Econ 101

Even Leftists Get It – Minimum Wage (UPDATED)

Published by Papa Giorgio

(Rearranged for homogeneous play) This is originally from Southwest Business Association: “Small business owners share their story and how a Minneapolis specific minimum wage will impact their business.” (Learn more at their website)

I find it sad that Leftists HATE big-business and the corporate models of doing business… yet they are all for getting rid of the small business owner by pricing them out of the market. Much to the GLEE of corporations.

Here are the three business highlighted in the video:

  • Alaina Nelson – co-owner of Nicollet Ace Hardware (FACEBOOK)
  • Jane Elias – Owner of Simply Jane Art Studio (WWW)
  • Heather Bray – co-owner of The Lowbrow Burgers and Beer (WWW)

SEE MY: Economics 101 | Minimum Wage

Just to note though, as many of the comments to follow from my YouTube and LiveLeak also note… these are the same people running around screaming for “free college,” more welfare benefits, etc. They only speak up with economic common sense when THEIR bottom line is hit.

  • I’m sorry to say, but it serves you right… and I have no sympathy for you. These people who are proud Bernie supporters and die-hard “progressives” staunchly support these horrific agendas as long as it’s someone else who has to foot the bill.
  • The left is so f’ing stingy with their minimum wage anyway. Why not $50 a hour?
  • So basically they support Bernie and his socialist ideas, except for when they personally need to chip in. Tells you everything you need to know about the character of these a$%holes.
  • f&*k these twats, if it didn’t effect them they’d be out on the streets screaming for $15 an hour.
  • Libtards are economically illiterate people, and the only way to make them understand how idiotic their policies are is to hit them in the pocketbook. Unfortunately most of them own nothing of value and spend most of their time hating and envying people who are better off than them, so it’s not an easy battle.
  • Liberals only understand economics when it bites them in the ass personally.
  • Self hating Leftist…
  • funny how they wake up the minute it is not OTHER peoples money!
  • Sad that they’re speaking the truth, and yet nobody would believe them unless they identified themselves as far left. Because hey, if a conservative said the exact same thing, it MUST be a lie!
  • Hard to believe lefties get basic economics.
  • I want to ask these people why it’s okay for them to not pay 15 dollars an hour but say corporations are greedy for not wanting to pay 15 dollars an hour.

Economics 101

Published by Papa Giorgio

“One of the great non sequiturs of the left is that, if the free market doesn’t work perfectly, then it doesn’t work at all-and the government should step in.” — Thomas Sowell

  • JUMP to the minimum wage section below
  • JUMP to Socialism

No really! The Russian jeep carrying the ashes of the late Cuban leader

Fidel Castro broke down and had to be pushed for a period on Saturday.

SOCIALISM

Dennis Prager Series – Left vs. Right:

  1. How Big Should Government Be?
  2. Does it Feel Good or Does it Do Good?
  3. How Do You Judge America?
  4. How Do You Deal With Painful Truths?
  5. How Do We Make Society Better?

MINIMUM WAGE (>>> Main Page <<<)

What happens when politicians decide they are in a better position than business owners to know how much workers should be paid? We don’t have to guess. Cities like Seattle and New York have already done so with their $15/hour minimum wage mandates. Simone Barron, a lifelong restaurant worker, recounts how “helping” her impacted her wallet, her career, and her life.

Corporations can absorb this “do-goodism”, small business owners cannot!

“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)

[fbvideo link=”https://www.facebook.com/SWBAmpls/videos/753869208152531/” width=”690″ height=”400″ onlyvideo=”0″]

See more on their website, HERE.

  • 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)

Last Friday, I wrote about how 81% of economists agree that rent controls are bad policy. In a field so renowned for its fractiousness, this degree of consensus might seem rather surprising.

The same is true with minimum wages. In 2015 the Employment Policies Institute surveyed 166 economists based in the United States on the subject. They found that

  • Nearly three-quarters of these US-based economists oppose a federal minimum wage of $15.00 per hour.
  • The majority of surveyed economists believe a $15.00 per hour minimum wage will have negative effects on youth employment levels (83%), adult employment levels (52%), and the number of jobs available (76%).
  • When economists were asked what effect a $15.00 per hour minimum wage will have on the skill level of entry-level positions, 8 out of 10 economists (80%) believe employers will hire entry-level positions with greater skills.
  • When economists were asked what effect a $15.00 per hour minimum wage will have on small businesses with fewer than 50 employees, nearly 7 out of 10 economists (67%) believe it would make it harder for them to stay in business.
  • A majority of surveyed economists (71%) believe that the Earned Income Tax Credit (EITC) is a very efficient way to address the income needs of poor families; only five percent believe a $15.00 per hour minimum wage would be very efficient.
  • The economists surveyed are divided on the impact of a $15.00 per hour minimum wage will have on poverty rates, as well as the impact it would have on the spending level for public programs such as the EITC, TANF, or others.
  • At lower levels (under $11.00 per hour) of proposed federal minimum wages, economists are divided largely by self-identified party identification as to an acceptable rate with a majority of Republicans and Independents who responded favoring lower minimum wages ($7.50 per hour or less) and a plurality of Democrats who responded preferring a minimum wage between $10.00 and $10.50 per hour.

This isn’t surprising. After all, as I’ve written before, the balance of empirical evidence suggests these things to be true…..

John Phelan (AMERICAN EXPERIMENT)

TeXaS vs CaLiFORNia

 

Minimum Wage

Published by Papa Giorgio

(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)

[fbvideo link=”https://www.facebook.com/SWBAmpls/videos/753869208152531/” width=”690″ height=”400″ onlyvideo=”0″]

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)

The Paris Agreement B.S. (Updated)

Published by Papa Giorgio

“I was elected to represent the citizens of Pittsburgh, not Paris,” ~ TRUMP

(ABOVE) The Paris Climate Agreement will cost at least $1 trillion per year, and climate activists say it will save the planet. The truth? It won’t do anything for the planet, but it will make everyone poorer–except politicians and environmentalists. Bjorn Lomborg explains.

I Love Capitalism over at GAY PATRIOT notes quickly this:

Yesterday I wrote a lot of text on this. Thanks to all commentators who made helpful additions.

Today I want to give the short version. With short sentences. For lefties.

  • The Paris Agreement did not control CO2. It let China, India and Russia do what they wanted. Oooh, Russia! Bad!!!!1!! Right?
  • The Paris Agreement did not control CO2. Even the UN scienticians agreed that it made almost no difference to their Global Warming projected temperatures.
  • The Paris Agreement was a krazy-bad deal. It made the U.S. almost the only leading country that has to wreck its workers’ lives and futures.
  • The Paris Agreement was a krazy-bad deal. It made the U.S. almost the only leading country that has to give away tens or hundreds of billions of dollars, to pay Third World kleptocrats to hold back their countries.

Hey lefties: If you didn’t know these things, I’m sorry you’re so gullible…

(read it all)

Here is an excellent article via IBD:

The Paris Climate Deal Was A ‘Fraud’ And A ‘Sham’ … Until Trump Decided To Ditch It

Shouldn’t environmentalists be celebrating the fact that President Trump decided to withdraw from the Paris climate-change agreement? After all, when it was signed, many of them called it a fraud, or worse.

The reaction to Trump’s announcement was ferocious.

Billionaire environmentalist Tom Steyer said Trump is “committing a traitorous act of war against the American people.”

John Kerry declared that Trump’s decision “will rightly be remembered as one of the most shameful any president has made.”

The ACLU said that dropping out of the Paris agreement is “a massive step back for racial justice and an assault on communities of color across the U.S.”

These are the more polite responses.

Yet it was only a little more than a year ago that climate scientists and environmentalists were viciously attacking the Paris agreement itself. The goals were too low to make a difference. There was nothing binding any of the signatories to live up to their promises, and no enforcement mechanism if they didn’t. It just kicked the can down the road.

James Hansen, the undisputed hero of the climate-change movement, called the Paris deal “a fraud really, a fake. … It’s just worthless words. There is no action, just promises.”

A joint letter signed by nearly a dozen top climate scientists said the agreement suffered “deadly flaws lying just beneath its veneer of success.” These scientists complained that the agreement could actually be counterproductive, since it gave the impression that global warming was being dealt with when in fact it wasn’t.

A study in the peer-reviewed journal Global Policy said that even if every country lived up to its CO2 emission reduction promises through 2030, the Paris deal would “likely reduce global temperature rise about 0.17°C in 2100.”

“Current climate policy promises will do little to stabilize the climate and their impact will be undetectable for many decades,” the study concluded.

Kevin Anderson, a climate-change professor at the University of Manchester told the London Independent that the Paris deal was “worse than inept” and that it “risks locking in failure.”

Friends of the Earth International labeled it “a sham of a deal” that will “fail to deliver.”…

(read it all)

Food Stamp Mantra[s] from Democrats Rebutted

Published by Papa Giorgio

Michael Medved responds to the food stamp issue that Democrats and the Left are bringing up. I take a clip from yesterday’s show and insert it into the middle of today’s show to give the listener some ammunition when these banal arguments come up. At the 5:17 mark, the caller mentions taxes for the millionaires as part of his argument. Medved Responds well to this challenge at the… and at the 6:24 mark you hear the caller respond with a bumper sticker jingle. In other words, talking about facts matters little to these people, but at least you will be able to influence those around you eavesdropping in on the conversation.

I posted this video on LIVELEAK, and a comment got me “clicking around” the internet to test what the person said. Here is the comment:

For every $1 spent on food stamps there’s a $1.80 stimulative effect to the economy. The poor person spends the funds at the grocery store, which allows the store to employ more people, the store spends the funds to buy more food which helps farmers and food producers. On the other hand, tax cuts for the wealthy have a negative effect on the economy, it just doesn’t trickle down enough so it drains economic growth. Plus it helps feed poor people that can’t afford to eat. — Warren H.

First, it should be noted that this idea was championed mainly by Moody’s chief economist Mark Zandi, a hard-core Keynesian. However, it should be noted that unfortunately “for Zandi, there has never been any empirical evidence of the Keynesian multiplier.  Government doesn’t take one dollar and turn it into more by spending it.  God doesn’t live in the White House, no matter how much Paul Krugman prays.” (AMERICAN THINKER)

HERITAGE FOUNDATION puts it like this:

…The Keynesian argument also assumes that consumption spending adds to immediate economic growth while savings do not. By this reasoning, unemployment benefits, food stamps, and low-income tax rebates are among the most effective stimulus policies because of their likelihood to be consumed rather than saved.

Taking this analysis to its logical extreme, Mark Zandi of Economy.com has boiled down the government’s influence on America’s broad and diverse $14 trillion economy into a simple menu of stimulus policy options, whereby Congress can decide how much economic growth it wants and then pull the appropriate levers. Zandi asserts that for each dollar of new government spending: temporary food stamps adds $1.73 to the economy, extended unemployment benefits adds $1.63, increased infrastructure spending adds $1.59, and aid to state and local governments adds $1.38. Jointly, these figures imply that, in a recession, a typical dollar in new deficit spending expands the economy by roughly $1.50. Over the past 40 years, this idea of government spending as stimulus has fallen out of favor among many economists. As this paper shows, it is contradicted both by empirical data and economic logic…

They then respond to the above:

The Evidence is In

Economic data contradict Keynesian stimulus theory. If deficits represented “new dollars” in the economy, the record $1.2 trillion in FY 2009 deficit spending that began in October 2008–well before the stimulus added $200 billion more–would have already overheated the economy. Yet despite the historic 7 percent increase in GDP deficit spending over the previous year, the economy shrank by 2.3 percent in FY 2009. To argue that deficits represent new money injected into the economy is to argue that the economy would have contracted by 9.3 percent without this “infusion” of added deficit spending (or even more, given the Keynesian multiplier effect that was supposed to further boost the impact). That is simply not plausible, and few if any economists have claimed otherwise.

And if the original $1.2 trillion in deficit spending failed to slow the economy’s slide, there was no reason to believe that adding $200 billion more in 2009 deficit spending from the stimulus bill would suddenly do the trick. Proponents of yet another stimulus should answer the following questions: (1) If nearly $1.4 trillion budget deficits are not enough stimulus, how much is enough? (2) If Keynesian stimulus repeatedly fails, why still rely on the theory?

This is no longer a theoretical exercise. The idea that increased deficit spending can cure recessions has been tested repeatedly, and it has failed repeatedly. The economic models that assert that every $1 of deficit spending grows the economy by $1.50 cannot explain why $1.4 trillion in deficit spending did not create a $2.1 trillion explosion of new economic activity.

(read it all)

CATO likewise notes that the numbers were fudged to provide exaggerated outcomes:

Food stamps are effective economic stimulus. Led by Mark Zandi and other Keynesian economists, food-stamp advocates have made wildly exaggerated claims about the program’s role in stimulating the economy. Zandi, for instance, claims that “extending food stamps is the most effective way to prime the economy’s pump.”

But aside from the fact that those economic models just as well predict an alien invasion would be a boon to the economy, there is little evidence to support the theory. Even the Agriculture Department’s own inspector general concluded that it was unable to determine whether the additional dollars in the stimulus’s food-stamp expansion were in any way effective in meeting the 2009 Recovery Act’s goals. Three of the four performance measures the program was supposed to use, the office found, “reflected outputs, such as the dollar amount of benefits issued and administrative costs expended” and did not provide any insight into outcomes.

On the other hand, we do know that a failure to get government spending under control will have long-term economic consequences. Food stamps are hardly the major cause of deficits and debt — that distinction lies with middle-class entitlements such as Social Security and Medicare — but every little bit helps.

Valerie Jarrett and Nancy Pelosi said similar things:

  • JARRETT: Let’s face it: Even though we had a terrible economic crisis three years ago, throughout our country many people were suffering before the last three years, particularly in the black community. And so we need to make sure that we continue to support that important safety net. It not only is good for the family, but it’s good for the economy. People who receive that unemployment check go out and spend it and help stimulate the economy, so that’s healthy as well.
  • PELOSI: Economists agree that unemployment benefits remain one of the best ways to grow the economy in a very immediate way. It immediately injects demand into our markets and increases employment. For every dollar spent on unemployment benefits, the economy grows by, according to one estimate, $1.52; by others, $2. So somewhere in that range, but much more than is spent on it…. We have a responsibility to the American people. These are people who have played by the rules, have lost their job through no fault of their own, and need these benefits in order to survive. So we must extend this insurance before the end of the year and we must extend it for at least a year. And I’d like to see that as we go forward before this year ends. Hopefully it could be part of a budget, but it doesn’t have to be part of a budget. It could be in its own vehicle as it goes forward, but it’s something we must consider.

Again, similar responses happened then as well:

Economists at the Heritage Foundation have written about this claim, explaining:

The theory behind extending UI [Unemployment Insurance] benefits as a stimulus assumes that unemployed workers will immediately spend any additional UI payments, instantly increasing consumption, boosting aggregate demand, and stimulating the economy.

This is not a new idea. Economists in the 1960s thought that unemployment insurance could function as an important automatic economic stabilizer. Empirical research in the 1970s demonstrated that this was not the case, and studies since then have concluded that unemployment insurance plays at best a small role in stabilizing the economy. Empirical research at the state level also finds that UI plays a negligible role in stimulating the economy.

Studies that have found that UI stimulates the economy effectively — such as studies by the Congressional Budget Office and economist Mark Zandi — rely on two faulty assumptions, thereby drawing a false conclusion:

They assume that unemployed workers spend every dollar of additional UI benefits almost immediately and that extending unemployment insurance does not affect workers’ behavior. In that case, every dollar spent on unemployment insurance adds a dollar to consumption without any direct effects on the labor market. Both assumptions are false.

Unemployment Insurance Prolongs Unemployment. One of the most thoroughly established results in labor economics is the effect of unemployment benefits on unemployed workers’ behavior. labor economists agree that extended unemployment benefits cause workers to remain unemployed longer than they otherwise would.

This occurs for obvious reasons: Workers respond to incentives. Unemployment benefits reduce the incentive and the pressure to find a new job by making it less costly to remain without work…..

“Game of Loans” ~ College Tuition Costs (ECON 101)

Published by Papa Giorgio

There is a law in economics, it deals with artificially propping up businesses, “goods” politicians deem necessary, production, etc. George Gilder notes this in a clip I isolated in an interview:

  • “A fundamental principle of information theory is that you can’t guarantee outcomes… in order for an experiment to yield knowledge, it has to be able to fail. If you have guaranteed experiments, you have zero knowledge”

R-PT’s note: this is how the USSR ended up with warehouses FULL of “widgets” (things made that it could not use or people did not want) no one needed in the real world. This economic law enforcers George Gilder’s contention that when government supports a venture from failing, no information is gained in knowing if the program actually works. Only the free-market can do this.

This applies to the real world in many ways, one being the co$t of college. Here is a very short video explaining this well:

OF course, one of my favorite videos of ALL TIME shows how students “benefit” from a subsidizing of college majors when in reality if they had to pay for college themselves it would be (a) cheaper, and (b) they would go into careers other than their majors… like sign flippers and bartenders (or other fields that are hurting):

The great conundrum of the U.S. economy today is that we have record numbers of working age people out of the labor ‎force at the same time we have businesses desperately trying to find workers. As an example, the American Transportation Research Institute estimates there are 30,000 – 35,000 trucker jobs that could be filled tomorrow if workers would take these jobs–a shortage that could rise to 240,000 by 2022.

While the jobs market overall remains weak, demand is high for in certain sectors. For skilled and reliable mechanics, welders, engineers, electricians, plumbers, computer technicians, and nurses, jobs are plentiful; one can often find a job in 48 hours. As Bob Funk, the president of Express Services, which matches almost one-half million temporary workers with emplo‎yers each year, “If you have a useful skill, we can find you a job. But too many are graduating from high school and college without any skills at all.”

The lesson, to play off of the famous Waylon Jennings song: Momma don’t let your babies grow up to be philosophy majors.

[….]

Kids commonly graduate from four year colleges with $100,000 of debt and little vocational training. A liberal arts education is valuable, but it should come paired with some practical skills.

Third, negative attitudes toward “blue collar” work. I’ve talked to parents who say they are disappointed if their kids want to become a craftsman–instead of going to college.This attitude discourages kids from learning how to make things, which contributes to sector-specific worker shortages….

(HERITAGE)

(For full disclosure, my degree — theology — is one of the lowest paying degrees out there, and the lowest in employment opportunities.) In a short debate of the issue, Peter Schiff notes this “propping up” of useless degrees:

In the above discussion, Diana Carew seems to want jobs created by the government to fit the degrees earned. Otherwise, how would you force the private sector to create such opportunities unless you artificially demand [create] such opportunities? ~ There was zero unemployment in Soviet Russia, but all this “opportunity” collapsed due to economic laws… “this is how the USSR ended up with warehouses FULL of “widgets” (things made that it could not use or people did not want) no one needed in the real world. This economic law enforcers George Gilder’s contention that when government supports a venture from failing, no information is gained in knowing if the program actually works. Only the free-market can do this.” (Peter Schiff gets into the weeds a bit in this video.)

Here is another great PRAGER U video discussing the issue:

This is one of the areas Gary Johnson was correct — supply and demand:

FORBES notes well that most on the Left-end of the spectrum “don’t hate entrepreneurship and innovation,” but that their Econ 101 “part of the brain that deals with economics tends to shut down when discussing sectors like higher education (or healthcare).”

A WASHINGTON FREE BEACON post relates findings from a Federal Reserve Bank (NY) study showing that the federal student loans have increased the cost of college tuition while at the same time college enrollment did not increase:

The expansion of federal student loans has caused tuition prices to increase without increasing college enrollment numbers, according to a report from the Federal Reserve Bank of New York.

The report evaluated student financial data as well as federal student aid programs “to identify the impact of increased student loan funding on tuition.”

According to the report, yearly student loan originations grew from $53 billion to $120 billion between 2001 and 2012, an increase of about 126 percent. During this time frame, average sticker-price tuition nearly doubled, rising from $6,950 to $10,200 in constant 2012 dollars.

The report found that for each dollar of federal aid applied, tuition increased as well.

“We find that each additional Pell Grant dollar to an institution leads to a roughly 55 cent increase in sticker price tuition,” the report says. “For subsidized loans, we find a somewhat larger passthrough effect of about 70 percent.”

[….]

The report makes reference to a hypothesis put forth by William Bennett, the Reagan-era secretary of education. The so-called “Bennett Hypothesis” holds that “increases in financial aid in recent years have enabled colleges and universities blithely to raise their tuitions, confident that federal loan subsidies would help cushion the increase.”

Many have compared the market for postsecondary education to the housing market…. [see video at the top]

Which brings me to finish this post with a humorous look at the hipster douche-bags scratching his or her head in regard to high tuition costs via REASON-TV:

POST-SCRIPT

In an article entitled, Why Is College Tuition Rising So Much? And What Can You Do?, that updates some of the numbers we are dealing with, I found this part sad (and I include myself in this paradox), because often times the young person takes as much money as they can get for the semester rather than get the bare minimum and subsidize the rest with income from work. (Editor’s note: this in part delays adulthood and why matters important to our body politic being expressed in an elementary way at the college level.) Here is the section:

As of 2015, there was over $180 billion in available financial aid for undergraduates. Of that, 67% was in federal grants and loans.

While federal aid has been valuable to those who otherwise would not be able to afford higher education, it has created something of a paradox.

Students accept whatever aid they can get, potentially failing to weigh the long-term financial risk once they earn that degree. The thinking goes that the debt will get paid back in time once they get a well-paying job.

The higher institutions, for their part, understand that with someone else footing the bill, they have very little accountability to the student to keep their costs in line. The institution will get paid no matter their tuition and fees.

Once that student does graduate, the burden becomes theirs.

It’s a heavy one too.

Currently, student loan debt in the U.S. is close to exceeding $1.5 trillion dollars.

Compare that to the over $750 billion owed in credit cards.

Wow.

Mary Bromley, the articles author, while making some good points didn’t include the idea that getting liberal arts degrees is not prepping the student for the shift towards technological needs for the future, nor did she deal with getting degrees that are actually useful in the real world environment. Mind you, that wasn’t the main idea or push of the article and may be a good “part deux,” but one of the main reasons tuition has risen IS BECAUSE the Federal Government is involved… practical ways to keep costs down that are in the article aside.

Likewise, automation (“robots”) will increasingly replace people in a “growing number of jobs, the skills employers are now looking for are technical skills.” But that doesn’t mean people will lose work over the issue, it means that society as a whole will need to change their focus to more technologically minded degrees. Frank Roberts in an earlier article continues:

What specific skills those might be will depend on the specific job you are looking at.

But, basically those skills would include

  • Computer skills
  • Problem Solving Skills
  • Communication Skills
  • Finance Skills
  • Business Skills
  • Science Skills

[In the article much is made of jobs being filled by persons holding bachelor degrees, but, that may merely be a reflection of the over supply of degrees. It should be noted that at the same time a higher percentage of those turned down for work were also bachelor degree holders.]

So a change to practical degrees dealing with the change in society is a requirement. NOT TO MENTION the trades that support families well should be encouraged as well. (Like a master tool maker, a carpenter, or a plumber, etc., these are high paying jobs that society will always need — and jobs like these are more apprenticeship driven rather that degree driven.)

FORBES notes one study that challenges the status quo:

  • …Beyond.com, found that a striking 64% of hiring managers said they would consider a candidate who hadn’t gone to a day of college. At the same time, fewer than 2% of hiring managers said they were actively recruiting liberal arts grads….

A person starting out in life should consider all of the above. Their choices made now will have lasting effects — speaking from experience.

The Venezuelan Diet!

Published by Papa Giorgio

See: Bernie Sanders Socialist Paradise!

Using an ancient Soviet method, 75% of Venezuelans have lost an average of 19 pounds and so can you! Who needs human rights and free press when you can get back to your old college weight? Watch the video and let Remy show you how it all works.

The “Card-Krueger” Study Debunked

Published by Papa Giorgio

The audio is the later part of Larry Elder commenting on Jane Fonda going to Detroit to advocate a $12.00 minimum wage (DETROIT FREE PRESS). I have already posted quite a bit on this (see the section titled “Minimum Wage,” on my “ECON 101” Page). While sitting many other studies… I wanted to zero in on Larry discussing the David Card and Alan Krueger study. I have had it cited to me in discussion, so I wanted to have a post to link to to refute the study.

I wish to have the reader view what is working against the “Card-Krueger” study:

  • 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]

  • 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).

Here is the NEW YORK POST article the “Prince of Pico-Union” [Larry Elder] was referring to:

….Back in 1994, Princeton economists David Card and Alan Krueger claimed that they’d looked at Garden State fast-food outlets in the wake of the state’s 1992 minimum-wage hike — and found that employment increased relative to similar restaurants in next-door Pennsylvania.

But six years later, the Card & Krueger study was debunked in the same economics journal that originally published it.

The Jersey study first gained notoriety when President Bill Clinton cited it in support of his proposal to increase the federal minimum wage in the mid-’90s. The economists’ work provided for a compelling story: Telephoning restaurants in New Jersey and Pennsylvania before and after Jersey hiked its minimum wage, they reported an increase in employment.

But other economists were skeptical. After all, just over a decade earlier, a seven-volume report from Congress’ Minimum Wage Study Commission had established conclusively that each 10 percent increase in the minimum wage reduced employment for young people by as much as 3 percent.

As it turned out, there was good reason to be skeptical. A team of researchers from the Employment Policies Institute (where I’m now research director) collected actual payroll data from 25 percent of the franchised restaurant locations that Card and Krueger had telephoned — and found that the hard info had little resemblance to what the economists (actually, students working for them) had gathered via phone interviews that used an ambiguous set of questions.

The funky data gave the Princeton economists a picture of businesses making implausibly large changes in employment — from zero full-timers to 35 in less than a year, for instance, or from 60 part-time staff down to 15.

EPI presented these results in a hearing before Congress’ Joint Economic Committee, and responsible outfits stopped relying on it. (Where media coverage of the Card-Krueger work once praised as a “most compelling study,” editorials now described it as “snake oil” that had been “dropped faster than a mis-flipped burger.”)

Economists David Neumark (then at Michigan State University) and William Wascher (Federal Reserve Board) followed up with a detailed independent analysis of the realrestaurant payroll data, and published their findings in the same journal where the Card-Krueger study first ran.

Far from boosting employment, they found, the mandated wage increase in New Jersey decreased employment — just as economic theory would predict.

Yet Jersey advocates for a higher minimum wage still cite the study. The liberal think tank New Jersey Policy Perspective recently cited the study as “groundbreaking,” while Rob Duffey of the New Jersey Working Families Alliancewrote in an op-ed last monththat it is “the seminal report on the impact minimum-wage increases have on employment.”

Sadly, some journalists are also playing this game: In recent months, writers inBloomberg, TheChicago Tribune, TheWashington Post and TheNew York Timeshave also trotted out the study to support their points.

Perhaps this is understandable — proponents don’t have many good studies to hang their hats on. The vast majority of economic research (including 85 percent of the best studies from the last two decades) points to job losses rather than job gains after a minimum-wage hike.

[….]

Unemployment is already 27 percent among New Jersey teens, and 35.5 percent for black teens — and hiking the minimum wage, as the advocates so dishonestly propose, will only make it worse.

To be fair, Paul Krugman has changed his view (as he has gone more Left… if that were even possible) on this over the years. FORBES notes the change with an “old” Paul Krugman quote and then some later commentary after some new ones:

…So what are the effects of increasing minimum wages? Any Econ 101 student can tell you the answer: The higher wage reduces the quantity of labor demanded, and hence leads to unemployment. This theoretical prediction has, however, been hard to confirm with actual data. Indeed, much-cited studies by two well-regarded labor economists, David Card and Alan Krueger, find that where there have been more or less controlled experiments, for example when New Jersey raised minimum wages but Pennsylvania did not, the effects of the increase on employment have been negligible or even positive. Exactly what to make of this result is a source of great dispute. Card and Krueger offered some complex theoretical rationales, but most of their colleagues are unconvinced; the centrist view is probably that minimum wages “do,” in fact, reduce employment, but that the effects are small and swamped by other forces.

What is remarkable, however, is how this rather iffy result has been seized upon by some liberals as a rationale for making large minimum wage increases a core component of the liberal agenda–for arguing that living wages “can play an important role in reversing the 25-year decline in wages experienced by most working people in America” (as this book’s back cover has it). Clearly these advocates very much want to believe that the price of labor–unlike that of gasoline, or Manhattan apartments–can be set based on considerations of justice, not supply and demand, without unpleasant side effects.

[….]

Old Krugman said that Walmart paying higher wages might lead to less turnover, better morale and higher productivity. But only at Walmart because the operative part was “higher wages than other employers”. And that’s the one thing that a general rise in wages, for example a rise in the minimum wage, cannot accomplish.

New Krugman tells us that a rise in the minimum wage will accomplish exactly that thing that Old Krugman tells us is impossible.

Economics is, as they say, all about the incentives. And my best guess here is that the incentives that Krugman faces have changed. In the earlier period the people who patted him on the head and said that he was a good little economist (read for which “excellent economist, one of the best”) were people who were economists, people who actually understood the subject. Today the people who pat him on the head and insist he’s a great economist are the editorial team at the New York Times. Not known as a hotbed of economic knowledge but equally well known as a hotbed of liberal ideology as being rather more important than reality.

Ho hum, how the mighty are fallen and all that.

Besides Paul Kugman getting worked over by economist Pedro Schwartz, and Krugman is woefully wrong on what Keynsianism can do and not do, there are also some funny memes of him!

Minimum Wage Realities (UPDATED)

Published by Papa Giorgio

UPDATE via the WASHINGTON EXAMINER with a shout-out to THE SAGE!

San Francisco’s higher minimum wage is causing an increasing number of restaurants to go out of business even before it is fully phased in, a new study by the Harvard Business School found.

The closings were concentrated among struggling, lower-rated restaurants. The higher minimum also caused fewer new restaurants to open, it found.

“We provide suggestive evidence that higher minimum wage increases overall exit rates among restaurants, where a $1 increase in the minimum wage leads to approximately a 4 to 10 percent increase in the likelihood of exit,” report Dara Lee and Michael Luca, authors of “Survival of the Fittest: The Impact of the Minimum Wage on Firm Exit.” The study used as a case study San Francisco, which has an estimated 6,000 restaurants in the Bay Area and is ratcheting up its minimum wage. Restaurants are one of the largest employers of minimum wage workers.

The city’s minimum wage is currently $13 an hour, compared with California’s rate of $10.50 and the federal rate of $7.25. The city’s rate is set to increase to $14 in July and again to $15 next year. That rate, unlike federal law, does not include an exception for tipped employees. The rest of the Golden State will see the minimum rate rise to $15 in 2022. States are free to set rates higher than the federal level, and cities can do the same regarding state minimums.

[…..]

Higher minimum wages also reduce the rate at which new restaurants open by 4-6 percent per $1 increase in the minimum, the study found.

Editor’s Note: In case you do not realize the outcome… the only food places able to stay open are the BIG… CORPORATE… CHAIN RESTAURANTS. Which is why they like raising wages… it kills any real competition — this is ECON 101. But we know that BIG GOVERNMENT likes to be in bed with BIG BUSINESS.

(clears throat… *Ehem*, Dems)

GAY PATRIOT comments on the recent study on the effects of minimum wage, hailing from lib-tard central San Francisco:

[….]

Leftists like to deny math and other facts of business and economics. What makes it odious is, they’re also smug about it. It isn’t just their ignorance; it’s their aggressive pride in staying ignorant.

Via HotAir, now a study confirms that San Francisco’s minimum wage does indeed injure the businesses and workers of that city.

San Francisco’s higher minimum wage is causing an increasing number of restaurants to go out of business even before it is fully phased in, a new study by the Harvard Business School found.

The closings were concentrated among struggling, lower-rated restaurants. The higher minimum also caused fewer new restaurants to open, it found.

“We provide suggestive evidence that higher minimum wage increases overall exit rates among restaurants, where a $1 increase in the minimum wage leads to approximately a 4 to 10 percent increase in the likelihood of exit,” report Dara Lee and Michael Luca, authors of “Survival of the Fittest: The Impact of the Minimum Wage on Firm Exit.” The study used as a case study San Francisco, which has an estimated 6,000 restaurants in the Bay Area and is ratcheting up its minimum wage.

So, Nancy Pelosi and her fellow limousine-socialists are looking at fewer restaurant selections for themselves – and more unemployed people. Do they understand that? Or even notice it?

There is only one time when the minimum wage doesn’t hurt employment: When it’s low enough, in real terms, to be ineffectual…..

(read it all)