Wednesday, January 23, 2019

Economics = Math x Common Sense

Go read McThag's crayon-on-napkin simple and clear explanation of why minimum wage laws are both wrong, and stupid, based on bog-simple cause and effect. This time from the Florida perspective.

Seriously, even Democrats should be able to follow such a blisteringly simple exposition.
(They'll still fail the pop quiz on it in a week, but that's from short attention span problems, not a deficit in their basic ability to grasp something, however fleetingly.)

When you ratchet the price of labor up, you drive the cost of the product up. This drives demand for it down. And it doesn't force businesses to sell things for less, it forces them to fire more workers, until they reach the nirvana of no employees, or as nearly as they can come to achieving that goal, to bring costs back down and recapture the lost demand of higher wages for a zero-value entry-level McJob.

$15/hr x 0 hours/wk = $0/wk.

Well-played, SJW retards. Good luck finding a $15/hr job with zero marketable skills.

And btw, this is true for all entry-level employment.
I've run into 100-hr EMT wunderkinds who cannot grasp their location on the medical employment totem pole hierarchy, and haven't figured that when the demand is $15/hr, the response will be to make EMT-Paramedic the entry level training required standard just to get into the field, and/or push all those jobs over to the public sector, as the only entity that can afford them, which will screen out white males at a 100% ratio in preference for box-checking diversity hires.
And if you don't think your jobs driving an ambulance will be replaced by guys driving for Lyft and Uber, neither you nor the cab drivers' local have been paying attention.
Some guy named Habib or Julio will get the same EMT card, and undercut you and your wages, and there'll be fuck-all you'll be able to do to stop it.
(Except apply at Lyft or Uber for their soon-to-be-announced medical transport category, which $15/hr wages and the consequent caterpillar motion of the entire wage chain will drive, exactly like all rising tides do.)
The days of walking in and getting a job will be over forever, and apprenticeship, tools, and actual skills will be required for everything.
What's that look like?
Google the unemployment rate in France.
Then look at their productivity per capita.
This sort of socialistic happy-gas is how you strangle an economy.
And when there's less actual workers, the gravy train of unemployment dries up faster and faster, like a drought in a desert.
On a macro scale?
You're about to learn the lessons your grandparents tried to teach you.


Anonymous said...

Yep. Already seeing it in Albuquerque and Santa Fe with their minimum wage laws of $12/hr.

It jacks the price of a fast-food meal to the same as a decent bar and grill meal. So, as the consumer, do I go to the fast-food joint and order a meal of mystery food made from unknown ingredients, served to me in a paper bag tossed on the counter by bored-looking help? Or do I spend roughly the same amount of money and go to a neighborhood bar and grill and order off a menu with my food cooked to order and served to me by a pretty, flirtatious waitress?

I could rant for hours on minimum wage laws and how inefficient and unfair they are, but it would just be preaching to the choir here.

Bear Claw Chris Lapp said...

They are trying to keep up with the inflation they say does not exist.

Stealth Spaniel said...

This sword cuts a lot of different ways, and the Dumocrats are too stupid to realize that a double sided blade does just that. Last summer, I drove for Lyft. Fun job, good people, but the money you make is up to you. Sit around waiting for that big ticket ride to the airport or take those $7 fares to the grocery store. What most of the public is unaware of, is how many seniors drive for Uber and Lyft. Where else can you go through a benign process to get authorized, and then make as much money as you want? And no one gives a SXXT how "old" you are either. I can tell you-not many employers like that. I know of one lady, 78 yro, driving her Prius every damned day. She is neat, clean, professional, and is a good transporter. She also NEEDS her job to make ends meet. This woman makes terrific tips because she isn't a 19yro asshole-and they don't last long. I'd hate to see AOC bring her $15 an hour crap to drivers: everyone would be back in cabs.

ADS said...

Not mentioned in your piece is the additional disincentive to medium-skilled workers. If you can earn $15/hr dinking around on a cash register or $16/hr running lathes in a factory, only a very few highly motivated individuals would choose the harder, dirtier, more stressful job. Many of these positions are already left empty due to 40 years of wage stagnation (and many other factors which don't warrant me commenting in this post). $15 federal minimum hourly wage would destroy mid-level trades.

Drake's Place said...

Robots already being used in supermarkets and big box stores instead of those "early learning" jobs for teens, etc. Why be forced to pay a $15 minimum wage, carry liability insurance, etc on "human" employees when Robots will do the job? Does The Left ever bother to think ahead far enough to potential negative impact or just rush in like fools? I's a rhetorical question. Very good post.

AB.Prosper said...

Someone who has a mid level trade who cannot afford a one bedroom apartment isn't going to make for much of an economy.

According to a mid tier one bedroom apartment in Olathe Kansas is around $700 or so dollars a month . Now back in the 80's a person was expected to make 4x the monthly rent to qualify which is 2800 US . So your hypothetical lathe worker won't even qualify for an apartment unless he gets a significant raise and raises are few and far between for most workers. Maybe after a year the guy can't rent an apartment. Some economy that

This kind of suggests there is no incentive to try and do better nor much ability to start a family which baring state support adds several thousand a year to the cost of living

Now in modern terms its 3x the amount so he will barely qualify, barely and won't have jack all left after taxes and utilities.

And no lowering taxes ain't going to do this. All the tax income goes to medical, military and old age pensions. The rest is borrowed.

You can't cost cut you way out of it. Cost of living down, wages up or both otherwise you can look forward to a poverty nation and all the delights of the 3rd world.

All this tells me that the cost of housing vs wages is jacked to hell and back. A skilled person who can't get by is little better than a slave and such a person is wise to wonder of the state won't be kinder to him or her. Hell the ojnly reason the Democrats don't have total control is they are stupid. You can't count on the other guys stupidity forever

Now getting rid of illegals and migrants of all stripes will reduce housings costs but unless either the cost of living goes way down or wages up, look forward to President Cortez or an American Maduro or a civil war you may well lose

AB.Prosper said...

Does the Right either. If wages keep going down and jobs keep getting scarce who is going to buy the goods and how are they going to start families?

The total fertility rate is well below replacement even among Hispanics. If your business model or society depends on people having babies, you don't have a future other than an Amish, Somali or in smaller numbers Evangelical or LDS . Is that what people want?

And before you suggest it this is not a moral or demographic issue , the population declines in the 1930's and the 70's and onward (with one year above replacement during this period) have radically different demography, technology, religiosity . One thing they all have in common is the economy was in decline in every single year

This is common to one degree or another in every single developed nation too.

Modernity is expensive and people having kids depends less on the moral culture and more on stable work with an adequate income If this means wages don't go up or somehow the cost of living down, and tax cuts won't cut it, than you can have low fertility forever

In modernity, no money. No babies.

AB.Prosper said...

Since I'm ranting, its accurate the true minimum wage is zero, its also true the value of the life of anyone who is not tribe is also zero.

Rights simply do not exist in any form and while the presence of a creator or creators or arguable, anyone with the slightest knowledge of history would find the idea that they are divinely ordained as the Founder thought as risible

The Left is correct in noting that human societies live mostly by social contract , that is the rules unwritten and written by which society works . God has nothing to do with these nor can you claim spite and envy, a common and normal human emotion is sinful or evil.

If you anger your neighbors enough they will kill or enslave you , this is humane nature and you can't avid it.

This conundrum should suggest to you that unless you want people to vote Socialist and put in President Cortez or worse than there had better be a good reason for them not too.

Better Red than Unfed even if it ends up impoverishing everyone, as Solzenitzen noted , spite is the last emotion to go

Domo said...

"Someone who has a mid level trade who cannot afford a one bedroom apartment isn't going to make for much of an economy. "

When did poor people living alone become a thing?
Get a two or three bed and room mates.

AB.Prosper said...

Domo,people with a trade are not poor and are not supposed to live like poor college students in our society. We also have a GDP just under 20 trillion dollars. Are you honestly saying we can't pay people enough for them to live well or that the US should encourage skilled people to live in poverty

In modernity if they are going to end up living as they are poor well into their 30's and or saddled with debt , why bother trying to get ahead? Its better to just drop out smoke weed and play X-Box which a lot of people are doing right now.

Anyway if you can't afford an apartment you can't afford kids. If both parents have to work to pay for the kids, the State or daycare ends up raising the kids . Are these the results you are trying for?

And no we don't live in the kind of society where religious pressures will ensure a steady population of new suckers to serve as cheap labor and people for the elite to manage. The TFR is currently well below replacement and at current rates it can go lower, reach German levels or lower.

Experts such as they say this is coming soon and in fact right now White fertility in the US is lower than Sweden and only a tiny but above Germany. It can go lower, Japan lower.

Worse our health and longevity outcomes are poor. Despite immigration and a larger population our birth rate is at an all time low in babies per 1000 population and life expectancy dropping.

This is Russia in the 90's die off. Again is that the outcome you want? And while yes Russia got a strong seemingly nationalist leader and more religious it hasn't recovered. Its life expectancy is better and fertility up a tad but its still in a death spiral

Poland for example recently declared Christ its king and its both increasingly religious and nationalist. Its TFR is 1.37

This tells me there is not a moral crisis anywhere but an economic one. In the US its caused by high cost of living especially rents and low wages and for some college debt

Lower taxes can compensate and for the middle and working would be a relief but it can't make up the difference from wage arbitrage.

In modernity unless they have good wages and job security, they don't have children period. Worse once a modern society spends too long at low fertility, it never recovers. Ever.

Id this the desired outcome. Maybe for the Malthusian Left but people who want more fellow citizens, workers and consumers and who claim to be pro life sure don't do much to ensure the conditions so people can live

"Just be poor so I can have low wages" will be met with a hearty "Go Eff Yourself" and justly

Now I am not saying the minimum wage needs to go up or we need to do something as stupid like Oregon having state wide rent control but if wages keep falling relative to cost of living and inequality keeps growing, the result will be more Communists in office and worse simply less people being born every year.

Find a way to get wages up a lot or reap consequences you really won't like.

Domo said...

I am semi skilled (none qualified accountant)
I have housemates, but do own the house.
My biggest single expense is taxes,
Just the easily identifiable are over £700pcm.
Stop taking that off me every month and I'll start knocking out kids.
Government is the reason the middle classes have stopped having kids
It was(is) the reason in Russia too