I stumbled across an incredibly tortured press release regarding raising the Oregon minimum wage.
Normally minimum wage proponents like to talk about nebulous "fairness", with the implication that only a cold-hearted bastard would oppose raising the minimum wage. So I thought it would be fun to examine what passes for a logical argument for minimum wages.
“It’s an economic stimulus for working families and Oregon,” said Leachman. “It puts money into the hands of the people who are most likely to spend it, spend it quickly and spend it here in Oregon.”I have never seen a minimum wage supporter come closer to admitting that they are wrong than this. An economic stimulus? Ha ha ha! That's as bad as the recent bailout justifications!
The adjustment reflects the rise in the cost of living as defined by the Consumer Price Index (CPI) and is mandated by ballot Measure 25. Oregon voters approved that measure in 2002, when the state was also reeling from the effects of a recession.It's a shame that minimum wage is a driver of inflation - this won't result in degenerate inflationary spiral or anything.
With the New Year’s cost-of-living adjustment, an Oregon full-time minimum wage worker will earn $17,472 next year. That’s below the federal poverty line for a family of three.What reasonable person would put minimum wage at a level that supports a family of three??? Holy crap! Well, I look forward to seeing the first fully automated McDonalds.
“We’re still a long way from having an Oregon economy that works for all working families, but a minimum wage tied to the cost of living is a step in that direction,” said Leachman.
You might be wondering if I see any positives in having a minimum wage. Nope. Not one. It is one of the most immoral social programs that has ever been invented, punishing the most vulnerable members of society: the homeless, drug addicts, mentally disabled, new immigrants, and seniors.
If one believes that it is wrong for people to work at jobs so menial that they would normally get paid below minimum wage, the moral thing to do would be to support more lenient welfare programs - or perhaps the Fair Tax prebates. You get the same effect of destroying/automating the low paying jobs (why would you work for less than the Government would give you?), but the people that would have worked them at least get replacement income.
7 comments:
"Well, I look forward to seeing the first fully automated McDonalds."
I was recently in a McDonalds in Vancouver and they automated trash compaction. (I am assuming they have had this for awhile.) I wonder why there isn't *more* automation at McDonalds . Why can't they automate burger flipping, fries oil shaking, and lots of other stuff? I'm sure they've studied this - I wonder what the impediments are.
One way to make capital investments in technology like this more attractive is to raise the minimum wage ...
At a McDonalds in Washington last week I saw an automated drink filling machine: the drive through attendant would key in the order, and the machine would pop out the appropriate size cup and fill it with the required drink.
It's coming...
Neat, that makes sense ...
I wasn't able to figure out what about raising the wages of low-wage earners you opposed.
You seemed to have some argument about inflation, but I find it hard to believe that you think that the minimum wage law in one, low-population state, has a larger impact on inflation, even in that state, than, for example, world oil prices.
What's the objection?
My objection is that minimum wage increases get absorbed in two ways: inflation, meaning the increase is proportionally less valuable, and through elimination of the most marginal jobs.
Yes, those who keep their minimum wage jobs are better off, but at the expense of those who no longer have jobs. Not at all fair, and I can't see how it's desirable.
Is there another likely outcome that I'm not seeing?
Thanks for the explanation. It was different from what I was expecting.
I still doubt that the minimum wage is a major driver of inflation. Even if it were, an increase in the legislated, nominal minimum wage would only be partially absorbed, still leading to an increase in the real, inflation-adjusted minimum wage.
As for the elimination of jobs, there is some wage, above the market wage, which provides the maximum amount of income to very-low-wage earners as a group. (This is essentially the same calculation as for a monopoly supplier, like a patent or copyright holder.) The increased wage (price) offsets the elimination of the marginal jobs (sales), as long as the wage (price) increase is not too extreme.
The question of whether everyone sees this benefit is also important. However, if the above-market wages really exacerbated a shortage of jobs, then we'd expect to see this shortage expressed in terms of long waiting lists, people relying on personal or political connections to get jobs, and people trying to stay in minimum-wage jobs for as long as possible. I've not investigated this thoroughly, but I don't think this is the case. From the little I've read, it seems that turn-over at places like McDonald's or WalMart is very high, so it seems reasonable to assume that the benefits are distributed between everyone looking for low-wage work.
I agree that the US minimum wages are probably not hugely higher than what the market average would otherwise be for those jobs. However, I would vastly prefer that minimum wage was effectively achieved through laxer welfare requirements than an explicit minimum. That seems far more flexible to me.
And I've got to say, talk of the benefit to a group over its component members makes me pretty uneasy... I suppose it's my lack of trust in government's ability to make these decisions that gives me libertarian leanings.
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