Minimum Wage aka Economic Illiteracy

“It’s not just going to be in the fast food business. Franchising is the best business model in the United States. It’s dependent on people that have low job skills that have to grow. Well if you can’t get people a reasonable wage, you’re going to get machines to do the work. It’s just common sense. It’s going to happen whether you like it or not. And the more you push this it’s going to happen faster,” the former McDonalds Chief Executive added.
http://www.zerohedge.com/news/2016-05-25/former-mcdonalds-ceo-crushes-minimum-wage-lie-its-cheaper-buy-robot-hire-15hour

A democratic republic which has taught its kids to be economic illiterates is in for some school of hard knocks learning.

We Need Low Wage Jobs

Another priceless excerpt:

Low-wage jobs serve several good purposes. One is to give first-time job-seekers a bottom rung from which to climb the income ladder. Remove the lower rungs — a $15 minimum would remove at least a couple of them in some parts of California — and the lowest rung on the ladder is out of reach for some.

A high minimum wage forces employers to be more choosy about whom they hire, and often the numbers make it wiser not to hire anyone. The truth that left-wingers such as Bernie Sanders and me-too Hillary Clinton refuse to accept is that the monetary value of work does not rise just because the government instructs it to. If the government raises the minimum wage above the value of the work, no one will buy that labor. Left-liberals are wilfully blind to the fact that businesses are not bottomless wells of money.

When work costs more, businesses buy less of it. Government-generated burdens create incentives for businesses to automate. Have you noticed that fast food restaurants now have touchscreens to take your order? Those machines will never call in sick or file employment lawsuits. For other kinds of businesses, such as landscapers, the minimum wage can make legal hiring prohibitively expensive. That's important in California and other such places where there is so much illegal labor available.

http://www.washingtonexaminer.com/the-wages-of-the-minimum-wage-is-more-joblessness/article/2588083

Why Not Make It $100/hour?

California has just adopted a $15 per hour minimum wage, to be phased in over six years. New York is doing the same thing.

It amounts to a social science experiment, and its proponents argue that it will "give a raise" to low-income workers. Actually, it will do nothing of the sort. It will, rather, deny low-skilled workers the one advantage they have, which is a willingness to work for less than others. Which means more of them will be unemployed, or else will move to states wise enough to avoid this kind of experiment.

http://www.washingtonexaminer.com/the-wages-of-the-minimum-wage-is-more-joblessness/article/2588083

Why not make the minimum wage $100/hour?  Because we all know that wouldn't work.  We want to pretend there's no reason $15/hour won't work, and perhaps in a tight labor market it will.  An easy prediction though is that a $15/hour wage will price out low skill workers, incentivize the hiring of illegal aliens for whom we don't have to pay FICA etc, and thus will do little to shift the situation of the average unskilled laborer.

Hey, with good intentions like these states have, how can we blame them if they disenfranchise the unskilled and create more well paid illegals?

Here's another take on the topic:
http://thefederalist.com/2016/03/29/70-tries-after-seattle-raised-its-minimum-wage-i-still-cant-find-a-job/

Great for the "Job Haves" and Illegals but Nasty for the Have Nots

That 69 percent ratio would be all but unprecedented, in U.S. terms and internationally. The current California minimum wage represents about half the state’s median hourly wage, just as the federal minimum wage averaged 48 percent of the national median between 1960 and 1979, according to a 2014 Brookings Institution paper by economist Arindrajit Dube. (It is currently 38 percent of the national median.) 

Other industrial democracies with statutory minimum wages typically set theirs at half the national median wage, too.

Dube, generally a supporter of minimum wages, recommended that states use 50 percent of the median as their benchmark in the United States. (He told me by email that California’s experiment is worth running and monitoring.)

Krueger has written that a “$15-an-hour national minimum wage would put us in uncharted waters, and risk undesirable and unintended consequences,” though he said it might be okay in certain high-wage cities and states.

https://www.washingtonpost.com/opinions/the-risks-of-californias-minimum-wage-increase/2016/03/30/6d58cc6a-f68e-11e5-a3ce-f06b5ba21f33_story.html

Sure will incentives barters and employment of those already in violation of the law to be here. Glad that experiment is being done in Cali, none are more deserving of further government inflicted economic mayhem.

Min Wage, Minimum Jobs

The AEI study, worked up from Bureau of Labor Statistics’ monthly surveys, shows that, between April and December last year, Seattle saw the biggest employment drop in any nine-month period since 2009 — a full year into the Great Recession.

The city unemployment rate rose a full percentage point.

Before the minimum-wage hikes begin, Seattle employment tracked the rest of the nation — slowly rising from the 2008-09 bottom. But it started to plunge last spring, as the new law began to kick in.

Furthermore, Seattle’s loss of 10,000 jobs in just the three months of September, October and November was a record for any three-month period dating back to 1990.

Meanwhile, employment outside the city limits — which had long tracked the rate in Seattle proper — was soaring by 57,000 and set a new record high that November.

Bottom line: A $15 law in New York is guaranteed to destroy jobs here — and boost employment in New Jersey, Connecticut, Pennsylvania and even Vermont.

http://nypost.com/2016/03/12/how-the-15-wage-is-already-killing-seattle-jobs/

Here's to a high minimum wage in New Hampshire and Vermont so all us Mainers can stay employed.

Most of the Benefits of a Minimum Wage Increase Would Not Go to Poor Households | NCPA

From 2003 to 2009, the federal hourly minimum wage rose in steps from $5.15 to $5.85, and then from $6.55 to $7.25. Between 2003 and 2007, 28 states increased their minimum wages to a level higher than the federal minimum. San Diego State University economics professor Joseph J. Sabia and Cornell University economics professor Richard V. Burkhauser examined the effects of these increases and reported their results in the prestigious Southern Economic Journal.1 They "find no evidence that minimum wage increases between 2003 and 2007 lowered state poverty rates."

http://www.ncpa.org/pub/ba792

It's an informative read and intuitively sensible.  They change these min wage things, but who sees the impact?  

11 Facts About The Minimum Wage That President Obama Forgot To Mention

Unfortunately for the White House, many of its claims about the minimum wage are divorced from reality. Here are 11 facts about the minimum wage that Barack Obama forgot to mention during his State of the Union address.

1) Only 1 Percent Of The U.S. Labor Force Earns The Minimum Wage

2) Teenagers Comprise The Single Largest Age Group Of Minimum Wage Workers

3) Most Minimum Wage Workers Are Under The Age Of 25

4) A Majority Of Those Who Earn The Minimum Wage Work In Food Preparation Or Sales

5) Less Than 5 Percent Of People Who Earn The Minimum Wage Work In

6) A Majority Of Them Also Worked Less Than 30 Hours Per Week

7) Less Than One-Third Worked Full-Time

8) A Full-Time Minimum Wage Worker In 2014 Will Make 24 Percent More Than The Federal Poverty Limit

A White House tweet and accompanying infographic from last August said, "It's time to raise the minimum wage because nobody who works full-time should love in poverty." But a little math and a quick look at the 2014 federal poverty guidelines show that a single individual who earns the current federal minimum wage and works full-time will earn $14,500 in a year (50 weeks per year x 40 hours per week x $7.25 per hour). By way of comparison, the federal poverty limit for 2014 for a one-person household is $11,670.

Wage income from a two-earner family with two kids where both adults earned the minimum wage would exceed the federal poverty limit by 22 percent:  $29,000 in income compared to a four-member household federal poverty limit of $23,850. And that's before federal benefits like Medicaid and food stamps are included.

9) One-Third Of Minimum Wage Workers Either Dropped Out Of Or Never Attended High School

10) There Are Nearly Six Times More Minimum Wage Workers Today Than In 2007

11) A Change In The Minimum Wage Often Triggers Union Wage Hikes And Benefit Renegotiations

The famous investment banker J.P. Morgan said something along the lines of, "Every man has two reasons for everything he does:  a good reason and the real reason."

http://thefederalist.com/2014/01/28/11-facts-about-the-minimum-wage-that-president-obama-forgot-to-mention-during-the-state-of-the-union/
Read the whole article to find out the real reason why the min wage is a political winner for the President.

Economic Reality and the Minimum Wage | RealClearPolitics

But supporters of a higher minimum wage would have us believe that low-wage workers are magically exempt from these phenomena. They claim companies will employ just as many employees at $10.10 an hour as they do at $7.25.

But they must doubt their own case. Otherwise, they would propose an even higher amount, confident it will be irrelevant to hiring decisions. If a minimum wage of $20 or $30 an hour would cause layoffs, though, why wouldn't $10.10? At what point on the wage scale does the law of supply and demand take effect?

Even liberal hero Paul Krugman, a Nobel laureate in economics and columnist for The New York Times, has grudgingly acknowledged this reality. In his 1998 textbook, he wrote that "the centrist view is probably that minimum wages 'do,' in fact, reduce employment, but that the effects are small."

http://www.realclearpolitics.com/articles/2013/12/15/economic_reality_and_the_minimum_wage_120957.html

George F. Will: Raise the minimum wage? It’s iffy. - The Washington Post

And that's about all I have to say about that.

http://www.washingtonpost.com/opinions/george-f-will-raise-the-minimum-wage-its-iffy/2013/12/13/f9a8d81a-6363-11e3-a373-0f9f2d1c2b61_story.html

Raise minimum wage? It's iffy

"It's not true that life is one damn thing after another — it's one damn thing over and over."
— Edna St. Vincent Millay

Liberals' love of recycling extends to their ideas, one of which illustrates the miniaturization of Barack Obama's presidency. He fervently favors a minor measure that would have mostly small, mostly injurious effects on a small number of people. Nevertheless, raising the minimum hourly wage for the 23rd time since 1938, from today's $7.25 to $10.10, is a nifty idea, if:
If government is good at setting prices. Government — subsidizer of Solyndra, operator of the ethanol program, creator of HealthCare.gov — uses minimum-wage laws to set the price for the labor of workers who are apt to add only small value to the economy.

The rest of the list is just as awesome or moreso.

What We Imagine We Can Design

Freaking love this analysis of the effects of implementation of minimum wages.  These things don't happen in a vacuum, be we dearly love the idea that simple coercion by the state will result ONLY in the thing we want to think should happen.

http://cafehayek.com/2013/12/an-open-letter-to-bob-keener.html

Economic Reality and the Minimum Wage | RealClearPolitics

But they must doubt their own case. Otherwise, they would propose an even higher amount, confident it will be irrelevant to hiring decisions. If a minimum wage of $20 or $30 an hour would cause layoffs, though, why wouldn't $10.10? At what point on the wage scale does the law of supply and demand take effect?

Even liberal hero Paul Krugman, a Nobel laureate in economics and columnist for The New York Times, has grudgingly acknowledged this reality. In his 1998 textbook, he wrote that "the centrist view is probably that minimum wages 'do,' in fact, reduce employment, but that the effects are small."

In the short run, McDonald's and KFC might have little choice but to keep staffing at current levels and cough up more on payday. But in the long run, employers would have a significant incentive to find ways to employ fewer workers -- by automating tasks, moving to more self-service, demanding more of each employee, cutting back store hours or closing marginal outlets.

http://www.realclearpolitics.com/articles/2013/12/15/economic_reality_and_the_minimum_wage_120957.html

Oh no, they are so smart they can pick the exact right amount of the minimum wage so that no one gets hurt by their use of force.  You see, folks with uniforms and guns can solve anything if the leadership is as smart as this administration is.

Min Wage - Easier Sell for the Less Informed

Various state legislators and interest groups around the United States are pushing for increases in the minimum wage. In California, for example, even Republican Gov. Arnold Schwarzenegger now advocates raising the state minimum wage from its current $6.75 an hour to $7.75 by July 2007. But when the minimum wage law confronts the law of demand, the law of demand wins every time. And the real losers are the most marginal workers - the ones who will be out of a job.
http://www.ncpa.org/pub/ba550

The federal minimum wage is currently $7.25 an hour, but some states and cities have minimum wages that are significantly higher. Furthermore, eight states raised their minimum wage, effective January 1, 2012.

Indeed: 

• Vermont raised its minimum wage from $8.15 an hour to $8.46 an hour.
• Oregon bumped its minimum wage from $8.50 an hour to $8.80.
• Washington state raised its minimum wage from $8.67 to $9.04 — the highest of any state.

Finally, San Francisco, which imposed a city-level minimum wage a few years ago, increased its minimum from $9.92 to $10.24.

Proponents of a minimum wage argue that a wage floor is necessary to lift people out of poverty, especially those earners who support families. However, the federal law sets a lower minimum for some classes of workers:  tipped employees must be paid a minimum of $2.13 an hour, and some farm workers are exempt.

Some people argue the minimum wage is not enough, and have proposed more generous “living” wages. A living wage aims to provide a minimum standard of living, accounting for the cost of housing and basic needs for an individual, or even a family of three or four. Some New York City officials are considering a bill requiring local businesses that receive government contracts to pay a “living” wage of at least $10.00 an hour, or $11.50 an hour if they don’t offer their employees health insurance. Los Angeles already requires companies that contract with the city or operate on city property to pay a living wage of $9.64 per hour with health benefits or $11.84 per hour without.

http://www.ncpa.org/pub/ib105

Minimum Wage, Maximum Nonsense: Newsroom: The Independent Institute

http://www.independent.org/newsroom/article.asp?id=4751

Why do you pay your kids $5 to mow the lawn but not pay the professional $40 to mow the lawn? If your choices were to spend an hour once/week to mow, or to pay a professional $40/week to mow, which would you do? What do you think the "average" homeowner would do?

In other words, you already know that minimum wage hurts unskilled workers who cannot provide value greater than the compensation they receive.  

Minimum Wage Delusion

"A minimum-wage law is simply a form of price control preventing anyone from selling his labor below a certain price. Whenever a minimum price is established above the natural market exchange rate for labor, some portion of the labor market will not find a buyer/employer. It is a simple supply and demand question; the higher a wage you must give, the more people seek the wage and the less number of higher wage jobs will be offered. A minimum wage inevitably creates a surplus of labor and thus higher unemployment, especially among unskilled workers for which the wage laws are supposed to help. These facts can't seem to overcome delusional wisdom as minimum wage laws have been around for almost 100 years.

The first minimum wage, enacted in Washington D.C., was struck down in 1923 by the Supreme Court, which said the law was unconstitutional because it "restricted the worker's rights to set the price for his own labor." The precursor to the modern minimum wage law began in 1931 with the Davis Bacon Act; which allowed whites to discriminate against blacks in the workplace because it protected the wages of unionized white construction workers from competition with black workers. Stunningly, this remnant of Jim Crow is still on the books. The first federal minimum-wage law, the Fair Labor Standards Act, passed in 1938 under FDR."

As H. L. Mencken observed, “There is always an easy solution to every human problem—neat, plausible, and wrong.” Minimum wage laws score extremely well on all three counts."
http://spectator.org/archives/2013/02/14/president-obamas-minimum-wage

A Couple of Links

It's most unsettling to the cluckers of climate change when one of their own leading adherents, who formerly toed the line, becomes skeptical and drop-kicks the "science."
Meet David Evans.
A scientist with six university degrees, Mr. Evans consulted for the Australian Greenhouse Office (today's Department of Climate Change) from 1999 to 2005. He studied carbon in plants, debris, forestry and agricultural products.
But while aboard the global-warming train, he found that the wheels got increasingly wobbly.
"The debate about global warming has reached ridiculous proportions and is full of micro-thin half-truths and misunderstandings," he says. "I am a scientist who was on the carbon gravy train, understands the evidence, was once an alarmist, but am now a skeptic."

Read more: Off the 'gravy train' - Pittsburgh Tribune-Review http://www.pittsburghlive.com/x/pittsburghtrib/opinion/s_739762.html##ixzz1O3qRzkve

http://www.realclearpolitics.com/printpage/?url=http://www.realclearpolitics.com/articles/2011/06/01/government_against_blacks_110051-full.html
Williams elaborates in a new book, "Race and Economics." A chief culprit, he insists, is the minimum wage.
"Let's not look at the intentions behind minimum wage," he said. "We have to ask, what are the effects? Put yourself in the place of an employer who must pay $7.25 no matter whom you hire. Will that employer hire a person who can only add $3 or $4 of value per hour?" 
http://www.realclearpolitics.com/printpage/?url=http://www.realclearpolitics.com/articles/2011/06/01/recovery_summer_part_deux_110050.html
Buy American! A conventional, well-intentioned, patriotically affirming sentiment. We've heard it all our lives. But unless you crave less competition, fewer choices and higher prices, it's also a completely irrational one.
Naturally, then, as we kick off "Recovery Summer! Part Deux," the chairwoman of the Democratic National Committee says that buying homemade cars is a matter of national importance. "If it were up to the candidates for president on the Republican side, we would be driving foreign cars," Rep. Debbie Wasserman Schultz explained while defending the protectionist auto/union bailout. "They would have let the auto industry in America go down the tubes." (And by "we," Wasserman Schultz, proud American, is talking about herself and her sweet Japanese-made Infiniti FX35.)
**I have to say, could there be anything worse than an ignorant, pandering politicians clothing themselves in the robes of good intentions while they use your money and mine to further their political careers?  Contemptible.
He will not. And so fewer young people get hired and "get their feet on the bottom rung of the economic ladder." This hurts all young people, but black teens most, he says, because "many of them get a fraudulent education in the public school system. So a law that discriminates against low-skill people has a doubly negative effect on black teenagers. The unemployment rate among black teens today is unprecedented in U.S. history. In the '40s, black teenage unemployment was less than white teenage unemployment."
And yet a Pew survey says 83 percent of Americans support raising the minimum wage.
"People have the misguided notion that the minimum wage is an antipoverty tool."