Posted on 10/08/2014 4:40:41 AM PDT by Kaslin
Fifty years ago, President Lyndon Johnson declared "War on Poverty." It sounded great to me. I was taught at Princeton, "We're a rich country. All we have to do is tax the rich, and then use that money to create programs that will lift the poor out of poverty." Government created job-training programs for the strong and expanded social security for the weak.
It seemed to work. The poverty rate dropped from 17 percent to 12 percent in the programs' first decade. Unfortunately, few people noticed that during the half-decade before the "War," the rate dropped from 22 percent to 17 percent. Without big government, Americans were already lifting themselves out of poverty!
Johnson's War brought further progress, but progress then stopped. It stopped because government is not good at making a distinction between needy and lazy. It taught moms not to marry the father of their kids because that would reduce their welfare benefits. Welfare invited people to be dependent. Some people started to say, "Entry-level jobs are for suckers." Many could live almost as well without the hassle of work.
Despite spending an astonishing $22 trillion dollars, despite 92 different government welfare programs, poverty stopped declining. Government's answer? Spend more!
Rep. Paul Ryan (R-Wis.), chairman of the House Budget Committee, points out that government measures "success" by the growth of programs: "based on inputs, how much money are we spending, how many programs are we creating, how many people are we putting on these programs -- not on outcomes -- how many people are we getting out of poverty? ... Many of these programs end up disincentivizing work -- telling people it pays not to go to work because you'll lose more in benefits than you gain in earning wages."
That doesn't mean the poor are lazy. It means they respond to incentives. They are rational about choosing behaviors that, at least in the short term, pay off.
It's not only welfare that makes it harder for the poor to climb the ladder of success. Well-intended laws, such as a minimum wage, hurt, too.
But most people don't understand that. Even Republicans, according to opinion polls, support a higher minimum wage. A minimum sounds compassionate. It's hard to live on $7.25 an hour.
But setting a minimum is anything but compassionate because that eliminates starter jobs. The minimum wage is why kids don't work as apprentices anymore, nor clean your windshield at gas stations. They never get hired because employers reason, "If I must pay $9, I'm not taking a chance on a beginner."
To most economists, the claim that the minimum wage kills starter jobs is not controversial. But it is among the general public. And so politicians pander.
On my TV show this week, Rep. Jim McDermott (D-Wash.) says that people like Paul Ryan and I "just want to cut the size of government. And trust the private sector to do everything."
Well ... yes. The private sector does just about everything better.
McDermott says, "This whole business about somehow raising the minimum wage causes a loss of jobs -- if that's true, why don't we just drop the minimum wage altogether and let people work for a dollar a day or $1 an hour?"
OK, let's do it! It's not as if wages are set by the minimum wage.
That is a great conceit of the central planners: thinking that only government prevents employers from paying workers nearly nothing. But the reason Americans don't work for $1 an hour is competition, not government minimums. Competition is what forces companies to pay workers more. It doesn't much matter that the law says they can pay as low as $7.25. Only 4 percent of American workers now make that little. Ninety-five percent make more.
The free market will sort this out, if politicians would just let it. Left free, the market will provide the greatest benefit to workers, employers and consumers, while allowing charity as well.
It would all happen faster if politicians stopped imagining that they are the cause of everything.
Now."
Come on, take it easy on him. It’s obvious he has a one track mind.
“Can you explain what these burdens are?”
Unemployment insurance, workers comp insurance, health insurance, social security, pension/401K, breaks/lunch and other unproductive time, required safety equipment, the list is endless, but those costs really add up.
There is nothing wrong with minimum wage as a starting wage, or for teenagers.
OTOH,the "poverty" I've seen in various parts of this country (Boston,NYC,DC and LA...among others) always seem to feature massively obese people talking on Obama Phones,eating a Big Mac and wearing $200 Air Jordan sneakers.
Poverty? Yah,right! Half (if not more) of the people of the Third World would sell their souls to live like the typical American welfare parasite.
There are no patronage jobs in the bureauracracy with fat, early pensions if we set the economy free. Letting people do what they want reduces the ability of government to tax.
Wrong questions. I'll bet the Americans know what which Kardassian did this week, who got kicked off the island or what star danced best! Oh, and that the Republican party has an ongoing "war on women" and wants to pollute the air and water...
Though he espouses many conservative principles, Stossel is a libertarian.
That's one of a myriad of reasons why invaders (legal and illegal) should be sent home and not allowed back in the US, EVerify should be the law of the land, there should be a law that US citizens who are qualified should get jobs instead of non-citizens. Make it a crime (including stiff fines and jail time) to hire invaders, knowingly or without proper scrutiny. There should be tariffs on goods from countries where workers don't get a living wage.
Then you'll get some real supply and demand in the labor market. And all those social workers, ESL coaches etc? They can get real jobs in positions invaders aren't filling.
Jobs won’t “come back” until gov’t stops driving them away by making them more expensive and more a hassle than outsourcing overseas to people willing to work harder for less.
And yes, I’ve been laid off several times. Each was an opportunity/compulsion to escape a rut and move up the ladder. 3-5 years is average turnover rate in the high-tech industry.
Thats assuming the presence of two brain cells.
So...you had 10 years notice?
You forgot vacation time. Workers comp rates can easily be 15% or higher.
That is included in ‘other unproductive time’. You also have legal costs, because every employee comes with a legal risk.
How very true. When I was a college student you got paid to work, even if you were just an assistant in some lab. Now college students supposedly have to have "internships" where they labor for free and their parents (or they) pay the college! What a racket.
Even greater than the specific burdens, like unemployment insurance, taxes, etc. are the risks you take on as soon as you hire an employee, even the minimum wage kid.
For example, you can assume there will be, at some point, some error in a required regulatory document that you'll have to deal with. And if you are in business long enough, you'll have in person visits from various government functionaries, some of whom will lift their jacket just so you know they are armed while they show you their ID.
And inevitably they'll want you to do something, and you can bet that writing a check will be part of the process. You won't have any choice in the matter, but you'll still spend a lot of money with your accountants, lawyers, etc.
Or one of your employees will sue you, or file a complaint, or decide to apply for Cobra health insurance continuation but fail to pay their bill. Or any one of hundreds of other things that always end up costing the employer money, sometimes a lot of it, like the new health insurance related penalties. In that case if you lose an employee classification argument you could end up paying a few thousand dollars per employee, enough to sink many companies, and bankrupt their owners.
In that situation, smart employers do everything they can to get work done in ways that doesn't expose them to the risk of having employees. This is yet another reason jobs migrate overseas, or disappear altogether. Having work done in a foreign country is an excellent solution to all of those issues.
I only work 3 or 4 days per week. I had been working as a park ranger, but that was all nighttime work, and I didn't like having to deal with drunks at midnight.
I am 62 and was forced out of the military at age 60. I don't need a job, but like to have extra spending money. There are plenty of chores to do on my days off, but I like to stay busy. BTW, you can still call me a n00bie!!
Here, I think you’re a bit mistaken. Internships = Apprenticeships (also ‘without min. wage’).
One works up the ladder to obtain the knowledge/skills of the trade.
A voluntary exchange or labor for training. That is a bad thing?!
Sorry, I’m opposed to most/all ‘licensing’ (We the People should not be requesting PERMISSION from gov’t for squat); let alone the Right to work (a voluntary exchange of work for XYZ...be that $$, food/shelter or what have you).
It is the job of GOV’T to ensure those in this Country are here legally (though, too, there should not be a welfare State or ....), in a much as it is the employers responsibility to provide insurance (or fined for not doing so).
A huge issue is that a lot of Americans think it’s someone else’s job to pay attention to these things. A lot of Americans think being an idiot makes you cool, for some reason. I’ll never understand it myself.
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