Minimum Wage

(I am changing some of my “Pages” to “Posts,” so some of this info is older to my site)

The above video is a good one-two-three punch explanation that is concise and short!


These people must be crazy! When there is near [damn] consensus on a topic… people should know about it, especially when the raising the minimum wage hurts the black community. But the left thinks and rants that not raising minimum wage is hurting the poor and minorities… when it is the exact opposite. What a crock!

Hurting the Poor

Thomas Sowell (left) and Walter Williams (right) explain the negative effects of the minimum wage.

(Minimum wage laws make discrimination on ethnicity and gender easy, via Milton Friedman) Here is Walter Williams referencing some statistics to make his point (including Neumark), followed by the excellent lead-up to the debate between [included as well] between L.A. Times columnist, Michael Hiltzik, and professor of economics at UC Irvine, David Neumark:

….University of California, Irvine economist David Neumark has examined more than 100 major academic studies on the minimum wage. He states that the White House claim “grossly misstates the weight of the evidence.” About 85 percent of the studies “find a negative employment effect on low-skilled workers.” A 1976 American Economic Association survey found that 90 percent of its members agreed that increasing the minimum wage raises unemployment among young and unskilled workers. A 1990 survey found that 80 percent of economists agreed with the statement that increases in the minimum wage cause unemployment among the youth and low-skilled. If you’re looking for a consensus in most fields of study, examine the introductory and intermediate college textbooks in the field. Economics textbooks that mention the minimum wage say that it increases unemployment for the least skilled worker.

As detailed in my recent book “Race and Economics” (2012), during times of gross racial discrimination, black unemployment was lower than white unemployment and blacks were more active in the labor market. For example, in 1948, black teen unemployment was less than white teen unemployment, and black teens were more active in the labor market. Today black teen unemployment is about 40 percent; for whites, it is about 20 percent. The minimum wage law weighs heavily in this devastating picture. Supporters of higher minimum wages want to index it to inflation so as to avoid its periodic examination….

…read more…

From the video description:

Larry Elder has on an L.A. Times columnist Michael Hiltzik on to defend his statements made in the column*, as well as professor David Neumark to debate some of the finer points. I do include the build up to the interview/debate, which includes and evisceration of anything deemed moderate at the L.A. Times — pointing out the bias lays firmly on the political-left.

More by Walter Williams:

How will the forced raising of the minimum wage hurt the poor?

As the #FightFor15 movement get fast food workers to strike in order to get a $15, and they watch businesses in Seattle closing because of the forced raise in wages. Automated cashier options are now an option to be weighed. Of course a business wants a human face to represent it. But the business wants to stay in business, so many are being forced to choose a cheaper, more sustainable option for its budget.

McDonald’s is buying 7,000 automated machines to replace people

Would you like some microchips with that burger? McDonald’s Europe strikes another blow against human interaction by installing 7,000 touch-screen computers to take your order and money.

[….]

McDonalds recently went on a hiring binge in the U.S., adding 62,000 employees to its roster. The hiring picture doesn’t look quite so rosy for Europe, where the fast food chain is drafting 7,000 touch-screen kiosks to handle cashiering duties.

The BELOW is and update to the above story about MceeDee’s in Seattle:

Via BizPic!

While it seems liberals may think that raising the minimum wage will raise living standards for poor Americans, they should have seen this coming.

With Los Angeles joining Seattle in setting a $15 minimum wage (Los Angeles by 2020, and Seattle by 2021), it stands to reason that McDonald’s would find a way around simply paying workers more, as Vox pointed out the obvious fact that “the reality is that McDonald’s just wants to make money.”

In a very real-world example of big business’ response to liberal policies, a conservative Twitter user sent Labor Day wishes from McDonald’s workers whose minimum wage never goes up.

And this real world affect of what politicians can merely raise taxes to meet budgets with (or, on the Federal level just print more money [a dumb move BTW]) is that small business go out of business, thus affecting the poor who want jobs.

But now the option through technology is to replace workers for businesses altogether:

(Washington Policy Center) Everyone is predicting what the real world impact of Seattle’s newly passed $15 minimum wage will be. The truth is there will not be a mass exodus of businesses from the city, nor will the economy crash.

Certainly, some businesses will move or close down, consumers will pay more, some workers will receive fewer benefits and the lowest skilled workers will have a harder time finding a job because they are competing with more experienced workers.

But many businesses will simply figure out how to employ fewer low-wage workers. They will do that by substituting machines and technology for people.

Service industry CEOs have cautioned a higher minimum wage is “encouraging automation,” which can improve efficiency. Even Microsoft co-founder Bill Gates warns that a higher minimum wage would “encourage labor substitution” and incentivize employers to “buy machines and automate things” and ultimately “cause job destruction.”

He’s right. When government increases the cost of labor, employers find other ways to save money.

Just look at how McDonald’s has responded to France’s $12 an hour minimum wage. In 2011, McDonald’s invested in 7,000 touch screen computers in France to reduce the number of workers needed. Restaurants around the country are already exploring automation as a means to cut costs; Applebee’s is installing 100,000 tabletop tablets for ordering and payments.

Many food businesses are considering a machine that can freshly grind, shape and custom grill 360 gourmet burgers per hour, no human labor needed. Alpha, the burger-making robot, can even slice and dice the pickles and tomatoes, put them on the burger, add condiments and wrap it up. The manufacturer makes the point that cashiers or servers aren’t even needed: “Customers could just punch in their order, pay, and wait at a dispensing window.” The maker says Alpha will pay for itself in a year.

…read it all…

See also: Businesses Forced To Hurt The Poor ~ Thanks Dems

  • “I’m hearing from a lot of customers, ‘I voted for that, and I didn’t realize it would affect you.’” (IJ-Review)

Powerline has a great short article about minimum-wage laws pushed by Democrats bumping into the steel reinforced wall of reality:

Via InstaPundit, a lesson in economics for liberals. This time, it’s the minimum wage:

San Francisco’s Proposition J, which 77 percent of voters approved in November, will raise the minimum wage in the city to $15 by 2018. As of today, May 1, [Brian] Hibbs is required by law to pay his employees at Comix Experience, and its sister store, Comix Experience Outpost on Ocean Avenue, $12.25 per hour. That’s just the first of four incremental raises that threaten to put hundreds of such shops out of business. …

Hibbs says that the $15-an-hour minimum wage will require a staggering $80,000 in extra revenue annually. “I was appalled!” he says. “My jaw dropped. Eighty-thousand a year! I didn’t know that. I thought we were talking a small amount of money, something I could absorb.” He runs a tight operation already, he says. Comix Experience is open ten hours a day, seven days a week, with usually just one employee at each store at a time. It’s not viable to cut hours, he says, because his slowest hours are in the middle of the day. And he can’t raise prices, because comic books and graphic novels have their retail prices printed on the cover.

If he can’t stay in business, all of his employees will lose their jobs.

[….]

“Why,” he asks, “can’t two consenting people make arrangements for less than x dollars per hour?”

Exactly. Conservatives should oppose minimum wage laws on fairness grounds. If a person is willing to work for, say, $8 an hour, how dare liberals tell him he must remain unemployed instead? There are many, many people whose best offer of employment will be for less than the $15 an hour that San Francisco will soon mandate. Liberals are, in effect, making it illegal for these people to work, even though they are ready, willing and able to do so.

Minimum wage jobs are overwhelmingly entry level employment. They provide valuable training, experience and opportunity for advancement. Making it illegal for young people, especially, to seek employment at the wage they can command isn’t just economically stupid, it is deeply unfair.

…read more…


Click to Enlarge


MINIMUM WAGE


“Any Econ 101 student can tell you the answer: ‘The higher wage reduces
the quantity of labor demanded, and hence leads to unemployment’.”
(Larry Elder)

Economists aren’t certain about many things, but on the minimum wage, nearly all of them (90 percent, according to one survey) believe that the case is open and shut. All else being equal, if you raise the price of something (for instance, labor), then the demand for it (for instance, by employers) will decline. That’s not just a theory; it’s a law.

James Glassman, “Don’t Raise the Minimum Wage,” Washington Post (Feb 24, 1998).


A majority of professional economists surveyed in Britain, Germany, Canada, Switzerland, and the United States agreed that minimum wage laws increase unemployment among low-skilled workers. Economists in France and Austria did not. However, the majority among Canadian economists was 85 percent and among American economists was 90 percent. Dozens of studies of the effects of minimum wages in the United States and dozens more studies of the effects of minimum wages in various countries in Europe, Latin America, the Caribbean, Indonesia, Canada, Australia, and New Zealand were reviewed in 2006 by two economists at the National Bureau of Economic Research. They concluded that, despite the various approaches and methods used in these studies, this literature as a whole was one “largely solidifying the conventional view that minimum wages reduce employment among low-skilled workers.”

Thomas Sowell, Basic Economics: A Common Sense Guide to the Economy, 4th Edition (New York, NY: Basic Books, 2011), 241. [Link to 5th edition]


…percentage of economists who agree…. A minimum wage increases unemployment among young and unskilled workers. (79%)

Robert M. Beren, Professor of Economics at Harvard University ~ (More: Wintery Knight)


Economically, minimum wages may not make sense. But morally, socially, and politically they make every sense…

Jerry Brown (Reason.org)

Myth #5: The Rich Get Richer, The Poor Get Poorer

A series of 5-myths via Daniel Flynn’s excellent book — Machiavelli said, “One who deceives will always find those who allow themselves to be deceived.”

  • Daniel J. Flynn, Why the Left Hates America: Exposing the Lies That Have Obscured Our Nation’s Greatness (Roseville, CA: Prima Publishing, 2002), 138-143.

MYTH #5: THE RICH GET RICHER, THE POOR GET POORER

WRITER JAMES L0EWEN laments the fact that publishers re­frain from printing “a textbook that would enable readers to understand why children of working-class families do not be­come president or vice-president, the mythical Abraham Lin­coln to the contrary.” Without a hint of irony, the author penned these words when the occupant of the Oval Office was a man abandoned by his father and raised in poverty by his strug­gling mother in Hope, Arkansas. The writer’s ideological my­opia regarding class and success in America is a central tenet of leftist philosophy. The Left’s propaganda campaign has been so effective that a majority of Americans now believe that the American system benefits the rich at the expense of the poor. A December 2001 Harris poll, for instance, revealed just how the belief in class rigidity remains entrenched in the collective consciousness. Sixty-nine percent of Americans agreed with the assertion that, in their country, “the rich get richer and the poor get poorer.” The facts do not support this popular belief. Nor do they buttress the idea that the system is set up to bene­fit the rich.

The burden of taxation overwhelmingly falls on the rich. The federal government relieves the poor of paying even a nominal amount of income taxes. The Internal Revenue Ser­vice reports that in 1999, the richest 1% paid more than a third of all income taxes it received. The richest 5% paid well over half of all federal income taxes. Only $1 out of every $25 collected by the IRS came from taxpayers on the bottom half of the economic ladder. To state that such a system unfairly ben­efits the rich, as many politicians perennially do, requires an abandonment of the facts as well as common sense.

The poor’s share of the economic pie has undeniably shrunk, however slightly, in recent decades. But the size of the entire pie has grown larger. Every economic class now receives a larger piece because they feast on a larger pie. From 1967 through 2000, the household income of the poorest tenth of the population increased by more than 33% in inflation-adjusted dollars. Surely it is better to have a smaller piece of a massive pie than it is to have a larger piece of a small pie. Countries exist, of course, where income equality is more pronounced among the masses. Economic equality for the populace (but not the leadership) is far more evident in China, Cuba, and Libya than it is in the United States. But what good is equality if it results in making everyone equally poor? Only one consumed by envy prefers equality of condition to increased prosperity for all.

A $9 trillion economy hardly leaves much room for what the rest of humanity considers true poverty. In more than 100 countries, America’s poor would be considered the moneyed elite. To its critics, the obscenity of our free-enterprise system is that some still go poor in a nation that houses Bill Gates and Leona Helmsley. Strangely, the system where everyone shares financial degradation equally earns higher marks from such critics. Such utopians fail to realize that only the system that keeps in place the natural rewards for hard work and ingenuity realizes the desired widespread prosperity. Government schemes that remove incentives seal the degraded fate of their own citizenry.

The United States is a free country. Any country that values liberty necessarily shuns the socialist’s conception of equality. The two ideals are incongruous. Nobel laureate Friedrich Hayek astutely observed in The Constitution of Liberty,

From the fact that people are very different it follows that, if we treat them equally, the result must be inequality in their ac­tual position, and the only way to place them in an equal posi­tion would be to treat them differently. Equality before the law and material equality are therefore not only different but are in conflict with each other; and we can achieve either the one or the other, but not both at the same time.

A variety of income levels usually reflects the health of free­dom in a nation. What truly would frighten would be no differ­ences in income.

Ignoring the absolute gains of the lowest economic class while stressing their relative losses serves as one example of the mathematical legerdemain the Left plays in the service of class warfare. A second trick involves the portrayal of “the poor” as a static group of individuals rather than as an economic class whose membership constantly rotates. The people we refer to as “the poor” today are not at all likely to be the people we refer to as “the poor” a few years from now. This reality alone rebuts the notion that the rich get richer while the poor get poorer. Today’s rich are often yesterday’s poor.

Hard statistics demonstrate that economic mobility is widespread. A Treasury Department study tracking class move­ment from 1979 to 1988 discovered that 86% of 1979’s poor no longer remained in the lowest income quintile in 1988. More of 1979’s poorest quintile actually found themselves in the richest 20% of Americans in 1988 than were still mired in the poorest 20%. Considering that the bulk of the survey focused on the Reagan years, the very time the Left describes as an era of un­precedented misery for the poor, the numbers are quite devas­tating to any claim of a static class structure.

An Urban Institute study at around the same time yielded similar results. The group found that the greatest proportional income gainers from 1977 to 1986 were 1977’s poorest quintile. This bottom fifth of the economic ladder saw their incomes climb 77% during the time period. By way of comparison, the average income gain during the 10-year period was 18%. Con­spicuously, 1977’s richest quintile experienced an anemic 5% increase in their earnings. In many ways, the Urban Institute’s findings merely confirm common sense. Poor people, having nowhere to go but up, experience more rapid proportional gains in income than the rich. To advance an ideology that ig­nores this reality flies in the face of common sense.

Over the past two decades, the U.S. Census Bureau has tracked individual income fluctuation from one year to the next on seven occasions. Even over a period as short as two years, the studies reveal a startling fluidity in the economy. In each of the Census Bureau’s seven two-year studies, at least three-fourths of all individual incomes fluctuated up or down by 5% or more. The studies affirm that the average American sees his earnings change significantly from year to year. A similar Census Bureau study of poor people in the mid-1990s found that nearly one-quarter of impoverished citizens in the first year of the study es­caped poverty by the end of the next. Again, the poor are not a fixed group of people. Poverty is a condition that different people find themselves in at different times. Students, the young, and newly arrived immigrants may constitute “the poor” during one still frame but live quite comfortably once we fast-forward their lives.

Just as the extremely poor are not typically chronically im­poverished, the extremely rich usually were not born into afflu­ence. Historians generally regard John Jacob Astor as the first man to be worth $10 million, Cornelius Vanderbilt, $100 mil­lion, and John D. Rockefeller, $1 billion. Significantly, each of these men earned his own wealth and rose from a fairly modest background. When we look at the rich today, the tradition of self-made wealth still holds true.

The self-made rich constitute the majority of wealthy people. Someone born into wealth stands a far greater chance of dying wealthy, of course, than someone born into poverty. But this hardly supports the claim that “the rich get richer and the poor get poorer.” Nor does it indict the American system. The advantages of inherited wealth occur not just in the United States but everywhere else in the world as well. In viewing the Forbes 400, the annual ranking of America’s superrich, one finds quite a few spots on the list that, like the publisher’s chair of the magazine compiling the report, are occupied by the inheritors of great wealth. Sam Walton’s wife and children constitute half of the Forbes top 10. A brood of Rockefellers populate the list. Five generations after the launch of Johnson & Johnson, nu­merous members of Forbes’s exclusive club bear the genes of the company’s founders. Old money has its advantages.

Yet these people are the exception. A perusal of the most recent list of the 400 richest Americans yields a count of 252 men and women, 63% of the total, described by Forbes as “self-made.”74 Their stories are truly amazing.

Texan Red McCombs (ranked at 158), the son of an auto mechanic, made billions selling the cars his dad was paid a few dollars to fix. Equaling McCombs in wealth is Kenny Troutt (158), a man who grew up in a housing project, only to establish one of the most successful communications companies in the United States. Andrew McKelvey (172), founder of Monster .com, got his start selling eggs. He later graduated to peddling ad space in the Yellow Pages, which undoubtedly planted the seeds in his mind for his successful Internet classified-ad com­pany. Both Marcus Bernard (60) and Arthur Blank (136) grew up in dilapidated tenement housing in and around New York City. After Bernard and Blank were fired by the Handy Dan home improvement store, they decided to launch their own venture. Handy Dan is out of business. Home Depot is one of the most successful stores in history. West Coast financier Leslie Gonda (136) escaped the Holocaust. The odds do not get much worse than that. Yet he made it. The lives of Mississippi sharecropper’s daughter Oprah Winfrey (280), college dropout Steve Jobs (158), and paperboy, horse breaker, and greeting card salesman H. Ross Perot (47) all serve as testimony to the reality of the American Dream.

These aren’t Horatio Alger stories. The rags-to-riches tales found in the Forbes 400 really happened. If the American Dream can become real for a Jew fleeing from under the jack­boot of Nazism, whom can’t it become real for?

The Working Poor Hit hardest by Obama `CARE`

From Video Description:

Gateway Pundit mentions that thanks to Barack Obama and Democrats, the poor (financially that is) Taco Bell workers will suffer and lose work hours. The Taco Bell in Guthrie, Oklahoma cut its employees’ hours due to Obamacare. (Posted by: Religio-Political Talk)

Yahoo News also mentions that Wendy’s is the latest to follow suit:

Count Wendy’s as the latest fast-food restaurant to respond to Obamacare with a reduction in worker hours. Following some other chains that have made headlines recently, a Wendy’s franchise owner in Omaha, Neb., told about 100 workers in the area that their hours would be cut in anticipation of mandates in the Affordable Care Act (ACA)….

All these egalitarian people that think they are helping are not. For instance, the cost of health care (according to Obama) was suppose to come down… immediately. In fact, the Affordable Care Act is making health insurance rates rise (HotAir). Even BIG supporters of Obama’s campaign are laying people off and closing plants that produce medical equipment because of the cost of Obama-Care (Breitbart). Again, a favored quote of mine comes to mind:

“Of all tyrannies, a tyranny exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.” ~ CS Lewis

Or put another way, when the cute bunnies attacked in “Search for the Holy Grail,” “RUN AWAY! RUN AWAY!”

What Do The Poorest Cities Have In Common?

This goes out with a h/t tp DocH (Official Right-Wing Extremist Veteran Seal Of Approval). While I have heard this stat many times before. DocH put it well and got me to find the format I wanted, from a commentator at Sweetness & Light:

City, State, % of People Below the Poverty Level, according to the U.S. Census Bureau, 2006 American Community Survey, released August, 2007 (250K+ population)

TEN POOREST CITIES

City, State, % of People Below the Poverty Level

  1. Detroit , MI 32.5%
  2. Buffalo , NY 29..9%
  3. Cincinnati , OH 27.8%
  4. Cleveland , OH 27.0%
  5. Miami , FL 26.9%
  6. St. Louis , MO 26.8%
  7. El Paso , TX 26.4%
  8. Milwaukee , WI 26.2%
  9. Philadelphia , PA 25.1%
  10. Newark , NJ 24.2%

U.S. Census Bureau, 2006 American Community Survey, August 2007

What do the top ten cities (over 250,000) with the highest poverty rate all have in common?

  1. Detroit, MI (1st on the poverty rate list) hasn’t elected a Republican mayor since 1961.
  2. Buffalo , NY (2nd) hasn’t elected a Republican mayor since 1954.
  3. Cincinnati , OH (3rd) hasn’t elected a Republican mayor since 1984.
  4. Cleveland , OH (4th) hasn’t elected a Republican mayor since 1989.
  5. Miami , FL (5th) has never had a Republican mayor.
  6. St. Louis , MO (6th) hasn’t elected a Republican mayor since 1949.
  7. El Paso , TX (7th) has never had a Republican mayor.
  8. Milwaukee , WI (8th) hasn’t elected a Republican mayor since 1908.
  9. Philadelphia , PA (9th) hasn’t elected a Republican mayor since 1952.
  10. Newark , NJ (10th) hasn’t elected a Republican mayor since 1907.

Einstein said, ‘The definition of insanity is doing the same thing over and over again and expecting different results.’

It is the poor who habitually elect Democrats,

While teacher’s union pensions swell like pirate booty chests, kids have to bring toilet paper to school. Our property tax money used to buy restroom supplies, now it funds go-nothing union teachers.

I was born and raised in Detroit and know first hand the poverty there (and the racism).