Carpe Diem

A challenge to proponents of a minimum wage of $9 per hour – what theory or analysis justifies that specific wage?

Here’s another issue related to the minimum wage that I think supports opponents of the minimum wage (most economists) and presents a serious challenge to the proponents of the minimum wage:

1. Opponents of the minimum wage law generally support no minimum wage, i.e. a minimum wage of $0.00 per hour.  To support a minimum wage of $0.00 per hour, the opponents can rely on economic theory, economic logic, scientific thinking, empirical evidence and cost-benefit analysis to support their position, which might be summarized as follows:

Increases in the minimum wage generate certain benefits (higher wages) for some workers,  but generate costs (fewer entry-level jobs, fewer hours, fewer benefits, less-on-the-job training, reduced opportunities to acquire work skills, etc.) that outweigh the benefits, making unskilled workers as a group worse off on net from increases in the minimum wage. Further, a minimum wage of $0.00 per hour requires no regulatory mechanism and therefore no enforcement costs.

Bottom Line: A minimum wage of $0.00 is optimal because it generates net benefits to society that are greater than the net benefits of a mandated, artificially high minimum wage.

2. Proponents of the minimum wage law support periodic increases of the minimum wage, e.g. to $9.00 per hour, but never seem to provide any justification or analysis that would support a position that $9.00 per hour is somehow optimal for society.  That is, why $9.00 per hour and not $9.25 or $8.75 per hour?  Why not $8, $10 or $18 per hour? Why not $90 or $900?  In other words, what is special or optimal about $9 per hour that justifies that hourly wage for unskilled workers?  What theory, analysis, logic or rationale justifies $9 per hour over all other alternatives?

Bottom Line: If there is no economic theory or logic or cost-benefit analysis that justifies $9.00 per hour as an optimal wage for unskilled, entry-level workers, which seems to be the case, then a $9.00 minimum wage is exposed as being totally arbitrary and random. Unless and until Obama and other proponents of a $9 per hour minimum wage can provide some analysis to show that $9 is optimal and maximizes the net benefits to unskilled workers, then it’s a policy that really can’t be taken seriously. Further, the minimum wage requires a costly regulatory mechanism that administers and enforces the government-mandated wage, which is a cost that needs to be considered.

165 thoughts on “A challenge to proponents of a minimum wage of $9 per hour – what theory or analysis justifies that specific wage?

    • Larry, thanks, your link informs us that Germany, the strongest country of the EU currency nations, has a minimum of wage of: zero euros and zero euro cents.

      • re: Germany

        ” No statutory minimum wage, except for construction workers, electrical workers, janitors, roofers, painters, and letter carriers. Minimum wage is often set by collective bargaining agreements in other sectors of the economy and enforceable by law[13]”

        is that better or worse CitB?

        • Larry, the construction trades in Germany are all fairly skilled. Painters are trained for two years before applying a wet brush to a wall. Basically, it looks there is no minimum wage in Germany (according to your link).

          Larry, what economic benefit would Germany have to look forward to if the unskilled were mandated a minimum wage?

          • @CitB – Germany has trade unions and apprentice programs – as well as McDonalds, right?

            do you support trade unions and mandatory apprentice programs?

            would you agree to replace our minimum wage system with those instead?

        • The fact that German labor (union) agreements are “enforceable by law” is no different than in the U.S. — I think it’s generally called “contract law.”

          The more important figures are the ones presented by Citizen B — “German youth unemployment rate ~7.9% vs. U.S. at ~24%.” But I’d like a URL source for verification before I put that one out.

          • re: contract law

            better check:

            http://en.wikipedia.org/wiki/Trade_unions_in_Germany

            sounds like the trade unions are much, much more powerful than US versions…

            would you support that instead of minimum wage laws?

            :-)

            also.. Germany has an education system for the 21st century. Their kids by high school basically are either on a college or technical track..

            If they are on a technical track.. it’s pointed at post-high-school certification and apprenticeships.

            http://en.wikipedia.org/wiki/Education_in_Germany

            but I’ll admit from the get go.. that Germany likely has the same kind of jobs that we have in the US that are low-skilled food service, etc…

          • However in Germany as I understand the situation a sector agreement affects all employers in a business sector, no company by company negotiation. (It is possible but history shows it is done by sector to minimize competitive pressures. ) This link http://www.rmci.ase.ro/no11vol5/09.pdf Provides some details on the sector agreements:
            67% of employees are in agreements with employers confederations, 59% with industry level agreements and only 8% at the company level. Net Net the article says 64% of german workers are covered by sector or employers confederation agreements. Of course this sort of thing flies right into the conspiracy in restraint of trade idea, (which the common law said was what a union was), as the whole german labor market is one big conspiracy to reduce the freedom of the employeer. If you belong to an employers group you get the agreement.

  1. If I may try and go down the middle road for a little bit:

    I’m sure there is some sort of analysis in determining the minimum wage. I have a hard time believing it is just an arbitrary level. I could very well be, but considering how much money the government spends on studies, I’d have to think they got the CBO or somebody to do an estimate.

    That said, it is an imperfect process. Just like when trying to determine a sin tax or some other Pigouvian tax, you try to build a tax to get to some socially optimal level. But the knowledge is so dispersed that it is hard to do that accurately. So, you set the tax at whatever you think is the best level and pray to God it’s not too high. Same thing with a minimum wage.

    Looking at some of the data you’ve posted, Dr. Perry, we see that the number of full-time workers on minimum wage is just 0.7%, give or take. It’s around 5.2% when you include all workers. When you separate out the groups, those who tend to be low-skilled (teenagers) represent the largest share of those on minimum wage, but even then it’s only about 10%. This suggests to me that the minimum wage is actually largely below the market price for labor. I think that’s also why we don’t see really large swaths of teenage unemployment. Of course, in a theoretical analysis, it’s not the amplitude as much as the direction, and of course there are those who get screwed.

    I’m getting off-topic, so in summary:

    I think there is a process, but it is imperfect. Just like anything else man-made.

    • I think there IS a rationale and it goes like this:

      we say – we determine …some say arbitrarily, others not what poverty level is.

      poverty level is the point at which – until and unless things change – we justify entitlements…

      when someone says ‘working poor’ – that is shorthand for working but unable to pay for needed things – that we, in turn supplement with entitlements.

      For instance, many who work for WalMart are said to also qualify for MedicAid and food stamps for their kids.

      so my “theory” is the minimum wage is an attempt to justify a high enough wage so the worker does not need “too many” entitlements.

      what would be interesting.. would be to see the average wage or the median wage and one sigma data for people who receive MedicAid… or SNAP… MedicAid by the way IS means-tested.

      • poverty level is the point at which – until and unless things change – we justify entitlements

        Circular logic. You gotta love it.

        when someone says ‘working poor’ – that is shorthand for working but unable to pay for needed things

        No it isn’t. It’s code for “I don’t know what I’m talking about” or “I’m going to lie to justify taking from you to give to my political favorites”. This is because the term “working poor” is used to mean people working full time, yet unable to afford a warm dry place to live, clothes on your back and three square meals a day.

        First and foremost, you should know that the median income for a full time worker with no high school diploma is over $27k/year, well above the Census Bureau definition for poverty and well above the necessary income to provide for housing, clothing, and food. There are no working poor in the US.

        “many who work for WalMart are said to also qualify for MedicAid and food stamps for their kids.”

        Since you’ve all ready established that the income level of entitlements has no bearing on ability to pay for things (your second sentence), using this as a definition of “working poor” shows just what a hack you are.

        Additionally, since full time employment virtually gurantees having an income above the poverty, the people you are talking about are part time workers. The minimum wage is a huge contributer to preventing people from making the jump from part time work to full time work.

        Thank you again for showing us all what little you have to add ot anything when talking about economics or even basic statistics for the economy.

        • poverty level is the point at which – until and unless things change – we justify entitlements

          Circular logic. You gotta love it.

          there is no “logic” .. it’s the reality of our current policies. You can disagree with them but you can’t wish them away by saying they are “circular”

          “when someone says ‘working poor’ – that is shorthand for working but unable to pay for needed things

          No it isn’t. It’s code for “I don’t know what I’m talking about” or “I’m going to lie to justify taking from you to give to my political favorites”. This is because the term “working poor” is used to mean people working full time, yet unable to afford a warm dry place to live, clothes on your back and three square meals a day.”

          we can go find a policy definition if you wish but it likely means folks who work full time but don’t make the poverty threshold income.

          “First and foremost, you should know that the median income for a full time worker with no high school diploma is over $27k/year, well above the Census Bureau definition for poverty and well above the necessary income to provide for housing, clothing, and food. There are no working poor in the US.”

          how about a cite? do you know what median means? It does not mean average.

          “many who work for WalMart are said to also qualify for MedicAid and food stamps for their kids.”

          Since you’ve all ready established that the income level of entitlements has no bearing on ability to pay for things (your second sentence), using this as a definition of “working poor” shows just what a hack you are.

          nope. I’ll agree to any standard definition in use. I don’t need to make them up. The fact that some WalMart workers get MedicAid is a fact… though.

          “Additionally, since full time employment virtually gurantees having an income above the poverty, the people you are talking about are part time workers. The minimum wage is a huge contributer to preventing people from making the jump from part time work to full time work.”

          I’m not following your logic here. are you saying ALL fulltime employment results in no one at the poverty level? please explain.

          “Thank you again for showing us all what little you have to add ot anything when talking about economics or even basic statistics for the economy.”

          thanks again for showing what an ideological idiot you are Ken. wanna play the insult game do you. I’m game.

          STFU guy if all you want to do is hurl insults. go sniff yourself.

          • there is no “logic”

            I’m glad you agree your statement contains no logic.

            we can go find a policy definition if you wish

            That isn’t what you wished. You wished to define what it was “code” for. I merely gave a much more reality based code for it. YOu can disagree with it if you like, but you can’t with it away.

            how about a cite?

            Because you are too lazy and inept to, you know, actually research and learn the real statistics of our society, on which you constantly pontificate? Why don’t you take some initiative and look up these statistics yourself? Is it because you might learn something?

            I’ll agree to any standard definition in use.

            You see what a hack you are? In the comment to which I replied, you chose to come up with a code, rather than any sort of “standard definition”. Now being forced to admit what a hack you are, or side step the question all together, like the good hack you are, you side step the question.

            ALL fulltime employment results in no one at the poverty level

            Are you so incapable of reading English? What I said is rather a straight forward assertion and easily checked. But being the lazy hack you are, I’m not surprised you cannot or will not understand the basic assertion of that statement.

            STFU guy if all you want to do is hurl insults.

            Are you hurt that I don’t take you seriously and can demonstrate why, and why no one else should either?

          • re: ” Are you hurt that I don’t take you seriously and can demonstrate why, and why no one else should either?”

            hurt? you gotta be kidding you nitwit. “seriously” in your book is myopia.

          • Because you are too lazy and inept to, you know, actually research and learn the real statistics of our society, on which you constantly pontificate? Why don’t you take some initiative and look up these statistics yourself? Is it because you might learn something?

            Do not bother with citations. Larry has been given plenty but refuses to look or learn from them. His is a faith based position that is devoid of logic. For him facts just get in the way.

            You see what a hack you are? In the comment to which I replied, you chose to come up with a code, rather than any sort of “standard definition”. Now being forced to admit what a hack you are, or side step the question all together, like the good hack you are, you side step the question.

            I have a theory about Larry. He is a genius who is simply posting crap that he knows is wrong to get people to waste their time. Or he is an absolute moron.

            After having enough exposure to his postings you are free to come up with another explanation or pick one of the two above.

          • “Because you are too lazy and inept to, you know, actually research and learn the real statistics of our society, on which you constantly pontificate? Why don’t you take some initiative and look up these statistics yourself? Is it because you might learn something?

            Do not bother with citations. Larry has been given plenty but refuses to look or learn from them. His is a faith based position that is devoid of logic. For him facts just get in the way.”

            I think I provide a fair amount of links to information myself but the real issue here is that some folks basically believe only what they want to believe and do not want information that contradicts their own beliefs.

            the idea that you can “prove” that there is only one relationship between the minimum wage and unemployment is an example of this bizarre thinking.

            “You see what a hack you are? In the comment to which I replied, you chose to come up with a code, rather than any sort of “standard definition”. Now being forced to admit what a hack you are, or side step the question all together, like the good hack you are, you side step the question.”

            yes.. and a fair number of such folks are basically petty name-callers… and engage in infantile behavior with those whom they disagree…

            “I have a theory about Larry. He is a genius who is simply posting crap that he knows is wrong to get people to waste their time. Or he is an absolute moron.”

            no genius and no moron not that some of the fools who post here would know the difference anyhow because they believe what they want to believe and anyone else who disagrees is a “moron”. I think this typifies some who frequent here.

            my view is – you be nice and I’ll be nice …and if you want to be ugly, fine, I’ll return the favor.

            “After having enough exposure to his postings you are free to come up with another explanation or pick one of the two above.”

            my basic instinct is to see if a premise holds true and does not have inconsistencies rather than just adopting any/all ideology and demanding others to believe what I believe or else.

            that’s a fairly common trait with some here. You believe what they believe and if you disagree or question it then you are a …. pick your favorite pejorative.

            If you think a particular poster is totally wrong you can point it out – politely OR you can just ignore him. There are guys here like Jon and Zach and others that almost always are polite and can disagree without launching into infantile name-calling behavior.

            then we have the little people who cannot seem to dialogue without overt name calling or more subtle but equally childish – insults…

            some of you remind me of grade school kids in the way you deal with things you don’t like or disagree with.

          • I think I provide a fair amount of links to information myself but the real issue here is that some folks basically believe only what they want to believe and do not want information that contradicts their own beliefs.

            You think wrong Larry. Ron and several others (myself included) have been sending you all kinds of references to simple accounting and economic concepts that you have yet to really look at or try to understand. Yours is basically a faith based position that is hidden behind a facade.

          • The only bolding that should have occurred in the above comment was the “You”, where the bold starts.

          • So I am correct to presume you have no response to the ripping I gave your sad sad comment? I mean other than raging that I insulted you as well (rather deservedly, I might add) ?

          • my basic instinct is to see if a premise holds true and does not have inconsistencies rather than just adopting any/all ideology and demanding others to believe what I believe or else.

            And that’s just the problem. You don’t appear to have the reasoning skills required to determine whether a premise holds true or has inconsistencies. That’s not an insult, just the inevitable conclusion one must arrive at after reading a number of your comments. You seem unable to accept the possibility that your views could be wrong, and instead resort to logical fallacies and meaningless irrelevancies to support your positions long after they’ve been proven wrong, and dismiss information and ideas you don’t like as theory or ideology, rather than pointing out the problems. You dishonestly change your argument to avoid being pinned down, and refuse to admit when you are clearly wrong.

            It’s a serious problem, Larry, and keeps you from engaging at any serious level with others in blog comments.

            Or perhaps that’s your intent. Maybe you ARE that genius troll others suspect you may be, in which case my hat’s off to you. You are truly a world class troll.

          • re: ” And that’s just the problem. You don’t appear to have the reasoning skills required to determine whether a premise holds true or has inconsistencies. That’s not an insult, just the inevitable conclusion one must arrive at after reading a number of your comments. ”

            when the view I hold is similar to most countries in the world – and one in which if economists who advise those countries would post here with pseudo-names, you and others here would also say you were not insulting them either as you called them morons and pricks.

            you forget the part where I say the premise is inconsistent AND not only with my logic but most other countries…

            but you ignore the second part so you can then insult but not call it insult.. just prick and moron.

            go away boy.

          • I think I provide a fair amount of links to information myself but the real issue here is that some folks basically believe only what they want to believe and do not want information that contradicts their own beliefs.

            Yes, you do provide links – most of them irrelevant or off topic. Your cite here to the “World Minimum Wage Rates” table is a great example.

            You described it as “interesting”. What, exactly, did you find interesting about it?

            Oh – just as I suspected, you have no idea what you were seeing there. Good one, Larry.

          • the idea that you can “prove” that there is only one relationship between the minimum wage and unemployment is an example of this bizarre thinking.

            And is typical with you, you claim something for which there is no basis.

            No one is attempting to prove that there is only one relationship between minimum wage and unemployment. It’s a complex issue , but there is one relationship that’s painfully obvious, and that is that they move in the same direction. Higher minimum wage will result in higher unemployment, in those very groups the minimum wage is supposed to help; those who are young, unskilled, inexperienced, uneducated, and those with learning difficulties. In other words those who cannot produce a value to an employer that is as much as they must be paid.

          • re: ” Higher minimum wage will result in higher unemployment, in those very groups the minimum wage is supposed to help; those who are young, unskilled, inexperienced, uneducated, and those with learning difficulties. In other words those who cannot produce a value to an employer that is as much as they must be paid.”

            to which I will ask if this is really true – are you saying that every country in the world that has such policies is wrong ?

            that’s my problem. It’s hard for me to believe if such a policy is so obviously wrong why so many countries have that policy.

            how do you explain that without claiming that all those countries and all the economists that advise them on this issue are all, every one ignorant “morons”?

          • when the view I hold is similar to most countries in the world –

            But you can’t possibly know that, because you don’t understand what you read.

            and one in which if economists who advise those countries would post here with pseudo-names, you and others here would also say you were not insulting them either as you called them morons and pricks.

            You’re right. Anyone who posted the moronic bullshit you post here would get the same treatment.

            you forget the part where I say the premise is inconsistent AND not only with my logic but most other countries…

            Countries don’t have logic, Larry, people do – well, SOME people do. You are always free to cite country-advising economists who agree with your nonsense, but there aren’t any, so you can’t, and you don’t.

            You only claim that “everybody’s doing it”, but that’s not so, is it.

            but you ignore the second part so you can then insult but not call it insult.. just prick and moron.

            You forgot shit-for-brains and fascist.

          • to which I will ask if this is really true – are you saying that every country in the world that has such policies is wrong ?

            Newsflash! Min wage is not an economic tool but a political one. It attracts voter sentiment. It appeals to those who don’t know better. I have no idea, nor do I care what other countries do, but if they all have minimum wages, then they do so for political reasons, not economic ones.

            that’s my problem. It’s hard for me to believe if such a policy is so obviously wrong why so many countries have that policy.

            No, your problem is being unable to grasp a concept you don’t already believe. Min Wage is political. Where are your pseudonym using economists agreeing with you, Larry? Anyone who favors price fixing to market prices will support min wage, as it is nothing more than an arbitrary fixed price.

            how do you explain that without claiming that all those countries and all the economists that advise them on this issue are all, every one ignorant “morons”?

            I have no idea whether any one but you is a moron. You haven’t provided any names or views on min wage except your own, and of course Barry’s. Barry is a lying politician. That’s far worse than a moron. I haven’t yet called you a politician, so there’s still room for you to fall.

            Those unnamed country-advising economists may also be politicians.

        • “there is no “logic” .. it’s the reality of our current policies. You can disagree with them but you can’t wish them away by saying they are “circular””

          he’s not wishing them away, he’s saying they are stupid, counterproductive, based on circular logic, and ought to be eliminated.

          you are making an absurd jump from “i can demonstrate that these things are foolish and based on a flawed thought process” to “i can make them go away”. anyone who has every had a fight with a boy/girlfriend knows that is not so.

          but it’s no reason not to try.

          you are just falling back on the appeal to practice fallacy again and getting IS confused with SHOULD.

      • poverty level is the point at which – until and unless things change – we justify entitlements…

        No it isn’t.

        when someone says ‘working poor’ – that is shorthand for working but unable to pay for needed things – that we, in turn supplement with entitlements.

        No it isn’t.

        Both of those statements are wrong. Do you just throw shit like that out here to troll people, knowing that you will get called out on it?

        Both the Census Bureau and HHS calculates poverty levels, and You could easily find information on their websites and at Wikipedia if you chose to.

        It’s a constant amazement that you just pull things out of your ass like that without having any idea what you’re talking about. You are an embarrassment to yourself, and you don’t even care!

        Don’t you wonder why so many people laugh at you everywhere you comment and correctly label you a shit-for-brains?

    • I want to second this. We live in a world where trade-offs are a reality to not just policy, but all facets of resource allocation. That some decisions pose greater uncertainty, more welfare dimensions, etc. should not be controversial. Discerning which cases fit which description inevitably will be.

      I say this as someone who believes that abolition of the minimum wage would be pretty close to Pareto-optimal — or at least close to optimal in the long run.

      • re: abolition of minimum wage

        there are countries that do that but many allow national trade unions and by law enforce collective bargaining.

        I had asked earlier if people would trade the minimum wage law for the system in force in Germany.

        • “I had asked earlier if people would trade the minimum wage law for the system in force in Germany.”

          and it was a foolish question then, just as it is now.

          why would we be required to make such a trade?

          why do we need to have individual liberty to enter into voluntary employment contracts at all?

          • re: a foolish trade

            perhaps Morg but it was in response to someone saying that Germany has no minimum wage – which was certainly true as far as it went.

            but the bigger point – ignored – was that Germany too, it’s people and their govt believe that there is such a thing as a minimum wage – they just implement it different from the way we do.

            As far as I can tell.. no one makes the argument in Germany that the trade union minimum wage policies causes unemployment but perhaps there are folks who say that.

            Most people in most industrialized countries seem to realize that people who work full time but don’t make enough to pay for their basic needs – will end up getting entitlements – paid for by others – so they support minimum wage type policies as the lesser evil.

            IF what you’d actually propose to voters is not only no minimum wage but also no entitlements, how would you sell that idea politically?

            I’m not saying you can’t necessarily but I don’t think the basic idea of no minimum wage and no safety net – won’t be accepted so why advocate for it?

            It’s not an “education” issue. People do know and do understand – they just simply would not agree to such a policy.

            what good does it to advocate for something that not only does not exist in the world (in industrialized countries) NOR would people accept it?

            It would seem that some middle ground is a better path towards reform.

          • larry-

            actually, no, that is not true at all.

            1. germany has NO minimum wage.

            2. certain industrial groups within germany have minimum wages that have been negotiated with trade unions. this covers some folks, but not all, and is still not the same as a forced national minimum wage as employers are not required to join such groups nor are workers required to work for companies in such groups. if you are a temp worker or a worker for a company not in one of the big trade groups, there is no minumum wage. as the major trade groups are for skilled workers, this is basically the same as not having a minimum wage.

            http://www.reuters.com/article/2012/02/08/us-germany-jobs-idUSTRE8170P120120208

            while this article is full of political barraking etc, it ought to also lay out for you that 1. there are MANY jobs in germany that have no minimum wage and that 2. the deregulation that made this possible has dramatically increased the number of jobs.

            germany now has one of the most vibrant low wage sectors in the oecd largely because of “minijobs” and temping.

            “”The unions’ argument that (mini) jobs lead to working conditions becoming precarious in Germany is not valid,” said Mario Ohoven, head of the main association of “Mittelstand” small and medium-sized firms.

            Ohoven said they were particularly popular with women and students trying to earn some extra cash, while Juergen Wuttke of the BDA employers’ group said the reforms gave companies more flexibility and the ability to hire more people for low-skilled jobs with low productivity.”

            MANY people made that argument about trade union wage floors causing unemployment in germany. that is why they reformed the laws and degregulated temping etc in 2002.

            and hey, it worked!

            you really need to start getting some actual facts instead of just making assumptive claims that fit your narrative.

            the rest of your argument is just silly.

            people do no know. they do not understand. most americans think tariffs and min wages do good despite the overwhelming evidence to the contrary.

            this is why getting the country to do the economically optimal thing is so difficult.

            there is no middle ground on price fixing. you either do it or you do not. if, as seems the political reality here, you cannot get a repeal, then the best you can do is limit the damage. the easiest way to do that is stop raising the min wage and let it get inflated into irrelevance.

            the way to stop the min wage from rising is to make the arguments mark and many of us are making and try to show people why they make sense.

            you seem to be incapable of separating two idea in your mind.

            no minimum wage would be best for the economy and the labor market. this is an economic fact.

            the fact that the politics of the country prevent this from happening does not make it any less true, contrary to what you seem to think. if the whole country believed the earth was flat, that would not make it true either.

            the politics are such that proposals to ban it will not pass. we have too many entrenched interests and people who think the world is flat. thus, the closest we can come to doing the optimal thing is to stop making the stupid thing we are doing worse. the way to do that is to stop hiking the min wage. this is politically possible and better than increasing it.

            i already explained that to you.

            so why keep asking the same question over and over?

            i know you run into a lot of hostility on this board larry, and this is why. you ask the same questions over and over when they have been answered, trot out the same repetitive logical fallacies and circular logic over and over, make up facts instead of looking them up, and seem unable even from one thread to the next to retain any information as, even when you admit somehting makes sense, you appear on the next thread saying the opposite again.

            it’s beyond frustrating.

            and comments like this are just absurd:

            “what good does it to advocate for something that not only does not exist in the world (in industrialized countries) NOR would people accept it?”

            oh, you mean like individual rights, rights for women, and end to slavery, ideas like free speech, legalizing drugs, allowing same sex marriage, etc etc?

            every big idea starts with people talking about something that has never happened before. often, such ideas are wildly unpopular and heavily opposed at first.

            people advocate for them and, if their ideas are sound, over time win adherents and change the world.

            how could it possibly be otherwise?

            to claim that such advocacy does no good is the height of entrenched, reactionary obstinacy, pessimism about progress, and stubborn dogmatism shored up by appeals to tradition.

            if you really believe that, then that’s very, very sad and you ought to count your blessings that our founding fathers and the philosophers like locke upon whom they based their vision did not feel likewise.

          • @Morg – I appreciate your view. I don’t agree with it totally but you make some good points.

            but I do keep reminding that at one point in the past – there were no minimum wage laws – and in theory – the better economic condition – then one by one – the industrialized countries adopted policies that you and other say are harmful.

            so now you say that one, by one, they will see the error of the ways and return to the way they were originally.

            I don’t say that can’t happen..and I don’t discount that countries as a whole can reject something now considered bad that used to be considered good.

            fair enough.

            I appreciate your patience in going through your argument.

          • but I do keep reminding that at one point in the past – there were no minimum wage laws – and in theory – the better economic condition – then one by one – the industrialized countries adopted policies that you and other say are harmful.

            And the reason for that seeming paradox, is that the *reasons* for adopting a minimum wage are not economic, but political. They DO benefit some at the expense of others, but not the people the minimum wage is purported to help.

            In the US, for example, minimum wages were first proposed to protect white labor from lower priced black labor. I know you refuse to acknowledge that, but look it up, Larry, it’s right there. It made racial discrimination cost free.

            It is always and everywhere a political tool and a vote getter. There is no economic support for a minimum wage.

          • And the reason for that seeming paradox, is that the *reasons* for adopting a minimum wage are not economic, but political. They DO benefit some at the expense of others, but not the people the minimum wage is purported to help.”

            so assuming you are correct, what would make you think the policies will now be discarded and go back?

            “In the US, for example, minimum wages were first proposed to protect white labor from lower priced black labor. I know you refuse to acknowledge that, but look it up, Larry, it’s right there. It made racial discrimination cost free.”

            I just don’t think it’s true. I think the white racists in the South saw it as that but not people in the North.

            Do you know when the minimum wage was enacted in the US? Do you know how many other countries enacted it before the US and had nothing to do with blacks?

            why would you think that there were also not people in the US who believe the same as the other countries who enacted it prior to us?

            “It is always and everywhere a political tool and a vote getter. There is no economic support for a minimum wage.”

            so why would it change?

          • “but I do keep reminding that at one point in the past – there were no minimum wage laws – and in theory – the better economic condition – then one by one – the industrialized countries adopted policies that you and other say are harmful.”

            and i keep reminding you that this is both false and appeal to practice fallacy.

            you keep missing the point here on pretty much every front.

            i’m not even going to try to explain appeal to practice fallacies and circular logic again as if you did not grasp it the first 100 times, the 101st will not matter.

            but it’s also untrue. not every country did this. some countries UNDID this. we have a perfect test case in germany whose deregulation of the mini job and temp markets sparked a boom in employment at the low end and very low unemployment overall in direct contrast to the rest if the EU (notably france) that upped wages and mandated a 35 hour week to try to offset the effects and STILL failed.

            the theory here could not be more clear. there is direct, recent, and real evidence that it is true.

            min wages are laws. laws are made for political, not economic reasons for the most part. you keep making these clownish appeal to authority (anther logical fallacy) arguments about countries having economists and those folks knowing what is right.

            but what you keep missing is the guys who make the laws DO NOT CARE what the economists think. if they did, here would be no tariffs. they make laws for political reasons like getting labor union votes and money and populist pandering to the economically ignorant or those who simply think they will benefit.

            it’s an example of regulatory capture, not unity in economic advice.

            i’m saying that to the extent that governments can be convinced to abandon harmful policies, their citizens will benefit. thus, it is worth making the case about bad policies to try and get at those benefits. politicians and citizens often have no idea what they are talking about.

            other than reagan, name a president that was an economist. there are barely any in the congress either. these people are damn near economically illiterate and so are most americans.

            thus, the case needs to be made loudly and clearly so that people understand the ramifications of these polices.

            we need to point to places like germany where it worked.

            you know well my views that democracy is a terrible maker of policy and that what we really need are inalienable rights (such as the right to free association and therefore free contract). that’s ultimately what i’d like to see.

            but we start where we can and try and get government out of our business by explaining to people how they are being rooked and why a different way would be better.

            i applauds mark’s efforts here as a good example of just how to do that.

            if every american read the pieces on min wage he wrote and took the time to understand them, maybe we could get some bad policy changed around here.

            you gotta start somewhere.

          • Reagan was an economist?

            geeze… I missed that for sure…

            Morg – you might be right – ultimately… but I think the jury is still out on Germany as there is much hand wringing as to what happens to poverty level workers when they get old and become destitute… and need assistance for food and shelter…

            I do totally agree that the market should set wages not the govt.

            but voting citizens don’t like the idea of older people dying homeless in the street and that influences elected to develop policies to prevent that from happening.

            is it min wage or entitlements or let them die in the streets?

          • so assuming you are correct, what would make you think the policies will now be discarded and go back?

            Well, there’s certainly no economical justification for min wage, and it’s probably really hard these days to justify it as a means of discriminating against blacks, so what are the the reason for keeping it?

            I just don’t think it’s true. I think the white racists in the South saw it as that but not people in the North.

            It was federal law, Larry, there were racists everywhere in 1938 both in the North AND South. It protected Northern white workers from competition from Black workers who migrated North seeking jobs. The earlier Davis-Bacon Act of 1931 was publicly promoted in congress by it’s author as a method to protect white construction workers in New York from competition from cheaper black laborers brought north for just that reason. Look it up, Larry.

            If nothing else, it’s pretty obvious that min wage has disproportionally hurt young black workers ever since it was imposed, so continuing to raise it is a sign of disregard for black workers.

            Do you know when the minimum wage was enacted in the US? Do you know how many other countries enacted it before the US and had nothing to do with blacks?

            1. 1938. 2. No. 3. Doesn’t matter & don’t care.

            why would you think that there were also not people in the US who believe the same as the other countries who enacted it prior to us?

            I have no idea about other countries. I don’t care what other countries have done or not done with respect to min wage. It has no economic justification, and is everywhere and always a political tool, so it doesn’t matter. I’m telling you about the history of min wage in the US. You can believe it or not believe it, it doesn’t change what it is.

            so why would should> it change?

            Because it’s bad law that costs far more to others than any small benefit to a few low income workers.

          • is it min wage or entitlements or let them die in the streets?

            Are there any other choices? would you let someone you know die in the streets in their old age?

          • Morg – you might be right – ultimately… but I think the jury is still out on Germany as there is much hand wringing as to what happens to poverty level workers when they get old and become destitute… and need assistance for food and shelter…

            He is right, Larry, just admit it. Man up and tell morganovich he’s absolutely right on every point and you were wrong.

            And quite trying to move the goalposts. The topic was elimination of the minimum wage in Germany, and the very positive effect that had on employment among low skilled and temporary workers. The jury isn’t out.

      • William Bruce: “We live in a world where trade-offs are a reality to not just policy, but all facets of resource allocation. That some decisions pose greater uncertainty, more welfare dimensions, etc. should not be controversial. Discerning which cases fit which description inevitably will be. ”

        What exactly are you saying? Would you mind reprasing your thought so that a simple person such as me can understand it?

        • just want to point out that John Dewey and William Bruce are two folks who post here who do not have to name call or shout “moron” at others and they can agree to disagree without resorting to infantile behaviors.

          there are far more folks who post here (and lurk) that ARE polite and CAN disagree – even strongly without acting like 5 year olds.

  2. “Labor unions often peg their negotiated wages to the minimum wage. Increases in the minimum wage can therefore trigger new wage negotiations or immediate pay hikes for unionized employees, according to research provided by the Center for Union Facts, an anti-union group.

    Collective bargaining agreements with the Union of Needletrades, Industrial and Textile Employees (UNITE) mandate that “[w]henever the federal legal minimum wage is increased, minimum wage [in the agreement] shall be increased so that each will be at least fifteen (15%) percent higher than such legal minimum wage.”

    Several United Food and Commercial Workers (UFCW) Locals have an agreement with a California grocer requiring that, “in the event the State or Federal minimum wage increases during the term of this Agreement (2007-2011) to a rate greater than eight dollars ($8.00), each rate will be at least twenty cents ($0.20) above the minimum wage and each rate will be at least ten cents ($0.10) higher than the previous rate in the progression schedule.”

    One SEIU Local’s agreement orders that “[t]he minimum hourly wage rates shall exceed any statutory applicable minimum wage rate by fifty cents.”

    The Retail, Wholesale, & Chain Store Food Employees Union Local 338 have an agreement that says, “In the event of an increase in Federal or State minimum wage requirements, the employer agrees to meet and discuss those rates impacted by the new minimum wage.”” — The Daily Caller

    It’s probably unrelated.

      • Will the proposed new minimum wage incentivize McDonalds to hire ~13,000 machine hamburger makers and touch-screen cashiers in the U.S.?

        • re: touch screens replacing people.

          maybe.

          Have you noticed how WaWa and Sheetz do this – and they did it without any encouragement from the minimum wage.

          the touch screen replaces ONLY the order taker – not the money taker.

          WaWa/Sheetz sell other stuff not just prepared food so they already have people doing cashier work so they never really needed dedicated order-takers…just sandwich makers… (not replaced with machines) and separate money takers (also not replaced by machine).

          I’m not sure exactly how a company like McDs which sells ONLY prepared food can do what WaWa/Sheetz did because you still have to have someone deliver the order to you and take your money.

          At McD… you could put touch screens in but you still need the counter to deliver food/take money… so you’d only be replacing 1 function – the order taking.

          • At McD… you could put touch screens in but you still need the counter to deliver food/take money… so you’d only be replacing 1 function – the order taking.

            You must be unaware that self service checkout can handle most kinds of payments including cash – paper and coins – with ease. I’m looking forward to the PayPal option.

            Just touch in your order, pay the machine, take your receipt and wait a few. Your order will appear at the delivery point shortly.

            What *will* be lost is the distraction of observing your server’s tats and body piercings while you wait.

          • You must be unaware that self service checkout can handle most kinds of payments including cash – paper and coins – with ease. I’m looking forward to the PayPal option.

            yup.. but not seeing it yet at WaWa/Sheetz but have seen it at McD… Paypal at Home Depot – have you actually tried to use it? I asked … and the cashier had no clue how it worked – …

            Just touch in your order, pay the machine, take your receipt and wait a few. Your order will appear at the delivery point shortly.

            so you’ve actually used it… ??? how does it work?

            What *will* be lost is the distraction of observing your server’s tats and body piercings while you wait.

            on that.. I agree… some of these folks look like convicts these days…

          • so you’ve actually used it… ??? how does it work?

            I haven’t seen full automation at McDs or other fast food restaurants, so no, I haven’t used it, but I can imagine it working quite well if and when it’s implemented.

            I’ve used self-checkout at Home Depot, Costco and some supermarkets. Haven’t seen a PayPal option.

  3. There is no economic theory . . . that justifies $9.00?

    Yes there is. It is called Public Choice Theory. Politicians and Unions believe they gain benefits from an enforced minimum wage, the costs of which are transferred to employers, consumers and especially those whose skills have a market value below the minimum floor. Why $9? Because it is the highest number that they think will seem “reasonable” to a public that doesn’t understand economics.

  4. I’d contend a NEGATIVE minimum wage is even better than $0. Sometimes it make make sense for people to pay to do work. I’d contend this what Universities do. THey charge people to do work on the prospects that the experience they gain will allow for higher earning power in the future.

    • Hmm. Perhaps the minimum wage should be extended to cover students. I’ll bet that would be wildly successful as a vote getter. I’ll look into it.

      Barry O.

  5. What ‘theory’ justifies central planning and central banking? What ‘theory’ justifies robbing savers by creating purchasing power out of thin air?

    These issues have little to do with truth or theory. They are political and in political matters all that matters is narrative.

  6. ….what theory or analysis justifies that specific wage?

    The very famous Theory of Magical Thinking.

    I’m surprised you’ve never heard of it, Mark. It’s quite prevalent.

    • Agreed with the concept of an agreement with an employers association, imagine if the UAW bargained with the National Association of Auto Manufactures. (For that is how it is done in Germany)

      • a national trade union of fast food workers instead of a minimum wage?

        ;-)

        don’t they have something like that in Vegas for workers in the entertainment industry?

  7. at $7.25 hour, some full time workers are below the federal povery level…$9 hour is enough to get the poverty stats down, and reduce Federal outlays for TANF (temp assistance to needy families) & SNAP (food stamps)

    • at $7.25 hour, some full time workers are below the federal povery level…$9 hour is enough to get the poverty stats down, and reduce Federal outlays for TANF (temp assistance to needy families) & SNAP (food stamps)

      You are very confused. Very few American full time workers are at the minimum wage level because they are more valuable than $7.25 per hour and employers will offer what one is worth. But the $7.25 is a high enough hurdle to prevent young kids who need experience from getting their first job. But do not be confused to think that kids will stay at the minimum wage because even today those that have jobs tend to make more than that rate.

      This means that the minimum wage is of no benefit to workers (since they make more than the minimum wage) but there is a great harm to those without skills.

      • Very few American full time workers are at the minimum wage level

        Is 1.275 million or 2.4% of employed wage and salary workers paid hourly rates with earnings at or below the prevailing federal minimum wage your definition of few?

        • Is 1.275 million or 2.4% of employed wage and salary workers paid hourly rates with earnings at or below the prevailing federal minimum wage your definition of few?

          Absolutely. I expect a few people to enter the workforce in any given year. They are likely to earn the minimum wage until they establish that they are worth more. And if they are worth more they will be able to find jobs that pay more as the other 98% of the population does. Then there are people who are taken on by employers but will never be worth the minimum wage. That is charity and they should not be punished for it, even if the federal government had the power delegated to it by the Constitution to do so.

      • The problem is that an increase in the minimum wage is likely to rise the price of many other things that depends highly on labor prices, so the new wage will soon be as less useful as the lower wage…

        • I do not disagree that an increase in the minimum wage could push prices higher because it should. But there is something even more sinister. Pushing the minimum wage up does not mean that businesses have to hire more workers or that the amount of workers on the old minimum wage rate will keep their jobs. What is missed by most of the economic extremists is the fact that the consumer ultimately calls the shots. We can force employers to pay more but that does not mean that they can pass on the higher costs to the 98% of the customers who make more than the minimum wage and did not get a raise.

      • vangel, i was talking about government statistics the administration cares about, not what workers should be making or what they’re worth…

        i was addressing mark’s title question, no more…

        • vangel, i was talking about government statistics the administration cares about, not what workers should be making or what they’re worth…

          i was addressing mark’s title question, no more…

          But is it really a justification to have workers be paid more than they are worth to the employers? All that does is create more unemployment. I would say that nullifies your justification because most of the people that you argue would be helped are already making that amount and we have to look at everyone that is impacted by the new law.

          • ” All that does is create more unemployment.”

            let’s assume this is unassailable true. When this happens do the rest of us then have to pay entitlements to them?

            should that dynamic be part of the discussion?

          • let’s assume this is unassailable true. When this happens do the rest of us then have to pay entitlements to them?

            should that dynamic be part of the discussion?

            You have it wrong Larry. You pay entitlements when they are unemployed. When they work they get marketable skills and increase their worth to employers. They wind up making more money and you don’t have as large an entitlement problem.

            And it is you who argues that we should tax to pay for entitlements, not me. I would rather have people use their own savings to plan for their own futures and have them learn to take responsibility for their own actions. Subsidising bad decisions only creates more such decisions.

          • let’s assume this is unassailable true. When this happens do the rest of us then have to pay entitlements to them?

            should that dynamic be part of the discussion?

            You have it wrong Larry. You pay entitlements when they are unemployed. When they work they get marketable skills and increase their worth to employers. They wind up making more money and you don’t have as large an entitlement problem.

            well you pay MORE than just unemployment for unemployed people. You pay for Medicaid, food stamps, housing vouchers, etc..

            AND you ALSO PAY when they are employed with low wages via the EIC and Child Tax Credits which are REFUNDABLE credits on the order of 3-8K per worker.
            so they not only get ALL of their withheld Fed income tax back but they get thousands of additional dollars THEN they ALSO qualify for the other entitlements if they are at the poverty level.

            “And it is you who argues that we should tax to pay for entitlements, not me. I would rather have people use their own savings to plan for their own futures and have them learn to take responsibility for their own actions. Subsidising bad decisions only creates more such decisions.”

            No. I argue that they are real and are an undeniable part of the equation that you cannot ignore when you advocate policies that will, in effect, increase entitlement costs.

            And when I say this – there are two common reactions:

            1. – that we’ll not only get rid of the minimum wage but also entitlements – in a country where people vote.

            2. – I’m a moron for suggesting that these are real issues that you cannot ignore and that you cannot really change in the way you advocate.

          • well you pay MORE than just unemployment for unemployed people. You pay for Medicaid, food stamps, housing vouchers, etc..

            Yes you do, which is why you have to stop adopting policies that increase unemployment. Come now Larry. You are so stupid or such a bad reader that you can’t even figure out what people wrote and argue some of their side for them? Stop drinking and slow down. Read carefully. And by all means try thinking.

          • RE: ” Yes you do, which is why you have to stop adopting policies that increase unemployment. Come now Larry. You are so stupid or such a bad reader that you can’t even figure out what people wrote and argue some of their side for them? Stop drinking and slow down. Read carefully. And by all means try thinking.”

            Van – do you think there is a relationship between wages and entitlements?

            more specifically – do you think if wages “floated” and could drop to 3, 2 or 1 dollar that it would affect how much we paid to them in entitlements to keep them level with the poverty threshold?

            this is a real question…guy…

            Now .. if we did not pay entitlements at all no matter what the wage then I would totally agree that people would truly earn what they were worth or more precisely what the market determined was their worth.

            but given the way the govt try to establish a floor for poverty and uses other taxpayers to fill in the gap –

            my question is – do you think that “entitlement filling in” has any affect on min wage issues?

          • Van – do you think there is a relationship between wages and entitlements?

            more specifically – do you think if wages “floated” and could drop to 3, 2 or 1 dollar that it would affect how much we paid to them in entitlements to keep them level with the poverty threshold?

            The real point is how to get people to improve their skill sets so that they can be employed and earn a decent living. Passing a minimum wage law is not the way because it will simply force employers to get rid of all those employees that are worth less than the minimum. Since most young people start at a low wage as they gain skills and show that they are reliable you will have fewer kids in the workforce. That means that there will be more unskilled adults on welfare that are supported by taxpayers until the system breaks down as it has in some EU countries.

          • “The real point is how to get people to improve their skill sets so that they can be employed and earn a decent living. ”

            I totally agree but there are always going to be low paid jobs that need filling also and those jobs do not pay wages much above the poverty level if that.

            “Passing a minimum wage law is not the way because it will simply force employers to get rid of all those employees that are worth less than the minimum. ”

            so those that get fired have no other options to find other employment ? is that true?

            “Since most young people start at a low wage as they gain skills and show that they are reliable you will have fewer kids in the workforce. That means that there will be more unskilled adults on welfare that are supported by taxpayers until the system breaks down as it has in some EU countries.”

            there are exemptions for students and I’d sign on to less restrictive exemptions for people who are in training, “learning”, in school, etc… including folks 65 and older if they already are receiving SS and Medicare.

            but that leaves the older group that has few skills who will receive entitlements.

            people who do taxes see people 25 with 3 kids who work full time at McD and receive $7500 in child credits on their taxes. In addition they get all their fed/state withholding back. Their kids get MedicAid, SNAP, reduced/free lunches and more.

            I’m not pleasing sympathy for them. They are dumbasses for not getting skills and then on top of that… breeding.

            and those who do get skills and do have children responsibly (or not) get to pay for those entitlements and tax credits.

            As bad as it is and it is bad…I just think part of the min wage issue is tangled up with these entitlements and that’s what’s “complicating” the “theory”.

            here’s an example: http://www.economist.com/node/21536648

          • I totally agree but there are always going to be low paid jobs that need filling also and those jobs do not pay wages much above the poverty level if that.

            Correct. But kids starting out, who usually fill such jobs do not need to worry about the poverty level because they have parents to clothe and feed them. Adults have more skills and do not get paid the minimum wage for very long. When 98% of workers make more than the minimum there isn’t a problem to worry about.

    • While the word “some” makes your statement factually correct, at $7.25/hr a full time worker makes approximately $15K,yr. Above the Census bureau’s $11.5K/yr poverty threshold for a single person household, and nearly as much as the Bureau’s $15.5K/yr poverty threshold for a single earner with one child.

      How many households or families do you believe there are in the US with three or more people depending on one full time minimum wage earner?

  8. Looking at the list of minimum wages by country they vary as a percent of the median wage from 20% up to 55%+. It should be noted that a lot of the EU countries don’t have minimum wages, but labor agreements cover all employees, and are sector wide, (no representation election if you are a merchant you get the merchant sector wage…). So the real question is what percent of the median wage to set it at. If you made it say 10% then the minimum wage would be effectively irrelevant. A list of devloped countrys shows Japan at 35% Belgium at 53, Canada at 44, France at 53 Ireland at 49 Netherlands at 48 New Zealand at 62 the UK at 50.5 and the us at 33 % . One way to eliminate it would be to do like the European countries where sector wide bargaining occurs, if you are in a sector that is what you pay, but that might be more objectionable to many.

    • Lyle: ” One way to eliminate it would be to do like the European countries where sector wide bargaining occurs”

      Oh, that’s a sure fire way to grow the U.S. economy: do whatever the western European nations are doing.

      The U.S. has not lost low-skilled jobs to the western European nations, Lyle. No, our low-skilled jobs have gone to Latin America and the lesser-developed Asian nations. How many nation-wide labor agreements exist in China, Taiwan, South Korea, and Mexico?

  9. The Australian Minimum Wage Myth

    07/13/12 – John Stossell reports [edited]:
    === ===
    The Australian government raised the minimum wage to about $15.30 USD, with overall unemployment of 5.1%.

    Most people who earn minimum wage are young, unskilled workers. In June, Australia’s unemployment rate for workers aged 15-19 was 16.5%. Last December, 63% of all jobs lost were jobs for young, unskilled Australians.

    When the price of something goes up, people buy less. So when the price of labor goes up, employers hire less.
    === ===

    There is 16.5% unemployment for those who are subject to the real bite of the Australian minimum wage. This contrasts with much lower unemployment 5.1% for the rest of Australian workers.

    Of course, the 11.4% excess unemployment for teens is probably only a small fraction of total employment, so it is only a small effect overall (sarc), except for the people who are affected.

  10. Our society of many thinking, responsible people is set on task after task to analyze each new government program. Often these programs are announced and implemented with lightning speed and at astronomical cost.

    Obama wants higher minimum wages on all states, tied to inflation.

    We are reduced to arguing about what studies appear in the world which support or criticize that policy proposal. But, the relevant studies and analyses are the ones that our government is relying on. What are those?

    This is the United States Government, of, for, and by the People. The public cannot participate in a government that runs on policies that are hidden. The government owes us a “white paper” giving an explanation of the thinking behind each program, policy, and bill.

    We need proposed results, proposed evolution, methods, justifications, comparative studies, past successes, funding sources, the works. Shouldn’t these already exist? Why does the government not want release its reasons and thinking? The press and public should be able to review these undelivered documents. The government should be proud to display its carefully researched and supported policies. We deserve this as a free people.

    The absence of these policy papers is appalling. Instead of open and proud policy, we have closed, imperial government. Sadly, we are controlled by a tyranny, if our government sees no reason to explain and justify its actions. Are our politicians ashamed or afraid of what they propose?

    • This is the United States Government, of, for, and by the People. The public cannot participate in a government that runs on policies that are hidden. The government owes us a “white paper” giving an explanation of the thinking behind each program, policy, and bill….

      The Constitution does not give ‘the people’ whoever that is, and I can assure you it isn’t the ordinary voter, to regulate wage rates through the federal government. Regulating voluntary economic or social transactions isn’t the government’s business. What it should do is leave people alone and stick to protection of individuals from aggression or fraud.

    • This is the United States Government, of, for, and by the People

      That sure has a nice ring to it, but it’s important to remember that Lincoln spoke those soul-stirring words about people governing themselves at the same time he was doing everything possible to *deny* a large group of people the right to govern themselves. Apparently political doublespeak is nothing new.

    • To Vangel,

      You’ve convinced me. The government doesn’t have those powers, except that 90% of the voters think they do.

      Along the way, let’s demonstrate the foolishness of government policies by at least calling for explanations which can then be opposed as illogical and mistaken. Maybe more than 10% of the people will see the light.

      To Ron H,

      I see nothing wrong with the words and their plain meaning. Of course, politicians say one thing and impose tyranny at the same time. What words would you use, to persuade people to demand more information from the government?

      • AMG

        I see nothing wrong with the words and their plain meaning. Of course, politicians say one thing and impose tyranny at the same time. What words would you use, to persuade people to demand more information from the government?

        They are fine words, I just don’t think they describe the government we have in the US., and I’m not sure that reminding those in office that they work for the people has much impact, as it’s not exactly true, at least not any more.

        Before the 2008 election we were promised a level of transparency in government by one of the candidates that we hadn’t seen since the founding, but those were just empty words, because if anything, government is even less transparent than before.

        I’m not even sure I need more information from government, so much as I need way less government. The words I use are to persuade people to demand less government.

        As to the specific topic of the minimum wage, I’m only mildly curious about how the amount $9/hr was determined, as in my view the correct amount is $0/hr, so any other amount is wrong, and how it was determined isn’t very interesting. I assume it was a political calculation, as there’s no economic justification for a minimum wage of any amount.

  11. President Obama obviously does not care about working people. If he did, instead of his insulting minimum wage proposal of $9 per hour he would embrace my recommendation of a minimum wage of $905.80 per hour. A minimum wage of $905.80 per hour would result in annual pay of $1 million per year. Why shouldn’t all Americans be millionaires? You are probably thinking, Doug, the concept is great but your math is off. No it isn’t. Not only am I proposing a minimum wage of $905.80 per hour, but I would also mandate 6 weeks of vacation and a 4-day work week. Shouldn’t millionaires have time to enjoy their wealth? Oh yeah, I also limit the work day to 6 hours. Get behind this! Write your Congressman and Senator now!

  12. “Bottom Line: A minimum wage of $0.00 is optimal because it generates net benefits to society that are greater than the net benefits of a mandated, artificially high minimum wage.”

    If conservatives believe that – they should most certainly say that when they run to represent us in office and let’s see how well that works out. That being said – just because raising the minimum wage is popular doesn’t mean it’s “the right thing”.

    Australia has unemployment of 5.6% and their minimum wage is around $16. If having a high minimum wage is so bad for the economy – how in the hell are they at 5.6%?

    They have a solid raw material export business but America has far richer deposits of oil and natural gas. Australia regulates their banks and they control the flow of their capital very tightly. They have universal healthcare and they have a high minimum wage.

    They live in a highly regulated capitalistic environment and it works. In fact – capitalism only works when it’s properly regulated. The laissez-faire ideologues are living in another atmosphere.

    • re: ” Australia has unemployment of 5.6% and their minimum wage is around $16. If having a high minimum wage is so bad for the economy – how in the hell are they at 5.6%?”

      correct.

      The AEI folks look ONLY at the US and focus only on pure theoretical things to produce their “study” and there are literally a world of counter-examples that they ignore, reject because it does not “fit” their “study”.

      I’m not justifying the minimum wage.

      I actually agree that in a pure theoretical environment, it would do the harm that is claimed.

      but we don’t live in that environment – as Germany and Australia and other countries prove and even our own laws and exemptions prove.

      What I do find interesting and worth exploring (perhaps the only one) is WHERE the idea came from with regard to the DIFFERENCE between a wage employee and an independent contractor. The Fair Labor Law is an interesting critter.

    • A high minimum wage doesn’t much affect “the economy”, that is most workers who are naturally employed at above the minimum wage.

      It is only harmful to most of the people it affects, less productive people who can’t produce enough to attract that wage. See above, “63% of all jobs lost were jobs for young, unskilled Australians” when Australia raised its minimum wage.

    • Australia has unemployment of 5.6% and their minimum wage is around $16. If having a high minimum wage is so bad for the economy – how in the hell are they at 5.6%?

      Well, why is North Dakota employment around 3.3% at a time when waitresses are getting $18 per hour and people are flooding in from all over the country? There are times when the economy is short of labour. At that time you do not have high unemployment and you certainly don’t need a minimum wage law.

      In the case of Australia there is massive demand for what it produces, which is raw materials that go into Asia’s factories. Australia’s abundant deposits of minerals have foreign direct investment flowing into the country and keeps the demand for labour high.

      But then we have the actual perspective of demographics and geography. When it comes to people Australia is a tiny country. At just over 22 million Australia’s population is less than that of the Shanghai municipality, which provides so much of the direct investment that keeps Australian labour rates low. Of that 22 million only 54% is in the 25-65 category, with about half women, many of which choose to spend a bit of time with kids before they head bak to the labour force. And let us not forget that 99% of the population is white or Asian.

      The fact is that countries like Norway, Brunei, Kuwait, or Australia have very different demographic and economic drivers than countries that have larger and more diverse populations and not as much natural resources per capita. So let us stop cherry-picking data and pretending that something as complex as an economy can be easily explained by looking at one lever or button.

    • They have a solid raw material export business but America has far richer deposits of oil and natural gas. Australia regulates their banks and they control the flow of their capital very tightly. They have universal healthcare and they have a high minimum wage.

      Australia has much more ‘stuff’ per capita than the US does. And it has a pretty homogeneous population that is tiny. You are also not paying attention to what is not seen because the government regulations prevent it. Given its abundant natural resources and a ready demand for them there is no reason why Australia cannot be much richer than it is today. A smaller, less-intrusive government would allow productivity gains that could dwarf the current standard of living. But as long as that government keeps getting in the way Australia will muddle through. And while that may be good relative to most countries not as blessed with such abundance of natural resource riches, it is poor relative to where the economy should be if government got out of the way.

  13. Here’s one factor, of many, I cited before:

    The High Cost of Low Wages
    Harvard Business Review
    December 2006

    “…Stingy pay and benefits don’t necessarily translate into lower costs in the long run.

    Consider Costco and Wal-Mart’s Sam’s Club, which compete fiercely on low-price merchandise.

    The average wage at Costco is $17 an hour. Wal-Mart does not break out the pay of its Sam’s Club workers, but a full-time worker at Wal-Mart makes $10.11 an hour on average…Stanley Holmes and Wendy Zellner estimated Sam’s Club’s average hourly wage at $11.52.

    On the benefits side, 82% of Costco employees have health-insurance coverage, compared with less than half at Wal-Mart. And Costco workers pay just 8% of their health premiums, whereas Wal-Mart workers pay 33% of theirs.

    Ninety-one percent of Costco’s employees are covered by retirement plans, with the company contributing an annual average of $1,330 per employee, while 64 percent of employees at Sam’s Club are covered, with the company contributing an annual average of $747 per employee.

    Costco’s practices are clearly more expensive, but they have an offsetting cost-containment effect: Turnover is unusually low, at 17% overall and just 6% after one year’s employment. In contrast, turnover at Wal-Mart is 44% a year, close to the industry average. In skilled and semi-skilled jobs, the fully loaded cost of replacing a worker who leaves (excluding lost productivity) is typically 1.5 to 2.5 times the worker’s annual salary.

    To be conservative, let’s assume that the total cost of replacing an hourly employee at Costco or Sam’s Club is only 60% of his or her annual salary. If a Costco employee quits, the cost of replacing him or her is therefore $21,216. If a Sam’s Club employee leaves, the cost is $12,617. At first glance, it may seem that the low-wage approach at Sam’s Club would result in lower turnover costs.

    But if its turnover rate is the same as Wal-Mart’s, Sam’s Club loses more than twice as many people as Costco does: 44% versus 17%.

    By this calculation, the total annual cost to Costco of employee churn is $244 million, whereas the total annual cost to Sam’s Club is $612 million. That’s $5,274 per Sam’s Club employee, versus $3,628 per Costco employee.

    These figures challenge the common assumption that labor rates equal labor costs. Costco’s approach shows that when it comes to wages and benefits, a cost-leadership strategy need not be a race to the bottom.”

    • The inability to control costs is precisely why Wal-Mart has gone out of business.

      Oh, wait!

      Maybe they know something you don’t, Peak? Even if they aren’t busy crafting general equilibrium models in your poorly-lit basement.

  14. Minimum wages hurt those at the margin who, more than anyone else, need a job and the opportunity to gain work experience.

    If government’s deem it necessary to insure that the lowest paid workers have more than a starvation wage, why not implement a cash payment to all workers that is clawed back with increasing income?

    This is an idea that Milton Friedman advocated at one time, i.e., a negative income tax, although I believe he dropped it because of the high marginal tax rate he believed necessary to claw the payment back from those earning just above the starvation rate.

    However, there is no need to claw back the benefit sharply. In Canada, every retired person is entitled to a payment known as Old Age Security. This is a non-contributory benefit of about $6000 per year. This is clawed back gently, with 100% recovered when total income reaches around $95,000.

    Such a program would be of minimal cost since it would greatly reduce the need for other welfare programs, e.g., food stamps. It would also surely reduce the incidence of crime, the occupation of last resort for those out of the labor force.

    • re: clawbacks

      we essentially do something similar.

      most of the entitlements are means-tested and the earned income credit is also.

      SS benefits to low paid workers is more than they pay in and is less than paid in for high paid workers and SS itself is means tested on the 1040 so that if you have other income – the SS benefits are taxes also – on a sliding scale up to 85%.

      essentially the way our system currently works – we make up the difference in tax policy and entitlements between minimum wage and the poverty level.

      I don’t have a way to prove this or more precisely I’m too lazy but there likely is a correlation between the level of minimum wage and the amount of entitlements and tax credits paid. A minimum wage worker with kids can and does often get more than 5,000 in tax credit refunds as well as things like MedicAid, SNAP and reduced lunches for their kids.

      perhaps what Obama is after is a back-door way to reduce entitlements?

      • “<i.perhaps what Obama is after is a back-door way to reduce entitlements?”

        No, Larry, Obama isn’t interested in reducing benefits for his voter base.

      • That makes sense.

        But it might make better sense to combine all the various entitlements into a single cash benefit.

        That would leave the recipient free whether to spend the cash on what it is intended for, i.e., wholesome food, essential medical care, etc., rather than booze, drugs, or whatever. But such freedom to self-destruction seems preferable a nanny state handing benefits for this and that specific thing, since it (a) eliminates most of the overhead, (b) allows the recipient freedom from the indignity and frustration of conforming with all kinds of bureaucratic rules and (c) leaves scope for a degree of natural selection against those with personalities that are fundamentally self-destructive.

        • re: how to fix entitlements so they cannot be squandered for purposes other than intended.

          agree.

          EBT cards work this way… and that’s a step in the right direction.

          giving people $5000-7000 in income tax refunds is not.

          Means-tested MedicAid for kids but not able-bodied is middle ground…

          reduce or free school lunches for fat but poor kids? geeze.

          • EBT cards work this way… and that’s a step in the right direction.

            EBT cards aren’t much of a deterrent to buying unauthorized products.

            Here’s how it works: You & I go to the store with my $100 EBT card. You pick out $100 in groceries, and I pay for them with my card. We go to your car, load the groceries, and you give me $80 cash. You have $100 in groceries for $80, and I have $80 to spend at the liquor store or my crack dealer.

            What could be easier? It’s a win win.

          • By the way, that was a perfect example of a free market transaction in which 2 parties voluntarily exchanged something they wanted less, for something they wanted more. Both are better off.

          • It’s a cute way around it .. agree.. but really a pain and what advantage does that have with the guy wish cash?

          • It’s a cute way around it .. agree.. but really a pain and what advantage does that have with the guy wish cash?

            Which guy with the cash? The one with cash before shopping or after shopping?

            I thought I it was pretty straight forward but apparently not.

            It’s not a pain if you can get $100 in groceries that you want to buy anyway for $80.

            And it’s not a pain if you can get $80 to spend on alcohol in exchange for some groceries you don’t want.

          • I won’t say it can’t happen because there probably is some of it but most folks who get EBT need the food and that’s what they would essentially be trading for something else.

            the tax credit is pure money, with no strings. Maybe it ought not be. Virtually every person I’ve seen getting the credit – has a smart phone… and not the cheap ones.

            Have you actually seen the entitlement numbers?

            http://www.cbo.gov/sites/default/files/cbofiles/attachments/43907-BudgetOutlook.pdf page 19

          • I won’t say it can’t happen because there probably is some of it but most folks who get EBT need the food and that’s what they would essentially be trading for something else.

            It happens just as much with EBT as it did with physical food stamps , just the amount available for non SNAP approved purchases has changed due to the extra step required to trade actual food for money.

            Most people need the food and they will buy it as they always have. Those who want to buy something other than food will do so just as they always have. The only difference is they now need to sell the food to someone instead of just selling food stamps.

            You can’t keep people from cheating in this way, you can only change the price.

          • re: keeping people from cheating.

            agree. the question is the rate but EBT cards for most are limited in what can be spent to start with.

            I have not seen actual stats but if it is a problem, it ought to be made more into a voucher system.

            what we don’t see to have – for govt and charities is master databases for some things like food pantries – which the govt does support also – along with EBT, reduced/free lunches/etc.

            food pantries are often an amalgam of church/community outreach, “food for life”, USDA and regional pantries that receive out-of-date foods and meats from area stores.

            there can be multiple food pantries that check govt databases but they themselves are not on the database so people can and do go to multiple pantries to get their allocation.

            I would posit that this is a far easier place to get “free” groceries… even to resell for money for stuff EBT won’t buy and the church won’t give away.

            there are a hundred ways to scam the system no matter if the govt or the charities run it.

          • I have not seen actual stats but if it is a problem, it ought to be made more into a voucher system.

            It is a voucher system.

            what we don’t see to have – for govt and charities is master databases for some things like food pantries – which the govt does support also – along with EBT, reduced/free lunches/etc.

            Ding! Ding! Cheat alert! Citizen HO405862-03 detected at pantry LACA-56 attempting to get another bag of groceries.

            there can be multiple food pantries that check govt databases but they themselves are not on the database so people can and do go to multiple pantries to get their allocation.

            I see what you mean.

            Requiring the implantation of an RFID chip in each SNAP recipient and requiring every private charity to register with the federal government and acquire the necessary RFID scanners to identify those recipients would certainly create a mountain of data and nearly eliminate the overwhelming problem of homeless people – for whom transportation is no problem – traveling to multiple food pantries in order to get unauthorized multiple allotments of food.

          • Requiring the implantation of an RFID chip in each SNAP recipient and requiring every private charity to register with the federal government and acquire the necessary RFID scanners to identify those recipients would certainly create a mountain of data and nearly eliminate the overwhelming problem of homeless people – for whom transportation is no problem – traveling to multiple food pantries in order to get unauthorized multiple allotments of food.

            people carpool to the pantries.. guy

            you’ll have 3 people getting their stuff and putting it in one trunk and back seat.

            have you ever worked at a pantry guy?

          • people carpool to the pantries.. guy

            you’ll have 3 people getting their stuff and putting it in one trunk and back seat.

            Hmm. Maybe all those folks aren’t really innocent victims of circumstances beyond their control after all.

            After further thought, it would probably be much cheaper to just tattoo each legitimate free stuff recipient with their citizen number for easy identification, rather than spend all that money on high tech stuff.

            What do you think?

    • Such a program would be of minimal cost since it would greatly reduce the need for other welfare programs, e.g., food stamps. It would also surely reduce the incidence of crime, the occupation of last resort for those out of the labor force.

      Great idea. How would that work, again? You haven’t explained where the money would come from. How about doing the numbers, or should we just take your word for it?

      The plan you outlined on your website has some major problems that you refuse to acknowledge or discuss.

    • Canspessy,

      The garbled mess that is the EITC was based upon Milton Friedman’s negative tax idea. This is what happens once ideas are ground through the political process.

      Also, Milton Friedman didn’t really think the negative income tax was a great idea. He thought welfare was a bad idea, but so long as we had welfare, he thought it was preferable in the form of a negative income tax. His real preference (according to him) was neither.

      • Re: Friedman’s preference for neither welfare nor minimum wage.

        If the state offers no aid to marginal workers one will have to face two consequences.

        One is that some people may actually starve, particularly in a country with a tradition of state funded welfare and where charitable organizations lack the resources to provide for millions of the indigent.

        The other is that some, which is to say some millions, who are unable to earn more than a dollar or two an hour will likely resort to dealing drugs, mugging, stealing copper pipe, etc.

        • One is that some people may actually starve, particularly in a country with a tradition of state funded welfare and where charitable organizations lack the resources to provide for millions of the indigent.

          That’s a truly ridiculous notion. No one starves in a country as rich as the US, and to claim that state support for the indigent is necessary requires a belief that the faceless, soulless state is more compassionate than individual people. Do you really believe that?

          Would you allow someone to starve? No? Neither would I.

          The other is that some, which is to say some millions, who are unable to earn more than a dollar or two an hour will likely resort to dealing drugs, mugging, stealing copper pipe, etc.

          So you prefer the institutionalized government mugging of productive people instead?

          You seem to have a pretty low opinion of poor people.

          • George Orwell maintained that the poor in england during the 1930′s were so demoralized that they didn’t have the guts to steel a bottle of milk from the doorstep of a middle-class villa (in those days milk was delivered daily in glass bottles). Orwell considered that pathetic.

            But even if it is the case that the majority of those in dire poverty would never relieve their exigency by crime, the fact remains that few muggers, drug dealers or pilferers of copper pipe have a regular 9 til 5 job.

          • But even if it is the case that the majority of those in dire poverty would never relieve their exigency by crime, the fact remains that few muggers, drug dealers or pilferers of copper pipe have a regular 9 til 5 job.

            Have you considered that those various ne’r-do-wells might be unemployable because they have no skills for which an employer is willing to pay the amount of the minimum wage?

            If they weren’t forbidden by law to work for some lesser amount, they might be able to find employment of some type,and possibly learn some skills that would raise their value to employers, and eventually allow them to become self supporting, productive members of society.

            If you’re correct that higher unemployment leads to higher crime, then eliminating the minimum wage should act to reduce unemployment among unskilled people and result in lower crime rates.

          • If they weren’t forbidden by law to work for some lesser amount, they might be able to find employment of some type,and possibly learn some skills that would raise their value to employers, and eventually allow them to become self supporting, productive members of society.

            Still trying to teach the hopeless? I admire the persistence if not the naiveté that assumes Larry capable of learning or reasoning.

          • ” Still trying to teach the hopeless? I admire the persistence if not the naiveté that assumes Larry capable of learning or reasoning.”

            well no. your job would be to convince the economists of al the countries that current believe they need the minimum wage.

            are they too – “capable of reasoning and learning”?

            why don’t you focus your insults to those also?

            see the problem here is that you boys don’t like to hear about the way the world really works – so you blame the messenger… pretty unintelligent on a number of levels but I’ve gotten used to that lame approach …

          • Still trying to teach the hopeless? I admire the
            persistence if not the naiveté that assumes Larry capable of learning or reasoning.

            That particular response was to CanSpeccy – an apparently self taught person for whom the world is a relatively simple place, and for which they have the obvious answers that no one else has thought of for some strange reason Judging from the very few comments at their blog, one would assume that there is a high level of agreement, but that’s because disagreement isn’t allowed.

            No, I have no hope of ever making the slightest dent in Larry. It’s just idle amusement – like playing Whack-A-Mole. Responding to Larry is a way of expressing views that others might find interesting.

            Larry believes the way to effect change is to influence voters, so that’s what I’m doing.

          • No, I have no hope of ever making the slightest dent in Larry. It’s just idle amusement – like playing Whack-A-Mole. Responding to Larry is a way of expressing views that others might find interesting.

            I must confess that I pursue the same strategy. Trying to teach Larry is hopeless. But there may be a person out there who learns something so I argue with Larry on more than a few subjects.

          • having amateur economists who have never earned a dollar actually practicing their “craft”, to assume that they have the knowledge and skill to “teach” is downright comical.

            the only thing being taught is how rigid and unyielding their dogma is and how infantile and childish they become when reminded of realities.

            according to the “esteemed” who blather on and on here.. the entire world of economists that actually do work in their field for a living are “morons” for daring to pursuing policies that violate Libertarian “thought” which in this blog is an oxymoron.

          • having amateur economists who have never earned a dollar actually practicing their “craft”, to assume that they have the knowledge and skill to “teach” is downright comical.

            Actually, dumdum, I have made my living by betting against the establishment economists over the past decade. I bet against the tech bubble, the housing bubble, and the bond bubble. I have now been in retirement about as long as I worked full time and having skin in the game means that I don’t get paid if I am not right. All those economists that told you how great the housing and tech markets were got paid for getting fools to transfer their money to the promoters. They are getting paid now as they try to convince retail investors that bonds are a good idea or that shale will be a solution to our problems.

            As I have written before Larry; I am not a cynic. I am not a skeptic. I just happened to be right. That is a lot more for the idiots that you believe even though they have been wrong all along the way.

          • having amateur economists who have never earned a dollar actually practicing their “craft”, to assume that they have the knowledge and skill to “teach” is downright comical.

            No one expects you would understand, but believe it or not, most people are receptive to reason and logic, and willing to entertain ideas and views that differ from their own. It’s been a long time since comments directed to you were actually intended for your benefit.

          • “No one expects you would understand, but believe it or not, most people are receptive to reason and logic, and willing to entertain ideas and views that differ from their own. It’s been a long time since comments directed to you were actually intended for your benefit.”

            not Libertarian types. They are particularly pernicious and no they do not entertain other ideas and views if it violates their dogma and ideology… noticed that right off the bat.

            back when we first discussed the SS Trust Fund – you showed your true colors…ignorant and proud of it.

            I don’t expect anything for “my benefit”, never did nimrod.

          • not Libertarian types. They are particularly pernicious and no they do not entertain other ideas and views if it violates their dogma and ideology… noticed that right off the bat.

            My comments aren’t directed to, or intended to benefit libertarians.

  15. I haven’t heard anyone argue that $9.00/hr is an ‘optimal’ minimum wage; so it is a red herring to refute an argument that is not being made.

    The argument that is being made is that $9.00/hr is preferable to the present $7.25/hr minimum wage.

    Whether the value of a net loss of jobs is greater than the increase in aggregate demand is the question that should be discussed.

  16. A raise of the minimum raise will be devastating to small businesses, who are already faced with providing Obamacare insurance to all employees next year or suffer a $40K max penalty in 2014 with scheduled raises in penalties for years following. Most of these businesses presently offer no insurance.

    The so-called 50 employee limit is a misnomer since the measure is based on Equivalent Employees working only 120 hours per month. With “controlled group” rules in place, it will be virtually impossible to break a business up into smaller companies.

    So small companies will shed employees to keep costs in line and a $9.00 minimum wage will make them shed even more. The only safety is having no more than 37 employees working regular 40 hour weeks. Getting skinnier will likely require doing business using some new paradigm.

    The bad news to us consumers is that, in the end, prices will rise – which means that business revenues will likely fall.

    • It’s no accident that the Dear Leader’s health care destruction takes place on this particular time line. He didn’t want the reality of Obamascare to set in before his next election.

      I believe the way employers are dealing with it is to turn full-time workers into part-time workers. But, don’t worry! We actually have a much larger welfare state than it now appears. It’s just that people don’t sign up to receive all the free goodies they can. Yet.

  17. Big Ed

    Have you never heard of the law of supply and demand? When demand for labor rises, all wages will rise but there is presently no demand with the increased business regulation being imposed by the Obama regime.

    In the good times, Mickey D’s paid higher-than-minimum wage to get good burger flippers, but now we await the dropping of the other shoe.

    • Gadfly says “Have you never heard of the law of supply and demand?”

      Simple textbook models are easy to understand. In the real world, where there are hundreds of major economic forces, a rise in wages can result in a positive net effect, e.g. reducing labor costs, increasing demand, boosting productivity, etc.

      • I’m not saying the partial equilibrium model is wrong, given its limitations; I’m saying there are hundreds of other major partial equilibrium models, optimization models, input-output models, contemporaneous models, etc.

        • Heh! Do these hundreds of models work for any other input to production besides labor, and do they show upward sloping demand curves for any of them?

      • This whole thread is below the zero minimum wage topic asking for valid reasons as to why we need minimum wages at all – with concrete benefits noted. So please tell us how the existence of a minimum wage will result in positive demand. Government interference in the economy is how we got to where we are and people here are arguing for more of the same.

        • the roots of the minimum wage philosophy are deep and old.

          The first minimum wage laws were in New Zealand in the late 1800′s.

          In the US, it started with the Fair Labor act in the 1930′s.

          In Germany – the issue of what a minimum wage should be (or not) was handled by turning the issue over to national trade unions and making the collective bargaining agreement – a law.

          I think the bigger point is that the minimum wage issue is not some Obama “socialist” idea. it’s got a long worldwide history and the US is just one of many players and Obama is just one of many US POTUS who believed in it.

          If the GOP and supporters TRULY believed that the minimum wage hurts people – then they should forthrightly incorporate it into the things they promise to do and sell that idea to the very people they say are hurt by it – and win the election and get into office to implement their vision .

          you can’t have it both ways. You cannot argue that it hurts people then for your election plank – blame the people who benefit from it and expect people to truly believe that you truly believe your own rhetoric about it hurting people.

          either make the case to the voters and win on that basis or admit that it’s really about ideology, ideology that the voters don’t agree with.

          • As deep and old and intractable as the roots of your stupidity.

            I think the bigger point is that the minimum wage issue is not some Obama “socialist” idea.

            Nobody gives a shit about that except you, dippity-do-da.

            you can’t have it both ways. You cannot argue that it hurts people then for your election plank.

            Great. Go to Republican headquarters and offer your services as head jester….I mean consigliere. This is an economics blog.

          • re: ” This is an economics blog.”

            that’s RICH!

            no this is a bunch of foul-mouthed infantile fools who THINK they know economics but who are totally out of touch with the way the real world actually works….

            and anyone who dares to point that out … gets “schooled” in how to best deliver insults and the like.

            Been here long enough to see how “ladies” like Methinks deals with folks she disagrees with – and the other idiots hold her up as a role model… and emulate her childish rants.

          • No, Larry, You get insulted bcause you waste so much of everyone’s time.

            You once told me that you came to this blog in order to learn. At that time, I tried to be patient with you as you were supposedly learning something.

            It is not clear to me that you have tried to learn anything at all in your time commenting here.

            FYI, methinks has demonstrated an interest in learning about other viewpoints. She also contributes a lot to the discussion here.

          • re: “learning”

            if some here were in a classroom and behaved the way they do – they’d be told to leave.

            If they were the actual instructor (as some of you claim), and you called those less educated morons and pricks and the like you’d be fired.

            I’ll bet you that Prof Perry NEVER engages in the types of behaviors seen here when he “instructs”.

            In fact, if you went to a newspaper site or other blogs and engaged in this kind of behavior, you’d be warned and then banned.

            Only here in CD and a few other places are people free to abuse those they think are less educated and the justification is that because one disagrees or even if one is obviously wrong then it’s just fine to call him a moron and worse.

            there are another group here that never fail to be polite to others even if they think the others simply are ignorant or worse… they make their points, express their disagreements and move on.

            I’ll not accept the excuses given here by the bad behavior. It is what it is but don’t kid yourselves as to your behaviors which would get you thrown out of most classrooms and blogs and actually fired if you were a real “instructor”.

            So John Dewey – think about what I just said to you guy.

          • Larry G,

            If this were an actual economics class, you would not be here beyond one semester. You would have failed Econ 101 and the rest of us would have moved on. So there would be no abuse because you wouldn’t have been allowed to continue wasting our time.

          • John Dewey – re Econ 101 – 99% of the public is in the same category guy and you don’t fail econ 101 – you put down what the instructor wants to see even if you do not totally agree with it.

            but you can ask questions even if others do not agree – and others who responded by calling you a moron WOULD FAIL the class… and any instructor that treated your opposing views in that way WOULD be fired so don’t give me that crap.. guy.

            you have a small cabal here of serial abusers.. who would never be tolerated in the classroom or even other blogs.

          • Poor Larry,

            Why is everyone being so mean to me? You are such mean people! Call me names and I will throw them right back at you, ten times as bad! None of you would succeed in the real world with that attitude…..blah, blah, blah.

            At first many of us thought you were trying to make an honest contribution to the discussions and had a desire to learn. Many of the posters here tried to help you with that. However it has become apparent that your only objective is to hijack much of the discussion with meaningless posts, endless questions and demands for examples, etc.. You don’t add to the discussion, you take away from it.

            This is a libertarian site with libertarian viewpoints. That is what you are going to hear from many of the posters here.

            Simple solution Guy, stop posting here. You know how we feel about your comments so why not just disappear. I am sure you can find other sites to grace with your presence. Get lost.

            Oh yeah, it’s a free country Guy! You can’t tell me where to post! I will do as I please Guy!

            Right, it is a free country (for the most part), despite the best efforts of people of your ilk.

          • as I said earlier – if economist who actually advise government would advocate here for the policies they advocate for govt – they too would get called morons.

            given the fact that few if any of the “geniusies” here don’t seem to have real jobs as economics and instead are self-made Jr. amateurs who then use such slim credentials to hurl insults at those they disagree with..

            is downright comical.

            if any of you boys were “real” economists – you would be glad to explain why there is theory and why there is real world practice and explore how to reform it instead of acting like 5 year olds throwing tantrums.

        • John Dewey – re Econ 101 – 99% of the public is in the same category guy and you don’t fail econ 101 – you put down what the instructor wants to see even if you do not totally agree with it.

          No, Larry, 99% of the public is not impervious to reason and logic.

          And to “put down what the instructor wants” you first have to know what it is. If you already have enough knowledge to disagree with what’s learned in econ 101, why are you even in the class?

          No, Larry, John Dewey has it right.

          • re: ” No, Larry, 99% of the public is not impervious to reason and logic.”

            yup.. and that’s why the “economists” who post here are free to call the 99% (in their view) morons…

            ya’ll are downright comical

          • yup.. and that’s why the “economists” who post here are free to call the 99% (in their view) morons…

            But no one here calls the 99% morons, Larry, it’s just You that gets called a moron, because you’re a moron. Most people are interested in reading others’ viewpoints, and perhaps learning from them, but not you.

  18. Well, the optimal figure is probably whatever level it needs to be to stop businesses that pay minimum wage from being ultimately subsidized by governments and families. So yes, the minimum wage should not be $9. It should be a hell of a lot higher. Working a 40 hour week should generate enough income to:

    - Contribute towards income taxes, at least enough to cover the person’s direct expenses to the taxpayer.
    - Pay for unsubsdized housing
    - Pay for the rearing of a reasonable number of children, and for the welfare of the wage earner and a spouse
    - Cover all healthcare costs, using insurance if necessary, and other welfare insurance costs.
    - Cover transportation costs

    So yeah, you’re right, $9? Too low. It’s only low because the reality in modern society is that too many cheap employers exist who know that they can pay as little as they want, and their hardworking employees, not them, will get slimed as moochers as a result.

    Here’s an interesting thought: if we made the minimum wage into a minimum income law, where people who knowingly accept jobs that pay too little to cover the cost of living get jailed as a result, would groups like the AEI be behind it?

    • So yeah, you’re right, $9? Too low. It’s only low because the reality in modern society is that too many cheap employers exist who know that they can pay as little as they want, and their hardworking employees, not them, will get slimed as moochers as a result.

      I guess that you would favour $50 per hour. After all, if we are going to help people why not help them raise well above the poverty rate? That way unskilled people who are not organized enough to learn marketable skills can enjoy the same benefits as those individuals that worked hard to learn and were prudent enough to make the right choices.

    • Here’s an interesting thought: if we made the minimum wage into a minimum income law, where people who knowingly accept jobs that pay too little to cover the cost of living get jailed as a result, would groups like the AEI be behind it?

      I don’t know about that, and I wouldn’t presume to speak for AEI, but I could certainly get behind a movement to tax poor people at a higher rate than rich people.

      Here’s why: Rich people , simply by being rich, are demonstrating their ability to generate high incomes and wealth, which is a tremendous benefit to society and the improved well being of all of us, whereas poor people, by simply being poor, are demonstrating their lack of ability or interest in improving the well being of society, so they should be taxed more to help make up for their smaller contribution. Isn’t it only fair?

  19. OBAMA’S UNION-PAYOLA THEORY…

    Since unions have a history of maintaining a spread- premium between what they get and what the minimum wage might be, the 24% hike opens up a 24% window of opportunity for the unions to ask for more.

    Its based on the democrats quid-pro-quo payola principle.

  20. Minimum wage is a price control. A price control on employers who cannot offer jobs that pay a wage below the minimum price and a price control on employees who cannot offer to work at a wage below the minimum price.

    Minimum wage laws stop the voluntary contracts between employers and workers that set wages below the minimum. By what right does the government have to stop what would be a voluntary, mutually beneficial exchange between these two? Morally, it seems wrong to tell them that the government has decided that you can’t enter into that contract because the government does not like the terms. Even though both side would voluntarily enter into the contract and both sides would see it as beneficial, the government says no you cannot do it. What justification is there that allows the government to take away their right to enter into the voluntary contract?

    There is none as far as I am concerned.

    • GMF

      You have this exactly right. The bottom line in all this discussion is that every exchange between parties should be voluntary, and un-coerced, which conditions will result in both parties being better off. There is no role for government, which is merely the imposition of the will of other unrelated parties, in labor agreements between employer and employee.

      We know for certain that price controls don’t ever work as intended, so any other argument for or against minimum wage is secondary to the basic argument that price controls, including the minimum wage, are harmful, and shouldn’t exist. Period.

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