The Minimum Wage is Bad for the Poor

Do you remember when grocery stores had baggers floating between a few registers?  They weren't in a hurry, they didn't cram a dozen items in one sack, and they would even help you out to your car.  As a general rule, that job doesn't exist anymore.  Window washers at service stations don't exist anymore.

A lot of little niceties of daily life just aren't included anymore.  Most of us think, well, companies are just cutting back.  They don't want to pay for those nice touches anymore.  We're only partly right.

When I was in high school, I worked as a warehouse stocker and delivery driver for an electrical supply house.  I made $4.25/hour and worked my tail off.  There was enough work for 2-3 of us.  The problem was that, well, that job wasn't worth much more than $4.25/hour.  So, the company made do with one where 2 or 3 would have done a more thorough job.

That company doesn't hire high-school students anymore.

Later, when I was looking for other work, I had this and other jobs that I could list on my resume, to show that I knew what an honest days work was, that I had some appreciation for toil, or that I had skills with invoicing, stocking, or delivery.  Many of today's youths won't have that opportunity to work, earn a wage, and gain valuable experience in the work-place.

Employers used to be willing to bring on a young adult and train them.  To take someone with no experience, pay them a small wage and pay them more in skills and training and then bump them to a higher wage once they reached an earning capacity.  This is becoming another rarity.  You see, at a certain point, the cost to the employer got too high, the benefit of training someone from scratch was outweighed by the cost of paying them a minimum wage.  So, now requirements for work are going up.  You can't learn a skilled trade on the job, you have to know something coming in.  Vocational schools are booming, trade schools are booming.  Employment for the young is down.  By the way, these vocational and trade schools are hideously expensive.  Some costing more per semester than a full public university's tuition.  And people are paying.

What this tells me is that these mentorships, apprenticeships, or low paying, learn as you go jobs have value much beyond their would be low wage, at least, for the holder of that job.  For the employer, not so much.  For the employer, it's normally a slight drag on production at first, that slowly yields some production gains until he has a viable employee.  Some forms of mentorships and apprenticeships are still available under current laws, but require payment of a minimum wage.  For employers faced with this added burden, many have simply elected to stop apprenticeships and shifted the burden for receiving the training squarely onto their future employees.

If a career is a ladder, with each rung you climb giving you some foundation in skills and experience for the next rung you reach, then the minimum wage laws in this country have effectively removed the bottom rungs from the ladder.  This is fine for everyone above that or marginally close to that level, but for those just starting out, it signals a lack of opportunity, a mandate that they must go out and pay for their own education and experience instead of learning through work.

Many people comport the minimum wage to a living wage or a minimum standard of living, but this ignores the reality.  Greater than 98% of working people in this country make MORE than the minimum wage.  This isn't because the government makes them do it.  These are market forces at work.  Which begs the question about that slightly more than 1%, who are they and why are they making so little.

That small group consists primarily of teenagers.  High school and college students with little skills to offer performing jobs with little skills required.  There is a lot of competition for these jobs.  There are fewer of them each time the minimum wage is increased, and there are always plenty of kids needing to gain employment history.  So, who will "suffer" if the minimum wage is abolished?  Less than 2% of the workforce stands to have to compete on price for their job.  More people competing will realistically force those wage points down.  For many of these jobs, it's unlikely that the price point can go too low.  People will make their own decisions about what their time is worth and employers will be allowed to find the price point and employment level that they are willing to pay.  We would likely see a 10-20% dip in the wage level for these positions, but also are likely to see a reduction in unemployment for the young.

What about the rest of the workers?  Wouldn't their wages be dragged down too?  Ummm.  No.  There is no mandate that employers pay the wages they currently pay ABOVE the minimum wage.  The only thing that would lower those wages is a slumping economy, a smaller job pool and increased competition for those jobs.

There is this irrational paranoia by people who support these massive government regulations that I will discuss in further detail in the near future, but it revolves around the idea that without the restraining hand of government, businesses would exploit us.  My experience has taught me that it is more often that exploitation happens with the assistance of the hand of government restraining the individual from seeking alternatives.  Ask yourself this question.  If the restraining hand of government is necessary to keep our nation from spiraling into poverty and to keep employers from enslaving us all, why are greater than 98% of jobs paying more than the paltry amount government demands?

Audit the Fed?

Yesterday, the House of Representatives, in a largely bi-partisan vote, passed HR 459.  This bill, championed by TX Representative Ron Paul for the better part of the last decade asks the non-partisan GAO to conduct an audit of the Federal Reserve's monetary policy.

Why is this needed?  The Federal Reserve, despite it's official sounding name and enormous power to shape the economy and the value of our currency, operates on its own.  It is not a government agency.  It is answerable to no government authority, and it's records are entirely shielded from review by any government authority.  The FOIA does not apply.  Congressional subpoenas for information can be ignored and even poor performing Fed Chairman get renominated to their posts every 4 years until they decide to retire.

Representative Steny Hoyer of Maryland spoke out against the bill, saying this bill was unnecessary and would lead to political interference in the Fed's mission.  This is somehow bad.  Let's apply that logic to other areas.  Should Congress be allowed to operate in secret?  Ban cameras from the halls, hide lawmaking behind closed doors?  What would Mr. Hoyer's reaction be to this?  He would probably be fine with it if his party were in power, but as the minority party in the House right now, he would probably object.  Secrecy would allow the Republicans to greater flex their majority powers.  Shedding light on the proceedings has some diluting effect to this (not much, but some).

Should the White House be shielded from public scrutiny in its execution of duties?  Again, depends on who you ask and who is currently in power.  Republicans argued for more autonomy for Bush when he was in office and now scream for more transparency now that Obama is in office.  The Democrats did the same thing in reverse, attempting to shield the Justice Department from Congressional Subpoenas that they would have insisted the Bush Administration comply with.

The point is that the WE, the PEOPLE are served best by knowing what it is the people who rule us are doing.  We don't always make the best electoral decisions, but that is because we frequently have less knowledge than we need to make the best decisions and quite frankly, too many of us treat elections like we treat our favorite sports teams.  If you're a Yankee fan, you'll cheer for Derek Jeter until he gets traded to the Red Sox and then you'll cheer against him.  The people and the process don't matter nearly as much as the uniform that they wear.  If suddenly Republicans started calling for higher taxes and Democrats started calling for smaller government, there are too many people who wouldn't change their voting habits at all because they're D fans or R fans.  They just like the mascot better or whatever.

Back to this Bill.  It is heading for the Senate.  Harry Reid, the quirky (that's a nice way of saying he's an imbecile) Senate Majority Leader has vowed that this bill will never come up for a vote in the Senate.  It doesn't matter than almost half of the Democrats in the House voted to pass this bill.  Harry says the Bill will die and therefore, it will probably die.  Why?  Because there are some things, Harry says, that we should not be allowed to know about the inner workings of our economy.  We can't politicize the decisions of our economic policy-makers.

What arrogance?  Just because some people are content to keep their heads down and ignore the problems in our political and economic system does not mean that we should not be given the opportunity to see who is driving the bus and more importantly, if there is a cliff ahead of us.  There is nothing about government that government has a right to keep secret from the People it is supposed to be representative of.  You may argue that intelligence agencies need secrets and that military needs secrets and you may be right that THEY need those things, but the needs of the People outweigh the needs of Government.  The Fed may NEED to be insulated from Politics, but if they are steering us toward a cliff, we would never know it.  No person, agency, or body with the power that they possess should be able to operate under a cloud of secrecy.  No just a cloud of secrecy in their decisions, but an absolute shield from having those decisions and the present ramifications reviewed.

Do you realize that no one in our government knows how much money has been lent to banks in this country and around the world by the Federal Reserve?  Not only does our government not know, they are not allowed to know.  More importantly, WE are not allowed to know.  How can we have a democracy when we cannot know what it is we are deciding about? If you want to keep your head in the sand, fine, but let me make that decision as you have.  Give me the option of knowing what is going on around me.

If you are so moved, please contact your Senators and ask them to support your right to know what is going on.  Knowledge is good.  Ignorance is bad.  Senator Reid, if you wish to stay ignorant that is fine by me.  Apparently you have been able to enact legislation without ever having read the bills you pass, but for the sake of those of us who want to know what is going on, get the hell out of the way.

Educating Barack

Speaking mostly to a group of people who have lived the President's words, Mr. obama laid out his view of the world.  He said:

There are a lot of wealthy, successful Americans who agree with me -- because they want to give something back.  They know they didn’t -- look, if you’ve been successful, you didn’t get there on your own.  You didn’t get there on your own.  I’m always struck by people who think, well, it must be because I was just so smart.  There are a lot of smart people out there.  It must be because I worked harder than everybody else.  Let me tell you something -- there are a whole bunch of hardworking people out there.  (Applause.)

     If you were successful, somebody along the line gave you some help.  There was a great teacher somewhere in your life.  Somebody helped to create this unbelievable American system that we have that allowed you to thrive.  Somebody invested in roads and bridges.  If you’ve got a business -- you didn’t build that.  Somebody else made that happen.  The Internet didn’t get invented on its own.  Government research created the Internet so that all the companies could make money off the Internet.     The point is, is that when we succeed, we succeed because of our individual initiative, but also because we do things together.  There are some things, just like fighting fires, we don’t do on our own.  I mean, imagine if everybody had their own fire service.  That would be a hard way to organize fighting fires.

There is a lot of truth in this statement.  Let's break it down from the top.

There are a lot of wealthy, successful Americans who agree with me -- because they want to give something back.

This is both true and false.  A lot of wealthy people do agree with Mr. Obama.  They donate a LOT of money to his Presidential Campaign.  The second part is a half truth and an intentionally misleading statement wrapped together.  I'm sure that many people who donate to Mr. Obama DO want to give something back, but that is not their basis for agreeing with him nor is it the reason they give him money.  The misleading part is that he implies that ONLY THOSE WHO AGREE WITH HIM "want to give something back."  

They know they didn’t -- look, if you’ve been successful, you didn’t get there on your own.  You didn’t get there on your own.

Of course not.  Most of us have families and mentors and friends to whom we could never repay the debt we owe.  But to claim that the mere existence of a society creates a debt to said society is ridiculous.  The best thing any of us can do for society is to do well for ourselves.

I’m always struck by people who think, well, it must be because I was just so smart.  There are a lot of smart people out there.  It must be because I worked harder than everybody else.  Let me tell you something -- there are a whole bunch of hardworking people out there.

If you are successful and smart, it's okay to feel pride in your success and to credit yourself.  Yes, there are smart people all around you, there are hard working people all around you, but do not let that take anything from what you accomplish.   Your success is your own.  The mere existence of others does nothing to lessen what you have done.

 If you were successful, somebody along the line gave you some help.  There was a great teacher somewhere in your life.  Somebody helped to create this unbelievable American system that we have that allowed you to thrive.  Somebody invested in roads and bridges.

 Like I said earlier.  Plenty of people probably helped you along the way.  Most of you had parents who worked hard to raise you right, fed you, clothed you, housed you.  I only know a few people who self-educated, and they all had a basis of education.  But do not believe that that was free.  My parents paid property taxes that paid for public education in two states.  They also paid for private school tuition, because the education provided by the government was sub-par.  Since then, it's only gotten worse.  Did teachers teach me, yes.  They were compensated for their labors.  Did someone build roads and bridges?  Yes.  And I have more than paid for my use of the same via taxes on gasoline and fuel.

If you’ve got a business -- you didn’t build that.  Somebody else made that happen.  The Internet didn’t get invented on its own.  Government research created the Internet so that all the companies could make money off the Internet.

You want to take credit for my business?  Go to hell.  You didn't sweat over this.  You didn't cram for these tests.  All you have done is make my job harder.  Somebody made this happen?  (doing breathing exercises, bringing down my blood pressure)  With all due respect (not much), please do not comment on what it takes to create a business until AFTER you have done so.  Put your own blood, sweat, and tears into making something and then tell me that I should give the credit to another.

Yes, government researchers did invent the internet, a technology that languished for several decades of moderate usage until it was opened up for private use and development.  Only then did it become the communications and technological marvel that is such an intrinsic part of so many of our lives.

 The point is, is that when we succeed, we succeed because of our individual initiative, but also because we do things together.  There are some things, just like fighting fires, we don’t do on our own.  I mean, imagine if everybody had their own fire service.  That would be a hard way to organize fighting fires.

The first part of the first sentence is spot on!!!  The rest is drivel.  Yes, cooperation and partnerships help everyone.  No, I'm not very good at fighting fires.  (At least, I don't think I would be.  I've never actually tried though.)  There are people out there who ARE good at fighting fires...and a lot of them are volunteers.  Aside from that, these services could very easily be provided by the private sector.  Someone told me earlier today that such essential government services such as Teaching, Firefighting and Policing couldn't be provided by the "scraps" that individuals would be willing to pay them.  I can't imagine why not.  These are things that add value to your lives.  Now, perhaps we would get a better deal if we got to negotiate those purchases on our own.  The way things are currently run, the government sets it's own price for the services it insists you buy (even if you intend to purchase those same services from a private source).  Could you imagine if Wal-Mart tried that with it's customers?  They'd get run out of business. Of course, they don't have the power to coerce you to buy anything from them.  That one is reserved to the Government.

This little stump speech, like the one given by Elizabeth Warren (D candidate for Senate in MA and 1/32nd Cherokee Professor of Law at Harvard) may sound good to some people.  They contain a little bit of common sense truth.  People helped you along the way.  The dangerous part is the implication that they make on top of this nugget of fact.  That this help requires some payback that only they can name.


Don't fall for it.

Terrorism

The government that rules our nation considers me and those like me a terrorist.  According to a study paid for by the Department of Homeland Security and conducted by the University of Maryland from 2003 to 2008, apparently the most dangerous groups of terrorists in the U.S. are conservatives and libertarians who "revere liberty" more than government.  I am doubly a terrorist by this study in that I am "inherently suspicious of the federal government."

This actually makes me wonder what the definition of terrorism is to these assholes.  If it's resistance to government oppression, then count me in.  If it's inciting violence against the populace as a means of striking fear into said population in order to enact radical political change, well, as John Lennon once said "don't you know that you can count me out."  And guess what.  You can count out the vast majority of people who agree with me.

All studies like this do is alienate an already disillusioned population.  It seeks to marginalize a group who want nothing more than the ability to make their own decisions about how their life proceeds, instead of merely acquiescing to the will of an uneducated majority.

Am I a terrorist?  Absolutely not.  Will I defend my family's lives and liberty with lethal force.  You bet your ass I will.