Carpe Diem

Quotation of the day: Minimum wage law is compulsory unemployment; it provides no jobs, it only outlaws them

“In truth, there is only one way to regard a minimum wage law: it is compulsory unemployment, period. The law says: it is illegal, and therefore criminal, for anyone to hire anyone else below the level of X dollars an hour. This means, plainly and simply, that a large number of free and voluntary wage contracts are now outlawed and hence that there will be a large amount of unemployment. Remember that the minimum wage law provides no jobs; it only outlaws them; and outlawed jobs are the inevitable result.

“All demand curves are falling, and the demand for hiring labor is no exception. Hence, laws that prohibit employment at any wage that is relevant to the market (a minimum wage of 10 cents an hour would have little or no impact) must result in outlawing employment and hence causing unemployment.”

~Murray Rothbard writing in 1988

100 thoughts on “Quotation of the day: Minimum wage law is compulsory unemployment; it provides no jobs, it only outlaws them

  1. Right. All minimum wages laws do is create a minimum standard of skills needed to make money. If you are not lucky enough to have the mandated skill set, you will be unemployed.

    • Mandated skill set? Minimum wage laws specify level of compensation, not a minimum standard of skills. How do you, or anyone else, know that the US is adding jobs at a rate of 1.8% a year? The addition of 1.8% of what? The current work force? They can’t even provide reliable, verified figures for that. Those doing so are snake-oil salesmen and people that believe them are fools.

      • Minimum wage laws specify level of compensation, not a minimum standard of skills.

        So, you are saying an employees compensation is in no way tied to the value they bring to a company? C’mon, man.

        How do you, or anyone else, know that the US is adding jobs at a rate of 1.8% a year?

        BLS statistics found here

        • “So, you are saying an employees compensation is in no way tied to the value they bring to a company?”

          When it comes to minimum wage laws, that’s exactly what I’m saying.

          • What magic exempts the market for low-skilled labour from the laws of economics – but, only the low-skilled labour market, according to you?

          • If an employer needs someone to pick up scraps of paper around the plant or keep track of the pallets, that employee must receive the minimum wage, regardless of his contribution to the value of the product. That means that the amount of compensation that he receives in excess of his contribution must be subsidized by a reduction in the compensation of employees that make more than he does or be subsidized by a decrease in the profits of the owners or stockholders or the task that he performs is delegated to others in addition to their regular duties and his position is eliminated. There are no positives in minimum wage mandates.

          • chuck

            …or the task that he performs is delegated to others in addition to their regular duties and his position is eliminated. There are no positives in minimum wage mandates.

            My bet is on that one.

          • My bet is on that one.

            Right on, Ron.

            No employer will keep a person on the books that is losing him money. A business is a profit-making enterprise. To suggest they would willingly take a loss is…well…unnatural.

          • No employer will keep a person on the books that is losing him money.

            Except perhaps his worthless nephew, which of course supports my views on the subject of compassion and charitable giving.

            I believe people are naturally compassionate and generous and feel a personal moral obligation to help those around them who are in need.

          • jon-

            “No employer will keep a person on the books that is losing him money. A business is a profit-making enterprise. To suggest they would willingly take a loss is…well…unnatural.”

            ah to be so young and naive. sure, in theory this is true, but give it some time to run into some serious nepotism.

            wives, kids, brother in laws, etc wind up on the payroll all the time at wages that wildly exceed their value.

            hell, it’s something we look for when shorting companies.

  2. Right now, the US is adding jobs at a rate of 1.8% growth per year. While not bad, it’s not the 2.0-2.5% you’d really like to see in a recovery. There still are many more people who need jobs. Shouldn’t the focus be on making it easier to get jobs, rather than harder? Shouldn’t the focus be on lowering the cost of employing people, rather than raising it?

  3. I don’t see how this is much different than compulsory licensing laws — e.g. hair braiding. Both are designed to enhance wages for those who already have jobs at the expense of potential new entrants. It’s rent-seeking, pure and simple, and our economy is being more and more controlled by rent-seekers and politicians who profit from them.

  4. the theory espoused here seems to assume there are no other alternatives for those who are not hired or fired because of minimum wage laws and that’s simply not the reality.

    this is like blaming unemployment on other cost or regulatory factors when the unemployment rate varies even when the rules don’t change – i.e. the unemployment rate of teens – changes even when the minimum wage law remains unchanged.

    the approach here is to advocate for the complete removal of minimum wage laws – as opposed to some middle ground reform – LIKE exempting ALL first year employees in training OR exempting all teens until age of graduation from high school – as is done already in a number of other countries.

    the only way that minimum wage laws are going to be completely outlawed is if a majority of Americans want it and that’s just not in the cards.

    so what is a reasonable middle ground to advocate for instead of outright repeal?

    • larry-

      that is one of the worst pieces of analysis i have ever read.

      surely you are not trying to claim that anyone is claiming unemployment is only affected by one factor.

      numerous things affect unemployment. wage controls are one.

      to say this: “i.e. the unemployment rate of teens – changes even when the minimum wage law remains unchanged.”

      is simply ridiculous.

      given that numerous things affect unemployment, why would just one staying still keep unemployment still?

      that’s like saying “my weight changed even though i got the same exercise, therefore exercise does not affect my weight”.

      if you forgot to notice that you were eating more then of course you’re going to get the wrong answer.

      for any other given set of facts (a condition economists refer to as ceteris paribus) a higher minimum wage will result in higher unemployment. period. it’s really that simple. sure, other factors could offset it, but that does not change the direction of the vector from that input.

      your question about middle ground is absurd.

      there is no middle ground. you either engage in price fixing, or you do not. if a bully beat you up every day, would you look for a middle ground where he, say, only beat you up every other day?

      you are getting 2 ideas muddled in your head.

      just because people may support somehting does not make it right.

      the answer is to educate them or (preferably) to take the ability to make such policy away from them altogether by protecting the individual right to free contract.

      the other more plausible (though longer term) solution is simply to oppose all minimum wage hikes and let inflation eventually make the current one meaningless.

      if the minimum wage were $1 instead of $9, it would basically have no effect. if we can hold the min wage constant, then time is on our side here. in real terms, it will drop every year and become less and less of an impediment to full employment.

      i suspect that is the best we can hope for legislatively.

        • Goes without saying. Did you notice the author was Larry?

          I can always tell within one or two sentences even when the name isn’t in my current view.

      • larry-

        that is one of the worst pieces of analysis i have ever read….

        You do realize that the analysis came from Larry? Did you expect something good? While it is true that Larry can be right when he supports one position over another every once in a while even when he is right he does not use proper analysis. Like many voters, his is a faith based position.

        • re: ” Like many voters, his is a faith based position.”

          not really. My position is that if the idea is so bad why is it so ubiquitous in the world.

          I realize some don’t like this approach but I consider thousands of other economists in other countries – no less smart or intelligent than the ones who advocate that such policies are wrong.

          Most industrialized countries do believe that there is a floor wage income below which the ‘safety net” will make up the difference and the safety net is provided by others who make higher incomes.

          I know of few industrialized countries that have no minimum wage, no trade union and no entitlements for those who don’t earn enough to pay for their basic necessities.

          it seems to be what distinguishes industrialized countries from 3rd world countries… and I simply point that out.

          • “I know of few industrialized countries that have no minimum wage, no trade union and no entitlements for those who don’t earn enough to pay for their basic necessities.

            it seems to be what distinguishes industrialized countries from 3rd world countries… and I simply point that out.”

            which once more establishes that

            1. you are not in command of the facts as nearly all 3rd world countries have min wages and numerous industrialized countries (germany, austria, singapore, sweden, finalnd, denmark, iceland, etc do not)

            2. you are irretrievably committed to the logical fallacy of appeal to practice.

            3. that you assume (wrongly) that laws get made for economic as opposed to political reasons. most countries have tariffs as well despite the provable fact that they impose a deadweight loss upon the imposing country. politics often trumps economics. that does not make it good policy.

          • Most industrialized countries do believe that there is a floor wage income below which the ‘safety net” will make up the difference and the safety net is provided by others who make higher incomes.

            LOL…Countries do not believe anything. Only individuals can believe. And there is a much larger variation in belief than the extremists would like us to think.

          • v and methinks-

            i meant bad even for larry.

            Sadly, I think that Larry has been consistently bad for the past few years. I am no longer surprised by anything that he writes and still think that he may just by playing some kind of joke on everyone since it is hard for me to accept that he could be that stupid.

          • Oh I think it’s pretty safe to say that few if any of the group of name-callers here actually earn a living as economists or teach it or advise corporations or governments but they sure would call anyone who were real economists – morons and pricks if they dare disagree with these Jr. economists here.

            eh?

            so we have hundreds of economists advising dozens of countries and those countries have minimum wages or policies that deal with low income workers and when that is pointed out in rebuttal to assertions that such policies are wrong – it has to be a moronic statement.

            right?

            of course.

          • Oh I think it’s pretty safe to say that few if any of the group of name-callers here actually earn a living as economists or teach it or advise corporations or governments but they sure would call anyone who were real economists – morons and pricks if they dare disagree with these Jr. economists here.

            Did you read the Fed minutes that showed that it missed the housing collapse even as it was happening? Those economics degrees mean nothing if they do not teach you how to see what is going on. Most people here will be Keynesians or Monetarists. That is why they will not be able to see the signs of trouble until it is very late to do much about them.

          • ” Those economics degrees mean nothing if they do not teach you how to see what is going on. Most people here will be Keynesians or Monetarists. That is why they will not be able to see the signs of trouble until it is very late to do much about them.”

            you can make that statement about some economists but when you say it’s a worldwide conspiracy of bad economists then it looks just bad guy.

            basically some here say that virtually all countries economic policies are wrong .. thousands of economists, real ones, that advise these countries.

            but the amateur economists here know the truth and anyone who disagree with it is a moron.

            if this sounds pretty comical.. you got it…

            I’m not into world conspiracies and sorry.. when a majority of countries engage in certain policies, I do not conclude that every last one of their economic advisers is an idiot especially when some of those economists are PHDs with significant credentials – far more than the yahoos have in this blog.

            One can argue the theory of the minimum wage – and I actually AGREE with that theory – but in practice there are “complications” like what kind of policies a country might have to deal with lower paid workers who do not earn enough to pay for their own basic needs.

            that’s a legitimate focus of govt and in many countries the response is to play the minimum wage issue against the entitlement issue.

            Is it better for everyone to pay more for a burger or is it better to get cheap burgers but have to pay taxes for entitlements for low paid workers.

            don’t say the correct answer is to get rid of both – because obviously the real world does not work that way.

            the only countries that actually do not have a minimum wage nor entitlements for low paid workers are essentially 3rd world countries.

            that’s the reality. People who advocate for removal of the minimum wage and removal of entitlements are, in effect, advocating for a 3rd world economic policy.

          • so we have hundreds of economists advising dozens of countries and those countries have minimum wages or policies that deal with low income workers and when that is pointed out in rebuttal to assertions that such policies are wrong – it has to be a moronic statement.

            Other than the hourly rate there is very little difference between most economists and prostitutes. They both please the individuals or institutions that pay them. Governments like to grow in power and to govern. As such they pay people to justify what they do. And they get what they pay for. What is clear is that the policies that have been tried are a failure. The more that governments meddle in the economy the worse the outcomes. While no governments refuse to interfere and get in the way those that stick to domestic security and leave the economy alone tend to have the best outcomes.

            This is a lesson lost on you either because you are too stupid to understand it or because your faith will not allow you to use facts that undermine your beliefs.

          • how about this CitB. change the law so it does not apply to anyone who has not graduated from high school?

          • how about this CitB. change the law so it does not apply to anyone who has not graduated from high school?

            LOL…Why not laws that do not apply to anyone who has red hair? Or is not below a certain BMI?

          • so we have hundreds of economists advising dozens of countries and those countries have minimum wages or policies that deal with low income workers and when that is pointed out in rebuttal to assertions that such policies are wrong – it has to be a moronic statement.

            That’s correct, Larry, it’s a moronic statement.

            Come on, Larry where are those links to even a few of those hundreds of economists?

            You keep saying that exact same thing over and over but you never support your moronic statement.

          • Come on, Larry where are those links to even a few of those hundreds of economists?

            You keep saying that exact same thing over and over but you never support your moronic statement.

            Here I am with Larry. Most of the labour economists who work for the unions and the government employed economists make a political argument for minimum wage. You can look at someone like Krugman, who used to be on our side of this debate talk in support of a higher minimum wage not on economic terms but by using political arguments. Larry does not make an argument that is only in favour of minimum wage but one that favours interventions in all sectors of the economy. His is a statist philosophy and most economists are in favour of central planning and state intervention.

          • Come on, Larry where are those links to even a few of those hundreds of economists?

            You keep saying that exact same thing over and over but you never support your moronic statement.

            how many countries have minimum wage laws nimrods?

            how many economist advisers does each country likely have?

            can you multiple the number of economists by the number of countries by the number of years the countries have had economists concurring with respect to the minimum wage policies?

            that’s a whole lot of economists who support the minimum wage eh?

            “Here I am with Larry. Most of the labour economists who work for the unions and the government employed economists make a political argument for minimum wage. You can look at someone like Krugman, who used to be on our side of this debate talk in support of a higher minimum wage not on economic terms but by using political arguments. Larry does not make an argument that is only in favour of minimum wage but one that favours interventions in all sectors of the economy. His is a statist philosophy and most economists are in favour of central planning and state intervention.”

            I don’t make the argument – I say it is the reality.

            and when I do it tips the amateur economists here of the cliff and they go berserk…

            and then they make moronic statements like because we used to have slavery and now don’t that we will “go back” to when countries did not have minimum wages which would be like saying we once did not have slavery but then got rid of it but then decided we were correct originally so we need to go back to slavery.

            that’s essentially the argument.. that once we did not have minimum wages then we did but now we “know” that they are wrong so we will repeal them and go back.

            Oh… and the other messy detail is that most people are also “morons” when it comes to economic theory and it’s a real bummer than they can vote and in effect control economic policies that prevent the imposition of correct ones.

            but then I ask them given the realities is Libertarianism essentially incompatible with elective/representative government.

            Another distressing question that evokes even more cries of “moron” .. and sometimes when they really get wound up – “prick”… !!!!

            so I must conclude the amateur economists who justify their behavior here by asserting that “morons” keeping asking these questions.. are seriously troubled by the whole deal…

            the world is not Libertarian and when you actually give people a vote in the matter – they reject it so the only solution seems to be to go back to Kings and other non-elected leaders but with one tiny proviso – the King/dictator must not only have a PHD in economics but he can’t be one of those nasty treasonous ones like Paul Krugman.

            these guys here are a HOOT! it’s like walking into the bar in star wars!

            ;-)

          • how many countries have minimum wage laws nimrods?

            blah blah blah

            that’s a whole lot of economists who support the minimum wage eh?

            No, Larry, that’s NO economists who support minimum wage. Lots of countries multiplied by we have no idea how many economists because Larry hasn’t even shown that they exist equals NO economists.

            You weren’t asked to guess at anything, you were asked to cite some actual other-country-advising economists who support minimum wage and you failed.

          • You weren’t asked to guess at anything, you were asked to cite some actual other-country-advising economists who support minimum wage and you failed.

            I do not believe that this is entirely true. While I can see that there are no economists who make an economic argument for minimum wage you see Krugman, the labour economists working for unions, and many others offer a political argument in favour of minimum wage.

            But that is not the issue for me because most economists are blinded by their faith in Keynesian teaching that makes them more likely to ignore reality than an individual unhampered with your typical American or European economic education. I had to go and work in China to hear much about Mises or Rothbard. And even those who have finally admitted that the Austrian School made the correct predictions avoid dealing with the issues by jumping on Hayek as the model when Hayek was somewhat of an interventionist and statist.

          • Vangel

            Here I am with Larry. Most of the labour economists who work for the unions and the government employed economists make a political argument for minimum wage. You can look at someone like Krugman…

            Heh. In my challenge to Larry I almost wrote “except Krugman” but didn’t want to confuse him with extra information.

            You are correct of course, but my challenge to Larry was to name ANY other-country-advising economist who supports minimum wage – something he claims exist in large numbers – and he couldn’t or wouldn’t do it.

            I appears that the difference between an economist making economic statements and an economist making political statements is too fine a distinction for Larry.

            That, and the fact that politicians often ignore their economists recommendations is way too much for the poor guy.

          • You are correct of course, but my challenge to Larry was to name ANY other-country-advising economist who supports minimum wage – something he claims exist in large numbers – and he couldn’t or wouldn’t do it.

            You are a bit naive my friend. The incentive is for economists to produce any conclusion that governments or special interest groups are willing to pay for. So you do have all kinds of papers that claim that minimum wage laws do not affect employment levels.

            http://www.irle.berkeley.edu/workingpapers/166-08.pdf

            http://escholarship.org/uc/item/86w5m90m.pdf

            http://www.economist.com/news/finance-and-economics/21567072-evidence-mounting-moderate-minimum-wages-can-do-more-good-harm

          • re: ” you wind up with a broken set of incentives and a pile of unemployable workers.

            how does that help people in their old age?”

            well it keeps them alive … but more to the point, it costs other taxpayers entitlements to do so.

            re: economic advisers..

            geeze folks.. how TOUGH is it to believe that England or Japan or Australia has economists advisers?

            do you really need them “named”?

            or do you believe all these countries that have minimum wage laws don’t have economist advisers?

            even if you can’t “name” them, believe it.. they have folks who advise them on economics and if the minimum wage was such a god-awful idea then why do all these countries with all their economic advisers just flat ignore the economists who are not affiliated with countries who advise against the min wage?

            the answer from the amateurs here seems to be that mistakes were made in passing minimum wage laws to start with – a shit-load of mistakes if you count all the countries that did it…

            .. but NOW.. we have become more “enlightened” and the pendulum is inevitably swinging back the other way and in a few years all the countries will come to their senses and get rid of the min wage.

            Isn’t that the narrative ?

            so according to the amateur economists here – all the folks who support minimum wage including all those countries with their staff of economic advisers are….

            that’s right… MORONS…

            QED

          • You are a bit naive my friend. The incentive is for economists to produce any conclusion that governments or special interest groups are willing to pay for. So you do have all kinds of papers that claim that minimum wage laws do not affect employment levels.

            Yes of course. Incentives matter and you get whatever you are willing to pay for.

            Larry pulled a phony appeal to practice argument out of his ass, and then was unable to support it even though support exists.

            His argument is that minimum wage laws must be good policy because so many countries have them.

          • re: entitlements vs minimum wage

            re: countries must think min wage is “good” because so many have it.

            I’m not sure EXACTLY what their reasons are but the fact that they ALL started out originally WITHOUT minimum wages and over time, one by one, they decided to implement minimum wages must at least mean there is some kind of similar thinking going on.

            and the link I provided for Germany shows clearly that they have a concern about low minimum wages and demand on entitlements.

            I point these things out as real-world “complications” to the pure libertarian theory…

            for people to believe that the libertarian theory is right and all these countries wrong – really presumes that much of the world governance is ignorant, not smart.. morons if you will.

            sorry charlie… insisting the entire world is dumb as justification for the ‘correctness” of libertarian theory is exactly why you guys are basically reduced to blathering on blogs as not a one of you or your libertarian heros apparently is actually in a position to really influence these countries or if they actually in a position they have failed miserably to convince those countries of the error of their ways.

            you don’t need a “study” to figure this out but you do need some measure of common sense.

          • re: ” you wind up with a broken set of incentives and a pile of unemployable workers.

            how does that help people in their old age?”

            well it keeps them alive …

            Creating a large number of unemployable workers helps keep people alive in their old age. Well, of course! Why didn’t I see that before?

            LMAO

            OMG, Larry You are a real gem.

        • not really. My position is that if the idea is so bad why is it so ubiquitous in the world.

          The quality of your comments is going downhill fast. And that’s from a really low starting point.

          In 1750 your comment could have just as easily applied to slavery.

          “Name three developed countries in the world that don’t rely on slavery.” shouts Larry. “It’s not just me, economists advising most other countries also advocate slave labor as a necessary ingredient in a vibrant and healthy economy.

          This habit of returning with the same unaltered nonsense thread after thread on such a wide variety of issues is what earns you those extra helpings of abuse. Nothing ever changes with you. The same moronic bullshit just keeps dripping from your typing fingers onto these otherwise mostly clean, readable pages. Nothing you read here affects your views in any way. Get a clue.

          • re: slavery is ubiquitous at one point then everyone who thought is was ok decides it’s not.

            except with the economic tripe here – people START OUT with no minimum wage and then many countries have it and the “theory” is that “just like slavery” everyone will come to their senses AND GO BACK to what it was before.

            that’s a significant difference…

            the point I make about most countries stands and there is no evidence of a worldwide movement to reject it.

            Indeed EVEN IN GERMANY the policies to maintain minimum wages is still in place in more than half of the industries.

            and EVEN in Germany the concern is that for every person who does not earn a living wage that others may have to pay taxes to provide entitlements to make up the shortfall.

            the ideologues here, the ” theory is true and it must work in the wild” folks, simply reject the idea that people don’t view societal issues through a pure economics lens and the ideologues don’t seem to accept that fact much less the fact that economic policies do not work the way the theory predicts in countries with representative govt.

            over and over the Jr. economists here blame economic policies on the 99% whom they say are economically illiterate but then they turn around and say that the tide is turning against minimum wage…

            that’s fundamentally myopia … a refusal to deal with real things.. and to insist that theory has to prevail because theory is right.

            that defines an ideologue.

            you’ll only get rid of the minimum wage law when you convince people to ALSO not provide entitlements as a safety net for low income workers.

            when is that going to happen? truly?

            that’s no different than the very same folks insisting that we’ll get rid of EMTALA because it’s wrong to provide free health care …or worse than all the countries that now provide universal health care will – either reject it and go back to a system without it or go broke.

            oh.. and folks who point these realities out? morons.

          • re: slavery is ubiquitous at one point then everyone who thought is was ok decides it’s not.

            Who are you responding to? You didn’t address my point except to use the word “slavery”. Did it go right over your head again?

            There’s no hope for you, Larry.

      • morgan, “your question about middle ground is absurd”.

        Larry might be right about a middle ground. A lesser minimum wage for teens could be very successful. If unemployment goes down with minimum wage going down then: ah ha, minimum wage is an impediment to jobs in the minds of the majority.

        Note: You don’t agree with Larry but you attack with with arguments, unlike some who are pittiful name callers. I can understand frustration with Larry but we all benefit from sound arguments, so, he is useful in this regard.

        • There is nothing useful in Larry’s prattle and any response to his prattle is only useful if you’re the extreme minority of the population whose IQ does not exceed 25. And if it is that low, then just like Larry, that person will be unable to understand the argument and if he can, he’ll forget it within 10 seconds.

          He is a moron. This is not “name calling”. It is a diagnosis of his mental condition. One for which I think we have ample evidence before us.

          • It’s not just his stupidity. It’s pointless trying to discuss anything with somebody so fundamentally corrupt. He often contradicts his own arguments within the same thread. All the while, he does his “just askin’ questions” schtick.

          • You’re not taken in my Larry’s “just here to learn” and “dialogue” song and dance, Paul? Well, I’ll be!

          • Oh man.. that Methinks is on a tear… woe is me…

            ouch ouch ouch… please Methinks.. please.. stop

            you hussy

          • Methinks

            There is nothing useful in Larry’s prattle and any response to his prattle is only useful if you’re the extreme minority of the population whose IQ does not exceed 25.

            I must be misreading your comment. As a person with an IQ of 75, I find must people’s responses to Larry’s prattle refreshingly coherent and informative. Should I attempt to drastically lower my IQ toward 25 with a medication such as tequila for even better comprehension?

          • Ron,

            You’re seriously telling me that 600 identical corrections to his 600 identical misconceptions about the third world, for example, or pointing out 600 times the same logical fallacies is actually useful and informative for you? Once, maybe. Constantly? I doubt it. You’d have to be as stupid as he is and I see no evidence of that.

        • cit b-

          a lesser minimum wage for teens would be better for teens than a higher one, sure. but it would also not be as good as as none at all. further, a two tiered wage scheme would have some severe losers.

          what if you are a recent immigrant or simply an unskilled adult who got married young, never finished school, and has no job skills?

          now you are doubly screwed.

          not only is no one willing to pay you the adult minimum wage as your skills do not warrant it, but now teens can undercut you on price as they can legally take a wage that you cannot.

          i’m not so sure that would really be a productive middle ground.

          don’t forget, it’s not just teens that work for minimum wage.

          • Yeah, I just think something needs to be done to lower unemployment by reducing the minimum wage, and prove it helps employment. Maybe it would be more palatable if the demographic that lives at home had better opportunities for a job, via a lower entry wage.

            Here is a quote from a sponsor on the proposed Washington State Wage Training Bill:

            “Rep. Condotta, sponsor of the House companion bill (HB 1150), said some Democrats have been receptive to the idea of a training wage to combat our state’s high teen unemployment. When a reporter expressed surprised Condotta quipped, “Democrats have kids too.”

          • Citizen B.,

            First of all, you will be met with a pile of peer-reviewed studies that show no that the minimum wage has no impact on minimum wage (defies belief, I know).

            Second, you will be met with a wall of unions who will cede no ground on this issue as minimum wage reduces competition for their labour force.

            Third, why on earth would you want to help teens at the expense of all other minimum wage workers like the not so young low-skilled labourer, new immigrants trying to get a start in America and young adults trying to support themselves through school? They would be the losers in this plan and they are no less deserving of the opportunity to work than are teenagers. If lowering the minimum wage for teenagers is a good idea then lowering or eliminating the minimum wage is a good idea, full stop.

          • Apologies for that awful first sentence. The studies show that minimum wage has no discernible impact on employment.

          • cit b-

            if you are going to have a “training wage” then why not apply it to everyone?

            why allow teens to undercut adults of similar skill level/productivity?

            it seems you are just creating a new problem and driving one group even deeper into the hole to benefit another.

          • I’d support a training wage..

            I’d support a system like Germany has where entry level is the apprentice level…

            but Germany is having the same problems that we are with the low end service sector… that is not subject to wage floors and the fear is that when they get older they’ll be destitute and need entitlements..

          • “but Germany is having the same problems that we are with the low end service sector… that is not subject to wage floors and the fear is that when they get older they’ll be destitute and need entitlements..”

            my god, it just never stops.

            if you are still so unskilled after years of work that you can only command a minimum wage, then you are so incompetent that it’s a wonder anyone hired you in the first place.

            if you want more money, acquire useful skills and get good at somehting.

            a min wage makes this worse, not better. 1. you will be fired and not be able to get work at all if you cannot bring your skills up. 2. those with skills worth $4 have little incentive to get more if they are guaranteed $9. why bother learning to be worth $8?

            you wind up with a broken set of incentives and a pile of unemployable workers.

            how does that help people in their old age?

    • Larry G: “so what is a reasonable middle ground to advocate for instead of outright repeal?”

      Just because the majority of voters are, like you, ignorant of economics is no reason to stop trying to educate them. That is, after all, Professor Perry’s vocation.

      I am actually optimistic that the majority of people who vote will someday, unlike you, be able to understand the harm done by minimum wage laws.

      • re: “educate” no can do when you call them morons and pricks John Dewey.

        what kind of strategy is that?

        as I said before – if you really think that – then you make that part of your appeal to voters – that the minimum wage harms them – and you make that case and see who votes for you.

        and I can guarantee you if you call them ignorant for not understanding your appeal that it will have a bad outcome.

        Most people not only in the US but every other industrialized country in the world – release than if a job does not pay enough money to afford food, shelter, health care, etc that society will end up paying those costs via entitlements.

        BTW John Dewey, I participate in quite a few blogs and I can assure you that most have a policy about Ad Hominems and abusive behaviors and they enforce them. There are a few that don’t and invariably there are folks who cannot behave themselves and invariably they blame the people they abuse…so I’m not buying your view about “un-educated” at all. If others in the general public came here to dialogue about such issues, they too would get the treatment that you excuse …

        and we’ve seen this happen… Methinks just got done working over Peak and having others join in like a cur dog pack …

        so don’t excuse this behavior. If it happened in a classroom, you’d be booted out. If the professor did it, he/she would be fired. And if it happened in most other blogs, you’d be banned.

        there ARE different points of view on the minimum wage and other issues. In YOUR OPINION those views might be uneducated but NO ONE gives you the right to behave like a 5 year old in response.

        • If you happened in a classroom, you’d be booted out. No teacher will allow this much moronic drooling from distracting everyone else.

          If you find other blogs more appealing, by all means, go annoy the patrons of those instead. The only other blog I’ve ever had the misfortune of finding you on is Coyote’s and the readers of that blog as are as sick of your river of stupid as the readers of this one.

          • re: the classroom -

            you’d be wrong Methinks if the professor is legitimately interested in education and if other class members were calling those they disagreed with morons and pricks they’d be invited out and if the professor engaged in that kind of behavior, he’d be fired.

            in fact, what he would do is test you on what you have learned – according to his standards but that guy is a trained and schooled economist as opposed to you yahoos here who are light on economic theory and heavy on name calling.

            Most legitimate economics “scholars” will fully admit the difference between economic theory and realities and engage the issue as to why – instead of calling his students morons and pricks as done here by those who claim to know “economics”.

            so no – Methinks – my policy is to not allow folks like you to run people off with your rude childish behaviors and the fact that a few of you have found birds of a feather when it comes to abusing those you disagree with – here and in Coyote – does not impress me the list.

            there are all kind of folks in various stages of learning economics – and legitimate questions and disagreements.

            Your reaction to those you disagree with is nothing short of the behavior I’d expect from a 10 year old brat.

            there are people who lurk here – afraid to comment – because of people like you so how about you take a trip elsewhere?

          • my policy is to not allow folks like you to run people off with your rude childish behaviors..

            No, Larry. You prefer to run them off with your monotonous idiotic prattle.

          • in fact, what he would do is test you on what you have learned – according to his standards but that guy is a trained and schooled economist…

            Well, that would be the end of you right there.

          • there are people who lurk here – afraid to comment – because of people like you so how about you take a trip elsewhere?

            Wait! How could you possibly know that?

            Come on, admit it. You just pulled that from your ass.

            Most legitimate economics “scholars” will fully admit the difference between economic theory and realities and engage the issue as to why…

            Can you provide some examples of that theory vs reality?

            so no – Methinks – my policy is to not allow folks like you to run people off with your rude childish behaviors…

            Shit. Does that mean you’ll be annoying people here for the rest of our lives?

        • “re: “educate” no can do when you call them morons and pricks John Dewey”

          Nobody here is trying to win your solitary ignorant vote.

      • re: “educate” no can do when you call them morons and pricks John Dewey.

        what kind of strategy is that?

        Those who might actually benefit from what some people write here, and who seem interested in learning will never earn the title of moron or prick.

        Every effort is wasted on you, and I don’t think anyone who has read your comments for more than a few days believes there’s any chance you will ever learn anything under ANY conditions, so there is nothing lost by expressing the annoyance and frustration you seem to attract like a magnet.

  5. re: ” Shouldn’t the focus be on lowering the cost of employing people, rather than raising it?”

    Jon – thank you for posting in polite terms and refraining from the infantile behaviors others seem to be unable to control.

    on your question….

    do you think the fact that we have policies to determine what a living wage / poverty threshold is – AND that we use that criteria to determine when people are eligible for entitlements that – that plays back into the minimum wage issue?

    It seems to be that way in other countries also.

    In the end – someone else pays – I agree. The only question is do they pay via taxes for entitlements for others or via higher prices for burgers and other products produced by low-skilled workers?

    I wonder if studies have been done comparing unemployment levels with minimum wages – with the other factors that also cause unemployment – accounted for?

    If the theory about unemployment and minimum wage were actually true – wouldn’t that mean the unemployment rate would change at the point where the new wage floor became law – and the levels stayed that way from then on without getting better?

    more complicated than that, right?

    • do you think the fact that we have policies to determine what a living wage / poverty threshold is – AND that we use that criteria to determine when people are eligible for entitlements that – that plays back into the minimum wage issue?

      Oh sure. But it’s also a little arbitrary. Someone determines what the basic needs are and how much is needed to reach those needs. I’m going to avoid going into too much detail here, as much of what we could talk about here are value judgements, and that, I believe, is not the point of your comment.

      In a more general sense on your comment, the trouble with using unemployment rates alone is in the definition. In order to be unemployed, one must be actively searching for work. If not, then one is not counted. For example, let’s say we had a hypothetical society. In this society, minimum wage doubles. Half the workers who were on minimum wage are laid off. However, they decide they will never be able to get a job now, so they just stop looking. In that scenario, the unemployment rate would remain unchanged (or possibly even fall, depending on magnitudes).

      We would want to look at hours worked (in theory, as minimum wage increases, more and more minimum wage workers would work fewer hours as hours get cut), possibly capitalization, labor force unemployment rate, and the like.

      There is also the possibility that the group affected by minimum wage hikes are too small to be noticed. Let’s say that of all the minimum wage workers, 99.9% would be unaffected by the wage hike. However, 0.1% find themselves out of a job suddenly. That 0.1% (approximately 1,700 workers if my quick math is correct) would not likely tip the scales in any major way. Unemployment won’t change much. The labor force participation rate won’t change much. Retail Sales won’t take a hit. No one would really notice. Does that mean the minimum wage hike has no effect? Of course not. Those 1,700 workers suddenly without a job would be hurt. Now, of course, there is always the possibility they retrain and re-enter the workforce at a higher wage. But one must acknowledge the bar has been set higher now.

      The point to all this is we need to be careful with statistics. And that goes beyond economics and into life and sports, too. Statistics provide us with a general idea of what is going on. They help build theory, which helps us formulate plans. But they are also limited, and one must know those limitations in order to fully use statistics. A baseball example: You are the manager for a team. The bases are loaded. You just need one out to win the game. You have your best closing pitcher on the mound. He has a BAA of .083 (in other words, only one in 12 batters he faces get on base). Theory and common sense tell you to keep the guy in the game. The numbers are in his favor. He’s got good stuff. Here’s the pitch….SMACK…grand slam home run to center field. You just lost the game. Things didn’t go as theory predicted. Does that mean the theory is wrong? Do you immediately trade your closer, or bench him the next game? Of course not! It was a statistical abboration, that home run.

      • thanks Jon.

        I’d say this. If the correlation between min wage and unemployment were world-wide and overwhelmingly convincing, I think it would change policies – worldwide.

        It would be as if someone said that all people need to get $5000 a year from the govt – people would totally reject that idea.

        but people don’t yet accept the correlation/causation between min wage and unemployment and beyond that they are troubled by what happens to people who work full time and still would not have enough money to pay for their basic needs especially if as taxpayers, we’re going to make up the different with entitlements.

        it’s a pretty simple calculation but I agree it leads to a hell of a slippery slope – and it is this:

        the FIRST TIME it is reported in the news that some kid starved to death and died for lack of a simple medical treatment – people will react to that.

        If it turns out that the kid starved or died for lack of food or medical care – then people are going to focus on how to prevent it …

        and from that point on – we’re on the slippery slope that leads to questions about how mom/dad can work full time but not have enough money for food and medical care fo their kids.

        At that point – basic economics 101 – goes out the door.

        the argument here – seems to be -that by having minimum wage laws – it actually leads to even more people not having enough money for food and medical.

        If that were actually believed to be true – and obvious to people – they’d DEMAND an end to minimum wage laws –

        right?

        isn’t that the basic rub?

        • At that point – basic economics 101 – goes out the door.

          Well, no. The laws of economics do not change just because something bad happens. I mean, if you fall and skin your knee, do the laws of physics go out the door?

          We still have the problem of a downward-slopping demand curve; as price rises, quantity demanded goes down.

          the argument here – seems to be -that by having minimum wage laws – it actually leads to even more people not having enough money for food and medical.

          If that were actually believed to be true – and obvious to people – they’d DEMAND an end to minimum wage laws –

          right?

          I don’t know. I’d like to think it’s just a matter of educating people, but it doesn’t seem to be that easy. People (myself included) have pre-conceived notions of how the world works. It’s just human nature. Sometimes, when something comes along to shake that faith, people change their POV (ideally). Other times, they withdraw. Still other times it’s outright denial. How many times have you gotten the whole “You’re just a socialist pig!” or, for me “you’re just a big government shill!” That tends to be denial. On another blog, we have a magic moron who just makes stuff up. He’s the self-proclaimed Master Race and to question him is to question reality. Obviously, he is the extreme of the deniers (and I thank God you are not like that).

          But even, lets take this outside the realm of economics for a moment. Look at the Westboro Baptist Church. Do you think any kind of education will change their minds? Look at creationism. Hell, if you want, look at climate-change deniers.

          I’d like to think, Larry, that all we need is one good economist, one who can articulate, to make the case and there’d be a massive revolution. All barriers to work would be swept away. But it will never happen.

          But public opinion has never mattered to me. I’m a Protestant who grew up in a Catholic town. I was a religious man at a secular college. I’m a Libertarian in a two-party nation, posting on a generally Conservative blog. Are my ideas wrong because the are in the minority? No. 300 years ago, the idea of a republic form of government was in the minority. That doesn’t mean monarchy was the better choice. 70 years ago, totalitarianism seemed to be the way to go. Does that mean we were on the wrong side of World War II? Of course not. 2,000 years ago, were the Romans right to execute Christians because their ideas were in the minority and Roman ideas were the majority? Of course not.

          I am martyring myself here, so I apologize for my vanity.

      • and from that point on – we’re on the slippery slope that leads to questions about how mom/dad can work full time but not have enough money for food and medical care fo their kids.

        An even tougher questions for high min wage advocates is how mom/dad don’t have enough money for food and medical care for their kids because they can’t get a job at all.

    • “In the end – someone else pays – I agree. The only question is do they pay via taxes for entitlements for others or via higher prices for burgers and other products produced by low-skilled workers?”

      Overlooked by Professor Larry is option c of reducing/eliminating the minimum wage while cutting back on the handouts his hero Obama loves to dole out to the masses.

      • Larry still can’t wrap the empty space between his ears around the concept of people getting priced out of the labour market entirely when your skills don’t merit the minimum wage, making them permanent wards of the state. He thinks he’s going to fix it by paying more for burgers.

      • Throw a little red meat out and look what happens.

        So rather than pass it off with a glib insult why don’t you educate me? I may very well be illiterate in statistics and I’m always willing to learn.

  6. Larry:

    Indeed EVEN IN GERMANY the policies to maintain minimum wages is still in place in more than half of the industries.

    What is the German minimum wage Larry? Do you have a reference to any German law that establishes this rate? If you do, where is it?

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