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Guest Post: Welfare, Minimum Wages, And Unemployment

Tyler Durden's picture





 

Submitted by Greg Morin via the Ludwig von Mises Institute,

Of the various flavors of government interventionism in our lives, the minimum wage is perhaps the most welcomed. It appeals not only to our innate sense of “fairness” but also to our self-interest. Its allure may erroneously lead us to the conclusion that because “it is popular,” ergo “it is right.”

The more astute proponents of the minimum wage, however, immediately point to the obvious; namely, that an extreme minimum wage ($1,000 per hour) would be unequivocally detrimental. However, the proponents quickly turn to dismissing this fear by asserting that, empirically, no such job loss occurs when the minimum wage is slowly raised. This is akin to arguing that although fire can boil water, a small fire won’t heat it up. The support for this assertion is the oft-cited 1994 study by Card and Krueger showing a positive correlation between an increased minimum wage and employment in New Jersey. Many others have thoroughly debunked this study and it is significant that the original authors eventually retracted their claims.

Youth and Entry-Level Unemployment

The problem with such “studies” that purport to demonstrate only positive and no negative effects from a rising minimum wage is that it is quite easy to count individuals whose pay went up. What is more challenging, if not impossible, is to count the people that would have been hired but were not. Likewise, offsetting reductions in non-monetary compensation will not show up in a monetarily-focused analysis.

However, empirical economic data is not entirely useless. Such data is more suited to qualitative rather than quantitative predictions (who is affected rather than how much they are affected). For example, basic economics predicts that a minimum wage will necessarily increase unemployment among those with the least experience. Indeed, if we look at the empirical evidence we see exactly that. Looking at the data from the Bureau of Labor Statistics we find that the unemployment rate (June 2013) among 16-19 year olds is 24 percent and among 20-24 year olds it is 14 percent. These values far exceed the unemployment rate (6 percent) of those workers with sufficient experience and skills to make them largely immune to minimum wage pay scales, namely 25-54 year olds. People whose productive value is less than the minimum wage are de facto unemployable. They are denied the opportunity to gain experience and skills, and their exclusion from the job market is a net loss to society.

The minimum wage is just another weapon in the arsenal of the misguided progressive trying to “help” the poor. Their mistake in wielding this weapon is in presuming all workers are similarly situated; i.e., that the vast majority of hourly employees earn minimum wage and that they are uniformly composed of heads of households. In fact the opposite is true. Only 2.1 percent of hourly employees earn minimum wage and of that number over half (55 percent) are 16-24 years old.

How Welfare Brings Down the Asking Wage

So, we know that a sizable number of minimum-wage earners are not in need of a wage that can support a household. But what of the minimum-wage earners who are? We are told repeatedly that minimum wage is not a living wage, so why are not more minimum wage earners simply starving to death? In reality workers earn two wages: one from their employer and one from the state. For example, someone making the current full-time minimum wage earns $15,000 per year, but they are also eligible for additional government benefits that bring their total remuneration to approximately $35,000 per year if they are childless, or up to $52,000 year if they have children. In fact, earning more does not necessarily help one wean himself off this state sponsored support. As wages rise assistance can often decline so precipitously that even earning $1 more can mean a loss of thousands of dollars in aid. This creates a disincentive for the worker to improve and earn more; the perverse incentive here is that we are rewarding the very thing we are trying to eliminate (low wages). These wage subsidies serve only to pervert the normal incentives present in an exchange between employer and employee. Both the employer and the employee are aware of the subsidies, so each is willing to offer less and accept less rather than demand more and offer more.

At first blush one might conclude the employer is making out like a bandit. But there is no free lunch — the subsidies have to come from somewhere. Taxes fund these subsidies. So the employer is not necessarily paying less if its taxes fund the very subsidies its employees are receiving. In fact many employers pay more on net. All employers pay taxes, but only some receive the benefit of subsidized wages. This is a net redistribution from one class of company to another. In essence we are forcing high wage companies to pay low wage companies to keep their wages low.

The Minimum Wage Reduces Worker Productivity

So considering that it is established that minimum wage laws and other forms of wage subsidization are detrimental to the stated goal of improving conditions for those regarded as poor, we must address the question perennially proffered by those who believe one’s salvation can only come via the state: “If not the minimum wage, what then can increase wages?” To answer this question we must understand there are only two possible routes to improving our wages/standard of living. The first method is the unethical route of using force (government) to extract what we want.

The second method, however, is what every rational person would be left with were there no state influence corrupting the incentives that drive their decision-making: improve or augment one’s skills so that they align with those skills currently in greater demand.

Self-improvement through education and/or work experience is the answer to the question: how do I earn more? Government sponsored interference in the market that results in fewer people gaining experience can only serve to frustrate one’s ability to engage in self-improvement. Elimination of the minimum wage is a necessary, although insufficient, first step to improving the economic value of the inexperienced or unskilled.

 


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Mon, 01/20/2014 - 20:07 | Link to Comment LetThemEatRand
LetThemEatRand's picture

As usual, you got a lot of it right right up until the proposed solution.  How does self-improvement through education and/or work experience get a guy ahead in a world where a few people control most of the world's wealth by inheritance?  Where the international system of trade encourages companies to build factories in countries with autocratic governments that keep their people in a subsistence existence?  Take the money back that was stolen, and then we can talk about building a new system on a level playing field where individual merit is rewarded and workers can bargain freely without fear of losing their jobs to a slave ship country.  Until then, the minimum wage/welfare debate is nothing more than a giant distraction from the elephant in the room that is oligarch control of the world and the intentional conversion of the West into a land of serfs and beggars.

Mon, 01/20/2014 - 20:12 | Link to Comment knukles
knukles's picture

At least the poor and downtrodden get the appropriate social and sexual welfare ...

 

www.youtube.com/embed/t3xJeUNpDOA?rel=0 
Mon, 01/20/2014 - 20:16 | Link to Comment Skateboarder
Skateboarder's picture

Kind of hard to justify low-performance tenured professors, 4x inflated tuitions ('03-'13) for four years of basic prerequisite knowledge without any field experience, additional two-year tracks for certification of basic field knowledge (certification only - actual field knowledge not guaranteed), and further seven-year tracks for esteemed certification of field knowledge (certification only - actual field knowledge not guaranteed), all the while working for and yielding all work to your masters.

This college thing and 'education' seem like a bad idea to me.

Too bad knowledge is considered invalid without certification in most circles still.

edit: knuks, no way!

Mon, 01/20/2014 - 20:18 | Link to Comment Spastica Rex
Spastica Rex's picture

Education /= Training /= Certification

Big money in the control of credentials, however. It's really just a different flavor of insurance.

Mon, 01/20/2014 - 20:29 | Link to Comment kaiserhoff
kaiserhoff's picture

Paying gubbermint workers no more than minimum wage would correct a multitude of sins.

Mon, 01/20/2014 - 20:41 | Link to Comment Gankfest
Gankfest's picture

Can I have your stuffs?

Tue, 01/21/2014 - 02:42 | Link to Comment James_Cole
James_Cole's picture

Government sponsored interference in the market that results in fewer people gaining experience can only serve to frustrate one’s ability to engage in self-improvement. Elimination of the minimum wage is a necessary, although insufficient, first step to improving the economic value of the inexperienced or unskilled.

Government is the fucking market, for fucks sake. This article is moronic, talk to some rich people and learn how the game actually works. All this moronic shit about 'market dictates' blah blah, aren't people sick of this tripe yet?

Minimum wage is one of the very few ways the peons can fight back against their masters. Commodities are priced GLOBALLY, get it? 

Tue, 01/21/2014 - 03:24 | Link to Comment AldousHuxley
AldousHuxley's picture

welfare = cost of staying in power for political class.

 

fake food + sports on TV keep them from leaving the factory.

Got Superbowl + winter olympics lined up.

Tue, 01/21/2014 - 13:47 | Link to Comment gallistic
gallistic's picture

Cole, you are right on target. It never ceases to amaze me how people vote against their own self interest. A serious body of work has developed trying to explain why this is. It is a serious conversation that is past due on the national agenda.

It is tragically hilarious to see "free" and working men who do all the work, throw themselves to their knees and suck the semen out of some "corporate personhood". In my personal view, it is a sad form of neo-feudalism.

Please, oh pretty please, give me less money, so the net profits can break a new record and your stock options and bonuses will rise accordingly. Yes!, yes!, let it "trickle down" into my mouth...

By the way, I have had enough of this bullshit "Austrian Economics" crap. They are the worst breed of academic utopians. A few of their ideas have merit, but taken as a whole, their theoretical blinders do not allow them to see the world as it is, and they are seriously detached from the real world.

They are zealots who defend their dead messiah's economic theology and live in a fantasy laissez-faire world where Smith's cold and dead, mythic, and absolutely "invisible hand" will guide them to economic nirvana or whatever...

Mon, 01/20/2014 - 21:13 | Link to Comment PT
PT's picture

What better way to motivate a President / congress than to ensure that they are no richer than the poorest worker?

Tue, 01/21/2014 - 02:26 | Link to Comment Yenbot
Yenbot's picture

Hear hear, Kaiserhoff!! The motion is seconded!! To the People with it!!

Tue, 01/21/2014 - 13:36 | Link to Comment caShOnlY
caShOnlY's picture

Education /= Training /= Certification

create a "in the club" mind set.  "we paid our dues, your pay yours" idealism.   Then education is no longer about "smarts" but about "paying the loan" that gives the degree.

Mon, 01/20/2014 - 20:54 | Link to Comment i_call_you_my_base
i_call_you_my_base's picture

"Kind of hard to justify low-performance tenured professors"

Kind of hard to assess their performance. Most professors don't teach many classes, don't interact with students, grade papers / projects, etc. That's left to the slave labor (graduate students).

Tue, 01/21/2014 - 02:00 | Link to Comment franciscopendergrass
franciscopendergrass's picture

that's worse than indentured servitude.  at least there was a timeline for the servitude.  what is the timeline for debt that can't be written off for an education that offers very few jobs upon graduation.

 

Mon, 01/20/2014 - 20:30 | Link to Comment kaiserhoff
kaiserhoff's picture

Funny as hell, knuks.

and probably cumming with EBT cards soon..., because Obama.

How do you find this stuff?  Friends at the SEC?

Mon, 01/20/2014 - 20:51 | Link to Comment G.O.O.D
G.O.O.D's picture

Omg that is way too fvked up knucks

Tue, 01/21/2014 - 07:14 | Link to Comment StychoKiller
StychoKiller's picture

All right Knuks!  That's some compassionate conservatism right there!  All you Progressive-Socialists take note:  Knukles has thrown down the (latex) gauntlet and demands that you prove your willingness to give your fellow man a hand!

Tue, 01/21/2014 - 02:33 | Link to Comment Canoe Driver
Canoe Driver's picture

Agreed, LTER. The author also omits that his premise depends on a limited supply of workers. The value of skills and experience plunges when the labor market is flooded with job applicants. This turns out to be true even for highly skilled workers, e.g., engineers, lawyers, etc., but is certainly most damaging to the lowest paid workers. 

Tue, 01/21/2014 - 06:14 | Link to Comment StychoKiller
StychoKiller's picture

"If they're going to die, they'd better do it and remove the surplus population!"

Mon, 01/20/2014 - 20:08 | Link to Comment billwilson
billwilson's picture

More lunacy from the moron.

We live in a society. Not all have equal abilities or desires or capabilities. Yet it is in everyone's best interest to have a harmonious society and not one where it is winner take all. That means sharing, and that means a form of government redistribution. Otherwise ... you get to the point where it is "off with their heads". 

The free enterprisers are wrong. More education is not only the answer, especially if it comes from private schools and more debt, and corpratized education.

As for minimum wages .... Canada is +$10/hr, Australia around +$15 ... and they have lower unemployment rates than in the US ... and folks don't have to pay extra for health care like in the US, so they get to keep more of their money too. Only the US is living in the dark ages..  

 

 

 

Mon, 01/20/2014 - 20:13 | Link to Comment Suisse
Suisse's picture

Australia has a minimum wage with a stepping system and both of these countries have EXPORT DRIVEN ECONOMIES. 

Mon, 01/20/2014 - 20:24 | Link to Comment The_Prisoner
The_Prisoner's picture

Australia has 5 million people on welfare. That is nearly 25% of the total population.

There is a difference between being an export driven economy of commodities versus industrialised goods.

Industry in Australia is gone. It cannot compete due to rising labour and energy costs. Car industry, aluminium smelters, steel mills, oil refineries, you name it... all gone.

Tue, 01/21/2014 - 01:59 | Link to Comment philipat
philipat's picture

Industrialised goods?

 

Mon, 01/20/2014 - 20:42 | Link to Comment Harry Dong
Harry Dong's picture

http://m.christianpost.com/news/almost-half-of-us-population-dependent-o...

As compared to nearly 50% here in 'Merica?

I'd rather see my local McD worker gettin 20 an hour and not having to live on food stamps, wouldn't you agree? It'll cost you 70 cents more a big Mac...are you too niggardly to chip in that?

Mon, 01/20/2014 - 20:53 | Link to Comment i_call_you_my_base
i_call_you_my_base's picture

I think the problem is that many people who work for minimum wage eat at McDonald's. People who can afford to pay more don't really eat there. The increased costs will be absorbed by lower-wage earners.

Mon, 01/20/2014 - 21:19 | Link to Comment Trucker Glock
Trucker Glock's picture

The problem is an economy where adults with children work jobs that high schoolers should be doing for beer and gas money.

Tue, 01/21/2014 - 03:11 | Link to Comment Canoe Driver
Canoe Driver's picture

Then they will eat less. Or perhaps cook their own food. No problem either way, might even lose some weight. There is an obesity problem, and it preferentially afflicts the lower classes. Basically, fast food should probably be taxed like cigarettes. Let's face it.

Tue, 01/21/2014 - 04:20 | Link to Comment stacking12321
stacking12321's picture

no, fast food should not be taxed, and neither should anything else be.

doesn't matter that most fast food is crap and unhealthy.

what matters is a principle of basic liberty - who gets to decide what's good food and what's not?

do you want some corrupt washington bureaucrat deciding for you?

let people live their own lives and make their own decisions.

Tue, 01/21/2014 - 06:18 | Link to Comment StychoKiller
StychoKiller's picture

Well, WHY are they not "deciding" to live without handouts from the Govt?

Tue, 01/21/2014 - 09:40 | Link to Comment Canoe Driver
Canoe Driver's picture

Exactamente, hermano.

Tue, 01/21/2014 - 17:15 | Link to Comment stacking12321
stacking12321's picture

maybe because when you give someone something for free, they often accept it?

that wasn't too hard to figure out now, was it?

doesn't mean it's right, though, to take money by force from people who work for a living, and give it away to others.

 

Tue, 01/21/2014 - 09:37 | Link to Comment Canoe Driver
Canoe Driver's picture

Fast food is a vice. It is an indulgence, not a staple of diet, and universally considered destructive to human health. Now, what would happen if all taxes were removed from alcohol, cigarettes, and other such comestibles?  Their use would increase, and government revenue would drop significantly.  Next, the healthcare burden on government would, in dollar terms, skyrocket.

Thus, you propose a recipe for gross exacerbation of the ongoing national bankruptcy. 

Now, if people want complete self-determination, great, but you would need to completely eliminate government participation in healthcare, welfare, social security, etc, i.e., government would need to have no fiscal interest in your health and well-being at all. Since that won't happen, government has to discourage unhealthy behavior. It is one of the few valid uses of government authority IF a welfare state is a foregone conclusion, since some people are hopelessly self-destructive. 

Tue, 01/21/2014 - 17:11 | Link to Comment stacking12321
stacking12321's picture

a vice? perhaps, but that's just an opinion. who gets to decide what's a vice? how about what tv shows you watch, what books you read? how you spend your free time? what religion you believe in? do you really think someone else should be making decisions for you as to what's a vice and what's not?

there should be no healthcare burden on government.

government interference in the sick-care (aka "healthcare") industry is the main reason it's so expensive in the first place. obvious solution: get rid of the government.

"Since that won't happen, government has to discourage unhealthy behavior. It is one of the few valid uses of government authority IF a welfare state is a foregone conclusion, since some people are hopelessly self-destructive. "

government is the use of coercion (violence) - it is never valid for a man to use force or threat of force to intimidate others into doing or not doing something, so long as that other person isn't infringing on the rights of anyone.

"Since that won't happen"...there was a time that people said that about slavery, as well. eventually people realized it wasn't right and ended the practice. so it will be with government. that's not to say we can't organize and work together, but it must be voluntary, not forced on anyone, that's the key.

 

Mon, 01/20/2014 - 20:54 | Link to Comment G.O.O.D
G.O.O.D's picture

If you eat Mccrap you have brain rot and should never post here.

Mon, 01/20/2014 - 22:05 | Link to Comment PhilofOz
PhilofOz's picture

Bullshit! Just today, Abbott and co having a bitch that nearly 20% of the Australian population are on some type of welfare and it must come down, which I know from people around me has started weeks ago with their slash and burn policies. Under 20& is not 25%.

Mon, 01/20/2014 - 20:13 | Link to Comment rbg81
rbg81's picture

What I get from this article is that the Government disincentives are the problem, not the minimum wage.

Mon, 01/20/2014 - 20:19 | Link to Comment LetThemEatRand
LetThemEatRand's picture

He does have the part right about welfare being a subsidy to corporations that allows the minimum wage worker to survive and remain in his/her situation, though he completely misses the fact that this is deliberate on the part of the big corporations.  Like most pure free market proponents, he urges a free market in a world where the game is already irretrievably rigged in favor of those who inherited their wealth from generations ago and/or who derived their wealth from exploiting a corrupt system.

Mon, 01/20/2014 - 21:23 | Link to Comment BigJim
BigJim's picture

Regardless of the corrupt and oligarchic system we find ourselves in, the argument against minimum wage still stands. It makes the poorer-skilled unemployable.

I would agree, though, that in a society where people do not pay a mark-to-market rate to everyone else in the polity for the privilege of monopolising natural resources, the poor are irrevocably fucked without some kind of welfare system.

Mon, 01/20/2014 - 21:32 | Link to Comment tickhound
tickhound's picture

Can't.. find.. way.. to shove.. square.peg.into.round.hole.

Ultimately, we're all "unemployable." So ultimately, doesn't humanity win?

Change the premise. Humanity can handle it.

Tue, 01/21/2014 - 02:33 | Link to Comment Yenbot
Yenbot's picture

Profound. Most people don't see far enough ahead to say such things, or think them. We in the West are also all "the little old man with the cane" if we're unlucky enough to live that long. Or when we're the recipient of the accident/illness of the week award.

Mon, 01/20/2014 - 21:46 | Link to Comment PT
PT's picture

No, the minimum wage is supposed to be a minimum.  The highly skilled workers are supposed to be paid more.  The fact that highly skilled workers have no leverage says all you need to know about the minimum wage.

But the elephant in the room is, as always, the price of real estate, be it the mortgage on the cheapest house in the cheapest suburb or the price of the land on which the supermarket is built where the minimum wage worker buys his food.

Where are all the builders building cheap houses to accommodate the cheap workers?  Our technology allows us to have a cheap everything except a cheap house?  How convenient!  How can we compete with the foreign labourer on $50 per week when the cheapest rent is $300 per week?  Sleep on the factory floor?  That'll do wonders for demand. 

1990 decent house in decent suburb $85000 = $136 per week out of $290 per week minimum wage (after tax) = 47%
2014 cheapest house cheapest suburb $250000 = $400 per week out of $500 per week minimum wage = 80%

Tell me again, what is fucking up the economy????????

Tue, 01/21/2014 - 03:30 | Link to Comment Canoe Driver
Canoe Driver's picture

If it makes them less likely to be employed, that is not an argument for pathetic wages. People seem to forget that the employer will not be able to legally find employees who will work for less, that's why it is a "minimum" wage. Therefore, he will have to increase the workload on other employees, which is only plausible to a point, or simply hire and raise prices.

This is why ALL labor pay increases are INFLATIONARY. There is NEVER a NET gain by labor, unless it is through increased efficiency or decreasing supply of labor itself. This reality in turn means that employment itself is over-utilized in our present culture, in that it probably only makes sense for gaining skills and experience, during which time an individual sacrifices net financial gain to benefit from training and to build skills. Every capable member of the workforce therefore should target being a partner in a business at some point. The ones who can't do so will pay the price of economic stagnation, and it is this cohort who are the proper object of compensatory and limited government assistance. 

Therefore I submit that the conversion of 99% of the people to an expectation of a lifetime of labor without equity is problem number one.

Mon, 01/20/2014 - 21:41 | Link to Comment GernB
GernB's picture

Free enterprise is letting consumers decide what labor is worth to them. Freedom is not freedom from the pressures of life, because that only happens by saddling someone else with responsibility for your need to feed yourself, cloth yourself, shelter yourself, and provide your health care. Living in a society with someone else shouldn't be a license to take their time by confiscating their resources. How many years of someone's life is it fair to take in the form of taxes to pay for someone elses free stuff?

Mon, 01/20/2014 - 21:57 | Link to Comment PT
PT's picture

First gimme some honesty in the price of real estate before we worry about the other stuff because the other stuff is currently insignificant.  We could easily compete with foreign manufacturers, if only we paid our workers ten cents per week.  Which they would happily work for if their mortgage was only one cent per week.

We're being crushed between foreign labour prices and local real estate prices.  That is the real problem. 

Mon, 01/20/2014 - 22:02 | Link to Comment PT
PT's picture

Will real estate prices ever go down?  You know, to reflect the true value of the real estate.

EDIT:  "True value" meaning "the productive capacity", NOT "the amount lent to idiots in order to bid up the price, with no attention paid to the ability to repay" 

Mon, 01/20/2014 - 21:59 | Link to Comment LetThemEatRand
LetThemEatRand's picture

So if I inherit a billion dollars from my family that ruled by force and stole their wealth a few generations ago, I'm cool then?  And that's not freeloading but rather keeping what my ancestors stole fair and square?  And if I fund a politician to write laws that allow me to make a billion "legally" by inflating away the purchasing power of the middle class, I'm cool because I didn't break any laws that I wrote for said politician?  My transfer of wealth from the middle class to me is not "saddling someone else with responsibility for my need to Bentley myself?"

Tue, 01/21/2014 - 00:43 | Link to Comment cynicalskeptic
cynicalskeptic's picture

Behind every great fortune lies a great crime.

Honore de Balzac


just because generations pass, it does not mean the crime was not committed

Tue, 01/21/2014 - 09:42 | Link to Comment artless
artless's picture

Rand,

So you are saying that everyone with a billion large did just that? No one aquired their wealth morally or honorably?

Really?

Perhaps had we lived in a more liberty based society that did not allow the use of government force or coercion as a tool of the wicked to exist we might not have the hypothetical example you cite. Are you referring or alluding to a particular figure either present day or from history?

Guys like you always like to reference Henry Ford and cite his high wage policy as an example. Did Ford acquire his wealth in the way you suggest? And by what claim does anyone have on that wealth once he died. Does he not have the right to do with it as he chooses? Is it not his property?

In light of that do you propose that all wealth in death be confiscated by the state or society? Would you include the wealth of the recently deceased Robert Wilson? The guy whop CHOSE to give away his 600 million to various charities, foundations, etc? Or were these entities not to yopur liking?

Your logic is a circular firing squad. You want to right the wrongs of the oligarch/political/ruling class by giving the wealth of private citizens to the oligarch/political/ruling class.

Hello!

Mon, 01/20/2014 - 22:26 | Link to Comment PT
PT's picture

Australia's minimum wage could have been worth something if it had have been able to keep up with the minimum price of real estate.

What the govt gives, the bankster takes double. 

Mon, 01/20/2014 - 22:28 | Link to Comment PT
PT's picture

... unless it is a "First Home Buyers' Grant", in which case the banksters take tenfold or twentyfold.

Mon, 01/20/2014 - 23:30 | Link to Comment The Shape
The Shape's picture

Most of the time.

Tasmanians looked to be getting a good deal out of it. For two years there wasn't a huge increase in loan size for first home buyers, then the mainland boomers started buying up everything in sight and decimated the place.

"Yet two years after the introduction of the grant, the average loan to first home buyers had only increased in size by 3.9%. But by mid 2006, however, the average loan to first home buyers had swelled by 101%."

http://www.idiottax.net/2013/12/no-country-for-new-profits.html

Even with the recent declines you've now got a minimum wage state coughing up 6-7 times income for some of the worst quality houses you'll ever see.

 

 

Tue, 01/21/2014 - 09:24 | Link to Comment Canoe Driver
Canoe Driver's picture

All wage growth beyond the market price of labor is INFLATIONARY as a matter of mathematical fact. There will always be a rapid and compensating general price increase which takes away any benefit of increasing the wage. Thus, all pay raises are made for their psychological "reward" effect. The actual wage, in terms of its purchasing power, depends on the supply of labor and on its efficiency.

"Employees" have been dumbed down to the point where not even 1% of them can figure out that emerging from their situation requires birth control and capital stock, not pay raises.

Wed, 01/22/2014 - 04:33 | Link to Comment PT
PT's picture

Close.  You will get numerical inflation but the minimum wage can increase if others do not demand proportionate increases for themselves.  This is reasonably possible given that the real minimum wage has halved over the last 50 years, even though productivity has increased.  Otherwise, as you said, the net result is bigger numbers and nothing else.  Except the dilution of debt, for both consumers and producers, which results in increased demand if the economy has the productive capacity to absorb it.  The biggest spanner in the works for a minimum wage increase is the price of foreign labour.  But as I keep saying, we could "easily" compete with foreign labour if we eliminated debt and crashed the price of real estate.  Who amongst TPTB is going to crash debt and the price of real estate to a level where we can compete with foreigners?  Is a block of land really worth a million dollars if it has to compete with a foreign block of land worth ten grand?  I'm not just talking about the block of land that holds the factory.  I also mean the x square metres of land the workers live on.

Another way of looking at it is to look at our excess capacity.  How can we "afford" to build stuff but we can't afford to buy it?  Do wages have to go up or down to absorb that excess capacity?

We have excess unemployment.  The cheapest worker gets the job, the rest are unemployed, no matter how talented they are.  So remove the minimum wage.  Joe Boss has determined his workers are worth ten bucks per hour.  But due to the excess of talented labour, Fred Boss can hire his workers for nine bucks per hour, decrease his prices to steal market share from Joe and what happens?  Joe Boss suddenly "discovers" that in order to compete, his workers are only "worth" eight bucks per hour even though they produce the same amount of stuff, Fred then swears black and blue that his labourers are now worth only seven bucks per hour and so on down to zero, at which point both bosses are swearing workers should be paying for the "privilege" of having a job because "that is all they are worth".  "Oh", you say, "but the workers can quit any time".  Sure they can, if they don't mind starving to death, but that is another story.  When the workers' wages go down, can they renegotiate their debt?  "Sure, I used to owe a hundred grand, but now I have a ten percent pay cut, can I only owe 90 grand?"  The real question is, "What goes down faster - worker's pay or workers' demand?"  Back in the day when I was a factory slave, my income ($380) exceeded my expenses ($360) by twenty bucks per week.  A 6% pay cut would totally wipe out my excess demand.  A 6% pay rise would double my "profit".  How much would a 6% pay cut / rise affect the profit on what my boss was selling?  Answer = less than 6% as minimum wages are only a small component of total price.

Once again, Google Peter Schiff and his "15 for 15" campaign, where he asserts that a $15 per hour minimum wage (i.e. double) would only result in a 15% increase in prices.  Would you care about a 15% price rise if your wages doubled?  Sure, non-minimum wage people will get upset but they don't need their wages doubled in order to compensate for the increase. 

But again, we're drifting off in the wrong direction.  In the time it took me to increase my wages by 40% (due to extra training- not everyone got that increase), the local price of real estate went up by 400%.  Why is no-one screaming about how that affects the equation? 

Tue, 01/21/2014 - 03:22 | Link to Comment LocalBoy
LocalBoy's picture

BS..
We dont need education, nimwit, we need production.

Capital is saved production

Good grief 

Tue, 01/21/2014 - 06:15 | Link to Comment StychoKiller
StychoKiller's picture

What is the population of Canada?  Of Australia?  Non Sequitir!

Tue, 01/21/2014 - 09:29 | Link to Comment artless
artless's picture

@billwilson

"That means sharing, and that means a form of government redistribution. Otherwise ... you get to the point where it is "off with their heads".

And how exactly do you propose to do this? Oh, that's right by putting an gun to my head. In otherwords "off with their heads"

AT what point and with how much proven failure of socialism does one finally come to the realization that maybe, just maybe some other way might be better? We have "redistributed" over $6 trillion since the inception of The War on Poverty. How's that working? What might that capital have produced in the hands of, well PRODUCERS inastead of our socialist-fascist rulers who skim about 72% of each dollar of that bounty "to do the business of the people". Like take trips to Africa that cost $100 million. Like start wars that kill nearly 60,000 of your "poor folk" by conscripting them to go to some jungle in SouthEast Asia to kill a bunch of fellow REALLY poor folks that are no threat to any American, then 40 years later end up having that very same "enemy" become a trading partner.

Oh no worries just "redistibute" MOAR. That will work.

Fucking moron.

Oh and by the way, Australia and Canada are gonna go bust pretty soon and GERMANY HAS NO MINIMUM WAGE. So your argument is bunk.

Oh and one more thing. Minimum wage laws were brought about predominantly by unions to disenfranchise non union workers by pricing them out of the labor pool. And just as luck would have it, most of those folks were minorities, immigrants, etc. Like the Italians and Irish in geneartions past. Like blacks Latinos and Asians. Deliberate racist policies ONLY ACHIEVEABLE through the force and coercion of the very same redistibuitve criminal government.

 

Tue, 01/21/2014 - 14:19 | Link to Comment moneybots
moneybots's picture

"As for minimum wages .... Canada is +$10/hr, Australia around +$15 ... and they have lower unemployment rates than in the US ... and folks don't have to pay extra for health care like in the US, so they get to keep more of their money too. Only the US is living in the dark ages.."

 

I'm guessing the Chinese boom is helping them.  How long will that last?  McDonalds was hiring at above minimum wage at the height of the 1990's boom and unemployment was low.

There is no paying extra for health care, the cost of health care has to be paid.  It isn't free.

Mon, 01/20/2014 - 20:11 | Link to Comment philipat
philipat's picture

"America will always do the right thing. But only after having exhausted all other possibilities"

:Churchill

Mon, 01/20/2014 - 20:10 | Link to Comment max2205
max2205's picture

Huh?

Mon, 01/20/2014 - 20:10 | Link to Comment Son of Loki
Son of Loki's picture

"It's only fair."

Mon, 01/20/2014 - 20:16 | Link to Comment Harry Dong
Harry Dong's picture

Australia..16 an hour min wage and look how they are suffering,

Hey, let's cut to the chase and talk about a maximum wage law...capped at 10 x minwage.

Mon, 01/20/2014 - 20:25 | Link to Comment Harry Dong
Harry Dong's picture

Hmmm..executives for goodwill rake in 500k year. And the floor help only gets min wage? (Or less)

So let's give these charities an INCENTIVE. You can't pay anyone more than 10 times the lowest paid worker. Booyah, problem solved.

Mon, 01/20/2014 - 22:05 | Link to Comment Trucker Glock
Trucker Glock's picture

You're the prettiest dong I've ever seen.

 

I agree there are serious inequality problems.  Can't agree with your solutions, though.  .gov solve a problem, any problem?  Funny.

 

Tue, 01/21/2014 - 00:53 | Link to Comment cynicalskeptic
cynicalskeptic's picture

Even the Robber Barons beileved in a limit to salaries.  They woud be OUTRAGED at the pay being paid to CEO's today.  Keep in mind that the fortunes made 100 years ago were made by men who built companies - often through scheming and with much manipulation of stocks - but they built railroads, steel mills, manufacturing companies, oil companies and more that CREATED VALUE, that EMPLOYED thousands and made fortunes for their owners (often the same people tht ran them).  The wealth came from OWNERSHIP and profits - the shareholders became wealthy, NOT the 'hired help' who today vote themselves enormous sums.  But today you have no major blocks of shareholders that will stand up to the hired help.

Today executives get bonuses and stock options when they DON'T meet goals, when the LOSE money.  Hell, they have contracts that GUARANTEE them MILLIONS if they are terminated early.  Only today can someone walk away with millions for 'working' less than a year and FAILING.

Charities are another scandal - vastly overpaid execs taking funds that should be going to help the cause they serve.  Boy Scouts has heads that get a million or more in total compensation despite declining membership, regular scandals and worse.  Property - camps and such donated for the benefit of BOYS - are sold off to pay salaries.  Meanwjhile VOLUNTEERS do all the real work - we joke that the ONLY time we see paid staff is when they show up to ask for money to pay their salaries.  Our Council was rich in property - camps, reservations, cabins and prime waterfront property (which had a trust fund for upkeep and maintenance).  Today we have 2 camp properties - rocks around stagnant lakes - one local and another 5 hours away.

Mon, 01/20/2014 - 20:23 | Link to Comment The Abstraction...
The Abstraction of Justice's picture

The von Mises twits promote open borders and here, the abolition of the minimum wage. So what is the agenda - financial genocide of the natives, Ukranian Holodomor style. von Mises and Communism are two sides of the same Zionist coin.

Mon, 01/20/2014 - 20:57 | Link to Comment G.O.O.D
G.O.O.D's picture

I think the answer is to send 2 hand grenades every week to every man woman and child in amerika to do with them as they see fit.

Mon, 01/20/2014 - 22:41 | Link to Comment PT
PT's picture

von Mises Institute = the place economics drop-outs go to gain employment selling out their countrymen by printing propaganda for other economics drop-outs ... actually, maybe I've got it wrong.  I think the drop-outs are actually the ones that notice the smell of the bullshit.  vMI would be for the ones with the degrees.

Keep printing that propaganda crap guys!  If you can't earn your keep then you'll have to come out into the real world and live it! 

Tue, 01/21/2014 - 04:32 | Link to Comment stacking12321
stacking12321's picture

the agenda is simple: promote a free and open society.

stop depending on government central planning which always fails, and let people live our own lives free of coercion, let us make our own decisions.

Tue, 01/21/2014 - 09:36 | Link to Comment PT
PT's picture

They have a mighty strange way of going about their so-called "agenda", and an equally strange set of "representatives" who seem to be chosen because, ummm, because ... because, ummm ... they were the cheapest quote?

Tue, 01/21/2014 - 17:12 | Link to Comment stacking12321
stacking12321's picture

no idea what you're talking about.

who are the "representatives" you mention?

Wed, 01/22/2014 - 04:39 | Link to Comment PT
PT's picture

The ones that get their stuff displayed here on ZH.  The ones that don't know how a supply / demand curve works.

Wed, 01/22/2014 - 16:21 | Link to Comment stacking12321
stacking12321's picture

let me see if i understand you correctly.

you're saying, that proponents of austrian economics (von mises, et al), don't undersand supply & demand.

what is your basis for making this claim?

 

Mon, 01/20/2014 - 20:23 | Link to Comment QQQBall
QQQBall's picture

Work experience or education - that sounds hard. I get more for another nino though...

Mon, 01/20/2014 - 22:47 | Link to Comment PT
PT's picture

I remember the year that my extra education and training allowed me to earn, for the first time in my life, $40 grand in one year!!!  It was also the first time I was earning average wages. It was also exactly the same year in which the median home price moved from a tad over $400 grand to a tad over $440 grand.

Bummer!  I obviously had the wrong education. 

Tue, 01/21/2014 - 03:15 | Link to Comment LocalBoy
LocalBoy's picture

And I remember the first year I made 120,000 with my hands and back. Then I quit building palaces for the pigs and still have my money, wife and dignity.

Covet your paper debt, enjoy your hubris....just remember, the next generation will not do for you what we did.

Were you educated or indoctrinated ?

Did you learn Morals or Dogma ? 

Tue, 01/21/2014 - 04:57 | Link to Comment PT
PT's picture

I took the necessary steps to transition from "unskilled worker" to "tradesman".

Wed, 01/22/2014 - 11:52 | Link to Comment PT
PT's picture

I guess in those days I might have been able to earn 120 grand in one year, if I worked 24 hours per day, 365 days per year at a flat rate of $13.69 per hour.  Naaah, I only got about $12.36 per hour and that was for night shift.  Maybe with the right penalty rates?

EDIT:  Just did the calcs.  Nup.  Wouldn't have even broke 100k, and that's before you take out tax.  Guess I simply didn't work "smart" enough. 

Mon, 01/20/2014 - 22:51 | Link to Comment PT
PT's picture

I remember the year that my extra education and training allowed me to earn, for the first time in my life, $40 grand in one year!!!  It was also the first time I was earning average wages. It was also exactly the same year in which the median home price moved from a tad over $400 grand to a tad over $440 grand.

Bummer!  I obviously had the wrong education. 

Mon, 01/20/2014 - 20:24 | Link to Comment disabledvet
disabledvet's picture

I agree..."there's no such thing as a bootstrapping effect." doesn't seem wrong to try and propagate the idea through a minimum wage though. at least you get something for labor...even if all it is is "that it exists." (through a "W-2") there does seem a rather odd contradiction that "working hard" conservatives propagate when it comes to taxes i might add. if my labor is my own and all that exists payment wise is between me and the person paying me...why should i "the laborer".. OR THE EMPLOYER...owe anyone anything? it was the Republicans after all who "discovered" the solution of having employers be the tax collector in 1986 and the whole "deficits don't matter" meme. Well...okay...tell me "debt monetization schemes don't matter" then as well. We've had far better recoveries with far more taxes and Government than this.

Now we find that we really can pay for this "war" it's time to "attack the minimum wage"? I say ditch Medicare Part B and go from there. "And that was a totally Republican plan" I might add.

Mon, 01/20/2014 - 20:39 | Link to Comment LetThemEatRand
LetThemEatRand's picture

Of course both parties got us here, because they both work for the same people who want us here.  They just love it when the sheeple debate how to divvy up the crumbs they left behind for us.

Mon, 01/20/2014 - 20:25 | Link to Comment ebworthen
ebworthen's picture

Listen; .gov allowed anyone and everyone to stream across the border to work like slaves illegally.  Then they shipped manufacturing overseas.  Then they allowed anyone with a Visa to further lower the wage scale.  So, we have the trifecta of fewer jobs, legal and illegal foreigners taking jobs, and a lowered pay scale.

The minimum wage is a half-assed attempt to Spackle over the much larger problems caused by crony capitalism.

The left and the right are DETERMINED to destroy the middle class and the nation so they can make $$$ in the moment.

Mon, 01/20/2014 - 20:29 | Link to Comment OC Sure
OC Sure's picture

"The pretended solicitude for the nations welfare, for the public in general, and for the poor ignorant masses in particular [is] a mere blind. The governments [want] inflation and credit expansion, they [want] booms and easy money." -Ludwig Von Mises, Human Action

The purpose of interventionism is to plunder. It is not about helping those who cannot help themselves; it is about stealing from those who can under the guise of doing good for those who cannot help themselves. 

Mon, 01/20/2014 - 20:46 | Link to Comment Curt W
Curt W's picture

Fill a 3 qt. sauce pan full of water

Put a candle under it

Call me when it boils

Mon, 01/20/2014 - 21:23 | Link to Comment OC Sure
OC Sure's picture

Can we set 3 frogs in it before it simmers? (Each one representing a generation of citizens since the 3rd Central Bank of America started.)

Tue, 01/21/2014 - 03:34 | Link to Comment LocalBoy
LocalBoy's picture

Drench a future generation in debt, destroy their money and productive capacity, back it with a world empire making enemies and ask yourself........why wont people work ?

Human Action cannot be defined by formulas.

I ask - Is it moral for us to live 17 trillion dollars beyond our means on the backs of an unborn child ?
Is collateralizing posterity moral, just or sustainable ?

Mon, 01/20/2014 - 20:50 | Link to Comment naiverealist
naiverealist's picture

The minimum wage argument is merely a distraction from the real problem, an unstable, depreciating dollar.

I tell about the time that I told a person that I would work for one dollar an hour.  He started to go a little nuts when I added that that dollar had to be a silver dollar.  He turned and left without another word.

That's the situation, as dollars are inflated away, their value depreciates so the dollar you work for today is worth less than the one you earned yesterday.  This is how it is with inflating fiat money.

If, instead, the dollar was identified by the amount of gold and silver as specified in the Constitution, then there would be a consistent value of the dollar and you wouldn;t have to constantly raise the minimum wage because of the loss of value of the fiat dollar.

Pure distraction.

Mon, 01/20/2014 - 20:55 | Link to Comment Toxicosis
Toxicosis's picture

Up here in Ontario, Canuckistan, the unelected premier Wynne just announced for the upcoming spring election that she wants to raise the minimum wage to 14 dollars/hour.  This is from 10.25.  Thus employers will employ less people and not more.  And for those who think our unemployment rate is less than the US, I have some news for you.  We here in Canuckistan stand at 7.2%, so whoever wrote we're less than you, well please do a little research before you spew.

Mon, 01/20/2014 - 21:28 | Link to Comment PT
PT's picture

You think you can't endure a 40% increase in the minimum wage?  Let us know how it works out when your customers are 40% richer.  Actually, you are right - number of jobs will decrease ... because more jobs will be sent over seas.  Do you guys still have any manufacturing?  Or are yous like the rest of us - all the manufacturing is already overseas?

But all that is irrelevant.  What happened to your real estate prices over the last 15 years?  How on earth did your economy absorb that?  You think your minimum wage workers would need a payrise if their mortgage didn't quadruple over the last 15 years?  Or perhaps all this minimum wage talk is about bailing out the banks by "stealth". 

Mon, 01/20/2014 - 23:27 | Link to Comment Toxicosis
Toxicosis's picture

We are no different than the US.  Since 1991 and fucked trade....ahem...free trade, we lost massive manufacturing jobs to mexico first, some to the US and the rest eventually to asia and China especially.  And yes of course we will continue to bail out are banks when the time comes.   And to all those who provided the down arrow, provide some fucking text to your reasoning or just fuck off and go back and leach of the taxpayer or attempt to score your minor victory at Sears or Target or Walmart.

Mon, 01/20/2014 - 21:50 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

Just take the money from the Maple Laughs.  They're overpaid anyways...

Given that they always snatch defeat from the jaws of victory.  Gave up on 'em decades ago and I sleep better, and do better things with my time.

Mon, 01/20/2014 - 21:01 | Link to Comment Spungo
Spungo's picture

We don't need no stinkin minimum wage. Russia in 1916 was doing just fine with... oh.

Mon, 01/20/2014 - 21:52 | Link to Comment new guy
new guy's picture

Instead of raising the minimum wage you could achieve the same affect by lowering taxes.

Mon, 01/20/2014 - 22:02 | Link to Comment rsnoble
rsnoble's picture

You're fired!

Tue, 01/21/2014 - 04:37 | Link to Comment stacking12321
stacking12321's picture

not good enough.

eliminate all taxes.

eliminate minimum wage.

eliminate all gov.

 

Wed, 01/22/2014 - 04:45 | Link to Comment PT
PT's picture

Last time I checked:  Mortgage on cheapest "house" in cheapest suburb = $400 per week.  Chinese workers describing $50 per week as a "good" wage.

Sort out debt and the price of real estate.  It'll pay off a shitload more than the other stuff. 

Except, "some people" are happy with things the way they are. 

Wed, 01/22/2014 - 11:56 | Link to Comment PT
PT's picture

eliminate debt.

let real estate prices reset to "internationally competitive levels".

Mon, 01/20/2014 - 22:00 | Link to Comment rsnoble
rsnoble's picture

"Self-improvement through education and/or work experience is the answer to the question: how do I earn more?"

Bullshit!  Someone is still stuck in yesteryear.  Granted it will work for many but for the large % I ask you to refer to all the unemployed college grads.  Now I will say that many have worthless degrees but on the other hand if everyone had say an engineering degree what good would it do?  Basically you'll have overeducated burger flippers till the robots come and the poor get even more screwed than they are now.

Great for companies they get highly educated people and couple that with no minimum wage?

Congrats.........we now make the same as people in China.

Complete race to the bottom.  Make a buck today, fuck the consequences is the motto.

Mon, 01/20/2014 - 22:17 | Link to Comment PT
PT's picture

In my line of business, I continually need to do "just one more course."  If you're lucky, the company you work for will pay for the course.  Otherwise, you use your own time, your own money, and you still have no guarantee of getting a job ... and then you get the common complaint, "Oh you have the ticket but you don't have the experience."  Well, no shit, there's no way I can get experience if you have the monopoly on the experience.  No points for initiative?  No, just a kick in the teeth.

Fuck the "education" bullshit.  If you know the right people and they like you, they will pay you to be educated.  If not, then you can use your own time and money to educate yourself but it guarantees nothing.  The only "education" you need is how to borrow money and not have to pay it back, because at this point, that is the only game left in town. 

Mon, 01/20/2014 - 22:08 | Link to Comment q99x2
q99x2's picture

Self-improvement through education and/or work experience

I'm already on the street yelling Up my FAFSA Yellen Motha Fucka. What you want me to do its Winter break God damn it.

Mon, 01/20/2014 - 22:12 | Link to Comment RMolineaux
RMolineaux's picture

Sure, a single employer may reduce his work force if he is required to pay a higher minimum wage.   No tears here!  He wll cease to receive taxpayer subsidies to his staff in the form of food stamps, medicaid and subsidized housing.  But those same employees will have more cash in their pockets to buy things and create new employment in other enterprises.  There will also be less government spending on food stamps, medicaid and subsidized housing.  A win, win situation all around that has the potential to lift the economy out of recession. 

Mon, 01/20/2014 - 22:39 | Link to Comment HerrDoktor
HerrDoktor's picture

The recession ended officially in 2009 for guys like you.  Give up EBT, food stamps, medicaid, section 8 housing?  Are you crazy, that shit is not only tax free, it is FREE!  The Free Shit Army never, never retreats.

Mon, 01/20/2014 - 22:13 | Link to Comment Atticus Finch
Atticus Finch's picture

The bottom line on minimum wage is that by not raising it, you continue to keep corporations from sharing their profits, which means that the minimum wage is made up by tax payers funding food stamps and other subsistence programs. In other words, supressing minimum wage is subsidizing corporations once again on the backs of tax payers.

Minimum wage can be on a sliding scale. If you are a mom and pop (Do they even exist anymore) there would be more flexibility. If you are a trans-national corporation, then fuck 'em.

Tue, 01/21/2014 - 15:19 | Link to Comment plane jain
plane jain's picture

Agree.  And I don't think you have to be too miserly on small either.  50 employees or less in the US, small business minimum wage.  

Over 50 employees?  You gotta pay enough that your employees projected annual income working their regularly scheduled hours don't qualify for food stamps as a single person/no dependents.  Not exactly a high standard, since many employees are likely to have dependents and would still qualify.

So they can either keep their part-timers at higher wages/no health insurance, or move to more full timers at a lower wage w/health insurance.  I'm sure they can be trusted to do whatever is more profitable.

Mon, 01/20/2014 - 22:23 | Link to Comment Meltdownman
Meltdownman's picture

85 richest people own as much as bottom half of population:

MINIMUM WAGE - I SAY BRING IT ON the rich won't miss it:

The 85 richest people on Earth have the same amount of wealth as the bottom half of the population, according to a new report that highlights growing income inequality as political and business leaders gather for the annual World Economic Forum in Davos, Switzerland.

Those wealthy individuals are a small part of the richest 1% of the population, which combined owns about 46% of global wealth, according to the report from British humanitarian group Oxfam International.

The study found the richest 1% had $110 trillion in wealth -- 65 times the total wealth of the bottom half of the population.

That bottom half of the population owned about $1.7 trillion, or about 0.7% of the world's wealth. That's the same amount as owned by the 85 richest people, the report said.

The findings undermine democracy and make it more difficult to fight poverty, the report said.

“It is staggering that in the 21st century, half of the world’s population own no more than a tiny elite whose numbers could all sit comfortably in a single train carriage," said Winnie Byanyima, the group's executive director.

"Widening inequality is creating a vicious circle where wealth and power are increasingly concentrated in the hands of a few, leaving the rest of us to fight over crumbs from the top table," she said.

In a report last week, the World Economic Forum said widening income inequality was the risk most likely to cause serious damage in the next decade.

President Obama recently called the expanding gap between rich and poor a bigger threat to the U.S. economy than the budget deficit.

The United States has led a worldwide growth in wealth concentration, according to the Oxfam report, titled "Working for the Few."

The percentage of income held by the richest 1% in the U.S. has grown by nearly 150% since 1980. That small elite has received 95% of wealth created since 2009, after the financial crisis, while the bottom 90% of Americans have become poorer, Oxfam said.

The share of wealth owned by the richest 1% also expanded in all but two of the 26 nations tracked by researchers in the World Top Incomes Database.

That's caused a "massive concentration of economic resources in the hands of fewer people," Oxfam said.

Falling taxes for the rich and increased use of tax havens have helped widen income inequality, Oxfam said.

The group called on World Economic Forum participants, which include some of the wealthiest and most influential corporate executives, to take steps to reverse the trend.

Among other things, Oxfam wants them to support progressive taxation, pledge not to dodge taxes, pay a living wage to workers at their companies and push governments "to provide universal healthcare, education and social protection" for their citizens.

[Updated 7:55 a.m. PST, Jan. 20: A previous version of this post said the 85 richest people owned nearly half of global wealth and the same amount as the bottom half of the population. The 85 richest people are a small part of the wealthiest 1%, which owns 46% of the world's wealth. The 85 richest people own about 0.7% of the world's wealth, which is the same as the bottom half of the population.]

Mon, 01/20/2014 - 23:15 | Link to Comment WhyWait
WhyWait's picture

America has the best educated, most talented, most experienced and over-qualified "Army of the Unemployed" in the history of humankind, with millions more back in school on borrowed money or delaying graduation, trying to ride out the depression and emerge tooled up to ride the recovery. The recovery that never comes. To someone watching this up close and personal, Morin's proposal to solve the problem with more education is laughable.  

As in "laughing just to keep from crying."

We need instead some serious thinking about how to put people back to work at good wages doing the work we all know needs doing, without having to borrow the money from the banksters.

Mon, 01/20/2014 - 23:51 | Link to Comment Spungo
Spungo's picture

MINIMUM WAGE WILL DESTROY US ALL!!!

/completely ignore Australia which has a minimum wage of $16 and is doing just fine
Australia also has socialized medicine.  

Tue, 01/21/2014 - 05:27 | Link to Comment PhilofOz
PhilofOz's picture

$16 is if you are full time/permanent part time with the benefits of 8 sick days a year, 3 or 4 weeks annual leave at 20% above your hourly rate, and another 9% put in by the employer as supurannuation. My wife gets $21 an hour as a permanent part time worker, $31 an hour working Saturday and $41 an hour working Sunday as a cleaner in Adelaide CBD. In a year she has over $2000 in super invested (although I doubt it will buy a loaf of bread in 25 years when she can access this continuously climbing balance)

 

Mon, 01/20/2014 - 23:50 | Link to Comment kchrisc
kchrisc's picture

Doesn't the current state of the American people bear witness that government can only destroy?!

Once the richest and most educated has been reduced to poverty and Honey Boo Boo.

 

"Those that believe that violence is never a solution have never been mugged at knife point."

Tue, 01/21/2014 - 01:37 | Link to Comment tony bonn
tony bonn's picture

what a bunch of bankster drivel....raise the minimum wage on the backs of the 1%....god knows how they have sucked the life out of  the 99%.

Tue, 01/21/2014 - 02:25 | Link to Comment the0ther
the0ther's picture

Hilarious

Tue, 01/21/2014 - 02:32 | Link to Comment noless
noless's picture

" improve or augment one’s skills so that they align with those skills currently in greater demand"

One way road asshole, meet you head on.

All that's in demand right now is fraud.

Tue, 01/21/2014 - 07:31 | Link to Comment Debugas
Debugas's picture

taxation system should tax capital more and tax work less

Tue, 01/21/2014 - 09:10 | Link to Comment mumbo_jumbo
mumbo_jumbo's picture

there is no minimum wage for food servers, they make ~$2.50 an hour, that, is the bottom scale if there is no minimum wage.......can that person pay income taxes on that income?...survive IN THE U.S.A.? is that our future? who buys the houses on that pay rate?

Tue, 01/21/2014 - 09:16 | Link to Comment mumbo_jumbo
mumbo_jumbo's picture

"People whose productive value is less than the minimum wage are de facto unemployable"

 

so that job that needs to be filled should have never existed? will be filled by a higher wage? or sent offshore? or be filled by an illegal under the table?

Wed, 01/22/2014 - 04:56 | Link to Comment PT
PT's picture

The unemployable will always be with us.

Years ago, my boss of the time hired a heap of "special" workers to do a menial task.  The story goes that they were paid one dollar per hour and the govt chipped in to make it up to a "living wage".  These people were hired to clean tins, but they took to it as if they were polishing a Rolls Royce.  They ended up getting sacked because, even at a dollar per hour, they were still not productive enough.

Were these people employable at twenty dollars per week?  Ten dollars per week?  Who cares?  Bottom line is at that price it would still be a waste of time for them and a pathetic waste when the job could be given to a real person who would give real production and get a real wage.  It's not like we've solved the unemployment problem already. 

Tue, 01/21/2014 - 09:19 | Link to Comment mumbo_jumbo
mumbo_jumbo's picture

"so why are not more minimum wage earners simply starving to death"

 

snap cards....is this an onion article?

Tue, 01/21/2014 - 09:23 | Link to Comment mumbo_jumbo
mumbo_jumbo's picture

"so each is willing to offer less and accept less rather than demand more and offer more"

 

this is a tough read, so now you are saying it's corporate welfare?????

Tue, 01/21/2014 - 09:34 | Link to Comment Last of the Mid...
Last of the Middle Class's picture

Doesn't matter, TPTB are in full pacify mode now that they have effectively destroyed the economy. People smoking recreational pot don't rise up, those taking Prozac or other SSRI's are pliable also. All press is about warm fuzzy stuff you should have and not about the cold hard facts of an economy stolen to protect TBTF. Guns and Ammo, with a little gold on the side, will be the next Civil War. The issue that divides once and for all should someone finally lay down their doobie, look around and figure out this government is shit. I didn't vote for Obama because he's black. I didn't vote for him because he's a cardboard cut out used to further an agenda that lets the welthy get more so. It's all bread and circus now till the fall, so plan accordingly. I did see one positive thing, though. Some media seemed to groan at the thought of another race card played, perhaps the veneer is wearing thin as our economy literally circles the drain. You gotta love the thouht of JV terrorists! Thank God they don't do much damage. What a crock this country has become

Tue, 01/21/2014 - 12:00 | Link to Comment A Cruel Accountant
A Cruel Accountant's picture

If you cannot make min wage or more it is illegal for you to work!

That right! Our government makes it illegal for our most vunerable to work

Tue, 01/21/2014 - 15:06 | Link to Comment gallistic
gallistic's picture

And imbeciles like you are enablers for the thorough exploitation of our "most vulnerable".

 

Tue, 01/21/2014 - 17:50 | Link to Comment A Cruel Accountant
A Cruel Accountant's picture

Gal

So the government making it illegal for a certain class of people to work (for an employer) is not exploitation? They make nothing how is that not exploitation?

Tue, 01/21/2014 - 23:41 | Link to Comment gallistic
gallistic's picture

We have to untangle poorly presented points.

Cruel, let's be clear here.

I must assume that by "certain class of people" you refer to poor, desperate people who would work for less than the minimum wage.

We are using the term exploitation to mean unfairly using another person's misfortune or desperation for profit. In this case, by paying them pennies for labor that merits higher compensation.

The gov does not make it illegal for that class of people to work. It makes it illegal for employers to pay them miserly (exploitative) wages. It does so by setting a minimum wage.

I simply cannot see how "the government (is) making it illegal for a certain class of people to work". This is absolutely false.

Even if it were true, (which it is not) I cannot see how that would qualify as exploitation.

Tue, 01/21/2014 - 15:27 | Link to Comment plane jain
plane jain's picture

It isn't illegal for you to work.  It is illegal for an employer to pay you less than the minimum wage.

Pick up recyclables, offer to do yard work for cash, babysit, find some kind of piece work...etc.  Cash Paid Daily jobs are still advertised. Hell, volunteer and you will likely at least get a meal if you put in a full day.

 

Wed, 01/22/2014 - 04:59 | Link to Comment PT
PT's picture

ACA:  If they cannot make the minimum wage then what is the point of them working?  So they can work hard plus sleep in the streets anyway?  Look at the unemployment rate.  It's not like talented people aren't available to do the job.  Or would you rather the talented people be unemployed and sleeping on the streets while the slowies are paid 50 cents per week?

Tue, 01/21/2014 - 16:22 | Link to Comment Radical Marijuana
Radical Marijuana's picture

The government's power to legalize robbery is almost 99% used to benefit the rich, while 1% used to benefit the poor, because the vast majority of people have been too effectively brainwashed to believe in the biggest bullies' bullshit social stories. In that context, the "minimum wage" is a tempest in a teapot.

This kind of article above seemed quite goofy to me, due to the degree to which it was operating in an obsolete frame of reference. As many of the previous comments stated, it is BULLSHIT to think that more education within the established system could be any kind of "solution." Only radical education to understand the system itself might be useful, but that is practically impossible, since everything is already trapped within a double-bind paradox, Catch 22 dilemma, where the school systems and mass media teach people to believe in bullshit, rather than face facts. The basic design of those systems is the problem. Tragically, there appears no real "solutions" other than the eventual psychotic breakdowns of the ways that legalized lies are operating legalized robbery.

The monetary system operates through the maximum possible frauds, while the murder system that backs that up operates through the maximum possible deceits. More radical truth, to have a better combined money/murder system, is practically impossible, although theoretically the only possible good resolutions, inside the real context where technologies which are trillions of times more powerful and capable are driving various transformations, towards which are being maintained attitudes of evil deliberate ignorance.

The economic system is actually based on organized crime, where the government is the biggest form of organized crime, controlled by the best organized gangsters, the banksters. Citizens are members of an organized crime gang, who do not understand that, because they do not want to understand that. Therefore, the systems of legalized lies, backed by legalized violence, which are supposed to be the powers of "We the People," have been almost totally privatized, and actually used by a tiny minority against the vast majority. However, there are no real solutions to these problems which could exist without sufficiently facing the deeper facts that political economy is inside of human ecology, which means that the debt controls are backed by the death controls.

The government enforcing a minimum wage is an extremely goofy way to use the powers of government, that typically refuses to face the bigger picture of social facts, that the USA has become a runaway combined money/murder system, which operates through the maximum possible frauds and deceits. However, too bad, so sad, there are no realistic political ways for enough people to wake up enough to those realities. About 99% of the "education" they receive is going to attempting to teach them to believe in bullshit. The only genuinely good solutions would require enough citizens to understand that they are members of an organized crime gang, and therefore, direct those powers to be used in overall better ways.

However, instead, it is obvious that we are looking at runaway social insanities, where 99% of the powers of governments have already been effectively privatized, and therefore employed through frauds and deceits, while less than 1% bothers to pretend that there is somehow public benefit behind the use of those powers. The minimum wage debates take place within that context. None of the real problems are addressed, but only superficial bandages on a terminally sick system are applied, such as alleged minimum wage laws.

Tue, 01/21/2014 - 16:17 | Link to Comment Comte d'herblay
Comte d'herblay's picture

As Canoe Driver asserts exactly: ALL wage growth without a corresponding increase in results obtained for the same level of work, will be inflationary.  All attempts at setting a wordwide wage for all 7 billion people on the planet would be an automatic rise in prices to absorb the increase over the previous wage.

 

 

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