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Bainbridge v. Drum on the Minimum Wage.--

It's Professor Bainbridge v. Kevin Drum on a hike in the minumum wage.

Both are eloquent enough to speak for themselves, but Bainbridge makes more of a positive argument, while Drum is just making a passing dismissive crack. Drum favors raising the minimum wage at least "a buck or two." Bainbridge favors indexing it:

First, the minimum wage debate is not really a debate about how much money the working poor make. Instead, it is mainly a debate about how much working teenagers and twenty-somethings in their first job ought to make. The federal Bureau of Labor Statistics reports that (in 2002):

Minimum wage workers tend to be young. About half of workers earning $5.15 or less were under age 25, and slightly more than one-fourth were age 16-19.

Among workers over 25, only two percent - 2%! - earned the minimum wage. Sympathy for the working poor thus ought not to be a driver of minimum wage debates.

Second, setting aside the debate of whether an increase in the minimum wage affects the supply of jobs for teenagers (wages go up, employers hire fewer workers), an increase in the minimum wage increases the demand by teenagers for work:

Minimum wages increase the probability that teenagers leave school to become employed or work more hours, and increase the probability that they leave school and become non-enrolled and non-employed. Minimum wages also increase the probability that lower-wage employed teenagers become non-enrolled and non-employed.

In other words, because teenagers tend to apply too high a discount rate to the higher future income associated with higher educational attainment, they systematically underestimate the present value of the future deferred income associated with staying in school. As a result, when deciding between work and a present paycheck versus school and deferral of income, they will tend to err towards the former. Increasing the minimum wage simply makes the choice of work even more attractive.

This analysis has two implications for minimum wage policy. First, a differential lower minimum wage for those who have not completed a high school degree probably would result in a lower dropout rate. Second, the minimum wage ought to be indexed, so that it grows no faster than inflation, so as to not further bias the choice between work and school.

George Gregg (mail):
Among workers over 25, only two percent - 2%! - earned the minimum wage. Sympathy for the working poor thus ought not to be a driver of minimum wage debates.

This is rather misleading, though, isn't it? Of course, fewer people are going to be earning exactly the minimum wage, and those would be entry-level people (mostly younger).

But how many folks are earning a wage BETWEEN the current minimum wage and any proposed new minimum wage?

THAT is the number of people who would actually stand to gain from an increase in the minimum wage.
4.12.2006 9:13pm
joe (mail):
The people who make b/w the current minimum wage and the proposed new minimum wage will be impacted dramatically. Since wages are a function of an employee's productive output, were the employee worth more than the minimum wage to an employer, he would be paid as such. By setting a wage above the market clearing wage (equilibrium), employer's will prune labor to reflect the higher wages and attempt to recoup the lost man hours through increased productivity. This is in addition to the damage done to those seeking employment who will now find fewer and fewer opportunities.

I like the concept of raising the minimum wage "a buck or two". Hell, why not 5 bucks? How bout 10? The reason that arbitrarily setting a wage does not work is because no human has the omniscience to properly gauge what the market clearing wage is, only the market can do that. By setting a wage above the market clearing wage, you assure yourself increased unemployment.

Alan Greenspan once replied during congressional testimony about whether he was in favor of raising the minimum wage as such: "No sir, I am not in favor of raising the level of unemployment".
4.12.2006 9:41pm
Ben Coates (mail):
It's more misleading than that, since Drum was discussing the California minumum wage, which is a good bit higher than the $5.15/hr federal minimum that the 2% statistic comes from--The more relevant questions would be how many workers make the $6.75/hr CA minimum or less than the new higher proposed minimum. As more and more states increase their minimums above the federal ones, that 2% statistic will become both more impressive and less meaningful.

I fail to see how indexing the minimum wage would prevent it from growing faster than inflation. Just adding an automatic annual increase doesn't make the rate any less arbitrary, and doesn't do anything to prevent a future legislature from adding to the baseline once some time had passed.

It even comes with a nice little perverse incentive, as the more people making the minimum the more people will benefit from an increase... at least at long as they keep their jobs, and don't lose non-cash benefits to compensate.
4.12.2006 9:53pm
Blar (mail) (www):
George is correct.

Another point: half of all minimum wage earners are over 25, nearly 75% are not teenagers, and (based on Table 6) over two thirds are high school graduates. That "2%!" of the over-25 workface represents about 1,010,000 workers. Why only focus on the small fraction of minimum wage earners who are teenagers facing a choice between work and high school when most of the people affected by the law change would be in very different circumstances?

Finally, if we are going to index the minimum wage to inflation, why not retroactively index it to the value of the minimum wage that was chosen last time Congress actively set the minimum wage nearly ten years ago? Based on this graph, that would mean raising it by about a buck and then indexing it to inflation, which should make both Drum and Bainbridge happy. Right?

(Joe, I recommend that you click through and read Drum's post.)
4.12.2006 10:05pm
pmorem (mail):
If it's indexed to inflation and inflation starts to take off, wouldn't that leave us locked into an inflationary spiral?
4.12.2006 10:06pm
You Know Who:

Joe says: "By setting a wage above the market clearing wage, you assure yourself increased unemployment."


How would you explain near full employment in the 1990's? The min wage would be predicted to significantly raise unemployment rates, but this didn't happen in the 1990's? Right? Isn't this a paradox?
4.12.2006 10:11pm
StateOfNature:
You Know Who,

You can't argue a negative ("minimum wage does not significantly raise unemployment") by looking at only what is seen. You have to consider what is unseen. The fact that employment levels were pretty good in the 1990s doesn't tell us what would have happened had the minimum wage been lower (what is unseen). Unemployment could have been even lower if we had decreased the minimum wage.
4.12.2006 10:19pm
You Know Who:
SON,

Well, sure. But if you're at (or near) full employment, by definition, you can't go any lower. And, based on the theory set forth, it seems implausible that *raising* the min wage would *lower* unemployment. Right?

In any case, raising the minimum wage is associated with increases in unemployment rates, particularly for younger adults. See, e.g.,:

http://www.cato.org/pubs/regulation/reg18n1c.html
4.12.2006 10:39pm
gr (www):

Second, the minimum wage ought to be indexed, so that it grows no faster than inflation,


That's an odd concern. Hasn't it failed to keep up with inflation?
4.12.2006 10:56pm
Jim Lindgren (mail):
BTW, I'm against indexing almost anything at 100% of the inflation rate. People adjust their purchases based on relative costs of items (and wouldn't buy the same things if the price of one rose very much more than the rest). Any market basket of purchases is thus artificial and unrealistically high going forward, because it doesn't adjust for substitution in purchases. Further, most items (not all) improve over time, so that a $500 TV now is much better than a $480 TV 15 years ago.

I think any indexing should be at 50% or 75% of inflation, then adjusted by statute if needed. If Social Security had been indexed at 75% of inflation 30 years ago, my guess is that it would be financially sound today.
4.12.2006 11:23pm
Tennessean (mail):
The market sets prices at marginal cost only when it is a perfect market or otherwise coincidentally/accidentally. Query: what reason do we have to believe the labor market is without inefficiencies preventing such efficient market-clearing?

I was always surprised that people holding themselves out as economically informed argued that legislating a living wage would raise unemployment in my college town, a small town with an overwhelmingly dominant employer (the school). In such a case, you would expect to see the dominant employer holding down employment in order to hold down wages, so legislating a higher wage should actually _decrease_ unemployment.

Given that micro-example, which shows that the common wisdom may sometimes be wrong, aren't we compelled to discuss bargaining power, etc., about the labor market before making any inferences about the effect of wage legislation on unemployment?
4.12.2006 11:34pm
PaulV (mail):
Minimun wage penaltizes the least productive members of society for some dubious benefit for the more qualified. They lose jobs, respect and the opportunity to improve job skils.
4.12.2006 11:51pm
Lord Jim:
Reverse engineering the policy aspect. Assuming that your goal is to increase wages for older working poor vs. students, how far do you want to take it? Obviously you cannot pay wokers over 25 one rate and under another because employers would hire younger workers and increase older workers' unemployment rate. You could theoretically, however, force employers to take an additional tax deduction (that might effectively be below current min. wage rates) from younger workers to be redistributed to older workers. Maybe some discrim/equal pro problems, but would appear to move towards all the previous policy points espoused.
4.13.2006 12:09am
Brooklynite (mail) (www):
As for who makes the minimum wage, I just looked up the stats:

Almost forty percent of those making the minimum wage are full-time workers. More than forty percent of them are over thirty, and almost forty percent are married, divorced, or widowed. (Two-thirds are women, by the way.)

This isn't just about teenagers.
4.13.2006 12:14am
Justin (mail):
But in the fictional world that Bainbridge lives in, he's sure persuasive.

Also, comparing Drum's throwaway point to Bainbridge's academic one isn't fair. If Drum knew his point was being contrasted agaisnt an academic one, he would have been way more thorough.
4.13.2006 12:50am
Bryon Gill (mail) (www):
Seems to me there's lots of folks who don't think the current minimum wage is worth getting out of bed for, 2% is one in 50 and that's nothing to sneeze at, and if unemployment rises the employees least likely to be retained for minimum wage would be the young and distracted, whereas the motivated breadwinner would be playing for slightly better stakes.
4.13.2006 12:55am
walt61:
Thomas Sowell has a recent column on minimum wage and unemployment in South Africa.

4.13.2006 12:56am
Ross Levatter (mail):
George Gregg: "how many folks are earning a wage BETWEEN the current minimum wage and any proposed new minimum wage?

THAT is the number of people who would actually stand to gain from an increase in the minimum wage."

Amazingly, George gets that completely backwards. These are exactly the people whose jobs are put at risk as employers are forced to decide whether to subsidize them at a pay-level they could not obtain in a competitive market or simply fire them.
4.13.2006 1:50am
Justin (mail):
In BYU's Econ 101 program, you're right, Ross.

In the "real world" you don't have a leg to stand on, and all the empirical research (including both NJ, CA, and national studies) bears this out. Increasing the minimum wage has no effect on the amount of jobs, only the wages of them.
4.13.2006 2:50am
eng:
Raising the minimum wage does not impact the demand from employers too much... BECAUSE... it is nearly impossible to sustain an increase in the real as opposed to nominal minimum wage. The entire economy merely inflates upwards.

Wait you say. Inflation is reported as being ~3%, obviously +1 dollar out of five is a lot more inflation than that.

To which I say: who told you inflation was 3%? If you restrict your attention to industries without signfiicant foreign influence--say construction, education, or healthcare. You see that ding-ding, inflation is extremely high. Overall inflation only seems low because the prices are weighted down by the *cheap* overseas labor and the dollar accumulation of Asian banks.

If you look at the Federal Reserve balance sheet you'll discover that the supply of money is inflating by nearly 10% per year. On top of this the velocity of money is increasing.

Indexing the minimum wage will only make this situation worse. There is only one direction prices should ever be going in a healthy economy and that is "down". (Yes, good luck convincing too many central banks of this--but that falling prices delay investment and collapse the economy is a myth. Just look at the computer industry to know that falling prices do not so delay investment as to destroy production and advancement. )
4.13.2006 3:19am
Joan (mail):
There are lots of older people earning no more than mnimum wage. My adult mentally hanicapped daughter makes $7.20 an hour in fast food, she has been the same place for several years. There is a nationwide job under the Department of Labor that for years-on-end, has paid no more than minimum wage. I feel it is a crime that the government can get by paying no more than minimum wage, and the people that work these jobs are older people than teen agers and early 20s.
4.13.2006 9:37am
Tflan (mail):
So where in the Constitution does the Fed get the power to tell me what wage I can work for?

Limited government? Enumerated powers? Think again.

Resistance is futile! You will be assimilated!
4.13.2006 9:54am
AppSocRes (mail):
Why stop at just the very bottom of the income distribution. Fill in the blanks: I think many _______s are grossly underpaid. Therefore the government should pass a law that all _______s should receive a gross compensation equal to no less than $________.__ per hour.
4.13.2006 9:59am
triticale (mail) (www):
The real question is what is the value to an employer below which a person may not legally be employed.
4.13.2006 10:22am
brahma:
What is the minimum wage based on? Certainly not living wage, as that would have to be geopolitically based. It's a lot cheaper to live in Tuttle,OK than NYC. Is it intended to satisfy the living needs of a single wage earner paying the way for a family of four? Many more people benefit from an increase in the minimum waage than the min wage earners, many (all?) collective bargaining agreements are based on a MW floor, whereby all payees are based on an absolute or relative relation to minimum wage. An increase in the MW thus has much greater costs than those attributed to the MW earners. And what of waiters or lap dancers, who work on tips? MW eliminates jobs and increases foreign outsourcing, both direct and indirect. MW in the US increases worker exploitation in other countries. Any inhibitor to employment, by increasing costs or regulatory impact, has these effects.

What is the goal? Is it to increase employment? Is it to decrease federally redistributed assets? Even the base military family qualifies for foodstamps.

Until we decide what the goal is, we cannot find the solution to the goal. A little less heartache is not a goal we can satisfyingly achieve.
4.13.2006 10:28am
yoyo (mail):
Lost in all this is the concept of freedom, and as an employer the freedom to pay whatever the heck I need to. But everyone seems to be a social engineer behind their keyboard.
4.13.2006 10:41am
Freder Frederson (mail):
Lost in all this is the concept of freedom, and as an employer the freedom to pay whatever the heck I need to. But everyone seems to be a social engineer behind their keyboard.

I love all this talk about freedom--until the employees decide they want to band together and negotiate a contract on even footing with the employer and demand they be given a reason before they are fired--then suddenly freedom is a horrible thing and you want the government to ban unions.
4.13.2006 10:50am
JosephSlater (mail):
One odd thing about U.S. policy/law on this issue is that increases in the minimum wage aren't linked to anything. In most European countries, there is some formula/method of computing what the minimum wage should be, overall or in various industries. But in the U.S., it's pretty much a matter of, "when the Dems. are in charge, the minimum wage will probably go up a bit (how much is unclear); and when the Repubs. are in charge, it probably won't."
4.13.2006 10:57am
Andy Freeman (mail):
> I love all this talk about freedom--until the employees decide they want to band together

and deny other folk the right to work for that employer at a wage that said other folk find acceptable.
4.13.2006 11:21am
Freder Frederson (mail):
and deny other folk the right to work for that employer at a wage that said other folk find acceptable.

If there is an existing exclusive contract between two parties, one of the parties cannot breach the contract without consequences just because he finds a better deal.
4.13.2006 11:31am
George Gregg (mail):

George Gregg: "how many folks are earning a wage BETWEEN the current minimum wage and any proposed new minimum wage?

THAT is the number of people who would actually stand to gain from an increase in the minimum wage."

Amazingly, George gets that completely backwards. These are exactly the people whose jobs are put at risk as employers are forced to decide whether to subsidize them at a pay-level they could not obtain in a competitive market or simply fire them.


Ross, please re-read Bainbridge's comment again. In the context of his comment, which is what I was addressing, my reasoning is sound.

Clarified: Bainbridge argued that there are only 2% at the minimum wage. He used that as an argument for why few people would be impacted by a raise in minimum wage. It was that misleading metric that I was addressing.

You have introduced the idea that an increase in minimum wage would have the absolute reverse effect, by actually hurting those people (via unemployment). But if this argument undermines my statement, it undermines Bainbridge's original premise, as well.

In any event, others in this thread have spoken more knowledgeably about the putative unemployment issue. I find it compelling that there were similar warnings of massive unemployment the LAST time a minimum wage increase was proposed, but that this failed to materialize. Causality is problematic, of course, but it does suggest that the counterargument based upon dire warnings of unemployment is not as black-and-white as its proponents would like to represent.
4.13.2006 11:40am
sbw (mail) (www):
The unspoken premise is that responsibility for lifting the income of those people who do not have the skills to command better wages should fall on the businesses that employ unskilled labor and not on every taxpayers' shoulders through a reverse income tax -- an earned income tax credit.

Minimum wage hides the problem from view, it does not solve it. It hides the full cost of the program from legislators so they are not in a position to decide that the burden is so much that alternatives -- like, I don't know, education -- might be a better, more efficient way to rebalance demand to make underpaid workers full participants in the economy.
4.13.2006 11:58am
Freder Frederson (mail):
I find it compelling that there were similar warnings of massive unemployment the LAST time a minimum wage increase was proposed, but that this failed to materialize.

It's not just last time, its every time the minimum wage is raised. The business community and the other usual suspects trot out the parade of horribles of all the high school kids and working poor (who of course don't work for the minimum wage so won't be affected anyway. but will still lose their jobs because they do work for the minimum wage, but they don't so they won't, but they do so they will--oh, I'm so confused) who will lose their jobs and the hyper inflation that will result because of the higher cost of janitorial services and McDonalds hamburgers that will ripple through the the economy (but of course it won't cause inflation, because employers will just lay off people rather than raise prices, no they won't, they'll raise prices because of the higher cost of labor, no they'll lay off, no they'll raise prices--I'm so confused again). So after battles in Congress, the minimum wage finally gets raised and we all hold our breaths waiting for the waves of unemployed teenagers and working poor (who weren't working those jobs anyway--although, funny it seems like my local McDonalds is full of adults behind the counter) and $10 Big Macs. And guess what--it never happens. Poor people, and maybe some middle class teenagers, get a little bit more take home pay and maybe McDonalds and WalMart profits take a .1% hit. They can afford it.

Meanwhile, the same usual suspects continually assure us that by lowering taxes, revenues will increase and the deficit will disappear. Yet every time we have tried that, deficits have gone through the roof.

When are we going to realize that these right wing economists and their think tanks (like the Cato institute) don't know what the hell they are talking about, and are a bunch of snake oil salesmen and their theories are about as discredited as those of Marx?
4.13.2006 12:02pm
Alan Meese (mail):
1. The minimum wage is an extraordinarily inefficient way to redistribute income, given that so many of its recipients are, say, teenagers in middle or upper middle class households. I am one of those people who once earned $3.50 per hour, 10 cents above the minimum wage, just before College. At the time my father was a GS-15. Raising it "a buck" would have increased my income and thus reduced the amount I had to borrow to go to the U of C Law School (I saved my earnings for Law School, since College at William and Mary was so cheap.) Ditto for many of my friends. Despite the oppressively low minimum wage, we all made it out of our tough neighborhoods.

2. Don't we already help the working poor via the Earned Income Tax Credit, as well as the refundable tax credit that came with the Bush tax cuts? The former applies only to folks with kids, right, while the latter applies to everyone, if I understand this. I wonder, how many people are BOTH ineligible for the earned income tax credit AND ineligible for the refundable credit in Bush's tax cuts? Anyone? Much of the discussion over the minimum wage seems to assume that its recipients have no other sources of income, i.e., assumes aways transfer payments. These seem to be superior redistributive devices, since they are targetted directly to those "in need."

3. Note also that the minimum wage is a great way for skilled labor to raise the costs hiring unskilled labor and thus force employers to substitute away from the latter to the former. No wonder unions support it! In the antitrust context this is known as "raising rivals costs." Of course, if the government does it, it's "public policy!"
4.13.2006 12:03pm
brahma:
Does anyone have figures on the number of folks included within collective bargaining agreements that have incomes (and dues?) which are set based on minimum wage levels?
4.13.2006 12:07pm
Alan Meese (mail):
To Andy Freeman:


Why does "freedom" include the right of employees to form a cartel? If firms do the same thing, it's a felony. Does "freedom" require repeal of the Sherman Act?
4.13.2006 12:09pm
George Gregg (mail):
Alan, is it thus your position that corporations deserve the same civil liberties as individual people? That sounds like the basis of your question.
4.13.2006 12:18pm
mtv200 (mail) (www):
good!!!!!!!
4.13.2006 12:25pm
Houston Lawyer:
While we're forcing employers to pay more than the market requires, why don't we also force them to provide full health insurance coverage for each worker. Last time I paid full freight on that one, it cost me above $12,000 per year for me, my wife and kids. Surely adding that minor burden to the cost of marginal employees won't cost anyone his job.

I also think it would be nice if we all were required to take a minumum of 6 weeks paid vacation per year and could only be fired for cause. And I want my employer to pay the cost of my child care as well.
4.13.2006 12:35pm
Thorley Winston (mail) (www):
That's an odd concern. Hasn't it failed to keep up with inflation?


Actually it's surpassed the value of inflation. The original minimum wage established in 1938 was $0.25 an hour. According to the American Institute for Economic Research, if it had been adjusted for inflation each year, it would be $3.52 an hour today rather than the current $5.15.
4.13.2006 12:46pm
WilleTalos (mail):
Clipped from the Heritage Foundation's Policy Blog

The Minimum Wage—A Real-Life Case Study

12/12/05 11:35 AM
In 2004, Santa Fe raised its minimum wage to $8.50 / hour and set a schedule to raise it to $10.50 by 2008.
Economist Aaron Yelowitz examines the effects of Santa Fe's higher minimum wage on the region's labor market. Coming after pages of detailed econometric analysis, his conclusion is remarkably clear:
The results here unquestionably show a decline in labor market opportunities for less-educated adults. This manifests itself in higher unemployment, longer unemployment spells, more involuntary part-time work, fewer full-time equivalent jobs, labor substitution toward teenagers, and perhaps most surprisingly, in no detectable wage gains.
Put simply, boosting the minimum wage hurt the very workers that it was designed to aid.
This shouldn't come as any great surprise, to be sure, to anyone who's passed Economics I. Raise the cost of something, and people will buy less of it—that's true for widgets, lollypops, and hourly-wage labor. This isn't rocket science.
4.13.2006 1:01pm
WilleTalos (mail):
Clipped from the Heritage Foundation's Policy Blog

The Minimum Wage—A Real-Life Case Study

12/12/05 11:35 AM
In 2004, Santa Fe raised its minimum wage to $8.50 / hour and set a schedule to raise it to $10.50 by 2008.
Economist Aaron Yelowitz examines the effects of Santa Fe's higher minimum wage on the region's labor market. Coming after pages of detailed econometric analysis, his conclusion is remarkably clear:
The results here unquestionably show a decline in labor market opportunities for less-educated adults. This manifests itself in higher unemployment, longer unemployment spells, more involuntary part-time work, fewer full-time equivalent jobs, labor substitution toward teenagers, and perhaps most surprisingly, in no detectable wage gains.
Put simply, boosting the minimum wage hurt the very workers that it was designed to aid.
This shouldn't come as any great surprise, to be sure, to anyone who's passed Economics I. Raise the cost of something, and people will buy less of it—that's true for widgets, lollypops, and hourly-wage labor. This isn't rocket science.
4.13.2006 1:02pm
Ian Argent (mail):
Anecdotal evidence to be sure, but let me trot it out:

A friend of mine lives in Washington State, which has a minimum wage significantly higher than the federal requirement. When she was living out on the east coast in a state that merely goes with the federal rate, she made a fairly decent wage as a secretary/admin assistant. Moves out west, and now the same jobs are minimum wage or near to - to the point that she doesn't work because it's not economical to pay for the additional commuting costs over her husband's job (cost of living is roughly the same).

I think this can explain why unaemployment doesn't seem to go up with a raise in minimum wage - but the money has to come from someplace, and it comes from increasing the number of jobs that pay minimum wage...
4.13.2006 1:31pm
Freder Frederson (mail):
Raise the cost of something, and people will buy less of it—that's true for widgets, lollypops, and hourly-wage labor. This isn't rocket science.

But freshman economics courses assume all kinds of things that don't occur in the real world, things like equality of bargaining power; that nobody actually needs widgets and can forgo them if they are too expensive; that widgets are fungible, that both supply and demand are both perfectly elastic and infinite. None of which applies to anything in the real world, especially labor.

And even when the perfect model of Freshman economics fails, it still neglects the very human and social toll of those percentage of people in this country (whatever small or large percent they are) who are struggling to feed a family on $5.15 an hour while major corporations can find the funds to pay their CEOs upwards of $200 million a year.
4.13.2006 3:21pm
Freder Frederson (mail):
Actually it's surpassed the value of inflation. The original minimum wage established in 1938 was $0.25 an hour. According to the American Institute for Economic Research, if it had been adjusted for inflation each year, it would be $3.52 an hour today rather than the current $5.15.

But if you take the minimum wage of $2.65 in 1977, when I started my working life (and I got $2.85 an hour when I started working at Walgreens in high school), it would be worth $8.68 now.
4.13.2006 3:27pm
Freder Frederson (mail):
For a less biased look at the Santa Fe employment situation since the new minimum wage went into effect, have a look at this report.
4.13.2006 3:37pm
REL (mail):
The statistic that I would like to see is what percentage of minimum wage earners have been earning minimum wage for more than a year. In my experience, most "minimum wage" jobs do not remain minimum wage for very long because people that can perform the job even adequately are given a raise. Does anyone have evidence for or against this concept?
4.13.2006 3:46pm
Davebo (mail):
I think we can all agree that raising the minimum wage by less than $3.00 would not have a horrific effect on employment in America.

And the idea that it would seems to defy my business experience. If McDonalds could sell the same number of hamburgers with one less employee on staff trust me, there would be one less employee on staff already.
4.13.2006 3:52pm
Anon for now:
I also think it would be nice if we all were required to take a minumum of 6 weeks paid vacation per year and could only be fired for cause. And I want my employer to pay the cost of my child care as well.


Agreed.
4.13.2006 6:52pm
Alan Meese (mail):
Gregg asks if I think that corporations have the same rights as natural persons. I can dodge the question because I think my post referred to "firms," pointing out that a labor cartel is analogous to a cartel of firms, the latter of which is a felony under the Sherman Act. "Firms," of course, include things like law firm partnerships, i.e., not corporations. If two law partnerships collude on price, that's a felony. Ditto for two solo practitioners. I'm not sure that, properly defined, "freedom" entails the right to fix prices in this manner. If so, it's not clear why "freedom" should include the right of several workers to band together and fix the price of their services, either.
4.13.2006 9:15pm
Justin (mail):
By the same rediculous token, Alan, we should also ban law firms - since the partners of Skadden, Arps, Meagher, Slate and Flom form a cartel and fix the price to their clients for their services.

Oh, wait - there's a huge exception in the Sherman Act for those that incorporate together for a single purpose.

As for the policy justifications for labor unions, crack open any history book for starters. Or start with Karl Marx and anyone who came after him, liberal or conservative (not the crazy Communist stuff, but the concept of power differentials and capital-labor relative bargaining power). As the Supreme Court rightly noted when declining to apply the Sherman Act (a legislative decision, not a natural constitutional right) to the equally Congressionally enacted Clayton, RLA, Norris-Laguardia, Davis-Bacon, NIRA, Wagner, Byrnes, Wash-Healey, Taft-Hartley etc acts, you're comparing apples and oranges.
4.14.2006 3:16am
Justin (mail):
I also think it would be nice if we all were required to take a minumum of 6 weeks paid vacation per year and could only be fired for cause. And I want my employer to pay the cost of my child care as well.

Stupid French commies and their...ummm...happiness.
4.14.2006 3:17am
jgshapiro (mail):
Stupid French commies and their...ummm...happiness.

Yes, they appear to be quite content. Especially the ones who were burning cars a couple of months ago. That's what I do when I'm jazzed about life. Doesn't everyone?

Raise minimum employee benefits high enough and you get two groups of people, the employed and happy and the unemployed and *very* unhappy. Very unhappy, because it is much less likely that they will get a job when the expense of one more employee is so high and an employer's ability to sack them is so limited.

The trick is to make sure that at least 51% of the voting population stays employed, so that the unemployed voters can't use their votes to force the government to make it easier for them to get hired.
4.14.2006 5:49am