Posted on 11/27/2006 7:18:17 AM PST by Toddsterpatriot
Nancy Pelosi, the new speaker of the House, has told us that she will call up as maybe the very first order of business increasing the minimum wage. Here are the relevant facts: The federal minimum wage, enacted in 1938, was last raised in 1997. From that point on, with certain exceptions, you could not lawfully hire someone to work without paying him or her at least $5.15 per hour. Paying that much would yield $206 per week, or $10,712 per year. A different federal agency defines poverty as annual earnings of $9,827 or less for a single person. The mathematics of the above informs us that the existing federal minimum wage barely keeps a single worker out of poverty.
Of course, many states and localities have enacted higher minimum wages than the federal one. In San Francisco, you need to pay a worker $8.50 an hour; in New York State, $6.75; in Wisconsin, $5.70.
We learn that 60 percent of minimum-wage earners — two-thirds of them women — are working in restaurants and bars; 73 percent, by the way, are white, and 70 percent have high-school diplomas. Nearly 60 percent work part time.
Now we can leech from these figures several observations:
(1) It can be very difficult to tell what a minimum wage worker is actually making. Many of those who work in restaurants and bars receive tips; then again, the minimum wage is substantially lower for people in that situation.
(2) A high-school diploma will not in and of itself give the worker merchandisable skills o'erleaping the minimum wage.
(3) Since there are part-time workers who receive only the minimum wage, a moment's reflection makes it obvious that they receive, by whatever means, income that makes life possible.
Now on the matter of what to do about it, we should begin by acknowledging that any argument for circumventing the market wage is sophistry. The market will tell you, even in San Francisco, what you need to pay in order to hire an hour's labor. But sophistry is sometimes in order. We do not allow child labor — except in certain circumstances: Peter Pan, at the neighborhood theater, is allowed to work even if he is only 12 years old.
Monopolies are not permitted to set prices. The idea is that in a free society, you must not tolerate any constriction in production. But again, sophistry is permitted, because labor unions, in many fields of endeavor, practice exactly that — a monopoly on the price of labor. What do we do about that? Exactly what we do about waiters who don't list their tips: We ignore it.
We learn that one individual American last year received compensation of $1.5 billion. This leads us indignantly to our blackboard, where we learn that the average chief executive officer earns 1,100 times what a minimum-wage worker earns. What some Americans are being paid every year is describable only as: disgusting. But that disgust is irrelevant in informing us what the minimum wage ought to be. The one has no bearing on the other.
We are bent on violating free-market allocations. Doing this is not theologically sinful, but it is wise to know what it is that we are doing, and to know that the consequence of taking such liberties is to undermine the price mechanism by which free societies prosper.
Milton Friedman taught that "the substitution of contract arrangements for status arrangements was the first step toward the freeing of the serfs in the Middle Ages." He cautioned against set prices. "The high rate of unemployment among teenagers, and especially black teenagers, is both a scandal and a serious source of social unrest. Yet it is largely a result of minimum-wage laws." Those laws are "one of the most, if not the most, anti-black laws on the statute books."
Professor Friedman is no longer here to testify, but his work is available — even in San Francisco.
Copyright 2006 Universal Press Syndicate
Or is that an ad hominem?
...and a vast majority have Liberal Arts degrees.
The truth...
Union payscales are are based on the minimum wage. they may be waking $65 per hour but if the minimum wage goes up then their wages up significantly without any negotiatiomn whatsoever.
It is criminal that Congress have the power to set wages. There is no Constitutional authority whatsoever.
We must start prosecuting politicians for their crimes.
It would have been interesting if the article would have also compared fast food prices. I'd bet that they're a fair amount higher in San Fran than they are in Wisconsin.
That's 100% correct. Also, some contracts allow wage provisions to be reopened, mid-contract, if there is a change in the minimum wage.
Very few people are supporting a family on the minimum wage, except of course illegal aliens who shouldn't be here to begin with.
Anybody that is working for only this minimum wage, is being subsidized by someone else.
Either by assistance in kind (free or subsidized rent, picking up the food bills by either a soup kitchen or food stamps, EIC on taxes that almost completely offsets the SS contribution), or by working more than the ordained 40 hours per week, at a second or even third job.
And since a person working 80 to 100 hours a week is at the edge of fatigue almost all the time, not much energy is left over to devote to the job at hand. Of course, at these wages, that may be enough, but if the person was able to concentrate effort on only ONE job, he (or she) may be able to bring a LOT more to that one job, and justify a higher, perhaps a much higher, wage.
I was called just about every name in the book for simply making a mockery of their logic
Raising the Minimum wage is just payback for the Demmies that voted for these Dingbats in Congress.
A vote bought with someone elses money.
Is that all unions? Or, just some?
Click the pic for a larger view. What ever happened to "minimum wage burger flipping" jobs. Hmmm... let's see. Major tax cuts lead to a booming economy, a 4.4% unemployment rate and deficit reduction. Now, with just about everyone employed who wants to be, the employers are having to get creative to attract new hires. End of economic rant :)
You don't need to be clairvoyant to see that their proposals are all for their favorite special interests.
Related, ironic link featuring the Breck girly man:
http://www.freerepublic.com/focus/f-news/1744547/posts
I think that the federal minimum wage only applies to companies engaged in interstate commerce. The ony place I know of which pays it is Family Dollar.
I spent September travelling on business and saw similar signs at C-stores and fast-food all over the place.
Speaking of idiotic economic theories, I’m surprised the libs haven’t pushed for a “maximum wage”.
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