Sunday, December 22, 2013

15 into 14; it won't go

If it is true, as was said in the Chamber of Deputies at the time of the French Revolution, that more evil has been done by poor logicians than by evil men intentionally, Seattle might soon see the unskilled labor market become a black market thanks to some with less than rigorous logic skills;
Studies by the Economic Policy Institute show that a $15 minimum wage would directly affect workers and indirectly benefit an additional the public in general. That’s a lot of people, the majority of the workforce and their families who would be more able to buy cars, clothing and food from our nation’s businesses.
  • An objection to a significant wage increase is that it would force employers to shed workers. Yet the evidence points the other way: Workers earn more and spend more, increasing demand and helping businesses grow.
  • Critics of raising the minimum wage also say it will lead to more outsourcing and job loss. Yet virtually all of these low-wage jobs are service jobs that can neither be outsourced nor automated.
  • Raising the earnings of all American workers would provide all businesses with more customers with more to spend.  Seeing the as Henry Ford did would redirect our country toward a high-growth future that works for all. 
Of course workers can only earn more, and then spend more, if they can first get jobs. Workers who cannot produce $15 in value--as consumers see it--won't have jobs at all, and their incomes will drop to zero (unless they work off the books).

Also, service jobs CAN be outsourced and automated. Anyone seen an elevator operator lately, or noticed the self-check out lanes at Safeway?

Henry Ford was only able to raise his workers wages because he found ways to raise their productivity first, to a level that could support those wages. He wasn't forced to do it by legislation, but by his own self-interest; he wanted the most productive workers working for him, not his competitors. The market, operating without interference, produced those high wages.

What is truly hilarious--if we ignore the potential human tragedies should 15in2014 get its way--is that for support, Jason Mercier of the Washington Policy Center is cited. Apparently ignoring that institute's motto; Improving lives through market solutions.


  1. I am inspired by the minimum wage. I propose an extension which will bring greater prosperity to every working person, eventually.

    Each month, the government will notify a different 1% of those who work for a salary. They will be required by law to demand a 15% raise. There will be no requirement that the employer meet that demand, but they cannot continue in that job if the employer refuses to pay the full raise.

    People who lose their jobs cannot work in the same industry unless they receive the higher required salary, but they can make any deal they want in a different industry.

    My theory is that people are timid (especially women) about asking for what they are worth, and employers are stingy about paying people their true value. Really, doesn't everyone deserve a 15% raise? At worst, each month less than 1% of salaried workers would lose their jobs, and the rest of that 1% would enjoy an immediate and welcome boost in income. Tax revenues would go up.

    It's only 1% of workers each month, but the new salaries would show others what they could bargain for, and salaries would probably go up throughout the industry to meet the new standard.

    ( Yes, this is sarcasm, but think of it. Everyone could enjoy the possiblity of a government mandated wage requirement, not just those at the lowest wages. Do you enjoy the thought of maybe receiving that help from the government? If not, then why should the low-wage worker enjoy that help? )


    1. Even simpler, the Dept of Labor could be required to, once a year, provide an Opportunity Cost assessment for every employed American. Should be a simple thing to do in the internet age.

      A standard form listing your age, occupation, education, years of experience, relevant skills, zip code.... Then the DoL could provide each worker with his next three best options for increasing his income.

  2. I was able to use the EPI's numbers to confirm my previous estimates on the number of jobs lost due to MW hikes.

    1. Yes, I saw that post. And you were prescient to say, 'Sadly, I don't doubt that we will have a chance, eventually, to test the theory again, with low wage workers as the test subjects.'