Tag: minimum wage

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Ultra-​Absurd?

minimum wage, coins, Walking Liberty, freedom

Sen. Josh Hawley (R‑Missouri) is oh-​so-​ultra.

USA Today dubs him a “conservative” in the title of a recent article on a proposed minimum wage hike, and then an “ultraconservative” (emphasis added) in the first word of the article itself. 

Why does this “ultraconservative” join a Democratic senator in raising the federal minimum wage to $15? They both seem to assume that minimum wage laws raise wages.

For hundreds of years, economists have argued they don’t. On the face of it, these laws merely prohibit jobs paid below a certain rate. They disemploy. 

When the government prohibits low-​wage compensation, businesses shift productive processes to keep afloat; when a factor is suddenly made more expensive, they adjust. With more automation, for example.

At least, the USA Today article mentions, briefly, that the Congressional Budget Office forecasts that some individual workers and families would see their livelihoods diminished by the higher minimum — which is the only part of the coverage of the new, more restrictive (higher) minimum wage regulation that gets to the meat of the issue: what minimum wage laws actually do. 

A related article back home in the Springfield News Leader (a member of the “USA TODAY NETWORK”) explores the question of Missouri’s minimum wage and what activist economists call the state’s “minimum living wage” — and it is relevant at least to this extent: states have different economic climates, and wage rates differ region to region in the United States, so it’s very relevant to a senator from his state affecting his state’s economy with a regulation applying equally to all states.

Which is to say that the minimum wage issue should be a state issue.

If an issue at all.

“Ultraconservative” Hawley’s bill is ultra-misguided.

This is Common Sense. I’m Paul Jacob.

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Exemptions, Not Repeal

If you light the fuse of a bomb, after warnings that this will cause it to explode, you should not be surprised at the explosion.

California’s lawmakers and governor recently imposed super-​high minimum wages for workers in fast-​food restaurants ($20 an hour) and workers in healthcare facilities ($25 an hour). When the legislation was in process, the impact on companies, customers, and job applicants was deemed irrelevant. What mattered was appeasing the labor lobby.

Governor Newsom is suddenly “realizing” (he’d been warned) that these new costs will also burden the state government, currently facing a $45 billion budget deficit.

But this isn’t causing him to seek repeal.

No. Instead, he has signed legislation granting an exception to the new minimum for fast-​food restaurants that are on government land. “Democrats don’t want the mandate interfering with government concession licenses,” The Wall Street Journal observes.

And Newsom also wants to defer the kick-​in of the new minimum wage for workers in healthcare facilities — which he projects would cost the state $4 billion more annually because of the impact on Medicaid and state-​paid health workers — until state revenue is in better shape. He would also permanently exempt state-​owned facilities from having to pay the new minimum.

Carveouts and minor delays are as far as the governor and lawmakers are willing to go. Whatever gets them past the uncomfortable present — the next moment and the one after are things to worry about later. With any luck, with time the voters will have forgotten the issue, and who caused what.

Exemptions are the order of the day for politicians and bureaucrats. Private sector businesses must remain on the rack.

This is Common Sense. I’m Paul Jacob.

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Dining Out on Cause and Effect

California, minimum wage, hamburgers, economics, wages, jobs

Could a barren, charred, devastated landscape be the actual intended goal?

In California as in Washington, lawmakers and chief executives apparently have a long list of nice things to destroy and are crossing them off one by one, as if on the payroll of aliens from outer space wanting to conquer earth without doing very much conquest-​work themselves.

Part 99‑C of the plan is to price entry-​level labor and entry-​level restaurant dining out of the market by hiking the minimum wage of fast-​food workers even further beyond the market rate for the labor and its actual productive value to employers: now to $20 an hour.

Already, prices for restaurant meals are going up, and restaurant workers are being laid off.

The $20 minimum is a compromise that restaurant owners accepted in lieu of probably paying a $22 per hour minimum. Like letting burglars take only most of the silverware and letting them return at will.

Even more looting of employers is to come, if employee and activist Angelica Hernandez has her way. “We’re going to have to keep speaking up and striking to make sure we are heard.” She wants her dough and doesn’t care about the consequences for others. Policymakers rush to appease her and those like her.

So is omni-​destruction the actual intended goal?

Or is it that the mental powers of the crusaders and politicians and too many voters don’t extend so far as the relationship between cause and effect?

This is Common Sense. I’m Paul Jacob.

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Subminimal Morality

Matt Thibodeau

He’s been at the job fourteen years. Congress may kill it.

Matt Thibodeau has disabilities that severely limit how productive he can be and thus how much he can contribute to the bottom line of his employer, Associated Production Services.

Under a longstanding exception to the federal minimum wage, Matt is paid $3.40 an hour for tasks like shrink-​wrapping and assembling packages. The rate makes his employment feasible. (The current federal minimum is $7.25.)

Some congressmen want to scrap this exception to the mandatory minimum, calling it unfair and “out of date.”

“I felt like they were being targeted because they couldn’t speak for themselves,” says Matt’s mom, “and so that made us parents even more determined to speak for them.”

What’s out of date, or was never justified to begin with, is Congress’s federal minimum wage regulation.

Any mandatory minimum wage discourages employers from hiring persons not yet productive enough to justify the cost of being employed at the dictated minimum. It prevents low-​skilled workers — on the outs of the economy — from getting a foot in the door.

Some employees initially paid only a few dollars an hour will soon improve their productivity and earn a higher wage. Others, like Matt, simply cannot advance further but can provide steady, conscientious labor within the compass of their abilities.

That’s fine. Each party to such an arrangement benefits. And his work enables Matt to be productive and valued, which is tremendously important to him. 

As it is important to all of us.

This is Common Sense. I’m Paul Jacob.

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Money for Robots and Representatives!

Rashida Tlaib, minimum wage, The Squad, economics,

Yesterday I addressed Senator Bernie Sanders’ minimum wage problem. Today it is member of Congress and “The Squad” Rashida Tlaib’s turn. She is unsatisfied with the just-​passed national $15/​hour minimum wage. 

She wants to make it $20.

Now a bidding war begins?

But not where laborers bid for jobs. Instead, a war in which restaurateurs bid for robots.

The point being that when you force up the costs of employing one factor in a production process, those who are trying to make a living as producers do not just fold and give their wealth away to rent/​purchase the newly exorbitant factor. They economize.

They make substitutions.

If I am not mistaken, basic economics has a term for the core concept … marginal something of something substitution. 

Why folks enamored of government regulation and prohibition (for the minimum wage law prohibits hiring help below a certain rate of pay) seem to think this elementary aspect of human behavior can safely be ignored is hard to figure.

At Reason, Billy Binion explains just how devastating Tlaib’s “one size fits all approach” would be for restaurants, “particularly those of the mom and pop variety.” What Tlaib demands, for these wage contracts, “amounts to an increase of almost 940 percent.”

Binion cites one study predicting “that a median-​rated restaurant on Yelp (3.5 stars) was 14 percent more likely to close with each additional dollar added to the tipped wage.”

If restaurants go out of business, new businesses would emerge, admittedly. Say, a return of the Automat!

While young folks look up that term, we oldsters wonder if these automation-​minded entrepreneurs will fund Tlaib’s re-​election campaign.

This is Common Sense. I’m Paul Jacob. 

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Rashida Tlaib, minimum wage, The Squad, economics,

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Bernie and Economic Law

Bernie Sanders, minimum wage,

One of the things Vermont Senator Bernie Sanders is known for is his push for a $15 per hour “living wage.” But this is politics — a policy position is never complete until its advocates demonstrate just how idiotic the policy actually is.

As Bernie just did.

His presidential campaign has been embroiled in labor union negotiations and a mini-scandal.

Some staffers have been paid a flat salary, not according to a per-​hour contract, making Bernie’s “living wage” commitment a bit murky. You see, these salaried employees worked longer hours than a typical 40-​hour work week (as is common in political campaigns), dipping their wage breakdown below the $15/​hour “minimum.” 

Now, no one is more deserving of this bit of policy blowback than resplendent millionaire Bernie Sanders.

Yet, it’s his campaign’s response that is especially droll: reduced hours!

So, while in one sense staffers got a pay raise, they did not get more money. Which is, as Matthew Yglesias acknowledged at Vox, “exactly the point that opponents of minimum wage increases are always making — if you force employers to pay more, they’re going to respond by cutting back elsewhere.” 

Ryan McMaken, at mises​.org, dug deeper, noting that there are a number of ways that the new union deal could amount to cuts in real wages. By “cutting worker hours, the Sanders campaign elected to provide fewer ‘services’ in the form of campaign activities. In practice, this will likely mean fewer rallies, less travel, or fewer television ads.” Less chance for growth. And decreased likelihood for increased employment of other workers.

Not exactly shocking. But a lesson. A terrible way to run a business.

Or a campaign. 

Perhaps we should say, “Thanks, Bernie!”

This is Common Sense. I’m Paul Jacob.

Bernie Sanders, minimum wage,

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Pick a Number

Bernie Sanders, 15, minimum wage, magic,

Is the number 15 “magical”?

The “democratic socialists” now dominating the Democratic Party first went for the $15 national minimum wage notion. Now it’s a cap on consumer credit interest rates, at 15 percent.

What’s next, 15 mph speed limits? Age 15 allowed to vote? 

Fifteen men on a dead man’s chest?

At Reason, Peter Suderman explains why “Bernie Sanders’ New Plan Will Make It Tougher for Poor People to Get Credit Cards.” The arguments proffered by Senator Sanders and his House co-​sponsor, Rep. Alexandria Ocasio-​Cortez, more than “suggest that people who choose to use payday loans don’t, and perhaps can’t, understand the choices they are making.… It is a form of benevolent condescension built on the belief that poor people can’t count.”

Now, it may be that, generally, poor people do not figure their finances as well as better-​off people. In fact, that’s demonstrated in the literature. But is that really the point?

The problem is, the methods they choose to help the poor make the poor less well-​off. Because they take away options: “What Sanders is actually bragging about is eliminating choices,” Suderman explains. “In essence, Sanders is proud of having eliminated useful financial tools for the poor.”

What’s really going on here is the magic of persuasion. Fifteen is a “sticky number.” It will be used again and again as self-​described socialists push for more and more unworkable government.

A bit of enchantment that just so happens to make one persuader a three-​house millionaire … and a bartender from the Bronx the talk of the nation.

This is Common Sense. I’m Paul Jacob.

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Minimum Sense

Washington, D.C., City Council, Representation, democracy, initiative, minimum wage, association, Counsel,

Suddenly, the Democrats who dominate the Washington, D.C., City Council seem unwilling to increase the minimum wage for tipped workers — despite their official support for legislative minimum wage rate increases.

And a vote of the citizens. 

Initiative 77, which passed easily last month, requires restaurant employers to incrementally increase the “tipped wage” until rates “reach what will be the uniform minimum of $15 an hour by 2025.”

“Initiative 77 is something I believe will be very harmful to our restaurants and, more importantly, our restaurant workers,” argues Councilman Jack Evans, one of three council members pledging repeal. 

A spokesperson for One Fair Wage DC, calling a repeal “deeply undemocratic,” notes that “D.C. voters don’t like it when Republicans in Congress do it, and we trust council will not stoop to that level.”

Yet it would not be “the first time the city’s lawmakers overturned a decision by the electorate,” the Washington Post reminds readers, citing “a decision in 2001 when the D.C. Council overturned term limits approved by voters.”*

I’m all for ballot measures to decide any issue the people have a right to decide … limited by all of our inalienable rights as individuals. Minimum wage laws constitute an abuse of our First Amendment right to association, which neither legislatures nor voters may legitimately abridge. 

That the council doesn’t recognize this right of association, yet nonetheless thinks it should nullify a vote of the people tells you everything you need to know about the sorry state of representation.

This is Common Sense. I’m Paul Jacob.

 

 

* And even quoting moi on the incredible hypocrisy dating back 17 years: “If you’re in a city struggling to get representation in the first place, that’s a terrible signal to say that your own local officials don’t respect their own citizens.”

 

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Accountability general freedom nannyism national politics & policies political challengers porkbarrel politics responsibility too much government U.S. Constitution

How Bernie’s Like Trump

Bernie Sanders, Donald Trump, minimum wage, jobs, anchor, bait and switch, negotiation, bargaining

Yesterday I made fun of Bernie Sanders’ jobs guarantee idea. Today, let’s take it seriously.

Not as policy, mind you. As propaganda.

It’s not worth talking about as a policy because there is no policy yet. “It is not clear when Sanders will announce the plan,” Fox News relates, “and a Sanders spokesperson told the Post that it was still being crafted.” 

It is mere advocacy. A press release. Vaporware.

But that’s the key to it, really. The jobs guarantee isn’t policy. 

It’s a ploy.

Bernie Sanders knows there is hardly a hope of passing such a bill. He probably understands that the current fiscal mess precludes it. He might even understand that it is literally a horrible notion, the worst policy idea in the world, and he would still have reason to pitch for it relentlessly.

Because what he is really after is the hiking of the national minimum wage to $15/​hr. That is the next Democratic ratcheting up of government. And by insisting that the government guarantee $15/​hr jobs, he is readying everyone to accept, as a compromise, the hiking of the minimum wage to that very figure.

Yesterday I noted a link between socialism and slavery. But minimum wages link up not with slavery but unemployment.

Which Bernie knows all too well. Before he got in politics, he was a layabout, a bum.

Not like President Trump at all, that way.

But by fixing on one key, “anchor” concept ($15/​hr) and demanding the Moon, he might just get his mere lunacy, er, minimum wage hike.

And that is a Trumpian* ploy.

This is Common Sense. I’m Paul Jacob.

 

* Though Trump’s better. His “linguistic killshots” are far more memorable … because funny and (usually) visual.

 

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Minimally Mugged By Reality

minimum wage, business, pay, workers, fallacy, profit, Bernie Sanders

It should shock no one: forcing businesses to pay steep minimum wages ends up pushing some businesses out … of business. Yesterday I looked at what minimum wage laws can do to low-​skilled workers. Today, consider the employers. When we make it harder to turn a profit, it becomes harder to profit. Businesses that can’t at least break even close their doors.

Many business owners are inclined to promote, politically, politicians who in turn support minimum wage hikes. Do they change their minds when mugged by reality? Alas, the trauma alone won’t convert a person to principled allegiance to free markets. 

I was reminded of this fact by a story about business owners in Minneapolis who stress their Sandernista credentials. 

“I’m a bleeding-​heart liberal and I’m a big Bernie Sanders supporter,” says businesswoman Jane Elias, an art store owner. “But this whole flat-​out, $15, one-​size-​fits all is just wrong.” Another victim, restaurant owner Heather Bray, says she’s a “proud, proud progressive.” But: “The arithmetic doesn’t work. People will not continue to go to budget-​conscious restaurants when they’re no longer budget-conscious.”

So … arbitrary minimum-​wage demands don’t add up in light of the demands of running their businesses under their particular circumstances. Well, no disagreement here. But take it further, please. Keep doing the math. The bottom line is that everybody, not just you — and always, not just sometimes — has the right to make his own decisions about his own life and property.

And profit by it.

This is Common Sense. I’m Paul Jacob.

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