Tag Archives: Minimum Wage

News

Will raising the minimum wage cause job creators to lay off employees?

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Basic economics: when you raise the price of something, people buy less of it
Basic economics: if you raise the price, then people will buy less of it

Right now, all the candidates for President from the Democrat party are competing with one another to see who can buy the most votes using taxpayer money. One popular Democrat policy to buy votes is to raise the minimum wage. Democrats reason that minimum wage increases are great, because workers will have more money to buy stuff. What could go wrong?

Well, I want to talk about this policy from a theoretical point of view, then give an example of how it works in practice.

Abstract from a National Bureau of Economic Research study:

We estimate the minimum wage’s effects on low-skilled workers’ employment and income trajectories. Our approach exploits two dimensions of the data we analyze. First, we compare workers in states that were bound by recent increases in the federal minimum wage to workers in states that were not. Second, we use 12 months of baseline data to divide low-skilled workers into a “target” group, whose baseline wage rates were directly affected, and a “within-state control” group with slightly higher baseline wage rates. Over three subsequent years, we find that binding minimum wage increases had significant, negative effects on the employment and income growth of targeted workers.

[…]Over the late 2000s, the average effective minimum wage rose by 30 percent across the United States. We estimate that these minimum wage increases reduced the national employment-to-population ratio by 0.7 percentage point.

That comes out to 1.4 million workers who lost their jobs, thanks to minimum wage mandates.

Why does it hurt young and unskilled workers most? Because those workers don’t produce as much as older, more experienced workers. So, if all the salaries go up, employers keep the most experienced employees and lay off the youngest, and least experienced employees. This is why the youth unemployment rates of socialist countries in Europe are so much higher than the overall unemployment rate. And just to be clear, minorities are disproportionately harmed by minimum wage laws, since they are the ones who are often trying to move up through those entry-level jobs.

Here’s an example of how this works in reality, from San Francisco, a Democrat-run city.

ABC News reports:

San Francisco’s minimum wage is currently $11.05 an hour. By July of 2018, the minimum wage in San Francisco will be $15 an hour. That increase is forcing Borderlands Bookstore to write its last chapter now.

[…]Borderlands was turning a small profit, about $3,000 last year. Then voters approved a hike in the minimum wage, a gradual rise from $10.75 up to $15 an hour.

“And by 2018 we’ll be losing about $25,000 a year,” he said.

It’s an unexpected plot twist for loyal customers.

“You know, I voted for the measure as well, the minimum wage measure,” customer Edward Vallecillo said. “It’s not something that I thought would affect certain specific small businesses. I feel sad.”

That was in 2018, but strangely enough, Democrat voters haven’t learned their lesson. They still think you can vote people more money, and not ask where the money is coming from.

Shawn sent me this story about Seattle, another Democrat-run city.

Excerpt:

Restaurants Unlimited, a Seattle-based chain with restaurant locations in 47 US cities, announced on Sunday it was seeking Chapter 11 protection, citing “progressive” wage laws.

The company, which has operated since the Lyndon Johnson Administration, said rising labor costs—part of a national trend of government-mandated minimum increases—were part of its decision.

“Over the past three years, the company’s profitability has been significantly impacted by progressive wage laws along the Pacific coast that have increased the minimum wage,” Chief Restructuring Officer David Bagley said in court filings, The Seattle Times reports. “As a large employer in the Seattle metro market, for instance, the company was one of the first in the market to be forced to institute wage hikes.”

[…]BLS data show that New York City experienced its sharpest decline in restaurant jobs since 9/11 following its passage of a $15 minimum wage law. In California, a local newspaper recently detailed how an entire business district virtually disappeared following the city’s aggressive minimum wage push.

Restaurants Unlimited’s announcement came a day before the Congressional Budget Office released a report estimating that a House bill designed to raise the federal minimum wage to $15 an hour would cost 1.3 million jobs.

Now, you might say to me “But Wintery, Democrats are the party of the little guy, why would they vote for something that would leave workers unemployed?” And there are two answers to that. First, Americans who work for a living tend to not look to the government for support. Second, Americans who work for a living tend to dislike when their taxes are raised to pay for people who aren’t working. Democrats are the party of higher taxes and bigger government. They always oppose letting people keep what they earn, and they always want the government to take free market solutions to health care, etc. so they can use the provision of health care to buy votes. So for them, kicking 1.3 million people out of work is a benefit.

When it comes to economics, we know what works. Trump cut taxes, and unemployment for all races is at a record low. If you want to reverse that, and have more people unemployed, living off taxpayer’s, then vote for Democrats.

News

Voting rights for terrorists and rapists, death penalty for unborn babies up to 9 months

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Boston Marathon terrorist about to place bomb behind 8-year-old child

Wow. It seems to me that the Democrats had a pretty good chance of competing against Trump in the 2020 election, with their presumed nominee, Bernie Sanders. He’s wildly popular with young people. He’s raising tons of money from rich progressives. All Bernie has to do is just not say anything crazy, and he’ll be competitive. Unfortunately, he can’t control himself.

Here’s a report from the radically-leftist Boston Herald:

U.S. Sen. Bernie Sanders says the right to vote should extend to those in jail — even the Boston Marathon bomber.

“If somebody commits a serious crime — sexual assault, murder — they’re going to be punished,” Sanders said in his CNN town hall talk Monday night. But, “I think the right to vote is inherent to our democracy. Yes, even for terrible people.”

The majority of convicted criminals would vote Democrat if they could, because Democrats are less strict on crime than Republicans. Democrats are always looking to allow more people who will vote Democrat to vote. They want to lower the voting age, because young people who don’t pay taxes naturally vote for free stuff. And they also want to import low-skilled immigrants and put them on a path to citizenship. Low-skilled immigrants pay less into the system than they use in education, health care, etc. They also vote Democrat.

Medicare for All

Bernie also has a long list of big spending programs, because he thinks that $22 trillion in debt and trillion dollar deficits is no big deal. But the truth is, we’re already out of money for the big social welfare programs that Democrats already passed. We certainly don’t have money for any new ones.

Far-left CBS News explains:

Social Security is on a path to become insolvent in 2035, with only enough money cover about 80 percent of its obligations.

Medicare would become insolvent even sooner, by 2026, if no changes are made to payroll taxes or how health providers are paid.

[…][M]any Democratic presidential candidates are calling for expanding Medicare benefits — even proposing “Medicare for All” — rather than addressing the program’s worsening finances.

How will Democrats pay for MORE spending when we can’t pay for the spending we already have? Tax increases won’t be enough, so they’ll have to nationalize private 401K retirement plans like other socialist nations have.

And what about Medicare for All? Well, they can just seize the money that’s being used to buy private health insurance now, and put everyone into a government-run single payer system. That’s what happens in Canada right now. People who pay taxes pay for the all the costs, but they still have to get in line behind those who don’t pay anything in taxes. The average cost (to middle-class taxpayers) is about $11,000 per year. That’s a lot more than people pay for private health insurance which delivers higher quality care. But the costs are higher for less quality, because the people who pay into the system are covering the people who don’t pay.

And remember, abortion through all nine months of pregnancy is taxpayer-funded in Canada’s single payer system. Pro-life taxpayers subsidize abortions. If you don’t like it, you can leave the country.

Infanticide

All of the Democrat presidential candidates support infanticide, according to this article from The Stream:

 On February 25, 44 Democrat senators, including all 6 declared presidential candidates, voted against the Born Alive Protection Act. Put another way, they voted for infanticide.

New candidate Pete Buttigieg is also in favor of infanticide: abortion through all nine months of pregnancy.

If you’re voting for a Democrat in 2020, then you’re going to get infanticide if they win. No use complaining later that you’re pro-life if you support the killing of viable unborn children who survive botched abortions.

Raising the minimum wage

Another policy supported by many Democrats is raising federal minimum wage rates.

Let’s take a look at a study reported  in the Daily Caller:

California’s minimum wage increase has cost the state thousands of jobs worth of growth in the state’s booming restaurant industry, according to a recent study by the University of California Riverside.

California passed a bill in 2016 to bring the state’s minimum wage up to $15 an hour. For businesses with more than 25 employees, the state’s minimum wage rose to $12 in January and will hit $15 in January of 2022. Other businesses have until 2023 before the full $15-an-hour minimum takes effect.

[…]Researchers also found that the minimum wage slowed growth more in low-income areas.

[…]Researchers estimate that the minimum wage increases will cost the state roughly 30,000 jobs from 2017 to 2022.

If you force businesses to pay workers more, them employers are left with no choice but to lay off workers, or cut hours.

Minimum wage jobs are entry level jobs. They’re not meant to allow people to buy a house, have children, or travel the world on private jets. People get them in order to get something on their resumes so that they can move up to more challenging jobs that pay more. If a person doesn’t want to move up to a more challenging job that pays more, then they shouldn’t be complaining that they can’t make the same life choices as software engineers, nurses and electricians. Jobs don’t all pay the same, because some are harder than others.

If voters chose candidates based on whether their policies would actually work to prevent poverty, they would never vote for Democrats. But so many people in America don’t vote based on what results policies will achieve. They vote in order to feel something about themselves. Transferring wealth from “rich” employers to “poor” minimum wage workers feels good. So they vote for it. And when those workers are laid off, they don’t care because they’ve already stopped paying attention.

Commentary

Five liberal Democrat policies that hurt minorities

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Marriage and Poverty
Marriage and Poverty

The five policies are:

  • higher minimum wage rates
  • opposition to school voucher programs
  • releasing criminals from jail
  • affirmative action
  • single mother welfare

This article is by Jason L. Riley, and it appeared in the Wall Street Journal.

Excerpt:

At the urging of labor unions, President Obama has pushed for higher minimum wages that price a disproportionate percentage of blacks out of the labor force. At the urging of teachers unions, he has fought voucher programs that give ghetto children access to better schools.

Both policies have a lengthy track record of keeping millions of blacks ill-educated and unemployed. Since the 1970s, when the federal government began tracking the racial achievement gap, black test scores in math, reading and science have on average trailed far behind those of their white classmates. And minimum-wage mandates have been so effective for so long at keeping blacks out of work that 1930, the last year in which there was no federal minimum-wage law, was also the last year that the black unemployment rate was lower than the white rate. For the past half-century, black joblessness on average has been double that of whites.

Last week the Justice Department said it would release some 6,000 inmates from federal prison starting later this month. The goal, according to the White House, is to ease overcrowding and roll back tough sentencing rules implemented in the 1980s and ’90s.

But why are the administration’s sympathies with the lawbreakers instead of their usual victims—the mostly law-abiding residents in low-income communities where many of these inmates eventually are headed? In dozens of large U.S. cities, violent crime, including murder, has climbed over the past year, and it is hard to see how these changes are in the interest of public safety.

The administration assures skeptics that only “nonviolent” drug offenders will be released, but who pays the price if we guess wrong, as officials have so often done in the past?

When Los Angeles asked the Rand Corp. in the 1990s to identify inmates suitable for early release, the researchers concluded that “almost no one housed in the Los Angeles jails could be considered non-serious or simply troublesome to their local communities” and that “jail capacity should be expanded so as to allow lengthier incarceration of the more dangerous.”

A 2002 federal report tracked the recidivism rate of some 91,000 supposedly nonviolent offenders in 15 states over a three-year period. More than 21% wound up rearrested for violent crimes, including more than 700 murders and more than 600 rapes. The report also noted the difficulty of identifying low-risk inmates. Auto thieves were rearrested for committing more than a third of the homicides and a disproportionate share of other violent offenses.

Keep in mind that when criminals are release, they don’t go move into wealthy progressive neighborhoods. It’s not the wealthy leftists elites who have to deal with the released inmates. It’s the poor, low-income minority neighborhoods that have to deal with them.

By the way, I covered the minimum wage argument here, and I covered the school choice argument here.

That covers the first 3 policies. This article from The College Fix covers the fourth policy, affirmative action.

It says:

A UCLA law professor critiques affirmative action as detrimental to the very people it strives to aid: minority students.

Professor Richard Sander, though liberal-leaning, has deemed affirmative action practices as harmful, a notion that contradicts a liberal view in college admissions, said Stuart Taylor, a nonresident senior fellow at the Brookings Institution.

[…]Sander began teaching law at UCLA in 1989. After a few years he garnered an interest in academic support and asked permission to analyze which strategies most effectively assist struggling students.

After reviewing statistics on performance, especially those of students with lower academic merit, he noticed correlations between race and academic success.

“I was struck by both the degree to which it correlated with having weak academic entering credentials and its correlation with race,” Sander said in a recent interview with The College Fix. “And as I looked into our admissions process I realized that we were giving really a large admissions preference.”

Sander noticed that students admitted into the law school with lower academic credentials than their peers had significantly lower percentages of passing the Multistate Bar Examination, Sander said. This especially pertained to minority students who were given special consideration in the admittance process due to their race rather than their academic preparedness.

He then began thinking about whether or not these students would have better chances of succeeding if they went to a less elite university, he said.

He called this discrepancy a mismatch; when minority students with lower credentials than their peers are accepted into more challenging universities and then suffer academically as a result.

And the fifth policy is welfare. Welfare encourages women to not marry the men that they have sex with, since they will lose their single mother benefits if they do. Children who are raised fatherless are more likely to struggle in a number of areas, and they are especially likely to be poor. What we should be doing (if we really want to help the poor) is paying people to get married and stay married. But Democrats are opposed to that. The connection between welfare, fatherlessness, poverty and crime is explained in a previous post.