Sunday, July 19, 2009

MINIMUM WAGE INCREASED ! (men, minorities, hardest hit)

The minimum wage will increase one more time on July 24th.

men, minorities, continue to be hardest hit.

From a blog post of about a year ago:

This (unemployment rate) is exactly what is happening at the lower end of the wage pool with today's minimum wage increase. There will be another mandated increase a year from now. A few months from now, start looking for bewildered print and online editorials about increased unemployment among teenagers and low-skilled minorities. The funniest ones will have no sense of irony, and will end with calls for our government to do something about the problem.

19 comments:

Dr Ralph said...

"As ice cream sales increase, the rate of drowning deaths increases sharply. Therefore, ice cream causes drowning."

And

"Sleeping with one's shoes on is strongly correlated with waking up with a headache. Therefore, sleeping with one's shoes on causes headaches."

Correlation does not imply causation.

That ring a bell with you? I believe it is one of your favorite fallacious arguments.

The Whited Sepulchre said...

Doctor,
I agree. Just because the rooster crowed and the sunrise happened, that doesn't mean the rooster caused the sunrise.

However, until a better correlation comes along, I'll continue to toot the Sepulchral Horn about this one.
If there were NO minimum wage, what do you think our unemployment rate would be?

We could easily get rid of the minimum, give everyone something, anything to do for a while, allow some people to shine in a new gig, and hasten the recovery.

But no.....we're just...too....compassionate.

TarrantLibertyGuy said...

Dr. Ralp, a 'fallacious argument' would be where two unrelated things happen and you imply that there is a causal relationship, and thus, are related.

Try these relationships on for size:
Increase in mandated costs of labor goes up. The costs of labor is a cost used to determine the price of a product. The price of the product must go up if A) the market can bear it or B) the costs must go down if the market won't bear price increases. Unempolyment rates are high, so increased prices won't work. One way to trim costs, and therefore maintain marketshare is to trim the workforce. Don't worry, executives, middle management AND the lowest rung employees all get whacked.

Seems more connected than the rooster and the sun to me.

So, still not enough to convince you that they're not related? I know in another marathon comment, I had two links - one going to a list showing each state's minimum wage. Another link showed each states unemployment rate. They completely mirrored each other. The highest minimum wage states had the highest unemployment! No rocket science needed here... No shoes causing headaches or roosters making sunrises. More like gravity causing objects to fall.

TarrantLibertyGuy said...

Hey, why don't we just mandate a wage of $150,000 a year? Surely all boats would rise in that tide!!

JihadGene said...

In California it is $8 an hour. That's why my wife and I put in so many hours in our store. To keep our operating costs down. I have a few part time employees only.

Dr Ralph said...

For this to have any hint of correlation, we have to know where those minimum wage jobs are. Food service, hospitality industry, retail, child care -- this are traditionally where most minimum wage jobs are.

Where have the biggest job loses been? Manufacturing, construction, agriculture, business services. With the possible exception of agriculture, none of these fall into "minimum wage" job sectors.

Your pet theory doesn't hold water.

If there's no work, it doesn't matter how low the minimum wage is.

Jay@Soob said...

You're taking the minimum wage to the extreme and arguing from that vantage point. Consider the abolishment of the minimum wage and the consequences. I'm all for it so long as WS and Tarrantlibertyguy are willing to shell out their own income to cover the increase in welfare and healthcare costs. Not to mention the increase in municipal provisions to deal with increased crime as shantytowns spring up around various urban centers round the country.

I think two somebodies need to visit India, Zimbabwe, Somalia, North Korea or some of the other paradise's that maintain zero minimum wage.

Minimum wage needs to be limited but bot abolished. My two cents.

Heath said...

First line of this blog:
"Women, minorities, continue to be hardest hit."

First line of article to which that line is linked:
"The current recession is hitting workers in just about every industry, but men are taking a much bigger hit than women."

Ummm.... what?

The Whited Sepulchre said...

Heath,
You got me there !
I've read and written that phrase so many times, it's become a habit.

Steven said...
This comment has been removed by a blog administrator.
The Whited Sepulchre said...

Jay,
Let's focus first on Zimbabwe. Last year their government was seriously considering a minimum wage of Z$100 billion per hour.

Any time your government can print that much money, I believe we can both agree that you have bigger problems than pegging the minimum correctly. We're talking a 300,000 % inflation rate.

http://www.afriquejet.com/news/africa-news/zimbabwe-mulls-z$100b-minimum-wage-200806035706.html

TarrantLibertyGuy said...

The reason why his pet theory holds water in light of what you say is that most of the union jobs that are evaporating in Detroit and Akron. True...I'm assuming, I haven't read about specific geos and exact job types - but I assume we're talking rust belt bolt tightener-jobs. As you know, the UAW has to start from SOMEWHERE for their wage increases. And where does it start? You guessed it.

And to Jay - My pet peeve to any argument regarding anything like this is "Well, you better be prepared for all the welfare you'll dole out!" AAAANK (buzzer)! First, the amount of people paying rent, feeding and clothing families (even the proverbial single mom) on minimum wage is almost non-existant. However, there are instances where a teen may take a job to help pay for a family's expenses. NOW, since that minimum wage job has gone away - they'll like just be worse off, but not still go on welfare.

Steven said...
This comment has been removed by a blog administrator.
Dr Ralph said...

TGL: I thought we were talking minimum wage jobs? Union bolt tightener-jobs are *not* going to be minimum wage (one of WS's other rant topics).

How does this have *anything* to do with the original premise?

The Whited Sepulchre said...

Doctor,
I'm kinda in a rush here, but I think what we're looking at is Bastiat's "Things Seen And That Which Is Not Seen".

We know we now have a higher than usual teenage unemployment rate. From which industry? Well, it's hard to tell what woulda happened without the minimum wage, the current goofiness going on in D.C., the looming healthcare debacle, etc.

One other thing to throw into this mix. Many government contracts and many union contracts state that workers must be paid at least a specified multiple of the minimum wage. (Imagine going to a car repair place and DEMANDING that you pay far more than necessary. It's one of many reasons why govt spending is such a waste.)

The number of adults who make minimum wage for any length of time is a very, very small % of the workforce. The number of union and govt contract workers is relatively large. Guess which group gets wage legislation done?

P.S. - I still owe you a reply on my previous union monopoly post. I finessed it while drinking Leninade with Denny.

Dr Ralph said...

WS - you nailed my key point: it's impossible to know how much the minimum wage contributed to teen unemployment given the current goofiness.

To decide the minimum wage is *the* correlation here seems a leap of faith (but I understand this is a matter of religion belief for you).

PS: I still want to know where to get that Leninade. Can you convince Pop's to start carrying it?

Stephen M. Smith said...
This comment has been removed by the author.
Stephen M. Smith said...

Generally speaking, when something is more expensive I buy less of it. That's not a definitive proof, of course, but that's the way the smart money bets nonetheless. Everyone seems to understand this concept (more expensive = less consumption) well enough when they talk of raising taxes on things like cigarettes and carbon emissions.

I'm not sure I understand why the demand for labor should be so inelastic as to be indifferent to increases in the minimum wage. Can someone explain? Thanks...

Browncoat Libertarian said...

Seems to me that Doc overlooked/ignored JihadGene's comment that completely demonstrates "the" correlation. Either that, or he just can't grasp the cost-of-labor/price of goods/affect on demand correlation that Mr. Smith mentions. Must be that Fine Arts education at work. (The fine-arts jab: THAT was a fallacious argument, Doc, i.e. ad hominem)
;^)