Tag Archives: Unemployment

News

Fast-food walk out ignores basic economics: minimum wage hike creates unemployment

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Investors Business Daily explains what’s wrong with the plan of fast-food industry workers to strike for higher wages.

Excerpt:

Egged on by unions, fast-food workers plan to strike in dozens of U.S. cities for much higher wages. Sadly, they’re being used to do something that’s not in their own interests.

Sensing the time is ripe, the Service Employees International Union and union-funded front groups are organizing a walkout of workers at fast-food joints in about 100 cities to protest how tough it is to live on the federal minimum wage of $7.25 an hour.

They’d like that nearly doubled to $15 — and not just for fast food, but retailing and other industries too.

Sounds great. But even by the loopy logic of the left, this is economic insanity and would lead to greater misery, fewer jobs and fewer opportunities for all.

That’s not just our opinion. Economists David Neumark and William Wascher, in their comprehensive book “Minimum Wages,” looked at virtually all the scholarly and statistical evidence worldwide, digging up literally dozens of studies.

Their finding: Minimum wage laws almost always result in a “reduction in employment opportunities for low-skilled” employees while limiting “skill acquisition by reducing educational attainment and perhaps training, resulting in lower adult wages and earnings.”

And, they said, it reduces the total amount of human capital — a huge cost to society.

The minimum wage is so devastating that roughly 85% of all economists in a recent survey — from both the left and the right sides of the spectrum — said they think it’s a bad idea.

[…]The idea that working families depend on these jobs is false. Most of those working for minimum wage are young, ages 16 to 24. They live in middle-class homes with above-average household incomes.

And as James Sherk of the Heritage Foundation notes, two-thirds of minimum-wage earners get a raise in their first year. This is how they learn to show up, work hard and get along with others — valuable life skills young people acquire as they begin work and the very things that will make them a success later on.

A higher minimum wage would cost young workers jobs and opportunities. They’d be wise to ignore the unions’ siren song of higher wages for nothing.

From Investors Business Daily, an article by famous economist Thomas Sowell has more on this issue.

Excerpt:

Switzerland is one of the few modern nations without a minimum-wage law. In 2003, the Economist magazine reported: “Switzerland’s unemployment neared a five-year high of 3.9% in February.”

In February of this year, Switzerland’s unemployment rate was 3.1%. A recent issue of the Economist showed Switzerland’s unemployment rate as 2.1%.

Most Americans today have never seen unemployment rates that low. However, there was a time when there was no federal minimum-wage law in the United States.

The last time was during the Coolidge administration, when the annual unemployment rate went as low as 1.8%. When Hong Kong was a British colony, it had no minimum-wage law. In 1991 its unemployment rate was under 2%.

[…]Most people in the lower income brackets are not an enduring class. Most working people in the bottom 20% in income at a given time do not stay there over time. More of them end up in the top 20% than remain behind in the bottom 20%.

There is nothing mysterious about the fact that most people start off in entry-level jobs that pay much less than they will earn after they get some work experience.

But when minimum-wage levels are set without regard to their initial productivity, young people are disproportionately unemployed — priced out of jobs.

In European welfare states where minimum wages, and mandated job benefits to be paid for by employers, are more generous than in the United States, unemployment rates for younger workers are often 20% or higher, even when there is no recession.

Unemployed young people lose not only the pay they could have earned but, at least equally important, the work experience that would enable them to earn higher rates of pay later on.

Minorities, like young people, can also be priced out of jobs. In the United States, the last year in which the black unemployment rate was lower than the white unemployment rate — 1930 — was also the last year when there was no federal minimum-wage law.

Inflation in the 1940s raised the pay of even unskilled workers above the minimum wage set in 1938. Economically, it was the same as if there were no minimum-wage law by the late 1940s.

In 1948 the unemployment rate of black 16-year-old and 17-year-old males was 9.4%. This was a fraction of what it would become in even the most prosperous years from 1958 on, as the minimum wage was raised repeatedly to keep up with inflation.

A survey of American economists found that 90% of them regarded minimum-wage laws as increasing the rate of unemployment among low-skilled workers.

Harvard University economist Greg Mankiw puts the level of opposition to minimum wage hikes at 79% among professional economists across the ideological spectrum.

Learn economics for Christmas

By the way, if you’re looking for a really good drama that shows the business-owner vs union-leader conflict, I really recommend the BBC production of North and South. It’s a beautiful period drama that’s based on a Christian woman’s novel. The author of the book wrote in the time of Charles Dickens, and he even named the book for her. It’s rated 8.7/10 on IMDB. It’s $19.99 on Amazon, although it sometimes goes lower than that! A great way to communicate basic economics to your liberal spouse or significant other – especially on this minimum wage issue. Oh, apparently there is a love story in it, but I didn’t really pay any attention to that part of it, other than to be pleased that there was no sex or nudity at all – not even kissing! Perfect! This DVD is WK-approved. It is also Dina-approved, because she was the one who suggested it to me.

Just to give you an idea of how much I liked it, I tried watching Downton Abbey and stopped after two episodes. It’s boring nonsense. But North and South I rated 9.5/10 and could not stop watching it once I started. There are no wasted scenes, no fluff at all. Everything they did worked to develop the theme of the story. How different it is from the garbage they have in theaters today! The presentation of capitalism is absolutely heroic, and yet the union side is presented sympathetically as well. Of course, if you want to read an economics book instead, then just get Thomas Sowell’s “Basic Economics“. One of my friends (Letitia) is actually reading that now.

News

Solar energy firm leaves behind toxic mess after wasting millions in stimulus funding

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Dad sent me this article about the Democrat energy policy from Fox News.

Excerpt:

A Colorado-based solar company that got hundreds of millions of dollars in federal loan guarantees before going belly-up didn’t just empty taxpayers’ wallets – it left behind a toxic mess of carcinogens, broken glass and contaminated water, according to a new report.

The Abound Solar plant, which got $400 million in federal loan guarantees in 2010, when the Obama administration sought to use stimulus funds to promote green energy, filed for bankruptcy two years later. Now its Longmont, Colo., facility sits unoccupied, its 37,000 square feet littered with hazardous waste, broken glass and contaminated water. The Northern Colorado Business Report estimates it will cost up to $3.7 million to clean and repair the building so it can again be leased.

“As lawyers, regulators, bankruptcy officials and the landlord spar over the case, the building lies in disrepair, too contaminated to lease,” the report stated.

[…]One of the hazards is the presence of cadmium, a cancer-causing agent that is used to produce the film on the solar panels, the report said.

[…]”If a coal, oil or gas company pulled something like that the EPA would send out SWAT teams and the U.S. Marshals to track down the offenders, bankrupt or not,” the center said in a report of its own.

President Obama touted Abound in a July 3, 2010 announcement of a $2 billion “investment” in green energy projects.

Here’s another trustworthy promise from Dear Leader:

“The second company is Abound Solar Manufacturing, which will manufacture advanced solar panels at two new plants, creating more than 2,000 construction jobs and 1,500 permanent jobs,” Obama said. “A Colorado plant is already underway, and an Indiana plant will be built in what’s now an empty Chrysler factory. When fully operational, these plants will produce millions of state-of-the-art solar panels each year.”

But less than two years later, the company laid off half of its 400 workers, and then, in the summer of 2012, filed for bankruptcy. It became the third clean-energy company to seek bankruptcy protection after receiving a loan from the Energy Department under the economic stimulus law. California solar panel maker Solyndra and Beacon Power, a Massachusetts energy-storage firm, also declared bankruptcy. Solyndra received a $528 million federal loan, while Beacon Power got a $43 million loan guarantee.

Why did Abound Solar get these loans? Because they had connections in the Democrat Party – that’s why.

Excerpt:

Abound Solar further claims $260 million in private investments, part of which came from billionaire medical heiress Pat Stryker’s Bohemian Companies.  This is where the story gets interesting.

Thanks to Independence Institute investigative reporter Todd Shepherd, we still have access to the Web page that lists Bohemian as an investor even though it does not appear on the company’s current Web site. The exact amount that Stryker has given is not public at this time.

[…]Forbes lists medical heiress and founder of Bohemian Companies/Foundation Pat Stryker as number 331 of its top “400 Richest People in America.” Worth $1.3 billion, the Fort Collins resident could single-handedly fund Abound Solar and still be well above the poverty line.

While some of her fortune has gone to Abound Solar, she also has chosen to donate more than $2.2 million (probably a low figure) to Democrats and their causes over the last several election cycles. Beneficiaries include Barack Obama, one-term Congresswoman and Fort Collins resident Betsy Markey, and Interior Secretary Ken Salazar when he successfully ran for U.S. Senate in Colorado.

The Washington Examiner published e-mails showing that the White House was directly involved in granting loans.

Excerpt:

Previously undisclosed emails made public today by the House Oversight and Government Reform Committee describe multiple instances of White House pressure on career Department of Energy officials to speed up approval of government loans to clean energy firms like Solyndra and Abound Solar.

President Obama is described in one of the emails as having personally approved “moving it ahead,” thus reversing a prior decision by DOE career officials not to extend $2 billion in tax-funded help to AREVA, a French nuclear power company, on an Idaho project.

[…]In another email made public today by the House panel, Silver instructed McCrea to tell a Treasury Department official of White House support for DOE help to Abound Solar.

“You better let him know that WH wants to move Abound forward. Policy will have to wait unless they have a specific policy problem with abound,” Silver said in the June 25, 2010, email.

Abound Solar is a Colorado-based solar panel manufacturer that had used $68 million of a $400 million DOE loan guarantee before filing for bankruptcy earlier this year.

Obama had to pay back his friends who got him elected. He used YOUR MONEY and YOUR CHILDREN’S MONEY to do it. Doesn’t that cause you any alarm? And this was done under the rubric of “stimulating” the economy.

You can see a list of other Obama administration green energy failures here.

Commentary

Women earned more doctoral and Master’s degrees than men in 2012

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Women now earning majority of graduate degrees
Women now earning majority of graduate degrees

From the American Enterprise Institute Ideas blog.

Excerpt:

The Council of Graduate Schools (CGS) released its annual report recently on U.S. graduate school enrollment and degrees for 2012, and here are some of the more interesting findings in this year’s report:

1. For the fourth year in a row, women in 2012 earned a majority of doctoral degrees. Of the 67,220 doctoral degrees awarded in 2012 at U.S. universities, women earned 34,761 of those degrees and 52.2% of the total, compared to 31,830 degrees awarded to men who earned 47.8% of the total (see top chart above).

[…]2. By field of study, women earning doctoral degrees in 2012 outnumbered men in 7 of the 11 graduate fields tracked by the CGS (see top chart above)

[…]3. The middle chart above shows the gender breakdown for master’s degrees awarded in 2012, and the gender disparity in favor of females is significant – women earned just under 60% of all master’s degrees in 2012, which would also mean that women earned 146.9 master’s degrees last year for every 100 degrees earned by men.

[…]Women represent 58.5% of all graduate students in the U.S., meaning that there are now 141 women enrolled in graduate school for every 100 men.

Click here for the charts.

The author of the post, Dr. Mark Perry, concludes this:

MP: Here’s my prediction – the facts that: a) men are underrepresented in graduate school enrollment overall (100 men were enrolled in 2012 for every 141 women), b) men received fewer master’s (40.5% of the total) and doctoral degrees (47.8% of the total) than women in 2012, and c) men were underrepresented in 7 out of 11 graduate fields of study at both the master’s and doctoral levels last year will get no attention at all from the media, universities and anybody in the higher education industry.

Additionally, there will be no calls for government studies, or increased government funding to address the significant gender disparities in graduate schools, and nobody will refer to the gender graduate school enrollment and degree gaps favoring women as a problem or a “crisis.”  Further, neither President Obama nor Congress will address the gender graduate enrollment and degree gaps by invoking the Title IX gender-equity law, like they have threatened to do for the gender gap in some college math and science programs. And there won’t be any executive orders to address the huge gender disparity in graduate schools by creating a White House Council on Boys and Men like the executive order issued by President Obama in 2009 to create the “White House Council on Women and Girls.”  Finally, despite their stated commitment to “gender equity,” the hundreds of university women’s centers around the country are unlikely to show any concern about the significant gender inequities in graduate school enrollment and degrees, and universities will not be allocating funding to set up men’s centers or create graduate scholarships for men.

Bottom Line: If there is any attention about gender differences in the CGS annual report, it will likely be about the fact that women are a minority in 4 of the 11 fields of graduate study including engineering and computer science (a gender gap which some consider to be a “national crisis”), with calls for greater awareness of female under-representation in STEM graduate fields of study and careers (except for the STEM field of biology, where women areover-represented).  But don’t expect any concern about the fact that men have increasingly become the second sex in higher education.  The concern about gender imbalances will remain extremely selective, and will only focus on cases when women, not men, are underrepresented and in the minority.

Men outnumber women in business, computer science, engineering and physical sciences.

I echo Dr. Perry’s point, and want to add this. In traditional Christianity, men are responsible for providing for their families. One of the ways that we men prepare for this is by getting advanced degrees in STEM-related fields, since these fields are the hardest and also pay the best. So with that in mind, what does it mean for men who want to prepare for this provider role that there is this obvious discrimination against men in graduate schools and doctoral programs? Is anyone going to do anything to change policies and incentives to favor men, like they did when women were under-represented? Of course not. The only thing that will be done is to ignorantly urge men to “man up”, while ignoring the real problems, e.g. – a lack of male teachers, schools that are not geared to male learning styles, and so on.

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