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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We have a multimillion-dollar minimum wage for Jewish bankers. If their incomes fall below this for a week or so, the (Jewish) Fed gives them a special bailout. I don't see closet anti-black racists complaining about this.
Economist are just like those blind men who touch a small part of a big elephant and think they know what is an elephant.
What gives them the right to set minimum wages?
What is the basis of such artificial minimum wages.
Lets assume that the market is full of unemployed labor. This allows rich to select the best and cheapest worker. They could pay below what is acceptable for survival. But is it true? If true then the worker is sure to die. Do they?
It may be inhumane standard of living. But who created such a situation?
And if we insist that those selected are given a minimum wage, does it solve any of the problem of all others who are unemployed?
The Government is trying to pretend that they are doing something about the plight of the workers. If they are serious, they will not looking at the low wages that is being payed out. But stop using the bogus employment rate statistics and start creating jobs. real jobs.
If an employer does not pay somebodys worth then the person can up sticks and go it alone. This no neocon employer likes and tries to prohibit, because your captive employer is your bulging profit.
Because of that concept and go it alone knowing what I do many cannot you get this ...
if I can supply and afford a living cheaper, always a gamble I just forced the comeptition to really start competing and the only thing to prevent it will be and it will happen is legislation prohibiting competition.
The elevated west cannot economically stand that concept.
Simply put; supply and demand. Wages should be traded on Wall St. like any other comodity; then we can see directly what it costs to open the floodgates to unlimited foreign immigration.
The central bankers policy tools, start listing them.
Rate hikes, raises the cost and drives the price upwards, the only downside is if you cannot afford to consume its efect is limited.
Taxes, raising the rate raises the price just like the ordinary rate hike with an added advantage you are compelled to partake and pay up.
Minimum wage (UK new terminology living wage), puts money in the pockets of the poorest people who then are now charged more for the same thing cancelling out any benefit of a wage hike if you do not cap the prices they pay. ALL FUICKING POINTLESS. But for the central banker, did you see the growth, that increase in value just adds to the bullshit they call growth. No more was consumed but you managed to inflate the system to satisfy their Kenysian model.
Put all 3 together, you have FORCED INFLATION AS MUCH AS YOU NEED AND IT HIDES UNDERLYING DEFALTION.
Who are the real suckers in this, they should be really pissed with this if they have not figured it out. If the company increases the wage to the lowest paid AND DOES NOT increase the wages of the middle classes the middle classes in relative terms took a pay cut because they purchase the same things as poor people.
The minimum wage is a banker policy tool now to drive inflation ever upwards just like interest and tax hikes.
The one bit the west are struggling with as we can only afford less and less, so the manufacturing nations go into forced deflation attempting to sell something we can never afford ...
so exactly how cheap must it be to purchase even on minimum wage?
here's a story about minimum wage from somebody who started at the bottom.
1987 (min wage = $3.50IIRC). I started as a cable technician. Installing TV cable in attics, digging ditches and things like that for minimum wage.
I bust my ass for a year and get a raise to $4.50 and get a promtion to Lead Cable Tech. I was in charge of 4 other guys making minimum and was proud of what I had accomplished. Fast forward a few months after my raise and promotion -- minimum gets raised to $4.25. The guys I was supervising all got a .75 ¢ raise by fiat. They didn't earn it.
They were now making almost the same as me. That devalued all the hard work I had put in to get that raise.
Minimum wage increases hurt everyone who worked their way up from the old minimum. They get no raise. It lowers their wage.
The answer is to stop devaluing the currency through deficit spending.
Try to explain to the average person how government deficit spending is functionally the same as money printing, and how every dollar conjured out of thin air and placed into the economy, devalues every other dollar in existence.
People either cannot or will not understand it.
Obama and congressional democrats are actively creating an open door to thousands of undocumented "refugees" from central america. Guatamala, Ecuador, Salvador, Honduras. According to the article, if they do not arrive with at least a minimum wage skill set, these thousands will be unemployable. I sense this would cause an increase in the crime rate. Things the US could get away with under the old global economic petrodollar model, US likely will not be able to get away with going forward, including uncompetitive minimum wages and accomodating legions of unslkilled workers.
The other elephant in the room is automation. If you have to pay a burger flipper $15 an hour, (with prospects for future mandated wage increases), then a burger flipping robot suddendly starts looking like a better deal. And as the burger flipping robot manufacturer then starts to see economies of scale kicking in, the cost to the next burger shack to convert goes down with the price of the increasingly cheap machine. Once a job nich is effectively taken over by machines, there is no going back... a high minimum wage just greases the skids on this process...
TXExPat....you're right about automation. The world may soon have 6.5 billion unneeded "eaters". The .1% will be considering ways to liquidate these liabilities. It's one of the topics I've been thinking about. Don't want to be Logan.
Raise the minimum wage for illegal immigrants to $100.00/hr.