MCViewPoint

Opinion from a Libertarian ViewPoint

Posts Tagged ‘minimum wage’

Bernie Sanders and the $15 Minimum Wage Delusion

Posted by M. C. on February 9, 2019

In reality—and absent any other government transfers—it is better to be employed at $5 per hour, than unemployed at $15.

https://www.theepochtimes.com/bernie-sanders-and-the-15-minimum-wage-delusion_2756091.html

Forcing people to pay more for labor is counterproductive
Walter Block
…Why do employers want to hire workers in the first place? It’s for their productivity (technically, marginal revenue product). Consider Joe, whose productivity is $5 per hour. This means if you have Joe on your shop floor, behind a counter, pushing a broom, or washing dishes for you, your receipts increase by that precise amount: five bucks per hour.

In the absence of any minimum wage at all, what would the firm offer him? Well, like everyone else, as little as possible. Even you, gentle reader when you purchase something, don’t you look for bargains? If not, you are unique. Suppose it is 1 cent per hour. If Joe takes him up on this offer, the employer will earn a pure profit of $4.99 per hour from his labor. Is this an equilibrated, stable situation? Of course not. Some other company will bid 2 cents and “exploit him” to the tune of $4.98.

Where will this bidding war stop? Why, at $5, assuming no transactions or other costs of putting together the two parties. That is why economists have an axiom that wages tend to equal productivity. LeBron James earns lots of money since his productivity (his ability to fill seats and draw TV audiences) is so high. I earn a middle-class income since my marginal revenue product is far less than his. The guy who asks you if you want fries with that is even less productive in terms of raising revenues for the employer and tends to be paid accordingly.

Now, consider the effect of a $7 hourly minimum wage, let alone one for $15. What happens to our man Joe? He produces $5 for his employer, but can’t legally be paid less than $7. What is the result if he is hired? The firm loses $2 per hour. That isn’t a viable option. Joe will be fired, or not taken on in the first place…

Be seeing you

free lunch

Free lunch.

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Doug Casey on Alexandria Ocasio-Cortez – Casey Research

Posted by M. C. on January 19, 2019

https://www.caseyresearch.com/casey-daily-dispatch/doug-casey-on-alexandria-ocasio-cortez

 

Justin’s note: America can’t stop talking about Alexandria Ocasio-Cortez (AOC).

AOC, if you haven’t heard, is a 29-year-old democratic socialist. Earlier this month, she became the youngest woman ever elected to Congress.

And that concerns me. I say this because her platform is every socialist’s dream. She wants Medicare to be free. She wants college education to be free. She wants to cancel student debt. She wants to hike the minimum wage to $15. And she wants to replace oil and gas with green energy by 2030.

Now, I realize these ideas might sound good to some people. But none of this would come free. It would require massive tax hikes and a lot more national debt. In short, she’s advocating for policies that often destroy entire economies.

Yet, she’s one of today’s most popular political figures…

Doug: Most likely she’s the future of the Democratic Party – and of the U.S. Why? She’s cute, vivacious, charming, different, outspoken, and has a plan to Make America Great Again. And she’s shrewd. She realized she could win by ringing doorbells in her district, where voter turnout was very low, and about 70% are non-white. There was zero motivation for residents to turn out for the tired, corrupt, old hack of a white man she ran against.

She’s certainly politically astute – but doesn’t seem very intelligent. In fact, she’s probably quite stupid. But let’s define the word stupid, otherwise, it’s just a meaningless pejorative – name-calling.

But in fact it doesn’t seem like she has a very high IQ. I suspect that if she took a standardized IQ test, she’d be someplace in the low end of the normal range. But that’s just conjecture on my part, entirely apart from the fact a high IQ doesn’t necessarily correlate with success. Besides, there are many kinds of intelligence – athletic, aesthetic, emotional, situational…

A high IQ can actually be a disadvantage in getting elected. Remember it’s a bell-shaped curve; the “average” person isn’t terribly smart, compounded by the fact half the population has an IQ of less than 100. And they’re suspicious of anyone who’s more than, say, 15 points smarter than they are.

However, there are better ways to define stupid than “a low score on an IQ test,” that apply to Alexandria. Stupid is the inability to not just predict the immediate and direct consequences of actions, but especially the indirect and delayed consequences of your actions.

She’s clearly unable to do that… Read the rest of this entry »

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EconomicPolicyJournal.com: Cuomo is Proud of This: Minimum Wage Goes Up in NYC to $15 per Hour

Posted by M. C. on December 30, 2018

It is union workers who do benefit from the minimum wage laws by eliminating by job competitors who would be willing to work for less but will now be prevented from doing so.

http://www.economicpolicyjournal.com/2018/12/cuomo-is-proud-of-this-minimum-wage.html#more

On December 31, 2018 in New York City, a $15 minimum wage goes into effect for most workers.

This, of course, will do nothing but cause unemployment for those whose skills do not produce $15 an hour in revenue. This is basic economics 101. But the New York State propaganda machine is featuring videos of New York Governor Cuomo taking credit for this evil anti-work law.

It is instructive that in the clip below, as he hails the minimum wage increase, it is union workers cheering him on in the background. It is union workers who do benefit from the minimum wage laws by eliminating by job competitors who would be willing to work for less but will now be prevented from doing so.

Embedded video

RW

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Why Do Leftists Settle for a $15 Minimum Wage? – The Future of Freedom Foundation

Posted by M. C. on November 28, 2018

https://www.fff.org/2018/11/16/why-do-leftists-settle-for-a-15-minimum-wage/

by 

If economic ignorance among leftists (i.e., liberals and progressives) had no adverse impacts, we could consign it to the ranks of the humorous. Unfortunately, however, such ignorance has very serious adverse consequences, especially on poor people.

The classic example of this phenomenon is the minimum wage. This week a liberal website named In These Times published an article about the minimum wage by a liberal named Marc Daalder. The title of the article is ”Why Every Democrat in Congress Should Support Bernie Sanders’ $15 Minimum Wage Bill.” In his article, Daalder sets forth the standard progressive justification for the minimum wage — to help the poor, needy, and disadvantaged.

There’s one big problem, however, with that justification: It’s false and faulty. In fact, if Daalder and Sanders succeed in getting the minimum wage increased, their success will only make things worse for those at the bottom of the economic ladder.

The question that should be posed to Daalder and Sanders is this: Why settle for $15 an hour? Why not make the minimum wage equal to what Sanders receives for being a member of Congress? When broken down to an hourly basis, Sanders receives about $60 an hour. Isn’t it a bit selfish for a liberal to be receiving $60 an hour and, at the same time, arguing that workers should receive only $15 an hour? What’s up with that?… Read the rest of this entry »

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Rent Control and Minimum Wage Laws Harm Those Who Are Supposed to Benefit | Mises Wire

Posted by M. C. on October 18, 2018

https://mises.org/wire/rent-control-and-minimum-wage-laws-harm-those-who-are-supposed-benefit

…The most recent example involves California’s Proposition 10, which would allow local governments there to once again impose rent control without restriction from the state. An October 6 article in the Los Angeles Timeswas titled “Will Prop. 10 help or hurt state’s tenants?” The problem is that such a question assumes all tenants can be treated as part of the same group. However, imposing rent control will treat different groups of tenants in sharply different ways. It would be a massive windfall for current tenants from landlords’ pockets, forcing rents below market value, with tenancy protections guaranteeing the windfall into the future. Los Angeles Mayor Eric Garcetti wasn’t wrong when he called getting a rent-controlled apartment “like winning the lottery.” But rent control does not benefit all renters. It would harm the far larger group of people who seek rental housing after rent control is imposed. The progressive reduction in the quantity and quality of the housing stock over time will increasingly face prospects with “no vacancy” signs rather than available or affordable units. But the usual focus on current renters as if they represent all renters hides that radically different treatment of present tenants and future tenant hopefuls. Read the rest of this entry »

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Bernie Sanders Might Learn Something from Venezuela’s Minimum Wage Experiment | Mises Wire

Posted by M. C. on September 26, 2018

Socialism isn’t like the free market which progresses peacefully. Socialism requires a bureaucratic boot on the neck of business.

https://mises.org/wire/bernie-sanders-might-learn-something-venezuelas-minimum-wage-experiment

There are labor shortages all over the country. There are not enough truck drivers, plumbers, food waitresses, construction workers, and so on. The official unemployment rate is below 4 percent. It was just reported private sector wages popped 2.9 percent.

However, Bernie Sanders and other “progressive” candidates are endorsing the idea of a federal living wage. On his website, Bernie starts with,

Millions of Americans are working for totally inadequate wages. We must ensure that no full-time worker lives in poverty. The current federal minimum wage is starvation pay and must become a living wage. We must increase it to $15 an hour over the next several years.

His latest big idea is to

tax companies with 500 or more employees an amount equal to federal benefits received by their low-wage workers. The bill is designed to discourage large companies from paying their workers so little that they end up relying on federal benefits, such as food stamps, to make ends meet.

If Bernie were paying attention, there is a minimum wage experiment going on in real time in Venezuela right now. Sure, there’s some serious money printing going on there and plenty of socialist schemes to keep the shelves empty. However, the fact there’s nothing to buy hasn’t kept Venezuelan president Maduro from hiking that country’s minimum wage 24 times since 2013 when he took office.

The latest hike went into effect on September 17, and it was huuuge — 3,000 percent. Fabiola Zerpa writes forBloomberg,

7 million employees are guaranteed 1,800 bolivars a month — worth about $20 at the black-market rate. President Nicolas Maduro intended the mandate as political boost, but it’s having the opposite effect as companies, already hit by Venezuela’s epic economic contraction, tell workers they can’t afford to keep them.

No one should be stunned if employees are told to go home if the government by way of brute force increases pay by 30 times. Read the rest of this entry »

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The Cure for Homelessness | Mises Wire

Posted by M. C. on September 19, 2018

It obviously doesn’t occur to Sanders that builders cannot build low-cost housing for the poor in Seattle when zoning laws prohibit them from doing so.

https://mises.org/wire/cure-homelessness

One of most fascinating aspects of progressives (also known as “liberals”) is the blindness they display to the adverse consequences of their very own government programs. Instead of acknowledging what their statist programs do to people and then calling for their repeal, they inevitably call for new government programs to address the ills that their government programs are causing.

A good example of this phenomenon was an article entitled “The Homelessness Crisis Continues. Maybe Libertarians Have a Solution?” which was published last June by a newsweekly in Seattle called The Stranger.The author of the piece was an associate editor at The Stranger named Eli Sanders. Sanders is no dummy. In 2012 he was awarded a Pulitzer Prize in featured writing. His book, “While the City Slept,” was a finalist for the Washington State Book Award and the Dayton Literary Peace Prize.

Yet, Sanders’ article, which mocks and ridicules libertarians, including me, for their supposed solutions to homelessness is a pathetic display of moral, political, and economic obtuseness. That’s because Sanders, like other statists, simply cannot bring himself to acknowledge and address the two root causes of homelessness, especially in Seattle — zoning and minimum-wage laws, both of which are warmly and enthusiastically embraced by both the left and the right and ardently opposed by libertarians. Read the rest of this entry »

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Follow the Logic Through to Its Conclusion – Cafe Hayek

Posted by M. C. on August 12, 2018

Another argument that central planning does not work.

https://cafehayek.com/2018/08/follow-logic-conclusion.html

Here’s a letter to the Wall Street Journal:

Terri Sewell and Jim Kessler correctly argue that a one-size-fits-all national minimum wage makes no sense because different workers face different economic conditions depending on where they live (“A Better Minimum Wage,” August 9). But in calling for Uncle Sam to set minimum wages regionally rather than nationally, these authors fail to follow fully the sound logic of their argument.

Worker conditions vary not just regionally; they vary individually – from worker to worker and from job to job. While it is indeed absurd to suppose that there is a single optimal minimum wage for all low-skilled workers in both Boston and Biloxi, it is no less absurd to suppose that there is a single optimal minimum wage for all low-skilled workers in Boston and another such wage for all low-skilled workers in Biloxi. Even low-skilled workers in the same city block differ amongst themselves in their talents, experience, interests, attitudes, constraints, energy, and plans. Likewise, jobs for low-skilled workers differ in their demands, fringe benefits, and employment amenities.

The notion that politicians can set an ‘optimal’ minimum wage even for a tiny group of workers turns out to be no less fanciful than is the notion that politicians can set an ‘optimal’ minimum wage for an entire nation. Therefore, compared to having no mandated minimum wages whatsoever, even minimum wages set regionally would inevitably reduce and worsen the employment options available to low-skilled workers.

Sincerely,
Donald J. Boudreaux
Professor of Economics
and
Martha and Nelson Getchell Chair for the Study of Free Market Capitalism at the Mercatus Center
George Mason University

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Poverty Is No Mystery – LewRockwell

Posted by M. C. on August 1, 2018

One of the reasons is that capitalism is always evaluated against the nonexistent, non-realizable utopias of socialism or communism.

Any earthly system, when compared with a utopia, will not fare well. Indeed, socialism sounds good but, when practiced, leads to disaster.

https://www.lewrockwell.com/2018/08/walter-e-williams/some-ideas-to-think-about/

By 

Poverty is no mystery, and it’s easily avoidable. The poverty line that the Census Bureau used in 2016 for a single person was an income of $12,486 that year. For a two-person household, it was $16,072, and for a four-person household, it was $24,755. To beat those poverty thresholds is fairly simple. Here’s the road map: Complete high school; get a job, any kind of a job; get married before having children; and be a law-abiding citizen… Read the rest of this entry »

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Listen to “Myth-Busters: Reality Hits Minimum Wage Boosters” on Stitcher

Posted by M. C. on September 1, 2017

https://www.stitcher.com/s?eid=51021806&refid=asa

Minimum wage reality.

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