Category Archives: Labor

‘Minimum Wage, Maximum Folly’ In The Ivy League

Economy, Labor

“Economic malpractice” in the Ivy League is nothing new. In promoting minimum wage laws, hundreds of so-called top economists have defied the “law known as the first fundamental law of demand.”

The law states that the higher the price of something the less people will take of it and vice versa.

Alas, members of “the brie, tofu, and champagne circuit” regularly pretend that this natural law, “to which there are no known real-world exceptions,” is unaffected by minimum wage legislation.

Now comes news that a California city is to raise its minimum wage to $16.00. This unemployment-causing folly is a good opportunity to revisit WALTER E. WILLIAMS’ magnificent, ongoing efforts to “embarrass the economists” who lie about the costs of raising the price of unskilled labor:

… Some people suggest that if the price of something is raised, buyers will take more or the same amount. That’s silly because there’d be no limit to the price that sellers would charge. For example, if a grocer knew he would sell more — or the same amount of — milk at $8 a gallon than at $4 a gallon, why in the world would he sell it at $4? Then the question becomes: Why would he sell it at $8 if people would buy the same amount at a higher price?

There are economists, most notably Nobel Prize-winning economist Paul Krugman, who suggest that the law of demand applies to everything except labor prices (wages) of low-skilled workers.

Krugman says that paying fast-food workers $15 an hour wouldn’t cause big companies such as McDonald’s to cut jobs. In other words, Krugman argues that raising the minimum wage doesn’t change employer behavior.

Before we address Krugman’s fallacious argument, think about this: One of Galileo’s laws says the influence of gravity on a falling body in a vacuum is to cause it to accelerate at a rate of 32 feet per second per second. That applies to a falling rock, steel ball or feather. What would you think of the reasoning capacity of a Nobel Prize-winning physicist who’d argue that because human beings are not rocks, steel balls or feathers, Galileo’s law of falling bodies doesn’t apply to them? …


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Your Get-With-The-Program, Demography-Is-Destiny Policy Paper

Education, IMMIGRATION, Labor, Left-Liberalism, Multiculturalism

You know just how scholarly an essay is when it is studded with loaded pop-words like “conversation”: “We need to have a conversation about race (when we do nothing but subject ourselves to one-way brow-beatings about imagined slights committed against the pigmentally burdened). “We need to have a conversation about immigration (translation: Get with the program of mass immigration from the third world and its implications for your communities—reduced quality of life, poorer education, environmental degradation; less safety and security, more taxation).

Jennifer Bradley of the liberal Brookings Institute lectures Middle America on how to prepare its diverse workforce for tomorrow.

Thus, for example, it is stated that “America is on the cusp of becoming a country with no racial majority, where new minorities are poised to exert a profound impact on U.S. society, economics, and politics.” The implication is that the seismic shift is due to a mystic force, and not to willful policies in which the host population has never had a say.

A feature of the Minneapolis-St. Paul diversity explosion, as Bradley sees it, is a widening “race-based education and achievement gap” that will “become a drag on workforce growths unless something was done to reverse these trends.” In other words, the immigrant population isn’t up to scratch.

I can think of a few options to narrow the gap. One is to welcome immigrants who’ll add value, not drain resources. But Bradely is here not to explore all options, but to dictate them.

The raiment of scholarship is shed as quickly as a hooker sheds her clothes (only less admirably; working girls deserve respect). Bradely brays about the need to “reframe the conversation about race-based education and achievement gaps in Minneapolis-St. Paul — turning what had been a moral (and insufficiently effective) commitment to its underserved communities into an economic necessity. Leading figures from the worlds of government, business, and academia, and public and private groups throughout the region, are now trying to figure out how to undo the effects of decades of neglect, tackling the problem from many perspectives and with an ever greater sense of urgency.”

If a population is not achieving parity it is inferred that it has been “underserved”; that its inhabitants need more resources rather than that the fault lies with the kind of incompatible immigrant being privileged by policy makers. The essay’s premise is that America is “underserving” her immigrant population, when it is the other way round:

Averaged out, the immigrant population is underserving the American economy.

And, research is only as good as the semantics used to state the hypothesis.

MORE braying (with apologies to donkeys; they’re adorable).

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And The Co-Conspirator In The Case Of Latest American Jihadi Is…

Affirmative Action, Jihad, Labor, Regulation, The State

The US government, of course. It always is.

It took the Kuwaitis to fire an alleged American Jihadi from a position he held in their country, as an airplane mechanic, in December 2014. It took the Turks to deny him entry into their country. And it took the Egyptians to deport him to the U.S.

Could these backward and benighted countries be looking out for their own better than the US does?

US Army veteran Tairod Nathan Webster Pugh was stopped—why, oh why? “keep jihadis OUT, not in”!—attempting to cross over into Syria, presumably not for the purpose of touring the ruins.

This avid Bin Laden supported was a former U.S. Air Force mechanic and had worked as a mechanic for American Airlines. And that was perfectly fine. So long as Pugh was endangering Americans stateside, he was safe from the American authorities (whose, constitutional duty it is to protect Americans).

Here in the US, labor and civil rights legislation guarantee that business can’t risk discrimination lawsuits should they fire bad people. They’d rather risk the lives of good people.

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Blessed Are The Burgerflippers

Business, Capitalism, Economy, Labor

By Myron Robert Pauli

So I see that Portland OR has raised the minimum wage to $15/hour and the rest of the state may soon follow.

Years back, I did some minimum wage work at a chemical-spectroscopy lab in New York – not particularly lucrative or enjoyable but it paid money. The company mostly hired college graduates from the Philippines (probably with some H-1 visa) because they were cheap. Not surprisingly, companies pay workers at little as they can get away with. Workers, in turn, are right to grumble and are free to seek out higher paying work (or at least better conditions – that lab was rather unsafe). Most people do not work for some great satisfaction – most jobs range from somewhat stinky to complete stinky. Who the hell wants to pick crops in the hot summer or climb up cleaning gutters in winter? Workers primarily work for one primary motivation – money.

The $15 minimum wage will be a boon to developers of automated burger-flippers. Not only do they not get the $15, the robots don’t need Social Security, W-2 forms, OSHA inspectors, Obomney-Rombama care, paid vacations, sick leave, and those other things that raise “overheads.”

Anyone who has studied the history of labor in the 19th or 20th Century should be aware of the Luddites who went around smashing machinery. I would not be surprised if some restaurants not only take reservations online but orders as well – press the steak icon and it will ask rare through well-done. This should not be too hard to code and people can pick up their orders cafeteria style. Or a robot can probably deliver the gourmet food to the table. The chef can be well paid, but who goes to the restaurant for the waitresses (excepting, perhaps, Hooters)? Four star pre-ordered robot delivered gourmet meals with profits shared between consumer and restauranteur.

However, let me put on my Samuel Gompers hat when it comes to the anti-worker rant of Jennifer Harris. First of all, workers have every right to be greedy and should be free to strike (but not destroy property or resort to violence) – with the flip side that the employer can find replacements. If I choose to “refuse” to be locker-room attendant for the Russian Women’s Volleyball Team for less than $1500 an hour, perhaps the team owner can find someone who will work for less pay!

The second point of Harris’ rant is how the troops are “getting shot at, deploying for months in hostile environments, and putting their collective asses on the line every day protecting your unskilled butt?” The first part about being shot in hostile environments is perfectly true. As to the second part: How are these “troops” protecting the butt of anyone, skilled or unskilled, other than the military brass and politicians who sent them in to be 21st Century IED-fodder? I know what benefits I get from the grocery clerk and the restaurant waiter and the guy who cleans my gutters. (Or from Edward Snowden.) Does the average American get protected when some troops “engage” Sunnis who are shooting at Shiites or Shiites who are shooting at Sunnis? Harris makes fun of “Sally McBurgerflipper” and “Johnny Fry-Boy,” but they enable Mom to save a day of cooking and let the brats play at the McSlides. What great “service” did anyone get out of Petraeus and that neo-con phony “surge,” other than some titillation concerning lover Paula Broadwell? Yet, “conservatives” deify Petraeus and sneer at the gardener.

In that sense, I can neither endorse the leftist desire to ignore the realities of labor markets, nor these rightists who extol senseless, pointless, endless killing over honest backbreaking work. Maybe the poor schlub mowing your lawn will motivate his kids to get a real education (not modern “liberal arts”), and that kid might invent a new “smart lawnmower.” Anyway, the poor shlub is doing honest work.

Blessed are the Burgerflippers – may they profit both themselves, their employers, and their customers for they are the Children of Peace.

Barely a Blog (BAB) contributor Myron Pauli grew up in Sunnyside Queens, went off to college in Cleveland and then spent time in a mental institution in Cambridge MA (MIT) with Benjamin Netanyahu (did not know him), and others until he was released with the “hostages” and Jimmy Carter on January 20, 1981, having defended his dissertation in nuclear physics. Most of the time since, he has worked on infrared sensors, mainly at Naval Research Laboratory in Washington DC. He was NOT named after Ron Paul but is distantly related to physicist Wolftgang Pauli; unfortunately, only the “good looks” were handed down and not the brains. He writes assorted song lyrics and essays reflecting his cynicism and classical liberalism. Click on the “BAB’s A List” category to access the Pauli archive.

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Third World Jobs Created & Declining Labor Force Participation Rate

Economy, Labor

Paul Craig Roberts explains the parallel reality created by government so that, “Unemployment is measured according to methodologies designed to prevent its discovery. Inflation is measured according to methodologies designed to deny its existence. Jobs are reported that don’t exist, and GDP growth rates are announced that declines in real median family incomes and consumer credit make impossible. The poverty level income is set artificially low in order to minimize welfare spending.”

The lies conceal a declining labor force participation rate. The jobs created are third-world jobs. “Good jobs are replaced by low-paying jobs.”

The uncounted unemployed can be measured in the sharp 21st century decline in the labor force participation rate. The labor force participation rate has declined because there are no jobs to participate in. But Washington, the financial media, and the bought and paid for economists lie. They say the participation rate is down because the baby boomers are retiring. However, as John Titus, Dave Kranzler, and I documented with the government’s own data in a recent column, the participation rate of baby boomers is the highest of all and the only one that is rising.

The reason is that with the Federal Reserves sole concern with the welfare of a small handful of mega-banks–the ones that sit on the board of the New York Federal Reserve Bank–real interest rates are negative. Therefore, retirees have no income from their retirement savings. (Generally speaking, retirees avoid stock investments, because they can lose a great deal from a major correction, and it can take more years than they have left for stocks to recover.) To supplement their Social Security pensions (a rigged CPI prevents or minimizes cost-of-living increases), retirees take the temporary, lowly paid jobs that are all that the US economy can produce. These jobs do not provide sufficient income with which to form a household.

As I have pointed out for a decade, or longer, the US economy no longer creates First World jobs. The US economy creates jobs for waitresses and bartenders, hospital orderlies, and retail clerks. The fact that the complexion of the US work force is becoming Third World is not considered a notable problem by the media or financial press, and economists seem immune to the facts.


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Wal-Mart’s Good For The Health

Capitalism, Economy, Free Markets, Labor

To ameliorate the effects of the Obamacare wrecking ball, Wal-Mart Stores, Inc., is venturing into the business of providing primary health care. For $40, the price of a copay (mine are way more), “you can walk into a Wal-Mart clinic and see a doctor.” It’s “just $4 for Walmart U.S. employees and family members.”

Sandra Fluke: You can have a pregnancy test at Wal-Mart for … $3.00.

Via MarketWatch:

On Friday, a Walmart Care Clinic opened in Dalton, Ga., six months after Walmart U.S., the retailer’s biggest unit, entered the business of providing primary health care. It now operates a dozen clinics in rural Texas, South Carolina and Georgia and has increased its target for openings this year to 17. A … cholesterol test [will cost] $8. A typical retail clinic offers acute care only. But a Walmart Care Clinic also treats chronic conditions such as diabetes. (Walmart U.S. also leases space in its stores to 94 clinics owned by others that set their own pricing.)
“It was very important to us that we establish a retail price in the health-care industry because price leadership matters to us,” said Jennifer LaPerre, a Walmart U.S. senior director responsible for health and wellness, in an interview.

Let the anti-Wal Mart jousting begin.

Typically, critics of Wal Mart—for example, Marian Kester Coombs, writing for The American Conservative—will do nothing to trace the mysterious mechanism by which Wal-Mart is said to impoverish. By offering “the lowest possible prices all the time, not just during sales”? What precisely is the economic process that accounts for Wal-Mart’s ability to “expel jobs and technology from our own country”? Competition? Offering a product people choose to buy?

“Protecting the home market,” which is what TAC writer advocates, is to the detriment of consumers. It forces them to subsidize less efficient local industries, making them the poorer for it. To keep inefficient industries in the lap of luxury, hundreds of others are doomed to shrink or go under.

The writer aforementioned also froths at the mouth over “the teenage girl in Bangladesh … forced to sew pocket flaps onto 120 pairs of pants per hour for 13 cents per hour.” It sounds dreadful. However, the economic reality is this: Wal-Mart is either offering higher, the same or lower wages than the wages workers were earning before its arrival in Bangladesh. The company would find it hard to attract workers if it was paying less, or the same as other companies. Ergo, Wal-Mart is a benefactor that pays the kind of wage unavailable prior to its arrival. More material, if the entrepreneur were forced to pay workers in excess of their productivity, he would eventually have to disinvest. What will the Bangladeshi teenage girl do when that happens?

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