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minimum wage Archive

Sunday

5

October 2014

0

COMMENTS

Minimum Wage Follies

Written by , Posted in Economics & the Economy, Free Markets

The great Krugtron the Invincible argues the minimum wage can be increased without much consequence. He says there’s “hardly any cost to raising it,” and that “we can raise these wages without losing lots of jobs.” Notice the weasel language. We can raise it without losing “lots” of jobs, but regardless of what he subjectively considers to reach the “lots of jobs” threshold, there will unarguably be a lose of some jobs.

Bringing in some data, Antony Davies at the Mercatus Center demonstrates that as relative minimum wages have increased, so to has unemployment rates for those with anything less than a college diploma.

Min wage vs Unemployment by edu

So Krugman’s job is safe, but plenty of those poor folks he claims to champion will feel the warm, fuzzy benefits of his proposal all the way to the unemployment line.

In the latest episode of Hotnomics, host Emerald Robinson looks closer at the numbers and lays out the evidence against raising the minimum wage.

Saturday

7

April 2012

1

COMMENTS

Saturday

6

August 2011

0

COMMENTS

Bloomberg’s Lazy Initiative to Help Minorities

Written by , Posted in Economics & the Economy, Education

Chronic poverty, broken families, unemployment, low graduation rates, and high crime rates plague minority groups, particularly in urban areas. These problems are certainly not unique to minorities, but they are particularly acute enough to have drawn special attention from the political class. But worry not, as some rich do-gooders have come to save the day! They’re going to throw money at the problems:

New York mayor Michael Bloomberg Thursday unveiled a $127.5 million campaign to help black and Hispanic youths who suffer from staggeringly high unemployment, crime and poverty rates.

The Young Men’s Initiative aims to bring in policy reforms to “connect young men to educational, employment and mentoring opportunities across more than a dozen agencies,” a statement from New York’s City Hall said.

The three-year program will be funded jointly by private and public dollars.

Billionaire George Soros’ Open Society Foundation pledged $30 million, while the Bloomberg Philanthropies also donated $30 million with the remaining $67.5 million to come from city funds.

…According to a recent report commissioned by the city, the poverty rate among young blacks and Latino men ages 18-14 in New York City’s five boroughs is 50 percent higher than among their white and Asian peers.

Unemployment rates among the group were 60 percent higher and more than 90 percent of young murder victims and perpetrators are black and Latino, it said.

…Specific initiatives within the program include $24 million that will be invested over three years to focus on college and career readiness among minorities.

There will also be initiatives to restructure in-jail services for inmates to prepare them for release, and more than $9 million will on expanding an internship program to help training for in-demand positions such as paramedics.

“This is a crisis that demands a crisis response,” said New York Deputy Mayor Linda Gibbs. “Expressly naming the problem of disparities and aggressively fighting barriers is how we are going to begin to achieve change.”

The benefits of this effort will be marginal, at best. They may well help some folks, but it sounds like the last thing they are likely to do is actually address the “barriers” at issue here. Those barriers are, after all, primarily of government construction.

Want to help improve the high minority youth unemployment rate? Get rid of minimum wage laws that price low-skilled labor out of the market, denying young people of all colors, but particularly those of poorer, less educated backgrounds, from learning the skills and work habits they need to advance.

Want to improve education among minorities? End the government school monopoly which traps the poor in failing schools, penalizing them compared to the wealthy who can afford to escape failing government schools for private alternatives.

These are things that can be done to actually help people. But they’re politically difficult and require real leadership. It’s easier for those who really just want publicity to throw some money at the problem. It’s almost like they’re more concerned about looking like they’re solving problems than actually solving them.

Saturday

15

January 2011

0

COMMENTS

A Lesson in Unintended Consequences

Written by , Posted in Government Meddling

I’m all for the scientific pursuit of knowledge. I have degrees in two very different scientific fields, I value the scientific method, and I firmly believe that knowledge is power (or as I learned from watching G.I Joe cartoons while growing up , “Knowing is half the battle”). I say all this to make clear that this shouldn’t be taken as a knock on science or the particular scientists involved in this story. Rather, I present this news item as an example of the dangers of unintended consequences:

Some scientists studying penguins may be inadvertently harming them with the metal bands they use to keep track of the tuxedo-clad seabirds, a new study says.

The survival rate of King penguins with metal bands on their flippers was 44 percent lower than those without bands and banded birds produced far fewer chicks, according to new research published Wednesday in the journal Nature.

The theory is that the metal bands — either aluminum or stainless steel — increase drag on the penguins when they swim, making them work harder, the study’s authors said.

Author Yvon Le Maho of the University of Strasbourg in France, said the banded penguins looked haggard, appearing older than their actual age.

Consequently, studies that use banded penguins — including ones about the effects of global warming on the seabirds — may be inaccurate, mixing up other changes in penguin life with the effects from banding, said Le Maho and colleague Claire Saraux.

Now imagine that the scientists are government and we are the penguins. Such unintended consequences are not at all uncommon from government policy. It’s not usually so bad as drastically increasing mortality rates, but unintended consequences abound whenever government do-gooders get a design in their eyes for how to improve society.

In the case of the penguins, I’m sure this new finding will be incorporated into future studies, with new study techniques being developed and implemented so that future beings aren’t condemned to death. That’s the difference between science and government. Scientists learn (eventually); government’s don’t. We know that government imposed minimum wages hurt the very people they are said to help, but still they remain, and are constantly increased. We know that government meddling in the housing market contributed to the economic collapse, yet the very same policies continue today.

We need a government that is aware of the likelihood and dangers of unintended consequences from sweeping legislation that drastically increases the role of government in society. It’s not that one expects the exact problems to be foreseen in every case (they are, after all, unintended), but a general awareness of the danger government can inflict on society through its meddling would result in far fewer destructive policies ever seeing the light of day. We penguins request just that little bit of additional consideration for our well-being.

Friday

17

July 2009

0

COMMENTS

Minimum Wage Set To Increase, Young Minorities Hardest Hit

Written by , Posted in Economics & the Economy, Government Meddling

Thanks to an ill considered bit of nanny state economic meddling last year, the federal minimum wage is set to increase again at the end of July from $6.55 to $7.25.  What better time could they have picked to increase the number of unemployed?  Secretary of Ruining the Economy, Hilda L. Solis, spouted the following nonsense:

“This administration is committed to improving the lives of working families across the nation, and the increase in the minimum wage is another important step in the right direction,” said Secretary of Labor Hilda L. Solis. “This well-deserved increase will help workers better provide for their families in the face of today’s economic challenges. I am especially pleased that the change will benefit working women, who make up two-thirds of minimum wage earners.”

It will benefit some working women, but it will do so at the expense of those who lose their job as a consequence of this legislation.

Some facts from the Employment Policy Institute:

  1. For every 10 percent increase in the minimum wage, teenage employment at small businesses is estimated to decrease by 4.6 to 9.0 percent.

    According to the U.S. Bureau of Labor Statistics, teen unemployment is at 24 percent, its highest rate in 17 years.
  2. For every 10 percent increase in the minimum wage, estimates show employment may fall as much as 8.5 percent for young black and Hispanic males age 16-19.

    African American teen unemployment is currently at 38 percent, which is four times the national unemployment rate and 27 percent higher than last year.

  3. According to U.S. Census data, only 16.5 percent of minimum wage recipients are raising a family on the minimum wage. 83.5 percent are teenagers living with working parents, adults living alone, or dual-earner married couples.

Friday

12

January 2007

0

COMMENTS

Democrats Care About Poor Workers, Unless They’re Samoan

Written by , Posted in Economics & the Economy

The argument used by democrats in favor of a minimum wage increase is that it’s a benefit to workers. We know this to be false. Nevertheless, they insist it is the truth. One would think that, in believing the minimum wage increase to be a good thing for workers and the economy, it would be imperative for Democrats to see that it applies to all such workers.

So, when we hear news that Democrats have exempted American Samoa from their minimum wage increase, it can only mean one of two things. Either they think it would harm Samoa, in which case the entire premise to their argument is washed away, or they don’t care about the people of Samoa. Neither speaks well of them. And the fact that 75% of Samoans are employed by Star Kist tuna, which headquarters in Speaker Pelosi’s district? Surely that’s just coincidence.

Friday

15

December 2006

0

COMMENTS

Reuters Pushing Big Government Agenda On Minimum Wages

Written by , Posted in Economics & the Economy, Liberty & Limited Government, Media Bias

Reuters is back, this time bemoaning the “poor” minimum wage workers in a story that reads as little more than partisan cheerleading. Even the title, “Democrats to raise wages for poor workers,” betrays the agenda, as most minimum wage earners are not poor – with only 19% below the poverty line.

The incoming Democratic-led U.S. Congress intends to give a hand to dishwashers, fast-food cooks and America’s other poorest-paid workers by raising the federal minimum wage for the first time in a decade.

With the gap between rich and poor widening, Democrats promised such a pay hike as a part of their campaign that saw them win control of both chambers of Congress in the November 7 elections from President George W. Bush’s Republicans.

Ahoy there class warfare! I didn’t expect to see you here. Okay, I did expect to see you here. But I still don’t like you.

“This is a moral issue, as well as an issue of economic fairness and justice,” said Steny Hoyer of Maryland, who will be the House of Representatives’ Democratic majority leader.

“No one can meet even the most basic expenses on today’s minimum wages,” said Rep. George Miller, a California Democrat who will chair the labor committee in the House of Representatives.

The assumption here being that minimum wage workers are, by and large, attempting to meet basic needs. Reality, however, paints a different picture. The average household income for minimum wage workers is more than $40,000. This is because more than half (53%) of minimum wage workers are under the age of 24, many of whom are living with their parents. Their goals are to gain experience – not support a family as the article later implies – which would be much more difficult to do with meddling legislators limiting their job opportunities. Ultimately, it should be up to the individual to decide whether to accept or not accept a job. Government shouldn’t limit those opportunities by legislating out low production jobs. As to being a moral issue, I thought Democrats frowned upon legislating morality? Anyway, the 3-page article only saw fit to include a one sentence reference to any opposition, and did so in the most minimalist of ways.

Traditional allies of corporate America, Republicans cite studies that show an increase in the minimum wage would hurt small business and reduce the number of entry-level jobs.

Of course, the author couldn’t cite opposition without including a backhanded insult, when the reality is that opposing minimum wage laws is in everyone’s interest. Nor could he be bothered to provide any specifics on how minimum wages harm low skilled workers.

Tuesday

3

October 2006

0

COMMENTS

Take A Hike, Santa

Written by , Posted in Economics & the Economy

Michigan minimum wage hikes mean fewer bell ringers next holiday season.

A $1.80 an hour increase in Michigan’s minimum wage going into effect Sunday will fatten the paychecks of most local Salvation Army bell ringers this year – but fewer likely will be hired.

Hiring reductions, pay freezes and price increases are among ways some area employers are adjusting to legislation approved in March to boost Michigan’s hourly minimum wage for workers 18 and older from the current $5.15 to $6.95.

Hat tip: FreedomWorks

Monday

31

July 2006

0

COMMENTS

Minimum Wage Facts

Written by , Posted in Economics & the Economy, Liberty & Limited Government

Michael Franc at the Heritage Foundation busts some myths while demonstrating the folly of raising the minimum wage.

An enduring urban legend about minimum-wage workers is that they are married adults struggling to raise children in Dickensian-style poverty. As Kennedy said in a recent Senate floor speech, “Minimum-wage workers are forced to make impossible choices between paying the rent and buying groceries, paying the heating bills or buying clothes.” Their families, he said, lack health care and adequate housing. Their “daily fear” is “poverty, hunger and homelessness.”

The data, however, tell a very different story. While some minimum-wage workers are primary breadwinners raising young children, the overwhelming majority are either younger workers honing their skills in entry-level positions or part-time, mostly female workers from middle-class homes supplementing their spouse?s income.

  • Only 1.9 million American workers (out of a total workforce of 127.4 million) earn the minimum wage. Most (63%) are women. More than half (53%) are between the ages of 16 and 24, and an even larger percentage (58%) work part-time.
  • Upward mobility is the happy norm. Two out of three of today?s minimum-wage workers will earn 10% more within a year.
  • Many are teenagers who live with their parents in middle-class homes. This explains why the average household income for minimum-wage earners is more than $40,000 a year and why only 19% (about 400,000 nationwide) fall below the poverty line.

 

 

Wednesday

28

June 2006

0

COMMENTS

Sound Economics Just “Mumbo Jumbo” To Dean

Written by , Posted in Economics & the Economy

Howard “I have a scream” Dean is out spreading the populist message of class warfare, as usual. This time his assault on intelligence comes in the way of denying the impacts of minimum wage laws.

“This is a moral nation, so the first thing we must do is convince people that poverty is a moral problem,” Mr. Dean said. “It is a moral principle to raise the minimum wage. It is nothing but economist mumbo jumbo to say raising it will hurt jobs.”

Let’s not beat around the bush here, Howard Dean is an idiot. Understanding the impacts of minimum wage laws is not that difficult. Some workers, often teenagers or first time workers, have low productivity. This is a simple fact. If a worker is worth $6 an hour and the government says you have to pay that worker $8 an hour, you aren’t going to hire that worker. Minimum wage laws always result in high unemployment of youth and low skilled labor. Unless we want a repeat of the civil unrest seen in France, we need to keep Howard Dean and his ignorant party out of power.