Mitt is still thinking like a liberal 3


Imagine the huge impact on the U.S. if we could find jobs for teen age males and engage them productively before they get themselves into trouble. What a boon this would be for America. The beauty is that it doesn’t require a government program. It simply requires more freedom, freedom to let each worker sell his or her productivity for what the market will bear. More…

The case for the “affirmative wage” experiment Reply


By Tom Quiner

Michelle Bachman

A writer characterized Michelle Bachman as a “sideshow candidate” in this Sunday’s Des Moines Register.

He mocked many of her quotes, beginning with this one regarding the minimum wage:

“We could potentially virtually wipe out unemployment completely because we could offer jobs at whatever level.”

Yes, Ms. Bachman was less than elegant in expressing her reservations for the minimum wage. Even public figures known for their glibness from Barack Obama to Ronald Reagan have been caught expressing their views with a paucity of political panache. So, I won’t condemn the Congresswoman for lacking the rhetorical grace of a Cicero.

On the other hand, I commend her for staking out a gutsy position in opposition to the minimum wage, a position many Republicans shy away from.

Essentially, Ms. Bachman suggests we could dramatically reduce unemployment if we allowed employers to pay lower skilled workers what they’re worth. When President Obama came into office, Democrats quickly raised the minimum wage. The results are apparent. Unemployment has increased. It is particularly pernicious with black teen age males, whose unemployment rate has skyrocketed above fifty percent.

I would like to propose a modest social experiment to test the efficacy of the minimum wage. I call it the affirmative wage.

The premise is simple: legislators would pass a law that compels employers to pay African-Americans a different minimum wage than everyone else. Although conservatives find such reverse discrimination repugnant, liberals have embraced, promoted, and enacted various forms of reverse discrimination over the years under the guise of affirmative action. They view it as “leveling the playing field.”

The affirmative wage would most likely fail to withstand legal scrutiny, but play along with me for a few minutes. Suppose Congress DID pass the affirmative wage?

If Democrats were the ones passing the law, what do you think they would do? Why they would pass a higher affirmative wage for blacks to help level the playing field. After all, they are more compassionate than Republicans, right?

Let’s say they raised the affirmative wage to $15 per hour for blacks, and left it at $7.25 for everyone else. Would blacks benefit?

Of course not. Unskilled black workers would be priced out of the market. The jobs would go to lower-skilled workers of other races who had abilities somewhat commensurate with the minimum wage that applies to them. African-American workers with a skill level above the $15 per hour wage would be unaffected. The unemployment rate for black teenagers would sky rocket to close to one-hundred percent, because few teenagers have a skill-set worth $15 per hour in today’s marketplace.

Let’s say Republicans controlled the Congress and eliminated the minimum wage for African-American workers. Republicans, after all, lack compassion don’t they? So we’d expect nothing less from those dastardly market-driven legislators. Would blacks be hurt?

To the contrary, lower-skilled African-American workers would find new employment opportunities open up that didn’t exist before. Employers would be able to pay workers who have a $5 per hour skill-set what they’re worth without fear of going to jail. The black teenage unemployment rate would plummet and scores of white and brown kids would be left behind.

The premise of the minimum wage is that it is possible to cheat the laws of supply and demand. An experiment with an “affirmative wage” would quickly validate (or invalidate) the premise.

It’ll never happen of course. So here’s what we’re left with: legislation that makes it illegal to pay certain workers what they’re truly worth. The result? Higher unemployment and reduced access to the type of starter jobs that help the unskilled gain experience … and new skills.

Michelle Bachman is right on the mark on this issue.

 

Milton Friedman explains the fallacy of a minimum wage 3


By Tom Quiner

The late Nobel Laureate economist, Milton Friedman, explains why minimum wage legislation is counterproductive. He explains it better than anyone.  The clip above was made when the minimum wage was around $2.50, which dates the interview around 1977.  Unemployment for teens, and especially black teens, has only gotten worse, as I highlighted in my previous post.

The mock-benevolence of “compassionate” legislation 1


By Tom Quiner

The Americans with Disability Act (ADA) was a compassionate piece of legislation, right? It prevented discrimination against individuals with disabilities.

Anyone who opposed that piece of legislation is considered mean-spirited, devoid of a drop of humanity.

How about the extension of jobless benefits from a standard half year to closer to two years (99 months)?  These are tough times, right?  In the name of compassion, let’s subsidize unemployment.

Anyone who opposed that piece of legislation is considered mean-spirited, devoid of a drop of humanity.

And what about the minimum wage?  People should be paid what they need, not what they’re worth, right?

Anyone who opposed the two recent bumps in the minimum wage is considered mean-spirited, devoid of a drop of humanity.

These legislative initiatives are compassionate.  They make us feel good.  But do they work?

The ADA was designed to make it easier for folks with disabilities to find jobs. Researchers at MIT studied it. They found that, in fact, employment for men with disabilities between the ages of 21 and 58 dropped after the passage of the ADA.  They found it dropped for women between the ages of 21 and 39.  Why?  Because the disabled became a protected class. The number of lawsuits increased when they lost a job.  The threat of increased lawsuits is a deterrent to employers, because the cost and aggravation went up to hire the disabled.

The “hire the disabled” programs that were in place before the ADA have gone away.

What about the extension of jobless benefits from 26 to 99 weeks. Beside the cost to taxpayers for subsidizing unemployment, what could be wrong with that?  According to Harvard economist, Robert Barro, it has actually worsened the unemployment rate. I quote him from his piece in the Wall Street Journal:  “My calculations suggest the jobless rate could be as low as 6.8% instead of 9.5%, if jobless benefits hadn’t been extended to 99 weeks.”

Why?  According to Barro, more compassionate benefits distort efficiency, prolonging unemployment due to insufficient job search.  Unemployment was higher in 1982 than now, but it wasn’t as prolonged, because unemployment wasn’t subsidized as long by the taxpayers.

Finally, what about the minimum wage, what could be wrong with that?  Here’s what: it suppresses employment for the least skilled workers in society, teenagers. It especially hurts employment prospects for black teenage males.  A year ago, the minimum wage was increased to $7.25.  Unemployment for these black young men immediately shot up from about 39% to about 50%.

How could it do anything else?  If you require employers to pay people more than what they’re worth, more employers will take a pass.

So, in the name of compassion, we have passed legislation that ultimately hurts the people we’re trying to help.  Feelings trump critical thinking.

So, in the name of feelings, take a few minutes to listen the song above.  It pays tributes to legislation that truly is “nothing more than feelings.”