Posted on 03/18/2013 10:28:05 AM PDT by SeekAndFind
Oh, minimum wage — the simple- and friendly-sounding yet actually regressive and economy-damaging populist throwback that just refuses to die. President Obama once again resurrected the timelessly terrible idea in his State of the Union speech in February, and it’s been percolating among the Democrats as a potential 2014-oriented rallying cry for how those obstructionist Republicans must really, really hate poor people because there’s no other possible explanation for their opposition (except that, you know, minimum wage hikes are actually counterproductive to an inclusive and prospering economy, but let’s just rid ourselves of any lingering school-girl notions that facts are what matter here, shall we?).
Last week in a hearing of the Senate Committee on Health, Education, Labor, and Pensions, Sen. Elizabeth Warren wondered, “If we started in 1960, and we said that, as productivity goes up — that is, as workers are producing more — then the minimum wage is going to go up the same. And, if that were the case, the minimum wage today would be about $22 an hour. So, my question, Mr. Dube, is what happened to the other $14.75?” National Review picked up on it:
President Obama’s call to increase the federal minimum wage to $9 an hour was one of the more significant proposals he laid out in his State of the Union address Tuesday night. But $9 an hour is still a far cry from what workers really deserve, a 2012 study finds.
The minimum wage should have reached $21.72 an hour in 2012 if it kept up with increases in worker productivity, according to a March study by the Center for Economic and Policy Research. While advancements in technology have increased the amount of goods and services that can be produced in a set amount of time, wages have remained relatively flat, the study points out. …
Between the end of World War II and the late 1960s, productivity and wages grew steadily. Since the minimum wage peaked in 1968, increases in productivity have outpaced the minimum wage growth.
I’m calling shenanigans. That is one wildly flawed premise, because the value of productivity is not a constant. As HuffPo’s writeup cedes, “advancements in technology have increased the amount of goods and services that can be produced in a set amount of time,” not to mention with fewer resources and at a lower cost — should in the increase in crop yield from a farmer using a donkey and plow versus a farmer using a tractor be directly proportional to an increase in those crops’ market worth because of some sort of imagined moral law about productivity and wages? No, because the market value of those crops has diminished as the ease of production has increased, and if that was the way the world worked, we’d all be paying a heck of a lot more for food right now.
Again, raising the minimum wage to some arbitrarily-determined level of ostensible just deserts is just another way of throwing market signals under the bus in exchange for more top-down control, which might benefit a few in the short run, but bogs down the entire economy in the long run. As Christina Romer, former head of President Obama’s Council of Economic Advisers, put it:
Raising the minimum wage, as President Obama proposed in his State of the Union address, tends to be more popular with the general public than with economists. …
First, what’s the argument for having a minimum wage at all? Many of my students assume that government protection is the only thing ensuring decent wages for most American workers. But basic economics shows that competition between employers for workers can be very effective at preventing businesses from misbehaving. If every other store in town is paying workers $9 an hour, one offering $8 will find it hard to hire anyone — perhaps not when unemployment is high, but certainly in normal times. Robust competition is a powerful force helping to ensure that workers are paid what they contribute to their employers’ bottom lines.
Fritos, Cheetos and grape soda are about the same as a few years ago. And flat screen TVs are way down so your minimum wage goes further these days you can live like a king if you are working at McDonald’s. And you are when compared to the poor worldwide
:: I think I see a fundamental assumption flaw in this statement.
Spend four years working your *** off in college to earn $22/hour
...be an idiot and drop out of high school to earn $22/hour
Which will people choose? Huh Warren?
This is part of Obama’s economic plan, and why he feels he does not need to cut spending. He has chosen inflation to devalue the value of the debts. Everything he does economically tries to spark inflation.
Big macs will not cost $11, they will become unavailable. Customers will choose making peanut butter and jelly sandwiches over fast food, and the fast food industry will disappear.
I’m with you!
Legislate a $32/hour minimum wage then tax the hell out of it!
(it’s the argument used by some on drug legalization threads)
We should be able to pay off a $20,000,000,000,000 debt in our lifetimes! < /sarc >
“:: Robust competition is a powerful force helping to ensure that workers are paid what they contribute to their employers’ bottom lines. ::”
If this were TRULY the case, then she’d be arguing for an increase in the minimum wage abroad as well.
Degreed professions are having to compete with third world salaries in India where work is produced abroad and imported via the internet with no duty is paid.
Can’t outsource service industry jobs and SEIU knows it.
Because the minimum wage is the benchmark hourly scale upon which Union wages are negotiated. 22 an hour from 7.25/hour would translate to over $110/hour for a us autoworker, for example. Even more for hourly truckers and.....voila.. incredible inflation of prices for goods.
Detroit UAW members who earn $75 an hour do not do work that could be done by unskilled workers. Minimum wage increases the earnings of union members who compete with low-skilled workers for jobs. The estimate is if the minimum wage rises 40 percent, unionized workers who earn between the minimum wage and twice the minimum wage could see their earnings rise between 20 and 40 percent.
A higher minimum wage increases the expense of hiring unskilled workers. This makes hiring skilled union members more attractive and could raise the earnings of union members who compete with minimum wage workers by 20-40 percent. Meanwhile, non-union, low-skilled workers’ earnings actually fall due to reduced working hours and fewer job opportunities. Raise the wage— fewer jobs, even at the mcdonalds.
Just remember...bankers and democrats..LOVE socialism because of the built in inflation, and the dems love it because taxes “have” to go up while the money to pay them has to go up. Meanwhile... all of the regular folks suffer in complete misery. Nice setup. This Warren fauxahontas is one stupid ahol biotch.
You have defined the work scale for 50% of federal jobs— even the bait fish inspectors.. 100K a year...lol.
Imagine someone making $21/hour for sweeping the floor or flipping a burger. Okay, well, the former already exists in government union jobs. Not sure about the latter.
is that how much Liz pays her housekeeper?
LOL @ “most integers are very large” :-)
We finally have someone to replace Biden as the dumbest person in the senate.
Why don’t we just make minimum wage a million dollars per hour so EVERYONE can be rich? Shoot, we’ll throw in some trillion dollar platinum coins to fix the debt too!
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