Tag: minimum wage

Categories
free trade & free markets national politics & policies

Bypassing McDonald’s to Fly

When a professional academic economist and poverty specialist like Prof. Robert Plotnick defends a radically higher minimum wage law, as has been put in place in SeaTac, Washington, and was just enacted (with elaborate postponement/implementation periods) in Seattle, I raise an eyebrow. What am I missing?

But then I read what he actually said: “People aren’t going to stop flying out of Sea Tac [airport] because it costs a little more to buy a hamburger or a beer,” he says.

No. They won’t.

But that’s irrelevant. With prices higher for fast food, there’s certainly going to be no increase in fast food purchases. People will still go to the airport, but more often avoid the fast food joints, in SeaTac or Seattle.

And, over time, as businesses struggle with reduced revenue, or at least reduced profits, fewer of those businesses will survive. And folks with better qualifications — say, better language skills, better people skills, or a higher work ethic  — will move in to the forced higher-wage area (the $15/hour minimum in both Sea Tac and Seattle is the highest city rate in the nation) and will replace less skilled workers.

Increasing poverty, not decreasing it: stultifying progress, both personal and in general.

Already the horror stories are piling up: check out the stories in the Seattle Times. (See economist David Henderson’s discussion on EconLog.)

One of the problems was inadvertently suggested by our president, who recently intoned, “Let’s declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty.”

Great. We’ll have fewer low-income workers working full time.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets initiative, referendum, and recall national politics & policies

The 22 Franc Minimum Wage

Fox News’s Bill O’Reilly and 2012 Republican presidential candidate Mitt Romney agree with America’s progressives: raising the minimum wage is common sense.

The Swiss had a chance to prove their solidarity with that notion yesterday, when they voted on whether to establish a minimum wage in the country, a rather high one of 4000 francs per month (something close to 22 francs per hour). They voted the proposal down.

Overwhelmingly. By over 76 percent.Frederic Bastiat's classic essay, What Is Seen and What Is Unseen

Unlike in America, this minimum wage would have affected a huge hunk of the population. One out of ten Swiss workers earns less than the proposed minimum. In America, only about a single percentage of workers earns close to the national minimum.

This matters, as Frédéric Bastiat clearly explained, because price regulations can have two effects: a loss of production, or none at all — “either hurtful or superfluous.” No effect, when the price floor (as in a minimum wage) is set lower than the level most prices are already at (or, for which workers already work). But when the price floor gets set higher, goods go off the market — with too-high wage minimums, workers with low productivity cease to get hired.

Swiss voters could scarcely afford to risk the jobs of ten percent of the workforce.

In America, raising the minimum wage is usually a matter of sacrificing a few people (whom voters mostly don’t know — Bastiat’s “unseen”) while rejoicing in the higher wages of those workers retained (the “seen”).

In Switzerland, the government declared the down vote a victory for common sense.

Which it was.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets national politics & policies

Maximum Mixed Feelings

If a man with a gun claims he can get your boss to increase your pay, but that doing so might have the unfortunate result of killing your boss and/or ending your job altogether, what would you say?

“I have mixed feelings on it,” Rebecca Pentz-Jones told the Washington Post regarding legislation to increase Maryland’s minimum wage. It’s a case whereby a man with a gun (government) forces a pay raise, but accordingly risks her job and her employer’s business.

Mrs. Pentz-Jones works at Dollar Tree earning $7.95 an hour, but would rather make $10.10 an hour, the minimum being pushed by President Obama.

Polls show public support for upping wages, but Maryland Senate President Mike Miller argues, “We don’t just pass things because they’re popular.” Perhaps Miller has a larger perspective in mind. When pollsters ask people what they think of raising the minimum if the raise would increase unemployment, support for the hike flags.

Maryland Democrats haven’t downed enough of the president’s Kool-Aid. They fear the Congressional Budget Office analysis correctly predicts Obama’s higher minimum wage would cost 500,000 to a million people their jobs.

“I feel like I’m on a battleground,” explains Sen. Katherine Klausmeier of Baltimore County, “between trying to help a person make a living and trying to save my small businesses.”

Prince George’s County Del. Dereck Davis notes that a higher wage “will benefit some people, but at the expense of others” and “could result in the elimination of jobs.”

“It gets very confusing,” adds Sen. John Astle. “Sometimes it makes me wonder why we even have a minimum wage.”

Me, too, Senator.

This is Common Sense. I’m Paul Jacob.

Categories
too much government

Society’s Interest

“Shame on Republicans for blocking the resumption of long-term unemployment benefits for 1.3 million Americans,” writes Democratic Party cheerleader and Washington Post columnist Eugene Robinson.

“And shame on Democrats for letting them,” he adds, meaning that talking-head Ds on your TV set aren’t currently bloviating enough about this R treachery to suit Mr. Robinson . . . as if more is even frighteningly possible.

Robinson calls the GOP resistance to the extension of benefits paid beyond 52 weeks an “exercise in gratuitous inhumanity.” He tells of folks who lost good jobs during the ongoing economic unpleasantness, who have been looking for work unsuccessfully for over a year. “They are people whose lives have been buffeted by forces beyond their control,” he explains.

True enough, agonizing enough. Only a fool wouldn’t consider that, as I so often heard growing up, “there, but for the grace of God, go I.”

Robinson then asks, “Isn’t it in society’s interest to give them a chance?”

Well, what is that chance? A functioning, diverse job-creating market economy — not a politician-centered redistribution regime.

Robinson argues that (a) unemployment benefit payments will create jobs (so that unemployment, in a roundabout way, creates employment?), (b) it’s been done before (compelling, eh?), and (c) that the $25 billion dollar price tag is “little more than a rounding error.”

Which brings us back to the Democrats.

Republicans demand that Democrats prioritize spending — since money doesn’t grow on taxpayers — and find enough cuts to offset this itsy-bitsy, teensy-weensy “rounding error.”

The answering silence? Profound.

This is Common Sense. I’m Paul Jacob.

Categories
media and media people national politics & policies

Wacky Ways to MSNBC the World

Alex Wagner of MSNBC’s “Now with Alex Wagner” fame decided her fellow network hosts had fecklessly failed to exhaust the world’s reservoir of inane 30-second political pronouncements. So, her vignette informs us:

Minimum wage was mentioned in the State of the Union earlier this year and then it wasn’t brought back up again. This should be something we think about and talk about every single week. This is one of those building-block issues that should supersede almost anything else we have. Economic security is foundational to American success.

Where to start?

Perhaps, by wondering if any serious person really thinks the minimum wage is an issue so paramount in the economy that it “should supersede almost anything else we have.”

Er, “we have”? Who’s editing scripts over there?

But let’s cut to the chase: Ms. Wagner is arguing that “economic security” not only comes before “American success,” but is “foundational” to that success.

Hmmmm?

According to the great Wikipedia in cyberspace, “economic security” is “the condition of having stable income or other resources to support a standard of living now and in the foreseeable future.” So, does Wagner really mean to suggest that before Americans were able to achieve success, wealth, we already had guaranteed to us plenty of steady income to finance a fine and dandy standard of living for as far off into the future as we could foresee?

Americans worked hard for this wealth; it wasn’t legislated.

Economic “success” creates economic security, not the other way around.

This is Common Sense. I’m Paul Jacob.

Categories
free trade & free markets too much government

The Zero Effect

The idea of hiking the legal minimum wage just doesn’t go away, alas.

The usual thought experiment those with common sense use to elicit a modicum of sagacity in the minimum wage advocates’ addled synapses runs like this: You say you want a higher minimum wage, say $9 per hour. Why not $49 — or $490.00?

Every sensible person knows that wouldn’t work; you can’t simply force all wages up without dire consequences in lost jobs, businesses. But it’s a way to impart some sense of why prices are what they are, how supply and demand work.

But there’s another tactic: Make the counter-offer. “I want to help low-skilled workers find jobs. Set the minimum wage to $0!” Then ask:

Would people work for zero dollars?

Would all wages fall to nothing?

You’ll get a few absurd answers, but the logic should sink in, eventually: High-wage jobs are there not due to Santa Claus employers, but because of worker productivity.

With no minimum wage, there would be more low-wage jobs available, sure. And some of the jobs at the current minimum may indeed go down in pay, but there would be a lot more employment.

And no 5¢ an hour jobs for the same reason no one but interns today work for zero dollars. It wouldn’t be worth it, wouldn’t even cover the costs of getting to work. Folks do have other options: Keep looking; sponge off relatives; beg, borrow, steal; scrounge. Sell things on eBay.

That’s why now people reject some jobs.

Let others protest low wages. The rest of us should protest low productivity.

And a lack of common sense.

This is Common Sense. I’m Paul Jacob.