To: All you folks “striking” for a $15/hour minimum wage
From: Mitch Berg, uppity peasant
Re: Money from nothing
“Protesters”,
Today, you’ll be out and about around dozens of McDonalds, Taco Bells, WalMart and other low-wage employers.
I saw one of you on “Today” this morning; a cute, blonde, twenty-something single mother (what else?) and front-counter worker who notes for the camera that sometimes she has to choose between work clothes and bus fare.
I feel for you. I do. Twenty-odd years ago, I was in my twenties, had a couple of kids and a $7/hour job. It was hard making ends meet. Really, really hard.
Of course, it was hard because of choices I’d made, not my diabolical employers. I’d devoted myself to my first career – radio, which paid really badly, too – with a monastic intensity. That career crashed – and it took me a few years to realize it.
And after a year of floundering, I got the aforementioned $7/hour crummy job.
Where I learned a couple of things; how to work in an office. How to use a computer (that wasn’t something people were born doing back then). How to work days instead of nights.
I had made a few good choices, of course; when I was a teenager, I’d stayed in school and learned a few useful things, and kept it in my pants long enough to get through college (with a BA in English, which was no more a ticket to wealth then than it is today).
Point being, that lousy $7/hour job was how I found my next job for $9/hour. And thence got into technical writing. And then into the career I have.
And if that $7/hour job had gone away because legal document coders had decided to strike for $12 an hour, causing most of the crummy entry level jobs to be eliminated, where would I be today?
The same place you’ll be if they double the minimum wage for working the counter.
By the way, the woman on “Today” also parroted the same thing I’ve heard from ostensibly smarter liberals: without workers, there’d be no business.
That’s 180 degrees wrong, of course; without the business, there’d be no jobs. Don’t believe me? Let’s try a quick thought experiment. Find a vacant lot somewhere. Put on a fast food uniform, and stand there saying “May I help you?” Wait – where’s the burgers? Where are the customers? Where’s the counter and the till? Where’s the building?
What? The SEIU goons behind the “strikes” never mentioned this?
Huh.
Minimum wage is 100% funded from a) someone else’s demand, frequently another poor person or b) from investment that would create employment or increased purchasing power.
Dumbest idea ever.
If they want to make more money on low-skilled fast food jobs, I suggest she move to North Dakota. Get a roomate to split rent costs and work 2 jobs while you are there. Get some skills and move back home after about 5 years. Thats my advice to her.
Perfect timing, Mitch http://bit.ly/18bJQe7
Here is the ONLY solution http://bit.ly/1kfPGv2
The problem is purchasing power and opportunity. The f’ing government and Fed have to take their thumbs off of the economy. They won’t of course.
Mitch:
If you were making $7.00 an hour in 1990, you would have been making more than twice the minimum wage of $3.35. The current minimum wage in $7.25, so those asking for $15 are just asking for what you made in that long ago “crummy” job.
Rick: That doesn’t change the fact that it’s a destructive distraction from real solutions http://bit.ly/1d2azrg
RickDFL, always out to crush the working person.
If the minimum wage is increased, the number of minimum wage jobs will decrease.
It’s called economics, RickDFL, you shouldn’t blather about it if you don’t know what you are talking about.
The left always wants more government force. It never works. Free up the economy. Obama, the Democrat Party and the Fed need to take a LONG VACATION. That is the solution.
So, the poor “single mom” is eeking out her pitiful existence on minimum wage?
What if the federal minimum wage were doubled, but then those who got it were inelligible for any other type government (local, state, federal) assistance?
I know that sounds heartless, but if the “single mom” wants to tie her well-being into her ability to earn a “living wage”, she should assume all the financial responsibilities that come with it.
How long will it be before the “single mom” designation will lose its undeserved emotional appeal? Excluding widows and the abandoned, of course. At one time the situation was a rare, but truly unfortunate condition. Now it’s a desired, virtually voluntary condition.
This is what Democracy looks like:
http://www.zerohedge.com/news/2013-12-05/fast-food-workers-go-strike-100-cities-applebees-unveils-waiter-terminator
The fucking problem is there is no opportunity. Welfare etc. is the best option until they LEAVE THE ECONOMY TO IT OWN DEVICES.
Except there are too many political class vampires that won’t let that happen.
We are doomed.
I just loved one of Yahoo!’s cover photo for their story on this. He looked like a Hispanic, holding a sign proclaiming; “Support $15 minimum wage and the right to unionize!” I guess that they haven’t done the math, because the union would take $5 of it, so their net increase would be $2 per hour.
Funny how the left can acknowledge that increasing the tax on cigarettes, causing them to be more expensive, will reduce consumption, but never make the similar conclusion that increasing the cost of labor will reduce consumption of labor.
I know someone that is really pissed off at the SEIU confiscation of her wages. She might get out of it.
The union folks don’t give a damn about minimum wage workers; they care greatly that their compensation is in many contracts indexed to the minimum wage. The goal isn’t to help single mother gal; the goal is to increase the compensation of bureaucrat guy from 60K to 75K or thereabouts. And once they’ve done that, they won’t care that single mother gal will be replaced by this.
The simple fact is, Obama and the Fed accelerated the replacement of labor with capital. Morons.
My first job (summer, during high school) was cleaning out horse stalls at the county fairgrounds, after the pari-mutual racing season, before the fair, after the fair and after the second pari-mutual racing season. Yes, I shoveled $hit. Got a buck a stall. Made between 4 and 12 dollars an hour. Minimum wage was, $2.35 an hour I think. Yes, I was paid more than minimum wage for an entry level, no skills job. Few months later, I got hired by McDonald’s. A burger-flipper.
I was also a Diesel pump jockey at a truck stop. One summer I worked the relief shift. 6 days a week, 2 days, 2 evenings, and 2 graveyard shifts a week. The next summer, I worked graveyard shift only.
Point is, none of those were jobs that I intended to make a living at. I just wanted to make money to reduce what I owed for college. Studied hard, worked hard. Graduated from college, passed my CPA and went to work for one of the Big Eight.
Wrong again, Rick. Minimum wage was $4.25 in 1992 and 1993.
You might also remember that by the mid-nineties until the early 2000s it was irrelevant; NOBODY worked for minimum wage. The economy was doing well enough that McDonalds was begging for people to work for $7-8/hour in the Twin Cities (Fed Minimum went to $4.75 in ’96, $5.15 in ’97 ’til 2007). Because the only real “minimum” wage in the real world is the one one’s skill support in their local economy. All else is baked political wind.
Or maybe you don’t remember it. Or maybe you did, but were ordered to ignore it.
Joe:
“What if the federal minimum wage were doubled, but then those who got it were inelligible for any other type government (local, state, federal) assistance?”
Since most government assistance programs are means tested, raising the minimum wage would make many minimum wage workers ineligible for govt benefits. Proponents of the minimum wage increase point out that low wage employers like Wal-Mart use social insurance programs as an indirect wage subsidy. Raising the minimum wage would shift these costs from tax-payers to employers.
http://www.businessweek.com/articles/2013-06-03/are-american-taxpayers-subsidizing-walmarts-low-wages
Ditto Mr D.
Interesting; Just as Obama’s circling the drain due to his incompetence in the Obamacare roll out / rip off & f*** over of tens of millions of Americans who have lost their insurance / doctor they were told numerous times they could keep; the White House and the Democrat Dominated Media Culture changes the subject and everyone (including the right-o-sphere) jumps in with their opinion on “living wage” and “minimum wage” which is nothing more than compassion with Other People’s Money.
Rick,
Don’t you work for one of the big public employee unions?
Is your pay indexed to the minimum wage?
Just curious.
Rick: The issue is HEALING THE ECONOMY. MORE OPPORTUNITY. More jobs, more organic (not forced) demand and human capital and financial capital development. Wages and PURCHASING POWER will go up naturally.
You can’t pay people more than what their economic output is as determined by market forces.
Should we jack up WalMart prices to pay for it? Who’e pocket does that come out of the most?
The minimum wage is just a stupid response to other stupid policies–inflationism: since 1913 or 1971 or pick your date.
Mitch:
It was not clear what year you were talking about when you made $7 an hour. What year was it? The point remains that the $7 an hour was significantly more than the minimum wage, just like what workers today are asking for.
Yes, full employment is the best and most effective way to raise wages, but the U.S. was in a recession until March 91 so I am not sure your $7 an hour wage reflects full employment wage pressure.
“Because the only real “minimum” wage in the real world is the one one’s skill support in their local economy.” Of course wages, both individual and aggregate, are primarily driven by productivity, but there is a huge band of possible outcomes that reflect the political framework for any given market. In 2012, the CEO of Target made $20 million and a Target cashier made $7.25, not just because that reflects their individual productivity, but because of political choices we made about who and how wages get set.
QUOTE: “the CEO of Target made $20 million and a Target cashier made $7.25, not just because that reflects their individual productivity, but because of political choices we made about who and how wages get set.”
There may be some problems with corporate governance that congress is too stupid to figure out. Minimum wage has NOTHING to do with this. Jacking up the cashier’s wages a little is just a theoretical justice that will just retard hiring or investment. This also likely has to do with the “financial-ization” of the USA which is separate issue.
What good does it do for the rest of the economy? Demand solutions are BS. We are at the neo Keynesian endpoint.
Mitch:
I don’t know of any union employee whose wage is tied directly or even indirectly to the minimum wage (other than in the all things are interconnected way).
The wall street journal cites a study that many union contracts are tied to the minimum wage, also the united food and commercial workers website claims a raise in the minimum wage will result in a wage increase for union workers up the salary ladder, both in early 2013. Rick’s statement that he doesn’t know any isn’t the same as proving the study wrong or proving the ufcw is lying, only that he is a loner.
Loren nailed it. There is a reason they are called: “entry level jobs”. The law of demand is a bummer.
“I don’t know of any union employee whose wage is tied directly or even indirectly to the minimum wage”
“I do not recollect at this time”.
http://online.wsj.com/news/articles/SB10001424127887324048904578318541000422454
“Honest, officer – someone else’s crack pipe must have fallen into my pocket”.
“I don’t know of any union employee whose wage is tied directly or even indirectly to the minimum wage”
I distinctly remember reading several different sources that said public sector union wages were tied DIRECTLY to minimum wage, when Uncle Winkler was pushing for a state minimum wage increase earlier this year.
It wasn’t hidden at all.
Your head must have been. Either that or you are lying out your ass for political expediency.
Mitch:
What I will love to see is one of those of groups that sponsor these strikes buy or start one of those businesses. They can advertise to the customers we pay good living wages for our employees.
If as they predict they can offer food on a dollar like a McDonalds while out paying McDonalds employees causing them to come over and work for them.
We know these businesses will fail in six months.
The people calling for these strikes know it since they never open these businesses to begin with.
Walter Hanson
Minneapolis, MN
This is worth looking at. 90 second video. http://bit.ly/1gbXEIm
They take union dues and blow millions for astroturf on a destructive distraction.
They pay PR firms to train burger flippers on how to talk to reporters. The whole thing is just a gigantic vortex of waste and graft.
QUOTE: Raising the minimum wage would shift these costs from tax-payers to employers.
And it comes out of the business guy’s demand, his investment, or his CUSTOMER’S demand (higher prices). In effect, it’s mostly regressive. Welfare is more sensible and it’s funded PROGRESSIVELY funded in a more spread out way.
Fix the economy.
The brutal reality is, due to globalization the price of shelter, health insurance, and education is WAY, WAY, WAY overpriced.
So they try to “equalize” it with various forms of government force, i.e. minimum wage laws.
Force begets force until the whole thing collapses. Rent seeking and graft. 100 years of too much government and monetary meddling.
What a country!
If housing went to a natural level, the banking system would implode and there would be a massive wealth transfer. So they pass the bubbles from generation to generation. http://bit.ly/1f2fBG3
I said before that post-election Obama has cemented the Democratic Party as the stupid party but the GOP is too incoherent to take advantage of the opportunity. It’s almost like Obama is mocking the GOP. “I’m going to propose the stupidest ideas and your inability to offer alternatives will make you look even stupider.” I expect bad policy from Democrats but the GOP’s inability to capitalize makes me want to hit them over the head with a frying pan.
I’m always urging people to acknowledge trade-offs. Universal health care costs money that we won’t get back but we should do it anyway. Welfare discourages work but we should do it anyway. Sure, economists might internally acknowledge trade-offs. If you aggregate Paul Krugman’s comments on the minimum wage, he believes there’s a disemployment effect but that we should do it anyway. He just doesn’t say those things together because he’s a team player. But I’m less interested in how they justify it and more in what the public thinks since that’s what makes or breaks laws. And most non-economist supporters of the minimum wage make no trade-off. It’s a free lunch as far as they’re concerned. If the public knew there was a trade-off, support would plummet, Democrats would stop pushing it, economists would stop making excuses for it, and the world would be a better place.
Seriously, what they should do is stop taxing ALL, and I mean ALL business activity. This gets no attention, but taxing business is mostly a regressive tax. it’s simple book keeping. It comes out of wages, the owners demand for something, prices, or the owner’s investment (or the bank’s lending where he has his account.)
On top of that, business taxation is a 100% redundancy to the income tax. Instead of tax preparers taking a cut on this USELESS ACTIVITY, let it flow into income and then let the parasitical government get it’s cut.
Great post Emery.
I think the ultimate problem is the language to describe this stuff is very technical. Paul Ryan has said as much. Democrats can fool everyone with simple language and concepts. Keith Ellison is a huge offender. Terrible.
The GOP has got to get up to speed and start coordinating messages like the democrats do.
Statism Central Planning Easy money Rent Seeking Public goods. Non-public goods Actuarial science.
Jason lewis is the only one getting it done in this area.
FACT: When the government generates non-public goods it’s by definition a NET reduction in GDP since the government doesn’t measure profit, ever.
Epic waste.
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Fundamentally, inequality cannot be solved by taxation. The man making $2 million a year will not be dragged back to the middle class by raising his taxes from 15 to 35%, and the man making $20 thousand will not join the middle class by reducing his taxes, as he pays very little now. To temper inequality the unjustified earnings of the finance industry must be reduced by preventing financiers from profiting from systemically destabilizing one-sided bets. The man making $20,000 can improve his lot by acquiring marketable skills. Inequality within the rich world is unlikely to lessen until inequality between the rich and poor worlds lessens further, which will take a generation or more.
Zero out corporate taxes and capital gains taxes, yes, but tax all increases in retained earnings (profits less investment before dividends), as normal income for the shareholders. This will be a tremendous incentive to stop corporations from hording piles of cash, which benefits management rather than shareholders. This will in effect tax corporate profits at the top marginal rate, but by avoiding double taxation lower taxes will be paid by corporations. Every corporation could be forced to pay a minimum dividend equal to the top marginal tax rate.
QUOTE: Fundamentally, inequality cannot be solved by taxation.
The Fed causes inequality and they keep trying to make up for it with taxes and government force. We are ruled by moronic whore-parsites.
On further consideration, I had forgotten earlier employment. When I was 10 or 11, I worked at the Optimist Christmas tree lot for 25 cents per hour and all the hot coffee I could drink.
I broke down bales of boughs into smaller bundles, helped carry sold trees to customers cars, and eventually helped customers pick our their perfect tree. I hated the idea of asking my parents for money, so that I could buy them Christmas presents.
That was well below the “minimum wage.” And if the Optimist club would have had to pay me minimum wage, I would not have earned a dime. But I was happy with what I had agreed to work for, and apparently they were happy with what they agreed to pay me.
Regarding Rick’s claims that raising the minimum wage would shift taxpayer costs to employers, that’s actually not going to happen very often. The final “dropoff” of government benefits (SNAP, EITC, daycare assistance, rent assistance, medical assistance, etc..) for a single mother of two children is around $60k. The lowest drop-off is around $30k for housing assistance, and hence your single person earning the minimum wage does NOT drop off assistance until he gets a job paying far more than the proposed $15/hour.
In short, we’ve got a problem with insanely generous social programs, not with a low minimum wage. All across Asia save Japan, people are living quite well on what we’d consider a minimum wage existence. We might consider teaching people how they do it instead of giving obese people more government assistance.
Am I the only kid who ever had a paper route, walked beans or bailed hay? Trust me, making as magnificent a sum as the federal minimum wage was a far-off fantasy, but I had jingle in my pocket nonetheless and life lessons learned about punctuality and giving full measure for my pay.
Of course, I also had a belt so I didn’t have to stand around holding up my pants all day. Maybe that’s what Conservatives should do to help poor folk in The Hood: donate used belts to free up a hand so they could work a job if one happened by.
“Shift the cost onto employers”
Who then shift the cost to customers or onto other employees. minimum wage is a tax on workers and the middle class, not “the rich”.
Joe, I’m thinking that instead of a belt, suspenders might be more appropriate in many parts of the hood, as it’s appalling how many poor kids are grossly obese and thus have no waist upon which a belt might be useful. Good thought, though.
Mitch:
I can almost believe that Joe was confused about your question, but not that you were. You asked if the pay of union employees, as in staff who work at a union, had their pay indexed to the minimum wage. I said no and nothing in the WSJ article says that. It is concerned with the wages of union employees as in workers for an employer who are represented by a union.
As for the WSJ article and the Center for Union Facts study you need to read them more closely. They contracts that tie wages to the minimum wage all (except the UFCW grocery contract) seem to involve those workers just at or slightly above the minimum wage. So yes, to the degree that unions represent workers below or just above a proposed minimum wage, raising the minimum wage helps those members. But none (except the UFCW grocery one) of the contracts cited involve automatically raising the wages of workers who are already well above the new minimum wage.
RickDFL is drooling at the thought of minimum wage workers getting booted from their jobs.
Obama is a moron http://bit.ly/IwKx6c
Yes, RickDFL, we can trust that those unions whose contracts are not already tied to the minimum wage will NEVER,EVER use a hike in the minimum wage to demand a raise. NEVER, EVER, but of course in reality, ALWAYS.
I can see why Dear Leader wants a minimum wage hike, though. I remembered only 2% of people earning it, and now, despite a hiatus in raising it, it’s 2.9% of the labor force.
Or, rather, about 12-15% of the labor force is earning the true minimum wage thanks to Dear Leader: $0.
Bikebubba: Raising the minimum wage is part of a comprehensive strategy to reverse 30 years of real wage stagnation for most workers (despite a doubling of their productivity). Workers should demand a huge increase in wages because that is what they are due.
Part of the comprehensive strategy involves full employment, but sadly the GOP austerity fetish, deficit phobia, and inflation paranoia block the large scale Federal spending needed to reach full employment.