An open and earnest question for our President and any minimum wage supporters from Don Boudreaux at Cafe Hayek:
If a government policy that artificially raises the price of Chinese-made tires reduces the quantities of such tires that are bought, why does a government policy that artificially raises the price of low-skilled labor not reduce the quantities of such labor that are hired?
Fascinating.
Could it get worse than that?
Anyway, turns out that France is trying to induce business to invest in France. And one of the areas is in tire manufacturing:
French Industry Minister Arnaud Montebourg had asked the U.S. mogul [Maurice Taylor of Titan] to take over a Goodyear tire factory that is due to close.
The factory is located in Amiens in France’s industrial heartland, 75 miles north of Paris. Goodyear Tire & Rubber company reported in January that it will close the unprofitable plant, putting around 1,000 workers out of jobs.
I’m gonna go out on a limb here and guess that the French factory is full of union workers, that they are wonderfully unproductive and THAT is the reason why the plant is:
“How stupid do you think we are?” wrote Maurice Taylor, in a letter to French Industry Minister Arnaud Montebourg, obtained by French business newspaper Les Echos on Wednesday.
…
“I have visited that factory a couple of times. The French workforce gets paid high wages, but works only three hours. They get one hour for breaks and lunch, talk for three and work for three hours,” he wrote.
“I told this to the French union workers to their faces. They told me that’s the French way!”
…
“Titan is going to buy a Chinese tire company or an Indian one, pay less than one Euro per hour wage and ship all the tires France needs,” he wrote. “You can keep the so-called workers. Titan has no interest in the Amiens North factory.”
Yup. Sounds about right to me.
I started blogging after the last minimum wage legislation was proposed, debated, voted on and then passed. So I missed the massive onslaught of economic debate surrounding it. However, I have certainly enjoyed reading this round.
What I do remember reading from the debate as the wage was being implemented was that unemployment rates for certain “at risk” groups was increasing. This struck me as somewhat disingenuous due to the fact that the minimum wage was being uplifted right in the teeth of the recession. However, Mark Perry at Carpe Diem posted data that showed what I was beginning to think. Mainly, how much worse was it for those groups than for the population as a whole?
The concept is “Excess Unemployment” and is described as taking the difference between the unemployment rate for the general public and the group being described. However, even this statistic understates the impact because these groups contribute to the rate in general. A better metric would be to show the difference of the group and then the public at large without that group influencing the number. Further understating the data is the fact that we include states and cities that already have wages set HIGHER than the federal minimum wage. Taking those locales into account would only make the data all the more striking.
So, which groups are likely “targets” of the minimum wage? Young workers, black workers and undereducated workers. Here is the devastating impact for each:
The data is showing excess unemployment for employees 16 years of age to 19.
Now, to those employees who are black:
Just as the minimum wage is effectively repealed due to inflation the black excess unemployment spikes up as the minimum wage rises. And then, of course, the unmistakable impact in recent years.
Finally the undereducated:
Honest to God. If you wanted to craft a policy that would hurt the most vulnerable among us could you think of one that would gather as much support and be so accepted as the minimum wage?
I’ve been watching the whole series of “The West Wing”. Its a great series, I loved it then and I like it even more now. Sadly, even as I obtained the ability to rip scenes from my DVDs, YouTube has objected claiming copyright infringement. And I don’t wanna take material that isn’t mine so….
The scene is this:
There is a party going on and Sam is entertaining an old professor of his. This professor wants funding for his project.
Sam’s advice, his comment?
What are you for?
Sam’s point is that if you want something, all you have to do is stake ground that you are FOR something and then cast your opponent as against it. And that has summed up the liberal left’s attack on reality. What are you against?
See, if the conversation can be shaped into one where there is a good guy and a bad guy, and you simply make sure that you are the good guy, then whatever it is that you are proposing is “good.”
A student at Eagle Rock Junior High won first prize at the Greater Idaho Falls Science Fair, April 26. He was attempting to show how conditioned we have become to alarmists practicing junk science and spreading fear of everything in our environment. In his project he urged people to sign a petition demanding strict control or total elimination of the chemical “dihydrogen monoxide.”
And for plenty of good reasons, since:
- it can cause excessive sweating and vomiting
- it is a major component in acid rain
- it can cause severe burns in its gaseous state
- accidental inhalation can kill you
- it contributes to erosion
- it decreases effectiveness of automobile brakes
- it has been found in tumors of terminal cancer patients
He asked 50 people if they supported a ban of the chemical.
- Forty-three (43) said yes,
- six (6) were undecided,
- and only one (1) knew that the chemical was water.
This is where I think that left is playing fast and loose with race. See, the left sells this notion of a minimum wage as a way out for minorities and the poorest among us. In reality, the minimum wage traps those very people into a continuous cycle of unemployment and dependence. And who wins?
The rich elite labor leaders who just so happen to mobilize to elect those very same democrats and siphon millions upon millions of dollars from their ranks into the coffers of democrats across the country.
Witness one man’s explanation:
The minimum wage is one of the most effective tools for racism in the world.
Posted in Economics, Government, Politics: National, Race
Tagged Minimum Wage, Walter Williams
Anytime I get a good chuckle out of reading economic news and political soap-operas, I have to post. Today I have two, both from Mark Perry over at Carpe Diem:
It’s hard to believe that this is the same paper that hosts former economist Paul Krugman, but check out this shocking New York Times staff editorial arguing against raising the minimum wage because it’s a fundamentally flawed solution to overcoming poverty.
I love the idea of referring to Krugman as a former economist.
I’ve found that somebody’s position on the minimum wage is a pretty good “litmus test” of a person’s ability to understand basic economic principles and think logically. Those who support increases in the minimum wage demonstrate their inability to think clearly, logically and rationally, and their inability to understand basic economic theory. Supporters of the minimum wage embrace emotional “thinking” over truly rational thinking, and generally therefore really can’t be taken seriously. Just my opinion.
Posted without comment:
Thomas Sowell on the impact of the minimum wage as it pertains to minorities in America, specifically black Americans:
Over the years, some of the most devastating policies, in terms of their actual effects on black people, have come from liberal Democrats, from the local to the national level.
As far back as the Roosevelt administration during the Great Depression of the 1930s, liberal Democrats imposed policies that had counterproductive effects on blacks. None cost blacks more jobs than minimum-wage laws.
In countries around the world, minimum-wage laws have a track record of increasing unemployment, especially among the young, the less skilled, and minorities. They have done the same in America.
One of the first acts of the Roosevelt administration was to pass the National Industrial Recovery Act of 1933, which included establishing minimum wages nationwide. It has been estimated that blacks lost 500,000 jobs as a result.
After that act was declared unconstitutional, the Fair Labor Standards Act of 1938 set minimum wages. In the tobacco industry alone, 2,000 black workers were replaced by machines, just as blacks had been replaced by machines in the textile industry after the previous minimum-wage law.
Fortunately, the high inflation of the 1940s raised the wages of even unskilled labor above the level prescribed by the minimum-wage law. The net result was that this law became virtually meaningless, until the minimum-wage rate was raised in 1950.
During the late 1940s, when the minimum-wage law had essentially been repealed by inflation, 16- and 17-year-old blacks in 1948 had an unemployment rate of 9.4 percent, slightly lower than that of whites the same ages and a fraction of what it would be in even the boom years after the minimum-wage rate kept getting increased by liberal Democrats.
Emphasis mine.
And who gains by the enactment of minimum wage laws?
Organized labor union.
Obama and the democrats continue to wage an economic war on a group of people in the most need of our help in order to win the union vote and its financial gravy train.
Posted in Economics, Politics: National
Tagged Barack Obama, Democrats, Minimum Wage, Thomas Sowell, Unions
On Tuesday night, Barack Obama announced a continued assault on the prosperity of America’s most vulnerable; the undereducated and the underskilled. He did this in his annual State of the Union Address when he announced a desire to raise the federal minimum wage to $9.00 an hour.
While the president may very well feel that he can slow the rise of the oceans:
Yes, while he may slow the rise of the oceans, he is not able to defy the laws of economics.
Now don’t get me wrong, the intentions are noble and honorable, if you are to believe politicians are capable of such things. We all would like to see the folks who make the least be able to earn more and enjoy a better life. We want to see a steady rise n the incomes of the poorest among us so that they too may avoid the constant worry of bills past due and the need to feed hungry children.
But that isn’t what Obama is doing. In fact, what Obama is doing is sacrificing the very people that he claims to be helping in order to make a catchy and effective sound bit during his speech. See, raising the minimum wage doesn’t help the people who are the ones making the least amount of money; it hurts them.
The minimum wage prevents business from hiring them in the first place. It raises the barrier to entry past the meager skills that they posses. At a time in their life when they should be willing to take a job, any job, to learn new skills, become proficient in new trades and crafts, during a time when they need to begin to understand the expectations of employers as it relates to employees, they are being priced out of the market.
The market is very effective at setting the value of scare resources. And labor is nothing more than a scare resource; we all want more of it as cheaply as we can get it. And so, in the course of voluntary trade, we set the rate at which we are willing to pay for it. And most labor, believe it or not, is set at rates already ABOVE the minimum wage.
But for those entering the job market, such as high school kids, they are finding that they lack the skills required to demand such a wage. And as a result, they are being left behind and find themselves unemployed. This at a time when we need these young people working. The years lost at the beginning of the working career are very difficult to make up. And the longer they are out of the work force, the further and further they fall behind those in it.
If you wanted to target the poor an the undereducated, many of which are minorities, you would be hard pressed to contrive a more malicious program that would guarantee to make life worse for those folks than the impacts of minimum wage laws that Obama supports.
But who benefits?
Unions.
Barack Obama has made a decision. He has placed a bet that he can secure the Union vote by selling out the poor, the undereducated and the underskilled all the while using words and rhetoric that would cause that group of people to support him.
It is depravity at its worst.
Posted in Economics, Economy, Politics: National
Tagged Barack Obama, Minimum Wage, Unions
I may have to reassess my belief in the power of the free market:
LOUISVILLE, Ky. – The producer of Maker’s Mark bourbon is cutting — likely permanently — the amount of alcohol in each bottle to stretch every drop of the famous Kentucky whiskey. The alcohol volume is being lowered from its historic level of 45 percent to 42 percent — or 90 proof to 84 proof.
The brand known for its square bottles sealed in red wax has struggled to keep up with demand that more than doubled the past seven years. Distribution has been squeezed and the popular premium brand has had to curtail shipments to some overseas markets.
“Over the last 100-plus days, there are many, many instances across lot of different cities where bars, restaurants, package stores have run low, run out,” Rob Samuels, chief operating officer for Maker’s Mark and grandson of the brand’s founder, said Monday.
“Given the surge in demand outstripping supply, what we’ve decided to do very carefully is to slightly reduce the alcohol volume.”
Of course, the other solution would have been to increase the price.
Tagged Bourbon, Free Market, Makers Mark, Supply and Demand
Minnesota has seen a democrat resurgence of late. What once was a red governor and house and senate is now blue through and through; fitting for the state that had voted for the democrat presidential candidate for the most consecutive elections.
And Wisconsin isn’t that. We all know the battles that have been waged in the badger state.
But this is awesome:
A Wisconsin legislator is using Gov. Mark Dayton’s budget proposal to try to lure business across the state border.
Republican Rep. Erik Severson, of Osceola, has sent a letter to hundreds of Minnesota businesses, including Best Buy, 3M and UnitedHealth Group. Severson urges the businesses to relocate to Wisconsin and avoid higher taxes.
Dayton’s proposal raises about $2 billion in additional tax revenue by lowering the state sales tax, but expanding it to more items and to services. The St. Paul Pioneer Press says Dayton’s office has responded to Severson’s letter by saying job growth is not dictated by taxes and that Severson should focus on his own state. The statement from the governor’s office also says Minnesota’s economy has fared far better than Wisconsin’s in recent years.
For what it’s worth, the Minnesota Wisconsin football rivalry is the single longest consecutive years played match-up in college football.
Posted in Economics, Fun, Politics: National
Tagged Minnesota, Paul Bunyan's Ax, Wisconsin