Minimum Wage Misunderstandings: Incompetence Or Dishonesty
Submitted by Walter E Williams via The Burning Platform blog,
Michael Hiltzik, a columnist and Los Angeles Times reporter, wrote an article titled “Does a minimum wage raise hurt workers? Economists say: We don’t know.” Uncertain was his conclusion from a poll conducted by the Initiative on Global Markets, at the University of Chicago’s Booth School of Business, of 42 nationally ranked economists on the question of whether raising the federal minimum wage to $15 over the next five years would reduce employment opportunities for low-wage workers.
The Senate Budget Committee’s blog says, “Top Economists Are Backing Sen. Bernie Sanders on Establishing a $15 an Hour Minimum Wage.” It lists the names of 210 economists who call for increasing the federal minimum wage. The petition starts off, “We, the undersigned professional economists, favor an increase in the federal minimum wage to $15 an hour as of 2020.” The petition ends with this: “In short, raising the federal minimum to $15 an hour by 2020 will be an effective means of improving living standards for low-wage workers and their families and will help stabilize the economy. The costs to other groups in society will be modest and readily absorbed.”
The people who are harmed by an increase in the minimum wage are low-skilled workers.
Try this question to economists who argue against the unemployment effect of raising the minimum wage: Is it likely that an employer would find it in his interests to pay a worker $15 an hour when that worker has skills that enable him to produce only $5 worth of value an hour to the employer’s output? Unlike my fellow economists who might argue to the contrary, I would say that most employers would view hiring such a worker as a losing economic proposition, but they might hire him at $5 an hour. Thus, one effect of the minimum wage law is that of discrimination against the employment of low-skilled workers.
In our society, the least skilled people are youths, who lack the skills, maturity and experience of adults.
Black youths not only share these handicaps but have attended grossly inferior schools and live in unstable household environments. That means higher minimum wages will have the greatest unemployment effect on youths, particularly black youths.
A minimum wage not only discriminates against low-skilled workers but also is one of the most effective tools in the arsenal of racists.
Our nation’s first minimum wage came in the form of the Davis-Bacon Act of 1931, which sets minimum wages on federally financed or assisted construction projects. During the legislative debates, racist intents were obvious. Rep. John Cochran, D-Mo., said he had “received numerous complaints in recent months about Southern contractors employing low-paid colored mechanics getting work and bringing the employees from the South.” Rep. Miles Allgood, D-Ala., complained: “That contractor has cheap colored labor that he transports, and he puts them in cabins, and it is labor of that sort that is in competition with white labor throughout the country.” Rep. William Upshaw, D-Ga., complained of the “superabundance or large aggregation of Negro labor.”
During South Africa’s apartheid era, the secretary of its avowedly racist Building Workers’ Union, Gert Beetge, said, “There is no job reservation left in the building industry, and in the circumstances, I support the rate for the job (minimum wage) as the second-best way of protecting our white artisans.” The South African Economic and Wage Commission of 1925 reported that “while definite exclusion of the Natives from the more remunerative fields of employment by law has not been urged upon us, the same result would follow a certain use of the powers of the Wage Board under the Wage Act of 1925, or of other wage-fixing legislation. The method would be to fix a minimum rate for an occupation or craft so high that no Native would be likely to be employed.”
It is incompetence or dishonesty for my fellow economists to deny these two effects of minimum wages: discrimination against employment of low-skilled labor and the lowering of the cost of racial discrimination.
(12 votes)
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If minimum wage goes up, and Your wage does not -the costs passed on to the consumer will take that extra money out of your pocket. Giving someone who hasn't Earned more money a raise is giving YOU a pay cut.
So now the maid is unemployed. Now what?
"The costs to other groups in society will be modest and readily absorbed."
2 things wrong with this statement.
1. The people getting the new minimum wage are part of the other groups in society that will pay more so that is a wash.
2. Although the additional costs may be modest, will the other groups choose to absorb them? How much will you pay for a meal made by a fry cook getting paid $15? I can flip my own burgers for free.
The economy is in the toilet.
What was left of any reasonable paying service jobs have been destroyed by off the books illeagal invader fucks.
The rest of the " good" jobs were offshore, some slope doing the job for 50 cents an hour, room and board at the company quarters. ( slaves)
That being said...and I think we agree on those points....if you are trying to live or raise a family on minimum wage....you're a fucking moron. It's a starter wage. Or for human dishwasher types, with an IQ of 70, to keep them useful.
Intelligent people just go on welfare. It pays better, duh.
Is bullcrap. There is some level of minimum wage which is more helpful than otherwise, one can quibble about just where it is, but if you're a 10% high or low, that's no big deal.
Especially in urban areas where the whole cost structure is higher.
Fifteen today might be a bit high, but most of the laws are putting in more like twelve now and giving three years or so to fifteen. That's within 10% of right, I think.
I Write Code.....
15 is bullshit. It should be at least 25 or 30, and you know it. With full fucking benefits and two weeks paid vacation after one year of faithful service.
Fucking pieces of shit employers.
You know what....on second thought.... Make it. $50. $ 50 a hour. Why not? Tell me why not. If $15 is good, $30 is better, $50 should just put this to rest, once and for all.
So it is spoken. And so it shall be done.
All Hail NoPension, your Supreme Leader, who knows better.
So what does 15 an hour really COST the employer? After SS / FICA / UE comp?
Hmmmmmmmmmmmmmmmmmmmmmmmmmmmmmm
Duc888.....
Who fucking cares?
What about the poor schmuck that is currently making $15 now is he going to be sol?
Nobody talks about the ripple effect that raising the minimum wage also bumps everyone's pay. So the employer fires the low paid worker or converts full time workers to part time, so he can cover the increase in labor cost.
wha???????? of course it would discriminate against lower wage people who may or not be not white. it happens that mexicans would be discriminated against today according to this assertion but in fact, since no one cares to check on the legal status of their employees, a higher minimum wage will actually make paying mexicans $10/hr cash with a 1099 much more lucrative. in other words, a $15/hr minimum wage would discriminate against legitimate labor, whatever or whoever they are.
Semi-skilled labor barely pays $15/hr in much of the U.S. Fuck Bernie Sanders.......
wages have really been the biggest theft of the people perped by fiat money. it goes like this, bust the unions so labor has no representation to pressure wages and let inflation make us rich by reducing labor costs because labor doesn't get a raise.
so now the dummies have realized they have reached the point where labor wages can't buy the stuff they make so they can't make the stuff they want so they go out of business. the fix is raising wages but they can't because it has become a race to the bottom, not the top, because too many companies have been too worried about next weeks profit and not whether there will be one to make next month.
Labor unions are simply dues collection agencies.
Just HOW much money can a company whose workforce is low or no skills MAKE? HS dropouts don't build engineering marvels....
I want to know how all the workers earning more than minimum but $15/hour or less make out. Do they get their wages indexed to the raise in minimum wage? Poor Uncle Harry, whose been working the same assembly line for 5 years and earns $15 an hour for his dedication now gets shafted by the high school drop out who now gets promised a raise to $15/hr for 3 months service.
No, he is to go die quietly. Like the man he is and he is so indoctronated that he will do it ...........
Ok doods, the government dampens demand for wages via social programs. So maybe companies are finding cheap labor via our taxes. That's my main reason for supporting a $15 minimum wage. 15 x 40 x 52 = 31k = I don't have to pay you welfare anymore.
Except that dont pay the bills either ........
No arguing that. Just saying, it's reasonable to support a minimun wage hike.
The big dirty secret about so-called minimum wage legislation is that unions are backing it as a guaranteed memberhsip booster. Many of these laws have carve-outs exempting union shops from the increase. Don't believe me? Look it up.
The minimum wage is $15. It is $35 or 70k/yr which is the cash and bennies from welfare - - tax free no less.
Until it's indexed to inflation, it doesn't matter what the min wage is, by the time it's enacted it will be obsolete. Inflation is the problem, not the minimum wage. Balance the damn budget, stop spending more than we have. Stop printing debt (it isn't money!) to cover the shortfall. End free trade, expecting someone to compete with slave labor in China and still maintain our standard of living. Multinational corporations DON'T CARE ABOUT YOU! This is madness! Ship all the jobs out of the country and wonder why people are hurting. Allow illegal aliens to walk in and take jobs from our citizens. WE TIED THE ROPE AROUND OUR OWN NECKS AND WONDER WHY WE'RE CHOKING.
Australia already has $15 an hour minimum wage. It is in fact $16.87 an hour. Kids are still employed. Our blacks would be too but they have no need to work for such low wages.
if wages were to rise this much who would fire employees ? Because if you can afford to fire them - they aren't doing enough work for you anyway. Most businesses manage to staff according to their needs, not pay scales.
If you NEED 20 employees to staff your business, raising their wages will not reduce the need for those employees.
If keeping wages low works, why not REDUCE everybody's wages to $5 an hour ?
American consumers really need to wake up. Stop expecting to buy a hamburger for 10 cents and pay a decent wage.
Again........ Except a "decent" wage to the CEO ....... or millions/billions in offshore accounts ........... THERE IS NO FUCKING MONEY LEFT TO PAY THE GUY WHO DOES THE WORK ...... You also forget this part of the equation .......
It's almost impossible to explain this to someone who has NOT run a business but it goes like this.
You have a good or service or product you give value to and for this you are compensated by a competitive market. The key here is COMPETITIVE.
However you do that determines your success or failure. It might suprise some but humans are smart and cunning and that means someone just like you is trying to do the SAME DAMN THING and TRYING TO BEAT YOUR BRAINS OUT if for no other reason than if you lose they win.
So that sets the stage for what you are doing now ready set GO!
First thought experiment and first rule of marketing YOU don't set the market for what you sell the GOD DAMNED MARKET DOES and so if you sell your good, service or thingy for MORE than the other guy YOU FUCKING LOSE!
So if you have to pay someone X and then they raise it to X+whatever you are in real danger of GOING OUT OF BUISNESS. You naturally will AVOID THIS IF POSSIBLE.
You have two ways of doing this.
Sell more or save more.
Since if you could fucking sell more you would have already then you'll try and save more and it will drive you to fucking pay someone less if you can.
If you can't then you will take a long hard look and see if YOU CAN DO WITHOUT THE FUCKER!
If you CAN you WILL.
Multiply this across and ENTIRE ECONOMY and that's what raising the minimum wage does.
The only way labor gets paid more is if the fruits of their labor warrant being paid more. Your only real defense as a worker is to add more value than you cost.
That and shop for jobs if you don't like what you're paid.
I won't get into how the modern corporations have killed off small businesses to avoid having to pay their workers more, I won't get into how the great offshoring actually killed the jobs, but in whatever jobs remain this is the rule book.
It's trying to mandate something because you have no fucking clue how the real world works and it's pure and simple economic laziness and stupidity.
Yes it's true labor is many times taken advantage of by big corporations and raising the minimum wage seems like a good idea but it never is it just papers over the real problem and the real problem is LACK OF DEMAND for what people of some modest skillset can DO.
If you were so GOD DAMNED worried about the pay of workers then you are about 2 decades to late as our fuckers in Congress and our government SOLD ALL THE GOD DAMNED JOBS YEARS A FUCKING GO!
If you are concerned about this then you should ASK THEM ABOUT THAT!
Darn nice rant. I'm going to copy and save this.
Raising the minimum wage is done by governments to offset currency devaluation, inflation. Raise minimum wage and prices in those sectors will find a new, higher equilibrium. Standard of living for low skilled employees does not increase. It really is just a monetary tool. In the short run it can hurt employment in lower wage sectors but it soon washes out as long as it matches timing of inflation/devaluation. Simple money mechanics.
'Black youths not only share these handicaps but have attended grossly inferior schools...'...BULL FUCKING SHIT....black youths go to multi millin dollar palaces. the reason they are shite is because they tear the fuck out of the facility, beat the teachers and do nothing but get pregnant.
210 'gov paid' economist side with the gov on raising the min wage...duh.
fuck any article that has the word 'discrimination' in it..........i am sick of everything in society being named good or bad based purely on racial discrinination. how about base everything on how well it works...
It´s matter of supply and demand.
Take Sweden in the early/mid-1970s up to the mid 1980s, for instance. The labour supply was restricted. The principal increase was due to the fact the percentage of women who worked gradually increased. Despite a minimum wage (including almost free health care supplied by the government) that probably would be about $12 an hour today adjusted for inflation, the unemployment figures were not higher than 3 to 3.5 %. And that was despite a taxation system that most people today agree harmed entrepreneurship and job creation. But the productivity still increased. Sweden had the highest per capita percantage of industrial robots in the world. A Swedish company (ASEA, now a part of ABB) launched the first commercially viable industrial robot in the 1960s. Swedish blue collar workers had the highest wages in Europe and the corporate tax system favoured investments in industrial robots and other fixed assets which increased the productivity, i. e. encouraged replacing manpower with machines. Excessive supply of labour harms wages and reduces incentives for increased productivity.
The US had a similar minimum wage, or higher, adjusted for inflation (especially if you adjust for real inflation, not the faked figures that have evolved since the 1980s) in the late 1960s. Still, the unemployment figures were lower in those days, not higher. And that was because there was no excessive supply of labour.
I have a slant on this that will be unpopular and earn downvotes. Whatever.
First off, blaming workers for being unskilled is beyond ridiculous. The vast majority of labor is ALWAYS going to be unskilled. I'm not even getting into the number of people who are incapable of learning real job skills (even a dumb person can learn a lot of the trades), but if you ever think there is going to be enough skilled jobs to go around you are delusional. It follows that if an industrial wage labor economy is what you want (which I question, more on this later) and you want a generally middle class country with a high standard of living, unskilled labor must make a living wage.
Now, I've been reading ZH comments awhile. Enough to know that a lot of you think of the 50s and 60s as some kind of capitalist golden age. It certainly was the highest point of material prosperity in the US. Guess what, minimum wage was the euivalent of at least $20 an hour. Probably more. You're not going to get that prosperity any other way. A working man or woman who can't afford shelter and food should not even be a thing.
Truth is there will never be enough jobs to go around again. Not ever. We are in the beginnings of a permanent depression largely brought on by too many warm bodies competing for employment in a global wage arbitrage system, coupled with a radical increase in the extraction cost of the resources to perpetuate said economy (energy in particular). How to deal with this is going to be one of the biggest chanllenges of the coming decades. i suspect the default answer in much of the world is gonna be to let people starve en masse. Here at the center of empire I doubt that will happen; more likely we'll see some sort of guaranteed basic income or something. Can't have peasant uprisings too near the centers of power, after all. Why do you think Obamacare happened? Because it was the only politically acceptable alternative to having 10s of millions of poor people without health care, with the attendant risk of them going apeshit as a result.
Ultimately, I believe what we need is freedom from the industrial wage labor economy. It is a form of slavery, because it depends utterly on a significant percentage of the population being sufficiently dispossessed that in order to survive they are forced into employment they would never accept if there was a choice. If we are to call oursleves free then participation in the money economy must be voluntary. How we get there from here is a more difficult question; we are in a very deep hole. But those of you who simly want to reform the parasitical industrial wage slave system by ending the fed or voting in new assholes or killing off the old assholes in open rebellion so you can install assholes who think more like you do are completely missing the big picture.
More than anything else we need to begin creating alternatives to using evil, parasitical systems to get the things we need. So long as we cannot eat without giving money to big ag or shelter ourselves without giving money to either the rentier class or to banks we are well and truly fucked. Putting alternative systems into place won't happen overnight; it's a process most of us living won't see come to fruition. But you can get started. Quit your job NOW. The squid feeds more on your labor than anything else. Get on as many government assistance programs as you can; you are now draining some of the squid's life force. get a skill you can freelance to get whatever money you still need. Do not work for ayone else. Use the resultant free time to learn useful skills, raise your own kids, and actually enjoy some of your one and only very short life by doing shit you want to do.
Guess what, minimum wage was the euivalent of at least $20 an hour.
I was there. $0.25 would buy a gallon of gas and a summer job for a HS student was $1.50/hour. There was no minimum wage that I know of. Today, gas is $1.70/gal. so with that as a measure, the minimum wage whould be $12.75.
If we had a properly managed Medium of Exchange process that guarantees zero inflation, this problem would go away ... as would about a zillion others ... including finance experts.
Going on welfare is not sustainable, ever.
The key should be to establish a system where people are able to enjoy the full fruit of their own labour. Wages is never good, because no one is ever able or willing to hire anyone unless they can extract more value out of them then they pay as wages.
In order to get full fruit of thy labour thou need to work for theeself.
One of the key problems is corporations. The idea of a soulless entity that employs people and have no one responsible for it. The corporations have allowed companies to grow to unhealthy sizes and destroyed capitalists abilities to control their own companies.
While I do recognize that it should be possible to invest in a company without being liable, some person in charge needs to be and in return have the final say. The German Kommanditgesellschaft is a good example of how this could work as an alternative to corporations.
Because what needs to be the central focus must be the people, not the state and certainly not corporations.
I challenge the $20/hr equivalent minimum wage in the 50's and 60's. My father made $1 or $1.25 per hour in HS working in a garage in that period. That might be $9 to $10 today. My father in-law made $3,000/yr as a beginning HS teacher back then, which might equate to about $11 to $12/hr wage today. I doubt he was making less than minimum wage.
Oh, and I think your reasoning for Obamacare is wrong as well. Higher Ed and healthecare are about the only domestic "industries" besides MIC and government, so TPTB saw this as a way to keep the ponzi going. Favor an industry to rape, pillage and extract resources that can then be taxed and keep up the velocity of money. Obamacare was not instituted to help anyone except the people who never needed help in the first place: your betters.
I like your energy and enthusiasm though.
It is fixable. Get the fucking govt out of the way. We have been on this planet for a long time and people have survived quite well. It is the definition of living standards that jas changed. People used to live off of the land and not a Walmart. People have become lazy and depend on others.
Fuck it.
End the minimum wage.
Let's light this fucker.
Yes!
Yes!
Yes!
If we had a properly managed Medium of Exchange process that guaranteed zero inflation of the exchange media itself, this problem would be non-existent.
Why don't we have that?
Because it would destroy the entire finance, real estate, and banking industries and remove the principle form of financing of governments everywhere.
What's not to love about that?
Since finance, real estate, banking and government finance are all frauds anyway...
meantime in Russia under criminal putin regime rule minimum wage in 2016 is 6 204 RUB a month. That is about 80 USD a month!!! Could you live with such money? No you could not. And Russians also cant live with such wages.
http://www.numbeo.com/cost-of-living/country_result.jsp?country=Russia
For example:
McMeal at McDonalds (or Equivalent Combo Meal) 4.77 $If Americans keep electing communists they will enjoy the same living standards as Russians.
if I would have no real arguments against a minimum wage I would also use "lowering of the cost of racial discrimination". The typical intellectual BSing of the readers.
They wrote similar quack in Germany 2 years ago, before introducing a minimum wage. Afterwards employment was rising.
Dear, in Germany workers receive an extra income ON TOP of the minimum wage. Nobody can live there off said minimum wage - that's the reason why. And those "subventioned" jobs have the advantage of 1) being cheaper for the social system than having someone unemployed living off social security only and 2) avoids low-skills jobs to be exported even further to low-wage countries. THAT's why employment was rising afterwards in Germany and that dates back to the Harz-IV reforms initiated under a SOCIALIST government.
"live in unstable households" Thank you for letting me know you know nothing about black folks, except what your told on tv and in the press.
Aside fro thast, not a bad piece.
Where is Snyder and his lists?
The Capuchin handlers know it's got to be grapes across the board, because not only do they have electrolytes, you can trade them for iDevices. https://m.youtube.com/watch?v=HL45pVdsRvE
“In short, raising the federal minimum to $15 an hour by 2020 will be an effective means of improving living standards for low-wage workers and their families and will help stabilize the economy. The costs to other groups in society will be modest and readily absorbed.”
So, by their own admission, giving the low skilled workers a pay raise to $15 per hour has a cost to other groups. If that cost is readily absorbed, and modest, is irrelevant. This is simply a wealth redistribution scheme with absolutely no benefit to anyone, except the government. By that I mean, the minimum wage worker will gain ZERO in purchasing power, and of course those who have to "readily absorb" this shake down sure arent in the winners circle.
But our old buddy the IRS will be stealing more taxes from the poor schmucks who now make that extra money.
but.. what about "free shipping"?
r
Let the business fail, if it can't pay a living wage.
Uh......what a dumbass.. The business owner needs to feed his family too. Oh, but most dimbfucks assume the business owner os rolling in money. I say, let the unemployed person starve of he cant improve his job skills. And guess what, with an elevated distorted "minimum wage" the jobs needed for people to build their skills are gone. Poof. If the wage is raised, employers simly cut back. The cost to the employer will not raise, but tue number of people employed goes down. The people with low skills are the ones let go. You know, idiots like you.