Saturday, February 16, 2013
The immorality and the economic damage of the minimum wage
There is no Freedom-Hater policy that sticks in my craw more than the minimum wage. My primary point of opposition is informed by the principle of liberty: It's government telling a private organization how to conduct its operations. But there's also real devastation among those who might wish to join America's ostensibly prosperity-generating organizations. Celia Bigelow at Breitbart focuses on its impact on unemployment numbers, and they ain't pretty.
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The argument that state minimum wages have had a substantially negative effect on a state’s labor market is an extreme repackaging of the perennial claim that minimum wages do more harm than good because they cause many low-wage workers to lose their jobs. While this argument was once more prevalent among economists, recent studies with improved methodologies have reached the opposite conclusion. In general, there is no valid, research-based rationale for believing that state minimum wages cause measurable job losses. Making the extreme case that the job losses are severe enough to show up in a noticeably elevated state unemployment rate is a wild extension of a largely unfounded theory.
ReplyDeleteA more careful look at state labor markets reveals that minimum wages are clearly not the cause of labor market pain in the states. Much more dominant forces, especially the unrelated decline in manufacturing employment, better explain state economic circumstances.
http://www.epi.org/publication/briefingpapers_bp150/
Israel, it appears, leads the world in this base immorality. They have a universal health care plan. So why are you so eager to have America go into some semblance of a world war defending her. Oh, I know, it's a fundamentalist Christian thing. Christianity itself is a whole lot more socialistic than you will admit too, certainly including Catholicism.
ReplyDeleteHow does Israel's minimum wage compare to the minimum wage in other countries?
Israel's yearly minimum wage is $12.00 in International Currency. International Currency is a measure of currency based on the value of the United States dollar in 2009. There are countries with a higher Minimum Wage than Israel, but Israel is in the top 0 percent of all countries based on the yearly minimum wage rate.
http://www.minimum-wage.org/international/en/Israel
Israel has always had a problem - actually, haven't all Western nations? - of lots of leftists in government and the public-policy arena. Still, it is a Western nation in terms of its basic governmental structure and understanding of the nature of God, and it is surrounded by hostile forces.
ReplyDeleteOh, for cryin' out loud. I just looked into this EPI outfit. The god dammed board of directors includes some of the most destructive Freedom-Haters on the scene today, such as Richard Trumka and Keith Ellison.
ReplyDeleteDoesn't do much for the credibility of its product.
In a survey amongst economists by Dan Fuller (2003), he found 46% of Economists agreed with the statement that “minimum wages cause unemployment amongst unskilled workers” only 24% disagreed with this statement. [1]
ReplyDeleteHowever, the experience of the UK is that increasing the minimum wage has been compatible with falling unemployment and rising levels of employment.
The minimum wage was introduced in the UK in 1999 at £3.30.
As of October 2007 the minimum wage for adult workers is £5.52. (It will rise to £5.73 by end of 2008)
There is a development rate for workers 18-21 of £4.60
For people under 18 (not of compulsory school age) the rate is £3.40
Source: National Minimum wage HMRC - [2]
In 1999, UK unemployment was 1,822,000 between January and March.(ILO method)
by 2008, UK unemployment has fallen to 1.61 million or 5.25%. Employment rates have also increased to 74%. The claimant count method is even lower at only 793,000 UK Unemployment stats
The experience of the UK is that a 67% increase in the NMW has reduced unemployment and increased employment. The UK is not isolated, in the US, studies have also show a link between increasing the NMW wage and negligible effects on employment. E.g. David Card and Alan Krueger, in their 1997 book Myth and Measurement: The New Economics of the Minimum Wage
http://econ.economicshelp.org/2008/04/why-has-higher-minimum-wage-increased.html
Did you look through that list of board members? A bunch of union thugs, race-obsessors and "green" activists.
ReplyDeleteAnd you stinkin' Alan Kreuger goes in for such crackpot theories as that inequality is the root of terrorism. In fact, the guy is preoccupied with taht inequality shit.
ReplyDelete1. Strong Economic Growth. In period of economic growth, firms employ more workers as there is more demand to produce goods. Economic growth in the UK has averaged 2.5% since 1999
ReplyDelete2. Monoposony Power. Classical theory assumes labour markets are competitive, but, in practice workers often face employers with buying power. This means firms are able to pay workers less than the market wage. Therefore, when a government artificially raises wages, firms can actually afford to pay them. It is argued minimum wage legislation is similar to anti trust regulation. [see: Monopsony and Minimum wages]
3. Increased Productivity. A study by David Metcalf [3] found that firms responded to increased wages by increasing the productivity of workers, especially in the service sector. This is important because it suggests that higher wages can actually help increase productivity in the economy.
4. Lower hours. Rather than make workers redundant, firms have reduced the average hours worked. This is related to part 3, firms try to get higher productivity in a shorter time, so they can afford the minimum wage.
5. Pass on Cost increases. Because the minimum wage affects all firms, it is easier for the cost increases to be passed onto consumers. e.g. because all cleaning firms have higher wage costs, they can all increase their prices. If the wage increase just affected one firm, they would become uncompetitive. (note: the rise in prices has not led to significant inflation in the UK)
6. Avoidance of Minimum Wage. It is uncertain to ascertain the extent of this problem, but some firms have circumvented the minimum wage legislation by employing immigrant labour and paying them lower wages. It also makes it more attractive to employ young workers.
http://econ.economicshelp.org/2008/04/why-has-higher-minimum-wage-increased.html
See, if you start putting up stuff by purveyors of dog vomit, I can easily cite refutations
ReplyDeletehttp://www.cato.org/sites/cato.org/files/serials/files/cato-journal/1995/5/cj15n1-8.pdf
and it becomes a pissing match.
Do you really believe the minimum wage is okay, or are you just pointing out people who do?
This Pettinger appears to be a real ripe specimen, too. Sri Chimnoy?
ReplyDeleteTypical divergence of opinion here. Maybe we need to rid the world of all freedom haters once and for all and all be on the same page. You'd likely like that, wouldn't you? Those who are not on the same page as you though are at least relegated to the immoral, which is somewhat of a stretch. Faced with such insurmountable opinionation, many seers have recommended non-attachment. It is all illusion anyway.
ReplyDeleteDoes your boy Pettinger really want to offer the UK as a model of an advanced society?
ReplyDeletehttp://online.wsj.com/article/SB10001424052702304299304577349962803326778.html
The paralysis of the public administration in the face of the problem induces a state of despair in the more civilized half of the population. (The public sector now accounts for more than 50% of British GDP, so the paralysis is not caused by a lack of resources.) Recently, for example, three people stripped naked a vulnerable young man of low intelligence, tied him to a lamppost, covered him in food, insulted him and left him there for four hours, then cut him down so carelessly that he banged his head on the ground (by the time he reached the hospital he was in a state of hypothermia). They were not even sent to prison.
In other words, practically no behavior is now beyond the pale for the British state. Sadly, the freedom to behave badly is almost the only freedom valued by, or left to, young Britons.
The people who want to flee Britain are not economic migrants. It is not high taxes that they object to (many want to move to France, where taxes are not low), but barbarism. They are cultural refugees in search of a more civilized homeland, where fewer people are uncouth or militantly vulgar.
http://www.city-journal.org/2011/21_3_otbie-uk-govt-spending.html
In Britain, government spending is now so high, accounting for more than half of the economy, that it is increasingly difficult to distinguish the private sector from the public. Many supposedly private companies are as dependent on government largesse as welfare recipients are, and much of the money with which the government pays them is borrowed. The nation’s budget deficit in 2010, in the wake of the financial crisis, was 10.4 percent of GDP, after being 12.5 percent in 2009; even before the crisis, the country had managed to balance its budget for only three years out of the previous 30.
You bet the minimum wage is immoral, and I know that even before I seek out substantiation from those with more economic chops than me. I just know it on principle - namely, that government has no business telling a private company what to pay anybody.
ReplyDeleteHere at LITD, the baseline is always, what course of action is going to foster human freedom?
ReplyDeleteThere are many immoral Republicans still in Congress who voted Yea the last go-round during the Bush administration. Perhaps we should look to the bankers and creative accountants out there for as beacons of morality.
ReplyDeletePresident Obama’s call for a minimum wage increase in Tuesday’s State of the Union address — like nearly all of his proposals — was met with immediate opposition from Congressional Republicans. But six years ago, many of the same Republicans supported a similar proposal backed by Republican President George W. Bush.
A ThinkProgress analysis finds that at least 67 Republicans who are still in Congress today backed an increase in the minimum wage in some form, including Rep. Paul Ryan (R-WI).
From: http://thinkprogress.org/economy/2013/02/15/1601831/65-republicans-supported-increasing-the-minimum-wage-when-bush-was-president/?mobile=nc
There's only one thing to say about that: Hey, guys, knock it off with the inconsistency. You're showing symptoms of RGS.
ReplyDeleteBottom line for me is, I'm not sure it's that bad for the economy and I do not agree that it is immoral. Stupid, perhaps, but not immoral. Reasonable minds can differ without one mind being immoral on this issue. Oh, I know reasonableness might be worse than immorality to you, I dunno.
ReplyDelete