Posted on 03/06/2013 12:52:17 PM PST by GVnana
Let's work through an example. Suppose 100 yards of fence could be built using one of two techniques. You could hire three low-skilled workers for $15 each, or you could hire one high-skilled worker for $40. Either way, you get the same 100 yards of fence built. If you sought maximum profits, which production technique would you employ? I'm guessing that you'd hire one high-skilled worker and pay him $40 rather than hire three low-skilled workers for $15 each. Your labor costs would be $40 rather than $45.
Suppose the high-skilled worker came into your office and demanded $55 a day. What would be your response? You'd probably tell him to go play in the traffic and hire the three low-skilled workers. After all, hiring the three low-skilled workers for $45, to get the same 100 yards of fence, would be cheaper than the $55 a day now demanded by the high-skilled worker.
The high-skilled worker is not stupid and knows that's exactly what you'd do. He will do a bit of organizing first, convincing decent, caring people that low-skilled workers are being exploited and not earning a living wage and that Congress should enact a minimum wage in the fencing industry of at least $20. After Congress enacts a minimum wage of $20, what then happens to the chances of a high-skilled worker's successfully demanding $55 a day? They go up because he's used the coercive powers of Congress to price his competition out of the market. Because of the minimum wage, it would cost you $60 to use the three low-skilled workers.
(Excerpt) Read more at washingtonexaminer.com ...
I think very few leftists chose introductory microeconomics as their social science elective.
Uhh, dude, your premise is flawed.
If you think you will get “the same fence” whether built by low-skilled and high-skilled workers, you’ve obviously never built a fence or hired someone to do one.
The fence may use the same materials and be the same length, but it is highly unlikely to either look or function the same.
This is a case where “disparate impact” actually supports a valid point.
Uh, well. Speaking as a woman who has built her own fences — and surprised plenty of contractors with my “workmanship” — you don’t need a 50-buck-an-hour-boy for that. Have you ever tried it?
I think you missed the boat on that one.....Dr. Williams, not the poster, made that statement, and I think he was actaully making the same point you were..
We fight Econ 101 battles all day long in this country.
Only every once in a while does an issue rise to Macro 101 (monetary theory.)
Most other issues are small in comparison.
0bamaCare is a total Econ 101 Fail for example. Nobody who took Econ 101 seriously could vote for that piece of excrement.
Walter Williams has been explaining this to us for over thirty years that I know of. People are just too dumb to hear.
Not to quibble, but I don’t think “Econ 101” - especially as it is used in the vernacular - means micro economics versus macro economics. I think it means elementary economics on either the micro or macro scale.
But your point, that nobody with an understanding of the macro or the micro would ever think that Obama Care would/could/should work.
Minimum Wage, Maximum Folly
http://econfaculty.gmu.edu/wew/articles/99/folly.html
IIRC, the history of minimum wage laws dates back to lawmakers who made it due to blacks coming north and competing with jobs from white workers.
(more Jim Crow laws from Dems)
The simple fact is that blacks at the time had less education and fewer work skills—and minimum wage laws were implemented, just as unions were organized, in a large part to keep low-skill blacks from taking jobs for less pay.\
The simple fact is that blacks at the time had less education and fewer work skills—and minimum wage laws were implemented, just as unions were organized, in a large part to keep low-skill blacks from taking jobs for less pay.
Oh, and the simple fact today is that blacks on average have less education and fewer work skills, so minimum wage laws are still disproportionately affecting their employment rates.
Beat you:
Daily News - May 23, 1978
NO Problem.. poor people believe what democrats tell them to believe..
ENVY is sacrosanct to a democrat.. “GIMME” is the only prayer they know..
When givernment supports poor people you get many many more of them...
Even many rich hide their wealth(offshore) and PLAY POOR..
Old Skool
What would really happen is someone would underbid the highly skilled worker. He would bid $50 ($5 less than the highly skilled guy) then hire 3 illegal aliens fot $5 a piece. He’d make $35 profit and the highly skilled worker would go on unemployment.
I’ve built a number of fences, not to mention added on rooms, built furniture, and a bunch of other stuff.
My point is not that doing it oneself well is impossible. You (and I) obviously care and do the very best we can.
I have worked extensively with and supervised workers of all skill and remuneration levels. And I will tell you right now that one often finds minimum-wage people who want to do a good job, even if their skill level is low. That can be handled by training, and when I found someone like that I immediately supplied the training (and a significant raise to keep them around).
But more often the minimum-wage guy is earning that for a reason, and it’s not oppression by the employer. He isn’t worth more, and often isn’t worth that amount. In general he doesn’t care and given the opportunity will sneak off to rest or even sleep when he should be working.
What quality of workmanship do you think this guy will produce?
Sorry if I’ve ranted a bit here, but I spent 10 years trying to get through to franchisees I was training that labor costs cannot be analyzed in the simple way this article does. If you pay more, you increase your chance of getting an employee who is higher-skilled, gives a damn about his work and is to some extent self-supervising.
Pay less and you greatly increase your chance of getting the guy I described above, and I guarantee any gross profit you earn on him will be more than outweighed by additional supervision and management costs, not to mention costs of correcting errors he makes and dealing with pissed-off clients he creates.
Rant off.
Along with the low skilled dude who ain't about to go to work and mess up WIC, Section 8, Medicaide, Food Stamps and Obamaphones!
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