The rhetoric of the minimum wage

[Ishmael]

The fact is the government poorly educates them in the first place and then tells them by statute they can't negotiate for lower wages to gain on the job training. To me this represents a focused discrimination. I think it is backed up by their unemployment figures as well.

There's not a doubt in my mind that you would find the numbers back it up. However, it's more complex than that and you would be sorely pressed to make the case that minimum wage law is the sole cause. I wouldn't even begin to go that far. It's just another straw on the camels back.

Ishmael

 

[RightField]

I really liked this article by Walter Williams that AJ cited:

There are decent people, without a selfish hidden agenda, who support increases in minimum wages as a means to help low-skilled workers, and there are other decent people, with the identical goal, who strongly oppose increases in the minimum wage. So the question is: How can people who share the same goals, helping low-skilled workers, come up with polar opposite means that produce polar opposite results?

It all depends on one's initial premise. It would do us some good to make our initial premises explicit and check them against reality. One initial premise is that an employer needs a certain number of workers to accomplish a given task. That being the case, increasing the minimum wage simply means that all low-skilled workers will enjoy a higher salary and employers will have lower profits and/or customers will pay higher prices. With this vision of how the world operates, the logic of increasing the minimum wage as a means of helping low-skilled workers is impeccable.

Another initial premise is that there is no fixed number of workers necessary to accomplish a given task. Employers might be able to substitute capital for labor such as using dishwashing machines instead of dishwashers, automatic elevators instead of elevator operators, self-service gasoline stations rather than full-service gasoline stations, online reservations rather than reservation clerks or relocating their operation overseas. People who share this initial premise can still have concern for the welfare of low-skilled workers but argue that increasing minimum wages will cause unemployment for some of them and deny job opportunities for others. Given their initial premise, the logic of their argument is also impeccable.

Thus, the question to decide is which initial premise best describes how the world operates. Is it the one that says there's a fixed number of workers necessary to perform a given task, or the one that says employers have flexibility in the mix of workers and capital they use and where in the world they can choose to manufacture? I think the latter description more properly describes how the world operates.

Place yourself in the position of an employer and ask: If a worker costs me, say, $7 in wages, plus mandated fringes such as Social Security, unemployment compensation, sick and vacation leave, making the true hourly cost of hiring a worker $9 an hour, does it pay me to hire a worker who's so unfortunate to have skills that enable him to produce only $5 or $6 worth of value per hour? Most employers would conclude that doing so would be a losing economic proposition.

There are a couple other villains in the piece that force employers to respond to increases in wages that exceed a worker's productivity. If he did hire such workers, he would earn lower profits. Soon, investors would abandon him and put their money where returns are higher.

There's another villain -- the customer. If the employer retained workers whose wages exceeded their productivity, to cover his costs he would have to charge you and me higher product or service prices. I don't know about you, but I prefer lower prices to higher prices, and I'd switch my patronage to those firms who adjusted to the higher labor cost.

Congress can easily mandate higher wages, but they cannot mandate higher worker productivity or that employers hire a particular worker in the first place. Those of us who truly care about the welfare of low-skilled workers should focus our energies on helping them to become more productive, and a good start would be to do something about the rotten education that many receive.


Dr. Williams serves on the faculty of George Mason University as John M. Olin Distinguished Professor of Economics and is the author of More Liberty Means Less Government: Our Founders Knew This Well.

 

[unregistered]

 

[Cap’n AMatrixca]

The fact is the government poorly educates them in the first place and then tells them by statute they can't negotiate for lower wages to gain on the job training. To me this represents a focused discrimination. I think it is backed up by their unemployment figures as well.

How do you force-feed education to a young man who's culture has him convinced that education is for whitey and just another tool of opression? You can fault the government for the failed social programs of the 60's onward that have helped fuel the alienation, but it this case, even I contend that any school has little chance of success in many urban areas.

Sharpton and Jackson still have a solid constituency.

Hell, we could see McKinney back in office yet!

What Nifong has done is placate that very constituency who seek Justice, not guilt.

What we need is a new approach to winning the hearts and minds before Islam gets its hooks into that hatred. You know they've been working the prisons for years now, and this new Senator Ellison comes straight from that movement, so you see them merging into the mainstream from the shadows, ready to step into the vacuum left by the cultural war on Christianity.

 

[Cap’n AMatrixca]

I don't see why all the hoolah over the same old tired feel good initiatives that liberals constantly bring up. Who the fuck works for minimum wage?

The damned illegals here (I meant guest workers) get 8 plus an hour.

I used to before the government took over setting the scale. After that, I always made more...

 

[unregistered]

 

[Cap’n AMatrixca]

There is no minimum wage for crack dealers and thieves...



But I agree, it's just more of the positive influence of government that has the best of intentions and the worst of results as it always results in yet another little loss of freedom.

 

[RightField]

It's the instability that it causes that bugs me. This little feel-good legislation causes some inflationary pressure which gets the unions on a push for higher wages. If employers push back then you start getting strikes and labor disputes and that kind of instability and if employers don't push back then inflation goes up higher and the cost of goods goes up until they can fine equilibrium and....well, foreign workers in places like India and China aren't getting a "legistated" pay increase so the cost of goods in those countries isn't going up making outsourcing look even more attractive and so on top of all the instability, the acceleration of jobs overseas increases. On top of that, Dems want to put more regulation on business (to make if "fair"), eliminate the planned tax reductions and loosen the money supply and that styfles innovation and demand so job creation starts faltering and within 6 years we have an economy that's starting to look like Jimmy Carters.

 

[RightField]

Good points Cap'n, I thought about them too but then we shouldn't excaberate the problem by telling them they cannot negotiate for lower wages to gain on the job training if they so choose. However in todays overly regulated job market with the litigation levels where they are and frothing lawyers preying on employers I doubt anyone would or could hire someone who, for instance, can't read a "High Voltage" sign or such.

Good point, I forgot to mention the free-for-all caused by the unleashing of the trial lawyers to litigate EVERYTHING.

But I disagree a little, I think this kind of feel-good legislation and the rest of the democratic platform will soon cause problems for everyone, not just those seeking entry-level work.

 

[RightField]

I didn't get to read the Thomas Sowell article, where'd it go?

 

[Cap’n AMatrixca]

Townhall.com or follow the links on Drudge if that one doesn't work.

 

[RightField]

Townhall.com or follow the links on Drudge if that one doesn't work.

Thanks. Adios, time to head out to the office. Have a good day.

 

[Cap’n AMatrixca]

I don't see instability, just a little retardation...

 

[unregistered]

 

[Cap’n AMatrixca]

Hillary has reserved that for her Presidential run...

 

[MakersandIce]

Is it time to abolish the minimum wage?

http://www.sacbee.com/110/story/102528.html

George F. Will: Don't mandate a minimum wage
By George F. Will -
Published 12:00 am PST Thursday, January 4, 2007
Story appeared in EDITORIALS section, Page B7


A federal minimum wage is an idea whose time came in 1938, when public confidence in markets was at a nadir and the federal government's confidence in itself was at an apogee. This, in spite of the fact that, with the 19 percent unemployment and the economy contracting by 6.2 percent in 1938, the New Deal's attempts had failed to end, and perhaps had prolonged, the Depression.

Today, raising the federal minimum wage is a bad idea whose time has come, for two reasons, the first of which is that some Democrats have a chronic and evidently incurable disease -- New Deal Nostalgia. Witness Nancy Pelosi's "100 hours" agenda, a genuflection to FDR's 100 Days.

Second, the president has endorsed raising the hourly minimum from $5.15 to $7.25 by spring 2009. The Democratic Congress will favor that, and he may reason that vetoing this minor episode of moral grandstanding would not be worth the predictable uproar.

Democrats consider the minimum wage increase a signature issue. So, consider what it says about them: Most of the working poor earn more than the minimum wage, and most of the 0.6 percent (479,000 in 2005) of America's wage workers earning the minimum wage are not poor. Only one in five workers earning the federal minimum live in families with household earnings below the poverty line. Sixty percent work part-time and their average household income is well over $40,000. (The average and median household incomes are $63,344 and $46,326, respectively.) Forty percent of American workers are salaried. Of the 75.6 million paid by the hour, 1.9 million earn the federal minimum or less, and of these, more than half are under 25 and more than a quarter are between 16 and 19. Many are students or other part-time workers.

Sixty percent of those earning the federal minimum or less work in restaurants and bars and are earning tips -- often untaxed, perhaps -- in addition to their wages. Two-thirds of those earning the federal minimum today will, a year from now, have been promoted and be earning 10 percent more. Raising the minimum wage predictably makes work more attractive relative to school for some teenagers, and raises the dropout rate.

The federal minimum wage has not been raised since 1997, so 29 states with 70 percent of the nation's workforce have set minimum wages of between $6.15 and $7.93 an hour. Because aging liberals, clinging to the moral clarities of their youth, also have 1960s Nostalgia, they are suspicious of states' rights. But regarding minimum wages, many have become Brandeisians, invoking Justice Louis Brandeis' thought about states being laboratories of democracy.

But wait. Ronald Blackwell, the AFL-CIO's chief economist, tells the New York Times that state minimum wage differences entice companies to shift jobs to lower-wage states. So states' rights are bad, after all, at least concerning diversity of economic policies.

The problem is that demand for almost everything is elastic: When the price of something goes up, demand for it goes down. Obviously, were the minimum wage to jump to, say, $15 an hour, that would cause significant unemployment among persons just reaching for the bottom rung of the ladder of upward mobility. But suppose those scholars are correct who say that when the minimum wage is low and is increased slowly -- proposed legislation would take it to $7.25 in three steps -- the negative impact on employment is negligible. Still, because there are large differences among states' costs of living, and the nature of their economies, Sen. Jim DeMint, R-S.C., sensibly suggests that each state should be allowed to set a lower minimum.

But the minimum wage should be the same everywhere: $0. Labor is a commodity; governments make messes when they decree commodities' prices. Washington should let the market do well what Washington does poorly. But that is a good idea whose time will never come again.

 

[unregistered]

 

[Cap’n AMatrixca]

This week, Missourah's new minimum wage went into effect. What's the first effect? The local city workers went apeshit because they didn't get a raise. Of course, they make above the minimum wage, but community pressure is forcing the city council to meet and consider across the board pay raises for city workers.

You can see the logic. If the unskilled are worth more, then surely we are worth more too! DAMNIT!!!

Okay Democrats, where do you think they are going to get the money for a pay raise?

 

[RobDownSouth]

Is it time to abolish the minimum wage?

<snip>

But the minimum wage should be the same everywhere: $0. Labor is a commodity; governments make messes when they decree commodities' prices. Washington should let the market do well what Washington does poorly. But that is a good idea whose time will never come again.

US Code Title 15, Ch. 1 § 17: The labor of a human being is not a commodity or article of commerce.

George Will hates America.

 

[Ishmael]

Is it time to abolish the minimum wage?

http://www.sacbee.com/110/story/102528.html

George F. Will: Don't mandate a minimum wage
By George F. Will -
Published 12:00 am PST Thursday, January 4, 2007
Story appeared in EDITORIALS section, Page B7


A federal minimum wage is an idea whose time came in 1938, when public confidence in markets was at a nadir and the federal government's confidence in itself was at an apogee. This, in spite of the fact that, with the 19 percent unemployment and the economy contracting by 6.2 percent in 1938, the New Deal's attempts had failed to end, and perhaps had prolonged, the Depression.

~~~~~snip for brevity~~~~~~~~~

But the minimum wage should be the same everywhere: $0. Labor is a commodity; governments make messes when they decree commodities' prices. Washington should let the market do well what Washington does poorly. But that is a good idea whose time will never come again.

The lawmakers know all those stats by heart. They don't give a shit because the general public is too fucking ignorant to look them up and their eyes would glaze over if they did. Just like when you tell them the facts you can see the lights behind their eyes go out.

The subject of 'Poverty in America' has been demagouged into subatomic particles. So much so that everyone thinks everyone else is living in squalor and starving to death.

Besides, it just looks so damn good to want to play Santa Claus. Especially if you can do with with the publics treasury or make someone else pay.

So, it will pass and be signed into law. The Democrats will crow about how THEY gave america a raise. And 4 years from now it will be as if nothing happened and 'by God' those poor, starving, sons of bitches still won't be able to raise a family of 4 on minimum wage. They have a big clock set in the Party headquaters that alarms when it's time to blow smoke up the publics ass again.

Ishmael

 

[unregistered]

 

[Pyro Paul]

Is it time to abolish the minimum wage?

But the minimum wage should be the same everywhere: $0. Labor is a commodity; governments make messes when they decree commodities' prices. Washington should let the market do well what Washington does poorly. But that is a good idea whose time will never come again.[/I]

so with this, you are suggesting we allow Large companies to pay their workers 15 cents a day?

 

[Ishmael]

Then there is the real law, the Law Of Economics.

This is the Title that Rob 'The Fucking Troll" has cited;

17. Antitrust laws not applicable to labor organizations
How Current is This?

The labor of a human being is not a commodity or article of commerce. Nothing contained in the antitrust laws shall be construed to forbid the existence and operation of labor, agricultural, or horticultural organizations, instituted for the purposes of mutual help, and not having capital stock or conducted for profit, or to forbid or restrain individual members of such organizations from lawfully carrying out the legitimate objects thereof; nor shall such organizations, or the members thereof, be held or construed to be illegal combinations or conspiracies in restraint of trade, under the antitrust laws.

The definition as applied serves two purposes. It basically allows unions to engage in monopolies and restraint of trade with impunity. It's secondary purpose has to do with tax law. If you were bartering your labor for just compensation, you would NOT have 'income.' It would be a net 0 transaction and we just can't have that, can we?

Ishmael

 

[unregistered]

 

[Cap’n AMatrixca]

Getting it right has never been high on Throb's list of priorities...