The Dishonest And Irresponsible Minimum Wage Issue.

Good bye. I know when I'm licked...

Good bye. I know when I’m licked…

I heard Bernie Sanders make another one of his economically-deranged statements as the crowd cheered, this one about how no American should work 40 hours a week and not have enough to live on. Then I went to the local Baskin-Robbins.

I ordered a single scoop of Chocolate Mousse Royale in a waffle cone. The cost was…$4.68.

For a single-scoop ice cream cone.

I will not go back to Baskin-Robbins again, which means I may have had my last ice cream cone. I also cannot believe that the company can continue selling ice cream cones at such absurd prices. When I worked for Baskin-Robbins as a summer job, a single-scoop cone cost $.29, and no, dinosaurs were not roaming the earth. I was paid the minimum wage, because a moron can do that job and you get to eat all the ice cream you want (within limits, which I thoroughly explored.)

Like most minimum wage jobs, scooping ice cream is overwhelmingly one filled by the young, who do not need a living wage, or those who have no skills or experience whatsoever and need to develop some. When the minimum wage goes up, companies eliminate jobs, and when it goes  up too much too fast, whole occupations and companies disappear. This isn’t capitalist propaganda: it’s true. Most of the jobs that disappear are those that make life a little more pleasant for those not doing them, like pumping gas, ushering in movie theaters, operating elevators, waiting on tables, and scooping ice cream, jobs that can be learned in about an hour or less by anyone with an IQ hovering around 90.

I ran a study on the issue at the U.S. Chamber of Commerce: it indirectly got me fired, in fact, because the Chamber didn’t appreciate that the results didn’t support their position that raising the minimum wage causes inflation. (It usually results in increased inflation, but doesn’t have to. Ice cream cones can get more expensive without changing the price of automobiles, but unions usually succeed in making a minimum wage increase justification for a union wage hike, which is the another reason Democrats like to increase the minimum wage.)

This is going to be a big topic in the Presidential campaign, because people with IQ’s hovering around 90 are a substantial voting bloc for Democrats, and they really believe there is such a thing as a free lunch. The Congressional Budget Office (CBO), Congress’s official arbiter of such matters, produced a report last year estimating that while an increase in the minimum wage to $10.10 would hike incomes for roughly 16.5 million workers, it would leave another 500,000 Americans unemployed. Never mind, say the Bernies among us; the important thing is to get those few ice-cream scoopers  who are left a little closer to the  obscene salaries made by greedy corporate CEOs, even if it gets the rest of them fired.  The scoopers and their equivalents are like the soldiers being sent into combat and told that the chances of them coming back alive are 1 out of 10, and who think, “Gee, I’m going to miss the other nine guys.” They think this way because they are either not very experienced in life, or not too bright…which is why they earn the minimum wage.

Various knee-jerk progressivism-infected cities, like Seattle, are leaping off the cliff with local $15 minimum wage increases, a one-way ratchet that will have significant negative effects on employment and the quality of life in those cities. Good restaurants will close; indeed, some already have.  The rest will be more expensive. Some of those former ice cream scoopers won’t be able to eat. The bright side: that will create more pressure for government handouts, and thus more Democrats.

I don’t know why the minimum wage can’t simply be incrementally raised by statute over time as the cost of living rises, if only to put a stop to the demagoguery of pols like Sanders. Convincing the dim, gullible and the ignorant to support policies that are likely to hurt them and make life less pleasant for the rest of us is an unethical, ugly practice that politicians excel at and will never cease, because it works. It always has. It also gradually eliminates lovely little moments of fun and pleasure that make our increasingly stressful existence more bearable, like licking an ice cream cone on a hot summer day.

142 thoughts on “The Dishonest And Irresponsible Minimum Wage Issue.

  1. Jack,
    “… IQ’s hovering around 90 …” You’re beginning to sound more and more like an elitist. Just because people don’t have the same level or kind of education as you doesn’t make them stupid, only ignorant and possibly misinformed. This is the first step into the false dichotomy of “This person doesn’t agree with me. But, since I’m clearly right, they must be either stupid of malicious.”

    I know the comment wasn’t meant literally, but it’s still not a tone you should want to convey at all. Your articles used to be read and enjoyed by people who otherwise disagreed because you were reasonable and made good points; don’t fall into the Michael Savage trap and become nothing more than a parody of yourself.

    All the best!

    Sincerely,
    Neil

    • I don’t know what “elitist” means in this context, Neil, I really don’t. It is unethical for elected officials to dupe ignorant and unintelligent people. I know they are low-hanging fruit, so to speak, but still: it’s wrong. Similarly, what is inaccurate or unfair about the statement to which you allude:

      “This isn’t capitalist propaganda: it’s true. Most of the jobs that disappear are those that make life a little more pleasant for those not doing them, like pumping gas, ushering in movie theaters, operating elevators, waiting on tables, and scooping ice cream, jobs that can be learned in about an hour or less by anyone with an IQ hovering around 90.”

      Is it acknowledging that that these are mindless jobs? Stating that they could be learned by an average 9 year old? Simple, rote jobs are still useful, and they can be done by simple, rote people, who have to earn money somehow. I have said this before, but you sometimes dig deep to find offense, and this is surely an example.

      • Jack,
        Why are you asking “which part?” when I quoted the exact line I found objectionable. It’s the assumption that their IQs hover around 90 — or joking that such is the case. Ignorance is not the same as a lack of intelligence. I’m not digging to find offense because I’m simply not offended, I’ve just noticed an increasingly sarcastic and often flippant tone that has subtly crept into your writing of late.

        It’s on par with Bill O’Reilly referring to everyone as “pinheads.” It sounds innocuous and jocular enough, but it underlines a very real belief that your opponents are simplistic morons and that it’s silly to even have to address them at all.

        Very intelligent women and men throughout history have been enthralled with Keynsian economics and income redistribution and they’ve looked at the same numbers you have. It’s not stupid to buy into such arguments, just misguided. I just don’t think name-calling, of any sort, is an effective way to constructively debate an issue.

        -Neil

        PS: I don’t come up with this on my own. Having been a fan of yours for as long as I have, I’ve likewise referred a number of friends and colleagues (many of who are avid lefties) to your writings over the years and they were similarly impressed. They’ve since all dropped off one by one for the reasons I continue to mention. I realize you’re not pandering to public opinion, it just makes me sad that you used to have more broad appeal because you rose above pettiness. Now, more and more, you seem comfortable among the fray.

        PPS: As I’ve said before, I have a loyalty here that extend back a generation, so I’m not going anywhere (unless you ask me to). I just wish it didn’t have to be quite as irksome to do so sometimes.

        • Neil, AGAIN The statement was “Most of the jobs that disappear are those that make life a little more pleasant for those not doing them, like pumping gas, ushering in movie theaters, operating elevators, waiting on tables, and scooping ice cream, jobs that can be learned in about an hour or less by anyone with an IQ hovering around 90.”

          There is no assumption in that statement at all. There is one fact: anyone of less than average ability and intelligence can LEARN these jobs and perform them The same is true of being a soldier. My father was a soldier. The same is true of playing, say, Go. Geniuses play Go. The same is true of driving a car. Need I do on? There is another assertion too: those who don’t do these jobs appreciate the fact that others are doing them, and that appreciation is related to the fact that they are inconvenient, unpleasant, boring, or that life is easier if someone else does it for you—like pumping gas. The fact that someone would rather have someone else pump their gas says nothing about their intelligence at all, pro or con, or the intelligence of the one punping, pro or con. Maybe the gas pumper is desperate for a job. Maybe he is an eccentric genius. And maybe it is all he can do. The point is: it ain’t hard to learn.

          You are reading elitism into a statement that signals none. Go ahead…how hard is it to be a housepainter? I already said that I scooped ice cream and was glad for the experience. Did that mean I have an IQ of 90? No, I don’t think so. The fact that a job can be performed by someone of less than stunning intellectual ability is a good thing. It doesn’t mean someone smarter doesn’t or shouldn’t do it, though I would argue it is better if such jobs are left to those for whom it is the highest use of their ability rather than the lowest.

          One of my favorite characters was Moe Berg, a man with multiple advanced degrees, a lawyer, a PHd, who spoke many languages, and who spend his adult life as a 3rd string major league catcher…a job that can be, and has been, performed by morons. Do I look down on Moe? Hell no.

          In short, this particular criticism is just pure, unadulterated crap. and based on either misreading or reading with bias. So I’ll say it again, in the hope that you actually read it rather than jump to unfair, knee jerk, biased assumptions about the sinister, non-liberal judgments behind it, when there are none:

          Most of the jobs that disappear are those that make life a little more pleasant for those not doing them, like pumping gas, ushering in movie theaters, operating elevators, waiting on tables, and scooping ice cream, jobs that can be learned in about an hour or less by anyone with an IQ hovering around 90.

          Clear now? Finally???

            • Jack,
              Actually, I’m teetotaler. That was also a lot to write when I said I wasn’t offended. Also, it was the second usage, not the first that I objected to:

              “This is going to be a big topic in the Presidential campaign, because people with IQ’s hovering around 90 are a substantial voting bloc for Democrats”

              Something,
              Neil

  2. Here is what I do not get.

    A wage is the price one has to pay in exchange for a service.

    Why should not the living wage rationale be applied to the prices of all goods and services? Why not set minimum prices for all goods and services, so that the seller can live off the money received?

    If such a rationale should not be applied for the sale of oil, or carrots, or DVD’s, what makes wages different from other prices such that those who sell labor must have a minimum price in order to live off the money receive, but sellers of oil, carrots, or DVD’s should not be guaranteed a minimum price so that they could live off the money received?

    • Conceptually, the idea is that if your business goes down in a properly competitive market, than it means that it was outdone by superior competition that deserves to take its place. Additionally, the person who lost their business can (barring a massively terrible unemployment situation) have the theoretical fallback of working for someone else at said minimum wage. The idea is that you have enough to support yourself if you’re not a person of above-average ability who can run their own restaurant, develop new seed types for Monsanto, etc., but if you’re talented and willing to take the risk of running your own business, you have every right to TRY to earn more than said minimum.

    • Michael,

      I don’t think you described precisely (or generally) enough what a wage is.

      Trying to express with as many of your words as I can use: A wage is the price that a wage-payer is willing and able to pay in exchange for a service, such that the wage-payee is not disincentivized from providing the service.

      Depending on the business relationship between consumer (demand) and provider (supply), the wage-payer is not necessarily the external customer of the provider. The wage-payer is often a “community organizer” who has taken the risk of organizing an enterprise (a “community,” in the form of a corporation) that provides the demanded service, at a price which covers the wage-payer’s costs and risks. One of the wage-payer’s costs (but not the only cost) is the wages paid to those community members who actually perform and deliver the demanded service. Therefore, the price for the service must account for the cost of the service that derives from (1) the cost of the wage-payees, plus (2) the rest of the wage-payer’s costs to sustain the community. The wage-payer naturally demands a cut of the gross take from customers (or else, there is no incentive to sustain the community), in addition to what the wage-payees demand (or else, there is not enough incentive to provide the service).

      For oil, carrots and such, the same pricing imperatives apply, but to a “supply chain” of multiple communities.

      So if you try to go back and set a “living price” along with a “living wage” for the benefit of producers of goods that flow through a supply chain, you are talking about setting a price (at the consumer’s point of acquisition) that must ensure living wages for every community (and, for every member of every community) in the supply chain. I believe it is easy to appreciate the difficulty of properly pricing every demanded product that way.

      The above, I hope, helps to explain why the living wage rationale is not applied to the prices of all goods and services.

  3. Yesterday, I asked in this thread, in reply to one of charlesgreen’s comments about indexing the mandatory minimum wage to the cost of living:

    “Doesn’t indexing create its own vicious cycle, though?”

    If Charles answered that, I either overlooked it, or did not get it when I read it.

    Tex (texagg04) replied to my question, answering “Yep,” with some elaboration. And then began the epic clash between Tex and Charles.

    Today, I am asking what I really would like to know, following from my earlier question:

    HOW can a government – ANY government – preclude a scheme of indexing-wages-to-cost-of-living from becoming a catalyst and sustaining force for an endless, zero-net-benefit cycle of wage and price inflation?

    I did think about that question and try to answer it, before posting it here. But I would like to see other commenters’ responses.

    I do think there is at least one answer or solution, but I don’t like the one that occurs to me most naturally – in fact, I reject it, abhor it, and would distrust anyone inside or outside of any agency of governance who would defend its being attempted.

    Other than that, after consulting an economist, I do now understand better the attractiveness to policymakers of striving to determine, and mandate, a “living wage.”

    But I am not convinced that our nation’s systems of unemployment benefits have fully matured to effectiveness, such that those who are unemployed return to work of their own volition as quickly as they possibly can, at the lowest possible costs to all others.

  4. I heard Bernie Sanders make another one of his economically-deranged statements as the crowd cheered, this one about how no American should work 40 hours a week and not have enough to live on.

    In and of itself, that is not economically deranged. What is, is the usual faulty inference (that he undoubtedly had in mind and at least suggested to his audience) that that desired condition can be most readily furthered by a mandated minimum wage. In the past I have offered to go into various alternative approaches to these issues, but you and other readers either overlooked that offer or chose not to follow it up; that offer still stands, but I won’t dump it unsolicited on readers here.

    Like most minimum wage jobs, scooping ice cream is overwhelmingly one filled by the young, who do not need a living wage, or those who have no skills or experience whatsoever and need to develop some.

    While that may once have been the case in the U.S.A., it is not universally true and – seen from my distance – it appears to be less and less true even in the U.S.A., and certainly not true here in Australia. Even where it does apply, it does not contradict Bernie Sanders’s assertion, as it folds in the effect of outside resources that bring those roles up to his standards – so, his criticism is implicitly about other cases, even if he wittingly or unwittingly seeks to apply it to that pair of cases.

    • Well, I’ve already described the alternative approaches that I’m working on at the moment. I’m interested in hearing any others that would be worth a shot. I agree that we as a society should expend a decent effort to remedy the problem of people needing to wear themselves down simply to make enough money to survive. What kind of effort will work, though, is something practically everybody ought to at least think about and discuss. Consider your offer solicited.

  5. The bigger problem with a $15 minimum wage is that it will destroy everyone’s retirement. We have a situation with almost zero interest rates on savings, but with rather high inflation (real, but not acknowledged). If we institute a $15/hour minimum wage, this will drastically increase inflation while interest rates will remain low. This makes it almost impossible to save for retirement. With the Democrats in Congress trying to make Social Security go bankrupt FASTER (by transferring retirement money to disability), we will create a horrific mess for our elderly.

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