Hurting People with the Minimum Wage and Other Political Tactics

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Conservatives around the Internet are having a chuckle at University of California professor Asantha Cooray, who appears only just now to have discovered that a massive increase in the minimum wage will mean he must hire fewer undergraduate researchers.  As with the progressives at the San Francisco comic book store I mentioned in May, the sentiment is always “I support this increase in the minimum wage, but…”

Many themes seem to be coming together this week.  Such reactions are akin to what one expects from somebody who has been or is in the process of being scammed, albeit a different progressive-Democrat scam than pension funds.  The victim still wants to affirm whatever the lure was for the con — “Of course, I want to help people.” — while having difficulty reconciling that good intention with the clear damage of the policy.

As with Democrat Governor Gina Raimondo’s intention to “cap” healthcare spending, the government can’t simply declare an outcome.  Changing an effect by fiat doesn’t relieve the undesirable underlying causes.  In fact, it’s a safe bet it will exacerbate them.  Economist Thomas Sowell gives an example:

Many, if not most, people who are zealous advocates of minimum-wage laws, for example, never check to see if these laws do more good by raising some workers’ wages than harm by preventing many young and inexperienced workers from finding jobs.

One of my own pieces of good fortune, when I left home at age 17, was that the unemployment rate for black 17-year-old males was in single digits that year — for the last time. The minimum-wage law was ten years old, and the wage specified in that law was now so low that it was irrelevant, after years of inflation. It was the same as if there were no minimum-wage law.

Liberals, of course, wanted the minimum wage raised, to keep up with inflation. The result was that, ten years later, the unemployment rate for black 17-year-old males was 27.5 percent — and it has never been less than 20 percent in all the years since then.

If the problem is that business cannot or will not pay a particular demographic group a higher wage, imposing a higher minimum won’t change the objective value of the job being done or eliminate the bias.  It will, however, reduce the number of low-end jobs that employers can fill and draw people who were voluntarily doing more or harder work in order to make more money toward the minimum wage jobs.  The gap from the disadvantaged group to the available jobs therefore increases.  That’s especially true if progressives at the same time raise barriers to entry, like licensing and insurance requirements.

From here, progressives do not learn their lesson and reverse course.  Rather, they provide subsidies to the demographic group (necessitating taxes taken out of the productive economy) and implement laws designed to seek out and eliminate real or even coincidental bias.  The real effect of these steps is to increase the cost of living, squash innovation, make it more difficult to start business and provide jobs, and whittle away our freedom, to boot.

Once again, being so predictable, this begins to have the air of an intentional attack on our social and economic system in order to increase progressives’ power and ensure electoral victory for the party of party favors.  We must begin educating people.



  • Warrington Faust

    I last found myself considering the “minimum wage question” while in the supermarket. The decision which brought it to mind was whether to use the robotic cashier, or the live cashier.

    As low wage jobs are, all most by definition, low sill jobs, they will certiany be the first to be “robotized” (is that a word yet?)

  • Mike678

    Minimum wage is anti-free market, thus is a step on the path to socialism.

  • msteven

    You are so correct here – the government can’t simply declare an outcome. Also, I don’t really understand the argument for raising the minimum wage past the simplistic ‘people deserve to get paid more’. Why not raise it to $20/hr? What could be bad about everyone getting paid at least $20/hr? When the proponents consider the effect of that on economics, then maybe a reasonable debate can be had. I have a better idea than raising the minimum wage – lowering the amount people receive on welafare/medicaid. This would increase the value of working, albiet for minimum wage.

    • Warrington Faust

      lowering the amount people receive on welafare/medicaid

      You have a point. Today I stopped by a local scrap yard to get rid of a couple of buckets of iron. Been doing this to get rid of metal for years and know the guy. He tells me that he is approaching retirement age and is concerned about Medicare. His present income is low enough that he gets coverage under “Mass Health”, he is afraid he will lose that if he retires and takes Medicare. “Mass Health” is the “best insurance” he has ever had. It covers many medical problems that Medicare does not and there is no 20% co-pay.

      • ShannonEntropy

        If your friend is enrolled in MassHealth he is in for a rude awakening

        The day he turns 65 yrs old, he will automatically be enrolled in Medicare and dropped from MassHealth

        The Medicare premium this year is only $105 / month so he not object unless he is highly subsidized by Mass. If he is … TOO BAD !!

        It’s just one more thing that sucks about getting older

  • Warrington Faust

    Survey shows growing US shortage of skilled labor – CNBC
    The headline pretty much says it all. One effect of the minimum wage is to eliminate those jobs where skill sets might be developed. Interestingly the story is illustrated with a picture of a welder. Welding is one of those skills which is measurable, speed , temperature, penetration, etc. As sensors develop these should become easily measurable. This will lead to robots (in many cases , it already has). Look at your bicycle and notice the joints are no longer brazed, but are welded. What will happen is that skilled welders will move to “job shops” where “job” size does not warrant the “set up costs” for a robot. Demand for those skills will fall off. The illustration of the welder perhaps led me astray. When I hear “skilled workers”, I think nuclear certified welders. toolmakers, cabinetmakers, etc. These are all part of an economy which is leaving us. Perhaps the reference to “skilled workers” in the article means medical techs, dietitians, even “cable guys”. Whatever, they are not there.

    An aside, I know several welders. They are all independent businessmen with operations ranging from fabrication shops to truck mounted mobile equipment. They do things that robotics cannot, small quantity jobs or repairs in the field. That works for now, but the handwriting is on the wall. More standardization of design so that “one off” jobs tend to disappear and replacement in the field being favored over repair.

  • ShannonEntropy

    Conservatives around the Internet are having a chuckle at University of California professor Asantha Cooray, who appears only just now to have discovered that a massive increase in the minimum wage will mean he must hire fewer undergraduate researchers.

    *hee!*hee!* …. Yer KILLIN’ me ,, Justin !!

    This story is just like the one where Harvard Professors were shocked — shocked! — to discover that the Obozo·care they loudly promoted would actually affect THEM !!

    http://www.nationalreview.com/corner/395738/harvard-faculty-revolts-over-obamacare-cost-increases-brendan-bordelon

  • John

    Thank God FDR saved our nation and started us down this road to have the federal government both create and then fix our problems.

  • bobfrommass

    The best part of this story is that low wage workers in San Francisco are asking their employers to cut back their hours so they don’t lose all the freebies from the government. Duh that’s why you got a raise but they want their cake and eat it too. It doesn’t work like that kids

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