Monday, September 14, 2015

The Only Thing that Matters About the Minimum Wage

If we got rid of it, would wages go up or down? Would employers pay two dollars an hour, or would there be an increase in jobs so that it went up to $10?

I understand the minimum wage is just a band-aid and solves nothing. Some businesses can pay more - and others would go out of business.

I would be for getting rid of the minimum wage if we got rid of the Federal Reserve Bank and returned to sound money without any inflation, if about 80% of the government was closed down, if Big Business corporations were not given special privileges so they can exploit workers (a corporation has the legal status of a person).

I occasionally run across spergs (as in Aspergers) who think they understand economics and are obsessed with getting rid of the minimum wage. But they don't understand economics at all.

Years ago a friend of mine in college worked in a "right to work" state and got a job as a security guard. He was paid two dollars an hour - and at the time the minimum wage was about five dollars an hour.

When I asked him if there were any high-paying jobs in that state, he told me "No." But with the minimum wage gone and the "free market" triumphant, shouldn't there be an increase in high-paying jobs?

The last time I checked, the average age of someone making minimum wage was 35 years old.

I know quite a few people making minimum wage. Lots of middle-aged people with low IQs. They aren't going to retrain for higher-paying blue-collar jobs, which don't exist anyway. They're stuck in these jobs for the rest of their lives (I know some of them who ride bikes to work because they can't afford a car).

I also know low-IQ 18-year-olds making minimum wage. Some are high-school dropouts because they couldn't do the work and couldn't stand being in school.. They aren't going to retrain for non-existent high-paying jobs, either. God knows what they are going to do.

When people tell me there would be an increase in high-paying jobs if we got rid of the minimum wage, my answer is, "Prove it." They never can. All they can do is babble bad economic theory. They can show no empirical evidence.

All the adults I know making minimum-wage are also on welfare. They get food cards and go to food banks and get help for their utilities. In other words, they're a parasite on taxpayers.

I've heard this called "privatizing the benefits and socializing the costs." Businesses, if the government lets them, shove their costs onto taxpayers.

What's possibly coming? Living in cinder-block apartments, four to a room?

Unless something is done about this, the United States is heading toward Third World status. But we'll never get there - something will happen long before that happens. It's getting to the point everyone hates the government - which is why Donald Trump is so popular.

For that matter, I want the Democratic and Republican parties utterly destroyed. That's a first step to making this a better country.

21 comments:

Sam said...

"(a corporation has the legal status of a person)."

Nothing will happen until corporations lose their human rights status. So Bob, do you think we will ever see such an event happen in our lifetimes? I am not too optimistic about it. I'm 38 years old and am continually wavering between different part time minimum wage jobs.

sth_txs said...

I don't think wages would necessarily go up with an increase but it would bankrupt a number of small businesses that can't afford to pass those cost along.

People forget to that when you raise a minimum wage, your local, state, and federal government also have those cost so don't complain about your tax bill. There a number of poor counties all across the country and South Texas has a number of them that don't have the tax base to pay it.

Sadly, even semi-skilled jobs don't pay much better than minimum wage. Though I can't say being educated really guarantees that much either.

Glen Filthie said...

"When people tell me there would be an increase in high-paying jobs if we got rid of the minimum wage, my answer is, "Prove it." They never can."
--------------------------------------------------------------------

China.

They use slave labour and aren't shy about it. When they started eating America's lunch their low wage workers got a bag of rice a week and a bicycle and were thankful for it. Today we have legions and generations and cities full of unemployable negroes that think Whitey owes them a Caddy and all the bling they can wear because racism. A higher minimum wage won't get them off welfare, because they have neither the IQ nor the ethics to be productive workers.

Any time you artificially inflate a company's costs they become less profitable and less productive. Think of the unions and The Big Three auto makers. Even though the guys that sweep the floors at GM are making far above minimum wage, often those union slobs hate their employer and won't hesitate to dog it, steal, or take advantage of the corporation. They phone in sick, slack off and do the absolute minimum. They will deny it, but the union protects deadbeats far more than it protects jobs.

America is going the same way the Big 3 are. I won't touch a Dodge, GM or Ford anymore. For the longest time Toyota was an excellent replacement until they went to unionized American/Canadian labour too - and now their quality and value are diving.

Having said all that: I would like to see a $15.00/hour min wage. It would destroy the cheap labour market and encourage Mexicans and other illegal foreign scum to go home. It would destroy some seriously bad industries like the fast food corporations. Finally it would give the chit house economist undeniable empirical evidence that minimum wages do not equal prosperity and imperil productivity and profit.

Bob Wallace said...

"So Bob, do you think we will ever see such an event happen in our lifetimes?"

Someday, yes, but I wish I could tell the future. I'd be incredibly rich, for one thing.

A.B. Prosper said...

I drive a Big 3 car, made by a union and its one of the best most reliable vehicles I've ever owned even with a lot of mileage on it.

Now as for minimum wage, you can't cheap out on paying the costs for civilization, no matter how you try. We've been doing this since the revolution, more or less and we've run out of room or the ability to externalize our costs

More importantly, the controls we use to prevent uprisings are fading. Christianity is weaker and our real religion Economic Liberalism which is frankly bullshit is fading. Its not a surprise that someone who acts something like an economic nationalist (Trump) and an outright red (Sanders) are polling so well.

The current elite strategy of flooding nations with foreigners to prevent people from organizing is working well enough but its almost certain to cause a collapse

In the end I suspect everyone will get a lot poorer. The only consolation I supposes is that the elite and their institutions may well meet local versions of the Jacobins or worse and will odds are get much of what's coming to them.

if we are very lucky, the now poorer society will set itself up in a much less efficient format designed around human nature and human needs and the common sense understanding that make societies run. It won't be terribly efficiency and people will on average poorer but will be stable and take care of our own people especially the ones who aren't rich 140IQ types or connected which is good enough.

Mindstorm said...

^ Are you personally willing to take care of people unrelated by blood to you that would turn out to be unable to take care of themselves?

In the past they either starved or died of diseases, or were living the life of beggars or wards of charity (and frequently starved or died of diseases regardless). Only those with richer relatives had it better, assuming that their caretakers did their job as well as expected.

Rusty Shackleford said...


"America is going the same way the Big 3 are. I won't touch a Dodge, GM or Ford anymore. For the longest time Toyota was an excellent replacement until they went to unionized American/Canadian labour too - and now their quality and value are diving."

Glenn, you sound like a WSJ editorial from 1987, and I don't think you know much about cars. The unions aren't even a ghost of what they were in terms of numbers or influence. Do you have any proof that Japanese cars built in Japan are less reliable than NA made models? If you want to know a dirty secret, those cars from Japan are built by migratory, quasi slave labor from Brazil and the Philippines.

Not that it matters because vehicles from anywhere these days are pretty good. They're designed on computers and built with robots. You can buy the cheapest car that Korea can build, and you can fully expect it to be reliable transportation. Ford in particular has been building cars that consistently hit the top of the quality rankings for years now. I'm a mechanic, and for my vehicles 300k is nothing. Take care of your car and it will take care of you.

Rusty Shackleford said...


"In the past they either starved or died of diseases, or were living the life of beggars or wards of charity (and frequently starved or died of diseases regardless). Only those with richer relatives had it better, assuming that their caretakers did their job as well as expected."

So how have things changed? Do you not have any panhandlers in your city, or has poverty been eradicated where you live? In the past people would tithe to the church and the church was the safety net for the poor. You can read about this and what happened to the poor and sick in England when Henry VIII suddenly decided to abolish Catholicism. It's no secret that religious organizations have always been much more effective at charity than the government. Where I live the only homeless shelter that will accept adult men is run by a Lutheran minister named Larry Rice, and, maybe predictably, the city government and gentrifying liberals are waging an all out war to shut him down. So, again, what's changed?



" ^ Are you personally willing to take care of people unrelated by blood to you that would turn out to be unable to take care of themselves?"

I've read about studies showing that people will give more money to their co ethnic beggars than they will to beggars from other groups. If we can dispense with Randian nonsense questions about bringing beggars into our homes, I think we can at least suppose that people in a homogenous society are more likely to contribute to their poor than they otherwise wood in a diverse, multicultural society. What's I'm getting at is that there are degrees of relatedness that factor into the question.

Robert What? said...

Would the wages go up or down? With millions of low skill / no skill / low IQ immigrants flooding in, they would certainly go down.

Of course the big question is how you decide the peg? Why just $15 an hour? Why not $25, $50. $100?

A.B. Prosper said...

RW.

Agreed on immigration. Its why both parties have to go.

re: wages there is a neglected middle between to high and too low a peg.

I'd use history as my guide. The minimum wage in 1968, its peak for example was $1.60. Inflation adjusted this is $10.97 so it occurs to me, $11 US is a reasonable wage

If a business can't survive on that wage than it either has to raise prices, become a family only/single proprietor business or simply go out of business since its model is broken.

However making this work will mean controlling imports to prevent wage arbitrage, controlling immigration and since automation is a huge job destroyer, lowering the work week.

Given the work week situation, having to drop it by say 20% to say 32 hours (4 eight days with a near ban on overtime) so that people have work, you'll need wages to be a bit higher say 25% higher so minimum wage re-indexed once a years would start at 13.75 US

Now unlike Leftists I am aware that the first response will be automation and layoffs instead of cooperation . So the tax code gets tweaked so that hiring people becomes economically more efficient than layoffs, sure you can put in a machine. It will cost 5 or 10x what an employee would, The companies that make automation solutions will hate this and the idiots who regard efficiency as more important than a functioning society or this 3 world country cum police state we have as progress will as well but the devil take all their houses,

However doing that will require a pretty near clean sweep of the political class something I'm not sure is possible short of a lot of actions that will in the end disrupt society and wreck the economy either. Lead and hemp cut profits a lot.

Another option is more socialism, again with closed borders. We get rid of the minimum wage and simply have the USG put everyone Basically everyone gets $800 a month upfront inflation and region adjusted every six months or so and fully paid in taxes. This reduces the tendency for prices to rise, hey everyone got an extra $800 a month, rents go up $795. You'll end up losing every dime you make in taxes so the sound move is to manage to keep rents lower.

You'd start the program on a delay, taxes first but used to pay for infrastructure repair

This however would end up with the government Hoovering Up 75% of the economy and the US having a fairly tiny military. The social consequences, re: family formation would also be highly dysgenic

This is more doable, sort of, everyone will be someone poor and the US as a whole poorer and the world less stable but it would stop a lot of poverty and allow businesses a pretty free reign

However it won't work with multi-cult like we have.

What i suspect will happen is baring Junta or a strongman the US will do nothing, keep locking people up to control for the social mistakes, not fixing the infrastructure until we become Brazil 2.0 or collapse even farther down.

We might, probably will have a civil war along the way in which case, we'll end up a lot of dead and much smaller more homogeneous nations which is good for many people . Hopefully we won't be at each others throats when its all over but I'm not sanguine about it.

Anonymous said...

The other big problem with a federal minimum wage is that it can't be adjusted for different regions- a reasonable wage in Massachusetts is going to be a heck of a lot higher than a reasonable wage for, say, Mississippi.

DeNihilist said...

And as Thomas Sowell has repeatedly pointed out, raising the minimum wage affects minorities and the young far more then older whites. The big lie here is that the minimum wage should be a living wage. Wrong. The MW use to be set up in a way that allowed employers to hire untrained or first time job seekers, so that they could afford those cigs they wanted, but not support a family. Get experience, have a resume, then get a family wage job, that is the path that is being destroyed by the=se MW hikes.

A.B. Prosper said...

Anonymous, true but given the nature of the societies in the South, you sometimes have to work around them. Also raising wages reduces capital flight and tax shopping. It would be ideal of all States and localities had the same fairly low rates but its not feasible so you do what you can

You could change the federal tax code to level taxes via adjusting deductions, that is the amount you pay in taxes won't really vary but the states that benefit from tax shopping because they have a low spending culture (like Texas) won't allow it.


DeNihilist,

Yes Sowell was correct but most people working at minimum age are now in their 30's. Back in the day into I dunno the 80's or so, a lower minimum wage was doable because it was for the young and hapless but no longer. The current economy no longer produces many jobs for regular people that pay well. Without those jobs, a modern capitalist state cannot function and you get an oligarchical police state ,socialism, or collapse in any combination.

Also the minimum wage met Sowell's ideas back in 1968 when it was in modern terms $11 an hour so it really doesn't hold that we don't adjust for inflation. Inflation isn't going to stop or go away , the budget cannot be balanced without an economic collapse anyway.

Simply, that beneficial path (minimum to resume to good job) wasn't destroyed by policy or by MW hikes but by automation and free trade. as an example, watch "How its Made" some time and than google pictures of old factories. Modern factories have a fraction of the staffing they used too and we aren't that far off from automating away say 2/3 of jobs

Heck a lot of office jobs, help desk, accounting , travel planning and such have been replaced by software.

Simply, all the factory jobs and "shovel ready" jobs and many office jobs that paid well have been automated away and that is a disaster .

The old path was destroyed by the machines and as such , we need a new one. Massive undischargable education debt and wasting women's peak fertile years in education they don't need (i.e college_) destroys family formation and makes society stupider,

So we have to have new policies that work with our tools. Its a post labor age and unless we have jobs for the majority of the population , 110 IQ and under, the US will not survivor.,

1st things 1st though, stop illegal immigration than most legal immigration than mass repatriation

Bob Wallace said...

I made minimum wage in college, owned a used car, paid for my own apartment and food, and my
phone. Today? Impossible.

I also had a Chevy Cavalier that had 488,000 miles on it when the transmission finally blew. It worked just fine in reverse, though.

A.B. Prosper said...

Aye, if the minimum wage was raised to comparable to 1968 (i.e $11 or so) and if the other things (repatriation and tax changes) were done, we could in theory get back there.

Full time employment would than net (assuming say 10% tax) around $1500 and month and assuming rent (1 bedroom) around $400 or so would be fine.

However its politically quite unlikely and would require a pretty nimble and smart governing class to avoid capital side price inflation.

My suspicion is imposing it and the necessary conditions would require either a benevolent dictator, imposed by overwhelming force with public support or a quasi-dictator ala FDR neither is likely before Full Brazilification or civil war commences.

Bob Wallace said...

"Lutheran minister named Larry Rice"

St. Louis. I lived there for 15 years and I remember the city was all over him trying to close him down. I assume they are still after him.

Glen Filthie said...

"Glenn, you sound like a WSJ editorial from 1987, and I don't think you know much about cars. The unions aren't even a ghost of what they were in terms of numbers or influence. Do you have any proof that Japanese cars built in Japan are less reliable than NA made models? If you want to know a dirty secret, those cars from Japan are built by migratory, quasi slave labor from Brazil and the Philippines."
------------------------------------------------------------------------

Well ya got me dead to rights, Rusty. I am out of step with the times, American automakers have closed the quality gap between themselves and the Japanese ... and I will also concede that Ford seems to be leading the pack in my biased opinion.

Japan, in the 80's, started kicking America's ass with automated assembly lines, not migratory workers. And - when ya get right down to it, the Japs are flapping in the breeze the same way America is. The third world is coming on line and when it does we are ALL in the crapper - minimum wages or not! As you note, even the Koreans can build a good car cheaper than the Americans can - and when the Chinese get over their teething problems with QA/QC... the fit is gonna hit the shan!

This is where Unca Bob and the other old hippies go off the rails. The current economic picture is totally and completely new. Automation is getting cheaper and cheaper. Human labour is getting ever more costly. We have a production glut. Contrary to Bob, never before in the history of mankind have we had it so good.

In my grandfather's day, poor people sometimes starved and froze to death. I have never been cold or hungry. My Grandad lived through two world wars, road on the roofs of trains looking for work in the dirty 30's, and his last home was about 700 square feet. He was prouder than punch of his Austin Prefect which was the only car he ever owned. He considered his final years as sheer opulence. My home is 1500 sq. ft., I have three cars, a motorcycle and just got rid of an ATV. I am nowhere near wealthy by today's standards either.

I agree that we are sliding backwards but a lot of that is our own doing. We are giving our nations away to foreign human trash that have destroyed their own countries. We are breaking the bank trying to buy good behaviour from feral negroes. We are flushing money down the third world faster than we can print it. We are letting the third world dump their products into our markets as they bar us from theirs. The minimum wage is nothing compared to these economic factors.

As always, perspective is everything.

Anonymous said...

"Contrary to Bob, never before in the history of mankind have we had it so good."

Objectively, compared to the rest of humanity currently living, and those humans that have lived and died before us, Americans have it pretty good:

https://www.youtube.com/watch?v=MDej3riTOS4

A.B. Prosper said...

Glen, yeah exactly.

Materially most of us in the 1st world have it pretty well. I'm not so sure we are spiritually or culturally healthy though.

Quartermain said...

Here is the most recent post by John Craig at Just Not Said:

http://justnotsaid.blogspot.com/2015/09/is-america-meritocracy.html

What he is saying and what you have been saying, just ties together well & compliments each other.

Well worth the read.

Bob Wallace said...

In business I have found it's not so much what you know (which helps a lot) but who you know. Connections.