was minimal when higher wages were forced on all businesses. About 97 percent of all minimum-wage workers were better off when wages went up, he wrote.

    But other business groups argue that an increase would hurt consumers and workers at the low end.

    In a survey released on the eve of the November elections — in which voters in six states considered raising their minimum wages — the National Restaurant Association said restaurants expected to raise their prices and eliminate some jobs if the voters approved the measures. The initiatives all passed.

    Here on this border, business owners have found small ways to raise their prices, and customers say they have barely noticed.

    “We used to have a coupon, $3 off on any family-size pizza, and we changed that to $2 off,” said Mr. Singleton, of Papa Murphy’s. “I haven’t heard a single complaint.”

    ...

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    Re: Raising the Minimum Wage Will NOT Hurt Good Businesses

    So you raise the minimum wage, the people who are only raking in just above will now be minimum wage employees? These workers get what equates to a pay cut?

    The cost of everything goes up, some a small percentage some everyday essentials (food items in particular) double, how does this help the economy? How does this help those at the bottom already, if you give them $10.00 more week, then their grocery bill goes up $15.00, rent another $50, and clothing and other necessities another 3-5%, what has really been accomplished??

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    Re: Raising the Minimum Wage Will NOT Hurt Good Businesses

    So you raise the minimum wage, the people who are only raking in just above will now be minimum wage employees? These workers get what equates to a pay cut?
    Not sure where you got that idea. A new minimum wage will not equate to a paycut for hourly workers who already make above the new rate. Unless an employer just feels like being vindictive.


    The cost of everything goes up, some a small percentage some everyday essentials (food items in particular) double, how does this help the economy? How does this help those at the bottom already, if you give them $10.00 more week, then their grocery bill goes up $15.00, rent another $50, and clothing and other necessities another 3-5%, what has really been accomplished??
    These increases won't be as significant as you're making them out to be. Where did you get the notion that the price of food items will double?

    And yes, eventually the minimum wage will be eclipsed by inflationary effects, but it won't happen overnight. This increase will give those at the bottom a break, if only a slight one, until the rate needs adjusting again a few years down the road. It will probably cause a slight rise in unemployment over the short term, but that will eventually even out as well.

    Not much point arguing over it, anyway. It's going to pass in Congress (already passed in the House), and Bush has said he'll support it, providing tax relief is given to small businesses to help cope with the increased employment costs, which Democrats have indicated they will concede to. More or less a done deal.
    Last edited by yossarian; 01-11-2007 at 07:31 PM.

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    Re: Raising the Minimum Wage Will NOT Hurt Good Businesses

    yossarian;
    Not sure where you got that notion. A new minimum wage will not equate to a paycut for hourly workers who already make above the hourly rate.

    If the minimum wage is $5.15, and let’s say the minimum wage goes up to $6, for example, the people who have worked there a few years to reach the level of $6 an hour, are not going to get a $.95, increase in pay, and the new guy they might hire tomorrow will start at $6? If that isn’t a pay cut then I am not sure how else to describe it, but the work and time they have invested don’t mean squat and they are now at the bottom of the pay scale, again?

    Yes, eventually the minimum wage will be eclipsed by inflationary effects, but it won't happen overnight. This increase will give those at the bottom a break, if only a slight one, until the rate needs adjusting again a few years down the road
    Really? In the 80’s when the minimum wage was increased (haven’t really paid much attention to the effects since then, but I noticed it because of the place I worked at the time) the cost of most every everyday items like milk, bread, cereal, etc… started going up before the wage increase even went into effect (the suppliers costs went up drastically), then when it did go into effect the cost went up more! The first increase was to adjust for the increase and the second surge was blamed on inflation, which really hadn't had the opportunity to make a difference yet?

    I don’t see businesses waiting until after the increases go into effect to start adjusting their prices? If you are right it will be the first time it has ever happened?

    It will probably cause a slight rise in unemployment over the short term, but that will eventually even out as well.
    It has rarely effected employment as long as it isn’t to drastic an increase, a $2-5 jump might have some companies laying off employees and placing the bulk of the extra work on those who may already be overworked, but a gradual increase doesn’t seem to effect employment as much as it does costs? They may also start laying off full time employees and hiring casual part timers, but most businesses will make adjustments to accommodate the increase? Unless of course more companies move their operations to Mexico, or some other 3rd world sweat shop facility?

    Not much point arguing over it, anyway. It's going to pass in Congress (already passed in the House), and Bush has said he'll support it, providing tax relief is given to small businesses to help cope with the increased employment costs, which Democrats have indicated they will concede to. Pretty much a done deal.
    Not arguing the point at all, just discussing the possible effects? Like most things it will look good on paper and will definately be used for future political fodder, but other than that we will still have families that work and have to depend on the government for subsidies, that the majority of companies will wind up paying for, one way or the other?

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    Re: Raising the Minimum Wage Will NOT Hurt Good Businesses

    I don't disagree with the increase...I just think it's a half-as* solution.

    The real issue is one of education. If you don't want a minimum wage job...go get an education.

    I just refuse to believe that the idea of a "minimum wage" was actually designed for people to live on. Even $7 an hour isn't enough to really live on. I just feel like these types of things feed the lazy people who refuse to educate themselves. It doesn't take a lot of education to get a job making enough to live on. Making a small change is pretty simple stuff.

    Typing...ms office...clerical work...basic bookkeeping. These are classes that my local highschool offers for $10 during the evenings. And it's open to people from other communities.

    Minimum wage jobs should be for high-school and college kids so they can "build character". Would you like Fries with that?

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    Re: Raising the Minimum Wage Will NOT Hurt Good Businesses

    Quote Originally Posted by Joe Sixpack
    yossarian;

    If the minimum wage is $5.15, and let’s say the minimum wage goes up to $6, for example, the people who have worked there a few years to reach the level of $6 an hour, are not going to get a $.95, increase in pay, and the new guy they might hire tomorrow will start at $6? If that isn’t a pay cut then I am not sure how else to describe it, but the work and time they have invested don’t mean squat and they are now at the bottom of the pay scale, again?
    Not really true. This happens in many industries paying much higher than minimum wage. Look at the IT sector.

    When I came out of school IT people were so in demand I had 5 offers. I went to a company for roughly $50K out of college. I was making as much as people who had been there 10 years.

    That's life in the big city. It isn't the same as a pay cut. If those people aren't happy with their wage they could go say "give me a raise or I'm outta here." And then the employer would have to deal with possibly losing a seasoned (possibly good) employee. Which is very expensive. High turnover is not good.

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    Re: Raising the Minimum Wage Will NOT Hurt Good Businesses

    Quote Originally Posted by Joe Sixpack
    yossarian;



    If the minimum wage is $5.15, and let’s say the minimum wage goes up to $6, for example, the people who have worked there a few years to reach the level of $6 an hour, are not going to get a $.95, increase in pay, and the new guy they might hire tomorrow will start at $6? If that isn’t a pay cut then I am not sure how else to describe it, but the work and time they have invested don’t mean squat and they are now at the bottom of the pay scale, again?



    Really? In the 80’s when the minimum wage was increased (haven’t really paid much attention to the effects since then, but I noticed it because of the place I worked at the time) the cost of most every everyday items like milk, bread, cereal, etc… started going up before the wage increase even went into effect (the suppliers costs went up drastically), then when it did go into effect the cost went up more! The first increase was to adjust for the increase and the second surge was blamed on inflation, which really hadn't had the opportunity to make a difference yet?

    I don’t see businesses waiting until after the increases go into effect to start adjusting their prices? If you are right it will be the first time it has ever happened?



    It has rarely effected employment as long as it isn’t to drastic an increase, a $2-5 jump might have some companies laying off employees and placing the bulk of the extra work on those who may already be overworked, but a gradual increase doesn’t seem to effect employment as much as it does costs? They may also start laying off full time employees and hiring casual part timers, but most businesses will make adjustments to accommodate the increase? Unless of course more companies move their operations to Mexico, or some other 3rd world sweat shop facility?



    Not arguing the point at all, just discussing the possible effects? Like most things it will look good on paper and will definately be used for future political fodder, but other than that we will still have families that work and have to depend on the government for subsidies, that the majority of companies will wind up paying for, one way or the other?

    I see what you're saying now with regards to a "pay cut" for those who have earned promotions. It's a good point. Any time new legislation is passed, it has positive effects for some and negative effects for others. There's no way around it. But I don't think that's enough justification to leave minimum wage where it is... it won't hurt those people as much as it will help the ones who get a raise, in my opinion.

    Also, the new minimum wage proposed is $7.25/hr, so economists do expect a slight increase in the unemployment level. But again, tax breaks will probably be added to the legislation before it goes all the way through the system, so that will offset it somewhat.

    And as far as the increase in prices -- yes, the price of goods will go up, but not all of them and not all at once. The marketplace today is much more competitive than it was in the 80s, and I don't think we'll feel the effects of it to the same degree.

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    Re: Raising the Minimum Wage Will NOT Hurt Good Businesses

    Jreed;
    Not really true. This happens in many industries paying much higher than minimum wage. Look at the IT sector.

    When I came out of school IT people were so in demand I had 5 offers. I went to a company for roughly $50K out of college. I was making as much as people who had been there 10 years.
    Although I appreciate your example, it really has little to do with trying to help people provide the basic necessities so as to lesson the burden on the government? Which I believe is more of the point to the minimum wage debate. $50,000.00, give or take, a year isn’t going to change your ability to maintain an existence, and or stay ahead of the normal cost trends! You certainly are not going to get rich but you can at least put money back for emergencies and increase your education if you so decide too.

    To quote a capitalistic scrooge, if they worked in the same position for 10 years, and haven't increased their viable worth, they don't deserve a pay raise, and maybe some new blood will help build incentive in those who want to stay ahead! (place evil laugh here!)

    yossarian;
    But I don't think that's enough justification to leave minimum wage where it is... it won't hurt those people as much as it will help the ones who get a raise, in my opinion.
    You don’t think it will raise the poverty level and place many more folks in that category?

    Also, the new minimum wage proposed is $7.25/hr, so economists do expect a slight increase in the unemployment level.
    Isn’t that supposed to be spread over a 4-6 year period though?

    But again, tax breaks will probably be added to the legislation before it goes all the way through the system, so that will offset it somewhat.
    More tax breaks which will only mean new taxes from another source? Businesses will pay for those tax breaks one way or the other? The gummint will get their money by robbing Peter to pay Paul, one of the major problems with our tax code, and the tax breaks so freely distributed to provide a quick fix to the problem!

    And as far as the increase in prices -- yes, the price of goods will go up, but not all of them and not all at once. The marketplace today is much more competitive than it was in the 80s, and I don't think we'll feel the effects of it to the same degree.
    Buying televisions, video consoles, and other toys might show to be competitive, but the cost of bread is the same pretty much any where ya go? These people are not the one’s out there making major purchases that could/would be considered necessarily competitive!

    Jreed touched on the problem that is plaguing the country right now? The fact that the workers, generally speaking in most markets do not have the leverage required to entice employers into paying them their actual worth, or the ability to demand wages that are comparable to the present cost of living? Which is why most responsible individuals making hourly wages must have multiple incomes, just to make ends meet!

    You don’t have to be a math major to realize that if you make $7 or $10 an hour, you really cannot feed yourself (much less a small family), pay rent (1 bedroom in this area is over $850 not including utilities), utilities, a car payment, insurance, gas, etc… Then if you have to get another job to provide you with the necessities, you will neither be able to put enough money away to further your education or have the time to go to school/study even if you did get funding from another source? Many of the people who are dependent on the government for subsidies have jobs? I believe that is a pathetic view on the standard of living our society has established?

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    Re: Raising the Minimum Wage Will NOT Hurt Good Businesses

    I think this is going to help. You keep saying "Oh, the price of food will go up, everything else will go up". The problem is it ALREADY has gone up and wages have NOT kept up with it, so right now people making minimum wage don't make it anyway. In Utah minimum wage is still sitting at $5.15/hr, and if you are making over $7/hr in my area you feel lucky. Yet, if both my husband and I were making $7/hr that would not be enough to cover rent, utility, phone, and food expenses. Excluding car insurance, daycare, and child support he pays for another child. Luckily, we both make more than that, however I'm glad this is happening. To many business's in my area abuse their employees by paying them minimum wage - which they cannot survive on.

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    Re: Raising the Minimum Wage Will NOT Hurt Good Businesses

    Quote Originally Posted by lisan23
    I think this is going to help. You keep saying "Oh, the price of food will go up, everything else will go up". The problem is it ALREADY has gone up and wages have NOT kept up with it, so right now people making minimum wage don't make it anyway. In Utah minimum wage is still sitting at $5.15/hr, and if you are making over $7/hr in my area you feel lucky. Yet, if both my husband and I were making $7/hr that would not be enough to cover rent, utility, phone, and food expenses. Excluding car insurance, daycare, and child support he pays for another child. Luckily, we both make more than that, however I'm glad this is happening. To many business's in my area abuse their employees by paying them minimum wage - which they cannot survive on.

    Accepting minimum wage is a choice, it's not abuse. If someone doesn't like it they can take a class and learn how to earn a better wage.

    I dated a girl in college...she was not terribly bright. (She did have 'other' redeeming characteristics :D ) Anyway...she did not have a college degree but taught herself how to type and learned the basics on MS Office. Got a job doing basic clarical work...10 years ago was making $10/hour. In her job she learned Office much better and got pretty good on the computer. Got another job less than one year later...$14 an hour.

    That's double the "new" minimum wage.
    She ended up joining the Navy, which was one of the best things to ever happen to me. But that's totally off topic. hahahahahaha

    My point is this: Working a minimum wage job is a choice, not abuse. raising the minimum wage just lets people unwilling to learn a new skill catch up with inflation. It's not really good or bad. I just think more people should be willing to learn new skills. But, that's life in the big city.
    Last edited by Jreed; 01-12-2007 at 12:23 AM.

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    Re: Raising the Minimum Wage Will NOT Hurt Good Businesses

    The minimum wage is and always has been an arbitrary figure. Nobody has ever explained the steps taken to get to the next number and it does not and has not reflected the needs of the lowest paid worker nor the capabilities of businesses. This issue has been and always will be simple political fodder to be blown into the atmosphere whenever some other issue becomes too troublesome.
    The terminally stupid and certifiably insane.

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    Re: Raising the Minimum Wage Will NOT Hurt Good Businesses

    It's not that I am necessarily against the increase? It is a long time coming! However the money has to come from somewhere, and I do not expect to see management taking a pay cut to make the adjustment? In fact that ain't happening!

    I am merely bringing up the cause and effect? Sure technically they will be getting a raise, on paper, but what will the cost be? Here's a quarter now give me a dollar for the effort, doesn't seem to be helping anything?

    In my own experience, and as a youngster I had several jobs. I was a paper boy (you don't see many of those any more, at least where I live) those jobs are being taken by adults who have made full time jobs out of the jobs that 10-15 kids used to do to break into the world of capitalism. I cleaned horse stalls, mowed grass, dug post holes, bagged & delivered groceries on a bike, washed dishes, worked as a fountain boy (when was the last time you saw one of those), and other assorted jobs that were predominately done by kids under the age of 16. These were minimum wage jobs. After I got my license I couldn't afford to work for minimum wage ($1,25 or so an hour) to keep up the expenses on the car (I also dabbed a bit in moto-cross), so I worked for a cotton gin during the season, and in the 70's made $100 a day (12 hour shifts), I helped at a dairy milking cows made $4-5 an hour, I worked at the local 5 & dime during the Christmas season and did piece work (putting together bicycles, swing sets, high chairs, strollers, etc...) could make around $5 an hour, I worked on job sights as a helper and did clean up which was good for about $3-4 an hour, when I graduated from High School, I didn't have the money for college even though I had good grades, so while I waited for the job I wanted in the military, from May to Jan in 77-78, I laid bricks for a housing developer, my pay was $350 per week take home (that's after taxes) and the houses we built sold for around $32,000.00 (lets see houses today go for hundreds of thousands and the workers on most of the crews around here are lucky to get $6.00 starting out), these were not considered minimum wage jobs, and the pay was in relation to the money that was created from the work, period!

    That is not the case today, all these jobs would be paying at or about minimum wage today, because management is taking all the money and putting it in their own pockets now? They pay what they can get away with and they get away with most of it! As I stated before, since workers have no leverage, the norm today is what ever you can cheat the workers out of is pocketed by management, and they deserve it cause mommy and daddy spent a lot of money to put them through college, and if all them lazy bastards that do all of the work want more money they need to get an education! (sarcasm)

    Unfortunately that doesn't work either because if we could "all" go to college to be doctors and lawyers, who would do all the menial tasks required to allow us all to live like the kings and queens we so richly deserve and who would wipe our filthy butts when the need arises?? (that's sarcasm and rhetorical of course)

    Well that was fun, but I was only trying to make a point! I am not against the minimum raise increase? I just don't think it is going to accomplish a whole lot? That's my opinion on the matter, and I won't apologize for it!

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    Re: Raising the Minimum Wage Will NOT Hurt Good Businesses

    Anyway...she did not have a college degree but taught herself how to type and learned the basics on MS Office. Got a job doing basic clarical work...10 years ago was making $10/hour.
    Most clerical jobs in my area pay about $6/hr. I have numerous clerical skills, but I do a phone type job because it pays more.

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    Re: Raising the Minimum Wage Will NOT Hurt Good Businesses

    Quote Originally Posted by Joe Sixpack
    It's not that I am necessarily against the increase? It is a long time coming! However the money has to come from somewhere, and I do not expect to see management taking a pay cut to make the adjustment? In fact that ain't happening!
    How about the government stop spending money on wars and rebuilding countries we destroy and use the home to help support industry in this country?

    Billions of dollars would go a long way towards job creation and higher wages.


    BTW, Ford will be laying off a lot of middle management this year. A lot of overpaid CEO's too. They are going to be doing some "downsizing" in 2007.

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    Last edited by sojustask; 01-12-2007 at 06:14 AM.

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    Re: Raising the Minimum Wage Will NOT Hurt Good Businesses

    If Ford didn't make such piece of junk cars then they wouldn't have to fire anyone. Their cars (especially the Focus) are the biggest piece of junk ever. I'd rather spend the same amount of $$ and get a Toyota, Honda, or Hyundai.

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    Re: Raising the Minimum Wage Will NOT Hurt Good Businesses

    Quote Originally Posted by lisan23
    If Ford didn't make such piece of junk cars then they wouldn't have to fire anyone. Their cars (especially the Focus) are the biggest piece of junk ever. I'd rather spend the same amount of $$ and get a Toyota, Honda, or Hyundai.
    Actually, they did a survey of American preferences of cars and 60% preferred Toyota, then Honda.

    I have a Taurus that is 12 years old, runs like a top and never gives me any trouble. And several times I've considered getting something new or newer and I always change my mind. I like my car, it loves me and behaves. LOL.

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