Tag: minimum wage

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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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folly free trade & free markets general freedom ideological culture moral hazard nannyism national politics & policies property rights responsibility too much government

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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Accountability ideological culture local leaders moral hazard nannyism national politics & policies responsibility too much government

Minimum Wage Laboratory

minimum wage, experiment, Seattle, scientific method, social engineering

Not every popular idea about government policy is good. Or bad. How do we tell the difference?

One way is evidence.

The modern administrative state was promoted heavily by social scientists who thought that piecemeal social engineering should be tested. A few even thought that the older experiment in limited-government federal republicanism gave Americans a near-ideal testing ground: “the laboratory of democracy.”*

Activists and politicians have been pushing big increases in the minimum wage in cities around the country. Seattle, Washington, has been one of those, establishing an $11.00/hour legal minimum in April of 2015, then raising that limit by two dollars in 2016. Now the results are in.

The City of Seattle commissioned a study of “the wage, employment, and hours effects of the first and second phase-in of the Seattle Minimum Wage Ordinance,” and it shows clear results:

  1. The first hike led to “modest reductions in unemployment” but scant change in over-all low-wage employment.
  2. The second hike led to a 9 percent reduction in hours worked at wages below $19/hour;
  3. a reduction of over $100 million per year in total payroll for low-wage jobs; and
  4. total payroll losses average about $125 per job per month.

Jonathan Meer, an economist teaching at Texas A&M University, calls this an “unmitigated disaster.” But he notices that a backlash against it was immediate.

To those who object: do you object to the method or the conclusions?

The only halfway plausible rationale for social engineering of this kind — top-down interventions into markets — has been “social science.” Rejecting evidence is to reject science, which is to reject . . . the minimum wage idea itself.

This is Common Sense. I’m Paul Jacob.

 

* The idea is to test policy tried in one location against its goals. What works should be mimicked, but only after the evidence is in and results accepted as good. And dropped in cases where not.

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Accountability folly free trade & free markets general freedom initiative, referendum, and recall nannyism national politics & policies property rights responsibility too much government

Minimum Shock

minimum wage, closure, restaurant, business, prohibition, wages, pay, Berkeley, San Francisco

“Three restaurants vacated the Bay this week, with Berkeley’s Bistro Liaison getting the most attention,” the San Francisco edition of Eater informs us. “It’s a bittersweet exit for the owners, who plan to start new careers.”

The week in question was in February. But this was not an isolated event. Sixty-four Bay-area restaurants and fast food joints closed their doors this last winter.

That is a lot of closures.

Why?

Every eatery has a different story, but the entry December 17* provides a big clue: minimum wage hikes.

Citizens should hardly be surprised. They got what they asked for. The minimum wage went up to $13.00 per hour last July, and will go up another two bucks next year. And this was the result of a citizen initiative. “On November 4, 2014, San Francisco voters passed Proposition J, raising the minimum wage to $15.00 by 2018,” the City Office of Labor Standards and Enforcement tells us.

And the thing about minimum wage laws is that they do not — either by magic or by law — directly raise any wages. They, by law and quite directly, prohibit wage contracts below the minimum established.

Businesses then react, struggling to accommodate the newly imposed costs. Sometimes they keep all their employees and economize on other inputs, but often they must re-arrange hours and workers and whole production schemes.

If hemmed in elsewhere, they just go out of business.

Just as one should expect, according to the law of supply and demand.**

Citizens might wish to reconsider. That is, initiate a measure to repeal a previously successful initiative . . . that gave us this unsuccessful policy.

This is Common Sense. I’m Paul Jacob.

 

* The entry reads thusly: “OAKLAND — alaMar Kitchen and Bar as you know it is shuttering on December 17, but will reopen in the new year with a fast casual format. The owner points to minimum wage raises and the cost of doing business in the Bay Area as the reasons cited for the closure/change.”

** It is often said that businesses just “raise prices” and “pass along the costs” to consumers in general, but, for reasons of supply and demand, they cannot do this without decreasing sales and thus revenue.

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Accountability folly national politics & policies responsibility

Greedy Union Bosses

union, labor, hypocrites, SEIU, Service Employees International Union, illustration

Since the Service Employees International Union (SEIU) is a union, you might assume it holds that workers should be unionized.

Or, at the very least, that workers should have a right to unionize, if they so choose.

But you would be mistaken.

Similarly, many unions, most notably the SEIU, have been quite vocal in urging — demanding — that cities and states and the federal government require businesses to pay their employees a minimum wage of $15 an hour. The “Fight for 15” is their fight, no?

No.

Well, yes and no. It may be a fight they’ve picked, but unions such as the SEIU are on both sides of it. They’re fighting mighty hard to make other employers pay at least $15 an hour to employees, sure, but they’ve apparently not got an ounce of fight left to muster up the $15 an hour in pay for their own employees.

Last month, the pro-labor In These Times covered the struggle between the SEIU and those working for the SEIU’s “Fight for $15” campaign to form their own union as well as to receive an hourly wage of $15.

“We don’t have the right to join a union that we’re fighting for other workers to have,” one worker explained. “When we’re fighting for everyone to have $15 an hour, we should have it ourselves.”

“It is true that over the labor movement’s long history,” confirmed David Moberg, senior editor at In These Times, “many unions have fought with their staff over whether staff could or should organize.”

“Practice what you preach,” Moberg admonished the unions.

And if that’s so difficult for the SEIU, maybe what it preaches is the problem.

This is Common Sense. I’m Paul Jacob.

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union, labor, hypocrites, SEIU, Service Employees International Union, illustration

 

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education and schooling folly free trade & free markets general freedom ideological culture national politics & policies responsibility too much government

Miseducated and Unemployed

minimum wage, illustration, money, economics

The persistence of the issue of raising the minimum wage is an indictment of public education, for at least two reasons:

  1. It shows that “our” schools are not teaching basic economics. Generally, those who think minimum wages help the poor do not understand what wages are (price of labor), why they are paid (worker productivity bolstering the bottom line) and what a minimum wage law is (a prohibition on contracting for work below the arbitrary government-prescribed rate).
  2. It shows that schools aren’t preparing the young for real-world activity. Wages track productivity. If disturbingly large numbers of people are affected by the minimum, that means they haven’t been adequately trained in the skills they need.

Bernie Sanders wanted a 15-buck minimum. Hillary went on record supporting a 12-buck rate. Donald Trump would prefer that the minimum wage regulations be enacted by the states, though he says a hike to ten dollars per hour would really help the less fortunate.

It wouldn’t.

That is the tacit theme in a Wall Street Journal piece on the recent minimum wage rate hikes in 14 American cities, including the nation’s capital. A classic, succinct article on BET makes the point even more stark: a duo of economists from Trinity University “report that when a state, or the federal government, increases the minimum wage, Black teens are more likely to be laid off. The duo analyzed 600,000 data points, which the Employment Policies Institute says included ‘a robust sample of minority young adults unprecedented in previous studies on the minimum wage.’”

Just as theory predicts.

Could it be that politicians promise a raise because they believe government-schooled Americans too miseducated to know better?

This is Common Sense. I’m Paul Jacob.

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minimum wage, illustration, money, economics