Bob Weeks discusses the Kansas minimum wage on the KPTS public affairs television program Kansas Week, February 13, 2009.
Tag: Economics
It’s My Money — I’ll Bailout Myself!
From the Lone Star Times, economist Michelle Muccio appears in the video It’s My Money — I’ll Bailout Myself!
It’s funny how many people would rather keep control over their own money rather than sending it to Washington (and their state, county, city, and school district). Can people be trusted to spend their own money? The alternative is to let politicians and bureaucrats have control. Their record — just look at some of the things in the economic stimulus bill — is not good.
Kansas minimum wage
A group in Kansas is pressing for raising the state minimum wage. Will raising it help or harm low-wage earners? And are the policy goals — taken in their entirety — of the groups pressing for a higher minimum wage in the best interest of workers?
The great appeal of a higher minimum wage mandated by an act of the legislature is that it seems like a wonderfully magical way to increase the wellbeing of low-wage workers. Those who were earning less than the new lawful wage and keep their jobs after the increase are happy. They are grateful to the lawmakers, labor leaders, newspaper editorialists, and others who pleaded for the higher minimum wage. News stories will report their good fortune.
That’s the visible effect of raising the minimum wage. But to understand the entire issue, we must look for the unseen effects.
The not-so-visible effect of the higher wage law is that demand for labor will be reduced. Those workers whose productivity, as measured by the give and take of supply and demand, lies below the new lawful wage rate are in danger of losing their jobs. The minimum wage law says if you hire someone you must pay them a certain amount. The law can’t compel you to hire someone, nor can it compel employers to keep workers on the payroll.
The difficulty is that people with lose their jobs in dribs and drabs. A few workers here; a few there. They may not know who is to blame. Newspaper and television reporters will not seek these people, as they are largely invisible, especially so in the case of the people who are not hired because of the higher wage law.
If we are truly concerned about the plight of low-wage workers we can face some harsh realities and deal with them openly. The simple fact is that some people are not able to produce output that our economy values very much. They are not very productive. Passing a law that requires employers to pay them more doesn’t change the fact that their productivity is low. But there are ways to increase productivity.
One way to increase workers’ productivity is through education. Unfortunately, there is ample evidence that our public education system is failing badly.
Capital — another way to increase wages — may be a dirty word to some. But as the economist Walter E. Williams says, ask yourself this question: who earns the higher wage: a man digging a ditch with a shovel, or a man digging a ditch using a power backhoe? The difference between the two is that the man with the backhoe is more productive. That productivity is provided by capital — the savings that someone accumulated (instead of spending on immediate consumption or taxes) and invested in a piece of equipment that increased the output of workers and our economy.
Education and capital accumulation are the two best ways to increase the productivity and the wages of workers. Ironically, the people who are most vocal about raising wages through legislative fiat are also usually opposed to meaningful education reform and school choice, insisting on more resources being poured into the present system. They also usually support higher taxes on both individuals and business, which makes it harder to accumulate capital. These organizations should examine the effects of the policies they promote, as they are not in alignment with their stated goals.
Facebook Finds Stimulus Petition Ad Misleading
My blogger friend Blue Collar Muse reports on a disturbing development at the extremely popular social networking site Facebook. The post FaceBook Drops NoStimulus.com Ad After Complaints explains.
Financial crisis caused by government
Did the “excesses” of capitalism cause the current financial crisis? First, we really don’t have capitalism in the United States, at least not any reasonable semblance of laissez faire capitalism, as explained in my post The Myth that Laissez Faire Is Responsible for Our Present Crisis, based on the work of Professor George Reisman.
The Wall Street Journal article How Government Created the Financial Crisis: Research shows the failure to rescue Lehman did not trigger the fall panic explains more in these excerpts:
Many are calling for a 9/11-type commission to investigate the financial crisis. Any such investigation should not rule out government itself as a major culprit. My research shows that government actions and interventions — not any inherent failure or instability of the private economy — caused, prolonged and dramatically worsened the crisis. … The realization by the public that the government’s intervention plan had not been fully thought through, and the official story that the economy was tanking, likely led to the panic seen in the next few weeks. And this was likely amplified by the ad hoc decisions to support some financial institutions and not others and unclear, seemingly fear-based explanations of programs to address the crisis. What was the rationale for intervening with Bear Stearns, then not with Lehman, and then again with AIG? What would guide the operations of the TARP? … Massive responses with little explanation will probably make things worse. That is the lesson from this crisis so far.
Kansas minimum wage at issue again
In Kansas, some want the state’s minimum wage to rise to match the federal minimum wage. The Lawrence Journal-World reports on this in its story Lawmakers asked to increase state’s minimum wage.
This issue has been covered on the Voice For Liberty in Wichita in several articles:
Unintended But Foreseeable Harms of the Minimum Wage
Minimum Wage: Helpful? Or Not?
Problem of Low Wages Not Easily Solved
The Descent of The Good ColumnNoStimulus.com Effort Crosses 200,000 Petitions
Here’s a press release from Americans For Prosperity that talks about the tremendous success of the NoStimulus.com website. This site experienced tremendous traffic yesterday and had difficulty staying online. Things are working smoothly now, so I encourage you to visit the site to learn about the stimulus plan. Then, sign the online petition.
NoStimulus.com Effort Crosses 200,000 Petitions as Taxpayer Outrage Intensifies
“This is an avalanche of public opinion, and members of Congress ignore it at their own peril.” — AFP President Tim Phillips
WASHINGTON — While the US Senate chose to ignore its constituents and vote in favor of a trillion dollars of debt yesterday, more than 100,000 American taxpayers expected to foot the bill signed Americans for Prosperity’s NoStimulus online petition, doubling the number in one day and bringing the count over 200,000.
“There is growing citizen outrage against this spending nightmare and American citizens are not giving up,” said Tim Phillips, president of Americans for Prosperity. “In fact, taxpayers raised their voices louder, doubling the number of petitions in one day.”
The amended bill will now go back to the House for a vote, giving taxpayers more time to examine its contents and voice concern to their legislators. If even one member of Congress changes positions, the stimulus ‘compromise’ will quickly be compromised.
“Despite the outcome of this first test vote, this bill is far from a done deal,” said Phillips. “The American people are so angry that they flooded our NoStimulus.com web site off the Internet as we rushed to add more servers all day yesterday. Millions of people tried to reach the site. This is an avalanche of public opinion, and members of Congress ignore it at their own peril.”
AFP launched NoStimulus.com, a website and online petition against the Pelosi/Reid/Obama spending package, with much success three weeks ago, collecting over 200,000 signatures to date and receiving national media coverage.
More than 50,000 of those petitions were delivered to Senate offices last week during debate on the bill. AFP continues to drive citizens to the NoStimulus petition and urges them to contact their legislators, flooding Capitol Hill with overwhelming constituent opposition.
The complete website and online petition can be viewed at NoStimulus.com.
Tim Phillips of AFP explains NoStimulus.com
Tim Phillips, president of Americans For Prosperity, explains why the Obama-Pelosi-Reid stimulus bill is not good for America, and also talks about the role of the NoStimulus.com website. So many people want to visit NoStimulus.com today that the site has had trouble staying online.