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Majorities In Several States Vote To Punish Low-Skill Workers
Submitted by Ryan McMaken via The Mises Economic Blog,
My anti-democracy critics will shake their heads in dismay at me, but I’ve been forced to come to the conclusion that there’s no reason to believe that plebiscitary democracy is any worse than the usual kind. Indeed, in American states that must hold plebiscites to authorize tax increases, one hears regular howls from the pro-tax crowd about how “direct democracy” is awful and that “representative democracy” is so much better. There’s even this federal lawsuit by pro-tax groups claiming that Colorado’s requirement that voters approve tax increases is unconstitutional. In other words, those who favor tax increases hate voter referendums and initiatives. Internationally, of course, there are the secession votes and the upcoming vote on gold in Switzerland. I have a hard time coming up with a reason why such things are comparatively bad (compared to an alternative in which everything is up to the elected elites).
That said, the news isn’t always good with such voter-approved measures. A majority of voters in four states voted to raise the minimum wage:
If there was upsets and contention in much of midterm voting, there was one topic on which the electorate was largely united: raising the minimum wage. Alaska, Arkansas, Nebraska, and South Dakota all had ballot measures on raising state minimum wages above both their current levels and the federal $7.25 an hour figure.
All four states passed the measures, most by significant margins. More than two-thirds of voters in Alaska agreed to raise minimum wage to $9.75 by 2016. Sixty-five percent of Arkansas voters set the state on course to adopt an $8.50 figure by 2017. In Nebraska, 59 percent said the number should be $9 an hour by 2016. Only South Dakota stood out with a slimmer margin; 53 percent voted to raise minimum wage to $8.50 an hour next year. In Alaska and South Dakota, minimum wage is now pegged to inflation, meaning that it will rise as the cost of living does.
What these voters said with their votes was “I’m in favor of making it illegal for people with low productivity to get a job. Teenagers, people who were poorly educated by failing public schools, people who have never had a job, and people who are not very intelligent, should all just stay home and do nothing because we want to make sure that no one can afford to hire those people.”
Wages are a reflection of the worker’s productivity. When wages increase (assuming a relatively-free market) it is because the worker’s productivity has increased, either because of improved capital (such as better equipment) or because the worker himself has improved (e.g., through more experience).
An employer simply cannot afford to pay an employee something above and beyond what the worker produces for the company. If he does, then the wage is generally being subsidized by the other workers who must now earn less than their level of productivity indicates, because some of that must go to pay the employees who are money-losers.
In practice, the overwhelming effect is this: employers don’t hire low-productivity workers whose productivity is below the minimum wage, and in many cases will simply replace workers with capital (i.e., automated cashiers, etc.) which have been made relatively economical by the increase in the price floor. The federal government itself admits this employment effect, since it has included a loophole in the minimum wage in its own regulations for disabled workers. Early progressives also assumed it would cause unemployment, which they thought was a good thing.
Increasing a minimum wage is a death sentence for the careers of the most “at-risk” members of the population (to use a phrase favored by the left). They will have to earn money under the table (i.e., illegally), work in an unpaid-internship, or simply go on welfare.
Meanwhile, detractors of free markets will say “gee, look, the employment rate looks just fine in NE, SD, etc.” Ken Zahringer explains.
* * *
Still not convinced? Numerous Mises Daily writers have covered this topic, of course. For more, see:
How Minimum Wage Laws Increase Poverty – George Reisman
The Crippling Nature of Minimum-Wage Laws – Murray N. Rothbard
Welfare, Minimum Wages, and Unemployment – Greg Morin
Even the Feds Admit Minimum Wages Cause Unemployment by Nioholas Freiling
How Special-Interest Groups Benefit from Minimum Wage Laws by Gary Galles
Mythology of the Minimum Wage - D.W. MacKenzie
The Unseen Costs of the Minimum Wage - Josh Grossman
The Minimum Wage Forces Low-Skill Workers to Compete with Higher-Skill Workers – George Reisman
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Anything in the extreme is bad. Obviously $25 is too high, they key is to set the minimum high enough that both the workers are not getting exploited and that they don't need to rely on taxpayers to survive while working.
Often overlooked in the minimum wage increase is the increase in taxes - FICA taxes
$2.50 wage increase to $10 an hour = 15.6% FICA tax of $2.50 = .3825 cents an hour x 2000 yearly full time hours = $765 tax increase for each minimum wage employee.
Government doesn't talk about this
Often overlooked in the minimum wage increase is the increase in taxes - FICA taxes
$2.50 wage increase to $10 an hour = 15.6% FICA tax of $2.50 = .3825 cents an hour x 2000 yearly full time hours = $765 tax increase for each minimum wage employee.
Government doesn't talk about this
« Wages are a reflection of the worker’s productivity. » ahem ..
Go and say that to a slave .. (At all events, bring a body guard)
This is sanctimonious, right-wing propaganda bullshit. Why not force "low productivity" workers into work houses where they get paid with room and board only? Why not have death matches where 10 workers fight to the death for one job that pays 3.50 an hour?
The wealthy in this country have amassed a fortune of a size and proportion rarely seen in history. The middle class is dead. Now let's enslave the poor as well? God forbid the shares of some military contractor or fast-food chain should slip by 2 cents so a man can earn enough to feed, house, and clothe himself.
I won't log back into this particular story simply because the entire premise disgusts me and I don't wish to read the rabid, non-sensical crap commenting on my post.
But, my god, has America really lost its soul to the point where we are now competing with Chinese slave labor and calling it capitalism and democracy?
I understand your compassion to the poor but how do you legislate fairness? One of my teenage kid's friends said that if we divvy up the wealth of the country everyone could make over $100k per year. That's all good but you still need burger flippers and movie stars. Who gets to do what? Everything pays the same. It's the same thing with free education. Who gets to learn what? Everyone could be a film studies major or a basket weaver but then you'd have too many of something.
You need to understand that the elephant in the room is DEBT MONEY and THE PRICE OF REAL ESTATE.
As people get poorer, does the price of real estate go down?
Does real estate prices REALLY reflect the ability of the populace to repay?
Or does it reflect the ability of idiots to borrow money even though they have no idea how to repay that money?
All this crap about minimum wages is just blaming the weakest victim who cannot fight back while real estate swipes any market gains plus more.
Expat -
But the really FUN part of it is that they did it by imposing over 300% inflation on the currency since '88. So... yeah. They have a LOT of money - but it's not worth nearly as much as it used to be - and since they don't understand how money REALLY works, they just keep on pushing for moar... driving the value down... and inflating to destruction. You want to buy a burger? "Yes sir. That'll be two billion dollars." And when the currency completely collapses, a lot of them will have NOTHING - just like a lot of poor people. In fact - they'll BE poor people. Read "When Money Dies" and see how the elites and rich people made out during that little currency collapse.
Meanwhile...the welfare class continues to troll walmart and buy things that allows it to live the "idea" that the surrounding of oneself with cheap chinese crap is the same as having morals and a backbone. One cannot be destroyed without the agreement of oneself to said destruction.
My favorite little tweak is to wear a conservative hat (ballcap with a conservative logo) into walmart and watch the heads turn, kinda like in the exorcist! cha!
Nothing uglier than someone, from good old days, coming from solid middle class family lecturing today's down ridden from:
"As a kid I was delivering a news papers",
"I (almost) dictated to my boss how much I was worth",
to my favorite:
"I've created a successful business even I did quit a school and do not have any degree", which comes to mind every time I am driving behind porcupine looking truck with lawn movers, leaf blowers and rakes.
Nothing wrong if they did! Dice of life had chosen that they are not the ones toiling the dirty jobs for almost nothing, but they can not simply be quietly grateful for that.
My 2 c.
Minimum wage is not just a jobs killer - it is a people killer. Minimum wage laws prevent ghetto teenagers from ever getting their first job - which means they never get any job. Instead of climbing the income ladder, whose lowest rungs are cut off by minimum wage, those in the ghetto climb the crime ladder, starting with petty theft and evidentually graduating to violent crime and murder. A very high percentage of murders committed by those who grew up in the ghetto can legitimately be blamed on the government jobs ban - aka 'minimum wage'.
And don't forget the Endless and Unending Obomao war on whites that has created the to-come race war. Think not? One must wonder when, yesterday, a friend calls with news that flyers noting the racism of the police department in Ferguson were being placed on all the cars.
Then the NY Times, always available for a I-hate-white-people article, runs an "opinion" piece that says the police should show "humanity" by sending in robots first to deal with people like Michael Brown. After all, a robot is just full up of "humanity." It seems never to be noted that white people teach their children to be polite to police officers and act in accordance with what they are asked to do so that the police officer is assured that they will go home that night. BUT as the opinion piece at the NY Times ranted on, the author noted these same things taught to black children are racist.
She (the author) also didn't bother to note the recent teacher killing by a 14 year old black young man Philip Chism who killed and raped his 24 year old teacher in Massachusetts; the killing of Hannah Graham (and other women) by Jesse Matthew a very large black man, or the recent Philadelphia case of the kidnapped nurses assistant Carlesha Freeland-Gaither by Delvin Barnes a black man who had also recently kidnapped a sixteen-year-old who escapped while he was digging her grave.
At some point, the black community has to shake itself out and say the first step is the cleaning up of its own community; then, and only then, do you get to blame everyone else.
why should I care? I am free to move, for now.
Think of it this way...the degradation of the scholastic system is directly correlated to the lack of need for workers. And yet, Obomao continues to let in the third worlders, and even...yea unto you!...heralds them as the savoirs of the racist white peoples.
The liberals are on the last leg of the complete erradication of America as a country. The only fly in their liberal ointment is those dang homeschoolers, who have been taught to think, avoid tattoo joints which sell them "individuality," and who have enough personal backbone that they will reject the public schools version of sex-for-all-at-any-time-in-any-way believing as they do that there bodies and minds are not gutters but personal dominions.
Strange and amazing how we got here...but even more strange and amazing is the enormous stupidity of the so-called population and voting electorate of the United States.