Well I heard a terrible April Fool’s trick today on BBC Radio 4, some economist chap talking about a hike in the UK’s minimum wage, saying that raising the minimum wage boosts the economy as there will be more money to spend in retail etc.
– Mr. Ed
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I don’t understand this Arindrajit Dube guy. Apparently, he has written several papers showing that hikes in the MW will increase unemployment (big surprise) but still he thinks California’s increase from $10 to $15 is an “interesting experiment”.
http://cafehayek.com/2016/03/an-open-letter-to-arindrajit-dube.html
We place a sin tax on alcohol to make people drink less. We place a sin tax on tobacco to make people smoke less. So, why do we place a sin tax on unskilled labor?
Dom: Why? For consistency.
The tax on booze and cigs takes a larger chunk from the poorer person’s entertainment & vice budget than from the richer person’s.
So naturally we want to take a larger chunk from the poorer person’s job prospects, now don’t we?
If the government has painstakingly worked out the minimum required to live on, why do they still insist on taxing it? The tax free allowance should rise in tandem.
In South Africa in the 20s, and in the southern US in the 30s, minimum wages were much liked by a certain kind of politician as a way to discriminate – to reserve more prestigious jobs for whites, not negroes, for example – when there were political reasons why they could not discriminate openly. It worked precisely because there was a lot of economic illiteracy around, so many of the loudest political commentators would not catch on that discrimination was happening.
Today, I gather it’s politically unacceptable to discriminate openly against illegal immigrants in California – indeed, politically unacceptable even to call them that. A minimum wage is one way to achieve a bit of the same effect without attracting the ire of the politically-correct. However the impression I get (from my opposite side of the pond) is that it is strictly the economic illiterates, not others skilfully duping them, who are causing the policy in CA. As regards our own ‘Tory’ government, I have wondered if an element of anti-immigration feeling enters into some tory toleration for this economically un-tory policy.
When there is a strong welfare state, minimum wage laws will work even better than before to keep more of the relevant group in their lowly place, but will be less effective at discouraging immigration. But I suspect that degree of economic awareness is even less common than awareness of the absurdity of having a minimum wage in the first place.
Niall, it’s true that I don’t get out much, except for frequenting such low-life dives as this one, but it would seem that outside of such dives the general populace in the U.S. is in principle at least on-board with minimum wage laws.
People’s stomachs really do think $ grows on trees (or appears magically in the wallets of the rich, due to their connections with the Great Frog or somebody) — regardless of their brains’ opinions.
As a matter of fact I watched a UT just the other night of some idiot student in a Q&A saying something to the effect of “even if you were right about the effect of minimum-wage laws on unemployment….” The rot is thriving in the country as a whole, as far as I can tell.
. . .
If Employers like illegal immigrants because they can get away with paying them below-market wages*, how is a raise in the minimum wage going to hurt the illegals? I should think that the Employers could go right on “underpaying” them at the old rate.
And if more people are thrown out of work by higher M.W.’s, that would release more people into the Black Market in Labor — were it not for the dole, of course — in which cases wages would be depressed there also.
*I am not sure this is generally true. But the idea surely gets spread around, as a part of the general Corporations/Business Evil theme.
If you can’t afford to pay somebody a living wage rate to do something for you then you should do without.
I was just listening to a UT of George Reisman on a “Pro-Free-Market Program for Economic Recovery,” where among many other perverse statements is his claim that the idea of the “exploitation of the worker,” which, he points out, is a direct (theoretical) result of the Marxist Labor Theory of Value, has become a ingrained in the public’s ideas about economics; and that this is the main reason for things such as, in particular, public support for minimum wage laws.
(The UT runs around 41 minutes. At U-toob, period, com, then /watch?v=_NSgJ-jpiE4 .
“If you can’t afford to pay somebody a living wage rate to do something for you then you should do without.”
And so, presumably, should the person you intended to pay to do it. I mean, better no wage at all than one that falls below some arbitrary rate the Chancellor pulled out of his arse on Budget Day, right?
It’s often a great comfort to me as I sit around all day bored out of my mind to remind myself that it’s all in the interest of fairness.
Indeed Pete, much better to replace them altogether with a roombah or a call centre in India 😉
At Leeds railway station they’ve just finished doing up the McDonalds. It now features half a dozen touch screens that you can use to place your order. Not only is it much quicker for the customers, but Mickey D gets much more value for money from their remaining staff. Thanks, George!
Remind me not to visit Mickey’s in Leeds.
The general scarcity of Real Human Persons in stores (and now, Mickey’s) is a phenomenon that is hard to bear. Try to find somebody in one of those real great WalMarts (or even the bookstore, if you’re lucky enough to be within driving distance of one) to answer a question or lift down something from the shelf that’s just out of reach.
Same thing with the god-awful phone menus.
*grumble*
Couldn’t agree more Julie but that is what results of too much labour law. Machines are not entitled to pensions, minimum wage, workplace safety regulations, you don’t have to pay employers social security contributions for them. Not yet anyway!
Too true, Alex. :>(
Very much so. One is working for The Man, never for oneself, humanity is divided into Employers and Employees, etc.
Regarding machines replacing some traditionally human jobs, I’m actually in favor, to an extent, and depending on the dynamics driving the change – with labor laws being very much the wrong dynamic.
Pete, unless you were being sarcastic, you really should give it some more thought.
Isn’t the whole idea that the government can mandate how much something is worth just wrong? Surely it is inevitable that if the price of something, anything, is artificially mandated to be more or less than its market value, either gluts or shortages will result. In the case of shortages, people are then forced by necessity to find some kind of alternative, in this case more automation.
“…raising the minimum wage boosts the economy as there will be more money to spend in retail etc.”
This, of course, is the claim that Bastiat demolished in “That Which is Seen, and That Which is Not Seen.”
I look forward to them explaining how raising the hourly wage to $100 an hour isnt a good idea.
After all if bumping it by $2 an hour is such a godsend for the economy and doesnt affect jobs and businesses then there is no logical argument against raising it till everyone is on $100,000 a year.
And that after this is accomplished, and the brave new world begins
When all men are paid for existing and no man must pay for his sins,
As surely as Water will wet us, as surely as Fire will burn,
The Gods of the Copybook Headings with terror and slaughter return!
What is a living wage? As usual with collectivist actions it’s one of those vague terms that everyone tends to accept as true without having the slightest idea of what it’s supposed to mean. Also, who gets to decide on the value of this supposed living wage? If the going rate isn’t decided by market forces then it’s just collectivism by another name. I don’t accept that the government should be involved in these matters.
pete has a sort of backwards point… Essentially once wages rise too high you build a machine to do it.
NickM, it’s a valid point and I foolishly thought, back in the 70s and 80s when articles first came to my notice in the press about our declining and aging population, that our ingenuity would devise ways to compensate. Never in my wildest dreams did I believe that our government would attempt to address this matter by importing millions of foreigners. In addition of course, aborting something like 200,000 babies each year has deprived us of replacing our citizens with our own progeny; we never needed or wanted these invaders; so with ingenuity and low abortion rates we could have provided a happy and safe monoculture. But no, the collectivists were in the driving seat and we let them meddle, wantonly forcing their social engineering experiments on us.
The goal of economic activity has been replacing people with machines since the day the first plow dug the first furrow. I can’t think of any economic improvement that doesn’t have at its foundation eliminating just a little more human labour from the process. For example- dugout canoe> rowboat> sailboat> steamboat> diesel boat> container ship- a little fewer man hours per ton mile of cargo every time.
It’s often said that time is money, but it’s more accurate to say that the time of workers is money. Human labour is generally the most expensive (and unreliable) component of any process.
Staghourds: “Human labour is generally the most expensive (and unreliable) component of any process.”
This is sometimes true. Long ago, when I worked in telecoms, there was the “one man and his dog” theory of telecommunication systems maintenance. The man fed the dog and the dog prevented the man from getting at the machines and ‘fixing’ them, as that was always what caused the problems. One candidate for ‘most ineffective strike ever’ was a walk-out of British Telecoms mainetenance engineers back in the day. They knew that lots of things went wrong when they were there so they assumed that the system would soon break down and management would be begging them to return. They were surprised to discover that much less went wrong when they were not there.
This is often not true. Automatic systems reflect someone’s model of how things will work. Humans – provided they are not jobsworths – can use their initiative to handle the frequent occasions when real life is not in accord with the model.
‘They were surprised to discover that much less went wrong when they were not there.’
Same can be said for ‘software maintenance’ where things that are not broken are ‘fixed’ ( so we can issue a ‘new release’ ) or those things are, God forbid, ‘improved’.
Agree with Julie –
Why do the menus phone NEVER have my particular need as an option ?
‘answer droids’ will be our ruination !!
Julie near Chicago wrote
Fair enough. If there are enough people who believe as you do, then the heavily manned McDs will survive and thrive. Me? I appreciate being able to pick up my Sausage & Egg McMuffin Meal in less than five minutes at slightly over cost, rather than having to queue for five minutes at least and dictate my order to some spotty youth and wait maybe two minutes more for it to be delivered. All for rather more money thanks to Calamity George and his “Living Wage”. We’ll see which works out as people put their money where their hungry mouths are.
As for bookshops, I love them and I used to shop regularly at Foyle’s off the Charing Cross Road back when Miss Foyle was still alive and in charge. Wonderful place to browse, but god help you if you actually wanted to *buy* a book! I did anyway, even though it was a fair bit more expensive than other bookshops, and the process to acquire one wonderfully Byzantine. However, not enough people agreed with me and now that Miss Foyle is long gone, Foyle’s is just another bookstore.
Yet, even so, books are more available today than they have ever been. That’s the free market for you; long may it reign.
FTFY
The minimum wage in CA will discriminate in favor of illegals. Citizens and legal immigrants work on the books, so they must be paid minimum wage. One can make off-book under-minimum deals, but they can turn you in, so that’s risky. Illegals work off the books, for cash, and can’t complain.
“The goal of economic activity has been replacing people with machines since the day the first plow dug the first furrow. I can’t think of any economic improvement that doesn’t have at its foundation eliminating just a little more human labour from the process. For example- dugout canoe> rowboat> sailboat> steamboat> diesel boat> container ship- a little fewer man hours per ton mile of cargo every time.”
What you say is not wrong per say, but that does not mean that the process does not have a natural speed and progression that can be disrupted by (usually government) coercion that leads to terrible outcomes; in much the same way that “water is good for you so more of it must always be better” can’t possibly be correct. The market mechanism is a way of balancing the speed of that progression toward greater automation and the trade off between capital and labor – when government coercion weighs the scale down on one side it inevitably leads to painful disruptions in what otherwise would be a better outcome.
Josh B nails it.
I read Cass Sunstein’s “Simpler” (about gov. regulations) on the flight to Boston. Had to put it down a few times to contain my ire, of course.
He appears to have a touching faith in the goodness of governments, especially when he is working there. It never seems to occur to him that reducing the space of government influence is the way to really simplify things.
If you read the reporting on new min wage laws in CA and NY states, one can learn that huge arrays of exceptions and modifications are “possibly appropriate” because of the great disparity in economic situations inside those huge states. Naturally, whole new bureaucracies are “possibly necessary” to plan and manage those things. More lifetime employment for more bureaucrats.
Much as I love my location in CA, I am thinking hard about getting out. Unfortunately my wife and I are in face-to-face businesses in the SF Bay Area, so it’s hard. However, there’s a little enclave just over the Nevada border near Tahoe that looks promising.
‘They were surprised to discover that much less went wrong when they were not there.’
I long for the day when town planners, traffic engineers, local government and MPs go on strike.
Traffic engineers?
http://www.hulldailymail.co.uk/8216-Red-light-district-8217-Beverley-8217-s/story-28654996-detail/story.html
Traffic Engineers;
This is the only one I approve of;
http://www.wired.com/2004/12/traffic/
Oh, I don’t object to giving jobs to machines. If the machines do a better job, or an equally good job at a fraction of the cost, I’m all for it in principle. (Although there are sides to that that really shouldn’t be overlooked. Wait for my 2,000-page book.)
As for the touch-screens in Leeds, First: Be my guest. I quit putting the entire corporation’s (& also Burger King’s) kids through college, finally, about 15 years ago. When I first embarked on that endeavor, which took some 35 years or so, Golden Arches was boasting that it had sold over 1 million (I think it was) hamburgers (1/4-pounders). The price had already gone up from 35¢ to 45¢, but to celebrate they were going for 25¢ for awhile, as I remember it anyway. And the famous McD’s Fries really were always hot and fresh and by far the best in town.
In 1965 we moved from Chicago to NYC, and I was so excited because I had heard about the Automat. Wow, is that high-tech and wave-of-the-future! I couldn’t wait to check it out! Turns out to be a hole-in-the-wall with several vending machines which had rotating shelves that presented you with sammiches, salads, pudding or Jell-o. That was just before microwaves hit, I think. Anyway, very interesting, let’s go to the World’s Fair in Queens now. :>)
So provided there are a few human bodies around in Leeds to answer such questions as “Why are you decimating the Amazonian rainforest,” or “Why are you melting all the glaciers on the planet,” I do see how the touch-screens could speed things up. In fact variants of the idea have been around for a long time….
Second, I will now tell the other side of the story as regards the lack of help on the retail floor. Namely, I recollect that up until some years back it used to annoy me no end that at any store classier than Wally’s (or, then, K-Mart), some idiot sales clerk was constantly breathing down my neck with “can I help you find something” or “this color would be beautiful on you” or “have you thought of trading in your prize Kentucky Walking Horse for this gorgeous poodle?” I wanted to bash all their heads in. “Leave me ALONE! I vant to shop! I vant to be ah-looone!!!”
Sigh…. Some people are never satisfied…. 🙁
However, I absolutely stick by what I said about telephone “menus.” Only a Systems Person or an old-fashioned Efficiency Expert could dream up such a nightmare. He or she s/have been drowned at birth.
Jerry: Marry me! :>)))
. . .
Josh: Alisa is right.
. . .
Fred IV: You almost make me want to read the bleeping book out the perversion known as “horrid fascination.” Of course, these guys tend to be masters of “mob psychology.” I think of Lenin and Alinsky, for instance. Maybe the problem with libertarians (and libertarianish conservatives or Classical Liberals…to the extent you think there’s a difference) is that we’re not much minded to be manipulative as a political strategy?
Hm.
. . .
Rich, true as far as it goes. Only don’t forget, we’re getting to the point where:
1. It’s against the Lawr not to check that your applicant is here legitimately, and to hire him if he is; and
2. Somebody will haul you into court if you discriminate against illegal aliens by refusing to hire them. Or if it’s not quite at that point yet, there are surely lots of cries for what amounts to that. I tells yer, there oughtta be a Law.
. . .
Edward, we used to have some wonderful bookstore chains here. Kroch’s & Brentano’s, Crown Books, Walden’s, Borders’, and now Barnes & Noble — the last one standing, and not all that great. They were all good for browsing, and they were all efficient at getting the customers out the door, when the latter were ready to go — which might be quite awhile past the time they’d intended to leave. (I wouldn’t know anyone like that myself of course.)
There may be “more books available,” but that does no good if you don’t have something in mind. In a bookstore you often go in to see what’s there, and there’s the physical item (already a different beast entirely from something presented on an Amazon webpage) to look over. And the “Bargain Books” tables, a.k.a. Remainders! Beautiful travel books with gorgeous photos, cookbooks, books of fantasy art, and on and on and on. Books that you’d wanted to buy 10 years ago but had forgotten about — now available at a discount price.
At the old K&B’s, a quarter or more of the floor space was given to specialized textbooks in math and science. I rarely made it into the trade sections….
But really, for at least a decade and maybe more, except for textbooks Borders’ was the Gold Standard. A huge selection, big Remainder selection, helpful employees who knew books and if they couldn’t answer a question themselves they could Look It Up on the computer; comfy chairs where you could simply sit and read, and no one would bother you; and for the second half or so of their existence, some sort of small coffee-shop area where you could have coffee and perhaps a pastry, and work on your laptop or “browse,” i.e. read, one of the books from the retail floor. (This last was a very nice amenity, but not really the reason to go to Borders’.)
And the checkout lines moved relatively fast, even during Christmas Rush. — At least they had the sense to use the single-queue system (Wendy’s and then BK being the only other two outfits I know of to work it out, for a VERY long time. Story about that, but not now).
I used to come home with a huge armful of books I never would have gotten if they hadn’t been there physically.
Although in the latter regard, the better used-book stores are even worse…. 😉
.
In sum, I wish we had Borders’ + good used-book stores AND Amazon + Abebooks + eBay. THAT would be the best of all possible worlds. 🙂 🙂 🙂
April fools day jokes seem to be going down in quality. I managed to alert everyone not to call pest control if they saw Meerkats in the building- it was just the new owner, named Alexi. Got a few chuckles. And that was it. One of the papers had an obvious joke about a second, identical, harbour bridge going up next to the famous Sydney Harbour Bridge. Any others out there?
Mr. Kilmartin, your candidate has been judged unworthy. I present to you this gem – here in my backyard, cab drivers plan to boycott the Democratic National Convention in Philadelphia unless someone does something about UberX and Lyft. I *so* hope they would, with as much publicity as possible.
Foyles, you say?
I well-remember. IIRC correctly, you got a sales slip from the salesperson, took it to a closed booth to pay the cashier (Juffrouw Klara! Kassa!) and then took the paid slip back to the salesperson to pick up the book. Hilarious. This was in the 70s – don’t tell me they still do this?
I used to spend happy Saturday afternoons at the original Borders on State Street, before they relocated into the department store building on Liberty. My old Dad (MHRIP) loved that store. But that was all BA (Before Amazon).
The ‘$15 minimum wage’ movement has now taken on a life of its own in the US, and cannot be stopped with mere logic and data. By the time the inevitable employment losses take effect, the politicians who created it to attract the votes of the economically-illiterate will have moved on to the next election, and the market will have adjusted so as to continue to pay the market rate for labour – to undocumented workers.
llater,
llamas
I have read somewhere that some labor unions have the wages of their members indexed to the legal minimum wage. That means that a rise in MW causes a general rise in all unionized wages, i.e. – all public employees.
Can anybody confirm this?
It would certainly explain why MW rise is so popular…
Here it is:
“The data indicate that a number of unions in the service, retail and hospitality industries peg their base-line wages to the minimum wage.”
http://www.wsj.com/articles/SB10001424127887324048904578318541000422454