GayPatriot

The Internet home for American gay conservatives.

The real minimum wage is $0

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A week ago, Zero Hedge reported on a study that Seattle’s minimum wage law is costing workers their income and jobs.

…boosting pay in low-wage jobs by about 3 percent since 2014 but also resulting in a 9 percent reduction in hours worked in such jobs. That resulted in a 6 percent drop in what employers collectively pay…

The report also estimated that there are about 5,000 fewer low-wage jobs in the city than there would have been…

But St. Louis workers face better times. The Missouri legislature passed a pre-emption law to invalidate that city’s hike.

Preemption laws are becoming increasingly popular in GOP-controlled states as cities – typically bastions of liberal sentiment – try to raise minimum wages above statewide minimum levels…

…at least 17 states have preemption laws that stand in the way of local minimum wage legislation, according to a recent study by the National League of Cities…

Sadly, MO Governor Eric Greitens, who is a gun-toting conservative hunk of delicious beefcake, was less-than-bold about it:

Fearing the political backlash…Missouri Gov. Eric Greitens wouldn’t affix his signature to the bill; Missouri’s constitution stipulates that bills that go unsigned by the governor automatically become law.

What happens in general, when wages go up too far, too fast? China has the answer.

Manufacturers, squeezed by rising labor costs and a paucity of skilled workers, are fueling an unprecedented boom in the adoption of automated technologies to cut down on the number of workers needed on factory floors, according to the latest findings of the China Employer-Employee Survey.

Ironically, the Communist Party’s willingness to support unprofitable businesses is compounding problems for Chinese workers, as many manufacturers are barely profitable to begin with.

Remember that video of China’s parcel-sorting robots? Or, closer to home, we could talk about McDonald’s replacing its cashiers with kiosks.

Serving them right

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On certain issues, leftist harping is especially odious. One is the minimum wage.

Anyone who has met a payroll knows that, when higher wages are simply dictated from on high, then employees (or hours or salaries) must be cut back elsewhere – assuming the business can survive at all. It’s math. We’ve seen it before,

Leftists like to deny math and other facts of business and economics. What makes it odious is, they’re also smug about it. It isn’t just their ignorance; it’s their aggressive pride in staying ignorant.

Via HotAir, now a study confirms that San Francisco’s minimum wage does indeed injure the businesses and workers of that city.

San Francisco’s higher minimum wage is causing an increasing number of restaurants to go out of business even before it is fully phased in, a new study by the Harvard Business School found.

The closings were concentrated among struggling, lower-rated restaurants. The higher minimum also caused fewer new restaurants to open, it found.

“We provide suggestive evidence that higher minimum wage increases overall exit rates among restaurants, where a $1 increase in the minimum wage leads to approximately a 4 to 10 percent increase in the likelihood of exit,” report Dara Lee and Michael Luca, authors of “Survival of the Fittest: The Impact of the Minimum Wage on Firm Exit.” The study used as a case study San Francisco, which has an estimated 6,000 restaurants in the Bay Area and is ratcheting up its minimum wage.

So, Nancy Pelosi and her fellow limousine-socialists are looking at fewer restaurant selections for themselves – and more unemployed people. Do they understand that? Or even notice it?

There is only one time when the minimum wage doesn’t hurt employment: When it’s low enough, in real terms, to be ineffectual. For example, if we have a period of inflation – and no minimum wage increases – then its real value will go down, and employers can afford to hire the low-end workers again. But the higher the minimum wage is, in real terms: the more low-end workers can’t get work.

Newsflash: Higher wages don’t come for free

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Business 101: When paying an employee, you have to pay in line with their productivity.

  • If you underpay, you lose the employee.
  • If you overpay, you run up losses and lose your business.
  • If you raise the hourly wage, you must get more from each employee hour – and you must cut the hours/employees that won’t or can’t rise to the new, higher bar.

You may have seen the following last week, but I didn’t want to let it pass without comment. After raising wages over the last 18 months, Starbucks and its employees have been learning some lessons the hard way:

An online petition accus[es] Starbucks Corp of “extreme” cutbacks in work hours at its U.S. cafes…

[Starbucks] recently introduced technology that allows customers to order and pay from mobile devices. That service aims to…reduce bottlenecks in stores. [ed: reducing the number of employees needed per shift]

Starbucks has a software system that determines labor needs based on business trends…
Comments on the petition painted a picture of broad discontent at the company…
…many signers say they noticed cutbacks in U.S. staffing hours…
One central California store has seen its labor allotment shrunk by about 10 percent, even though sales are up…
“No matter what we do to save on labor at my store, the system tells us EVERY SINGLE DAY that we are at least 8 hours over in labor for the day and have to cut even more,” wrote [a petition] signer…

Like other restaurants and retail companies, Starbucks is wrestling with the effects of local minimum wage increases…tipping has fallen substantially amid broad customer adoption of the “Starbucks Rewards” program, which allows customers to pay with a loyalty card or mobile phones.

Suppose Starbucks gives in and boosts employee hours (arbitrarily; without a matching, widespread sales & productivity gain). What happens then? Operating budget overruns and closing stores. And/or price increases, declining sales, and closing stores. Perhaps eventually, a closing company. Thanks, Blue State lefties!

UPDATE: This oldie from The Guardian in 2014 may help us to see the problem:

[Read more…]

Hey Liz: Here’s why you are a socialist

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Picking this up from V’s post of a week or two ago, Elizabeth Warren does not understand why people think she’s a socialist.

(Please, I need a moment to stop giggling. It’s as if President Obama were to say he does not understand why people think he’s a liar. Air gasp. OK, I think I can go on.) – Warren said:

I just don’t know where [people] get that [idea of her being a socialist]. You know, look at the issues. I mean really, let’s take a look at minimum wage — I just believe nobody should work full time and live in poverty…Student loans: I don’t think the U.S. government should be making tens of billions of dollars in profits off the backs of our students, which is what the current student loan system is doing…

Never mind that Warren proposes the U.S. government to *lose* tens of billions of dollars on student loans. Let’s go straight to Kevin Williamson, defining socialism:

The current Random House Dictionary definition of “socialism” is serviceable but dated: “a theory or system of social organization that advocates the vesting of the ownership and control of the means of production and distribution, of capital, land, etc., in the community as a whole.”…

[Dated, because] It should read “ownership -or- control” rather than “ownership -and- control.” As we have seen in the cases of enterprises such as Fannie Mae and Freddie Mac, it is entirely possible for government economic planners to intervene deeply (and, in this familiar case, catastrophically) in the economy while maintaining private economic forms…

A more complete definition of socialism incorporates two criteria: The first is that socialism entails the public provision of non-public goods. The second is the use of central planning to implement that policy.

And that, Liz, is why you are a socialist.

  1. You want the public purse to pay for *private* goods (goods that benefit the individual primarily, if not exclusively). For just one example, you want government to fund special young people on a costly, but often low-benefit, multi-year jaunt that we politely call “college”.
  2. And you believe in a planned economy. For just one example, you want government to dictate the minimum wage at which a worker may offer her work (or else you will not permit any employer to give her work).

For the record: I don’t and I don’t. So, I’m not.

Because we can’t let Seattle beat us

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Follow-up to V’s post on Seattle, last week the California Senate voted to destroy entry-level jobs:

The state Senate on Thursday approved a measure that would gradually raise the minimum wage in California from the current $8 an hour to $13 in 2017, despite warnings from the California Chamber of Commerce that the bill is a “job killer.”

Warning: Gay Left politicians at work!

Sen. Mark Leno (D-San Francisco) said his bill is necessary to help lift many of the 7.9 million Californians being paid minimum wage out of poverty. “Income inequality has been spoken of by our president as the defining challenge of our time,” Leno told his colleagues.

He said the current minimum wage is so low it allows many who receive it to get public assistance. “It is our tax dollars that are subsidizing the largest corporations paying these poverty wages.” Leno said. No other state has a minimum wage of $13 an hour…

Related: Calif. Senate votes to reduce penalties for sale of crack cocaine

The “Related” was added by the LA Times (when I pasted the text). Fitting, isn’t it? Because the measure would actually keep poor Californians in poverty, increase inequality, and push more people onto public assistance. Is that Leno’s real goal?

And Chicago also wants a $15/hr minimum wage. It’s trendy.

But not trendy enough for the Swiss: in May, they rejected a high minimum wage by a huge margin. (The Swiss proposal would have been $25/hr by exchange rates, or $14 by PPP adjustment.)

Obama’s daily lawlessness

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On Wednesday, V noted how President Obama set aside his own Obamacare law and decreed a delay to the “individual mandate”. (The mandate that he previously told the Supreme Court was an absolutely essential part of Obamacare.)

Thursday’s example was Obama’s plan to decree overtime pay for some 10 million who had willingly been working without it, because they are salaried employees.

It’s not a good thing. First of all, anytime the government mandates pay increases, it costs real people their jobs. While some people might get more pay, others’ pay goes to part-time, or to zero. When Obama proposed his minimum wage hike last month, even the Congressional Budget Office (CBO) agreed that it would cost 500,000 jobs.

But the deeper problem is that, in Barack H. Obama, we have a President who increasingly abandons constitutional, legislative and democratic processes. Throughout his administration, in issue after issue, he has declared that the rules are now different because he says so. Whether it’s ripping off honest GM bondholders, Fast and Furious, hiding information about corrupt federal prosecutors, Obamacare or countless other issues, you never can tell when this President will suddenly decide on different rules.

With this overtime change, there is serious debate about whether the President has the legal authority to do it. Some say he doesn’t; some say he does. But that means his move is dubious. And however that might be – and I say, even worse – Obama’s move makes the government interfere, once again, in arrangements that freely consenting adults had agreed on. (Liberals may want government out of the bedroom, but boy, do they want government in everything, everyone and everywhere else.)

This is one more, little thread in the tapestry of America’s decline: we have become a nation ruled by “men, not laws.” And if you think that arbitrary government doesn’t make for an atmosphere of fear and uncertainty that stifles the economy, think again.

UPDATE: Allahpundit has video, as he puts it, of Obama “in 2008 promising to roll back Bush’s executive overreach because he was a law professor and knew the Constitution ‘n stuff.”.

Rep. Trey Gowdy gives an appropriate response.

Is Obama dumb, or just his base?

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Is President Obama ignorant of how the job market works, or does he cynically exploit the ignorance of his left-wing, “low information” voter base?

If economics has two consistent findings, they are:

  1. Rent control messes up a city’s rental market, driving rents *up* (and rental quality down) over time.
  2. Raising the minimum wage kills low-end jobs, the ones held by young and/or poor people.

You can prove (2) to yourself with a simple thought-experiment. Imagine we raised the federal minimum wage from its present $7.25/hour to, say, $25. Would McDonald’s or any other restaurant, large or small, be able to stay in business?

They might, if they adopt Applebee’s new “Waiter Terminator”.

The E La Carte Presto tablets – powered by Intel – will allow patrons to pay from their seats while also adding food and beverages to their existing orders…

The Presto tablets, which were developed at MIT, have been “ruggedized” to deal with the spills and rowdy children…

DineEquity said it might consider introducing the tablets at its IHOP restaurant chain as well. The company joins many others in the industry that have begun incorporating technology into the customer experience.

When government forces wages up, it forces businesses to kill jobs: either by the business dying, or by its replacing workers with technology (a.k.a. capital). The restaurant industry has technology waiting in the wings.

As if to defy that reality, last week Obama tweeted his base the following total falsehood:

Hence, my question. [Read more…]

U.S. minimum wage is high, already

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If the “science” of economics has two consistent findings, they are:

  1. Rent control doesn’t work. It only leaves a city’s rental market more messed up and expensive than ever before. And,
  2. Raising the minimum wage is a great way to raise unemployment, denying jobs and hope to the poor, the young, and other relatively unskilled people.

Do left-liberals care? Noooooo. With their unreasoning devotion to Big Government as Fantasy-Mommy-Daddy Which Picks Our Food From Unicorn Bushes, they continually advocate both rent control and minimum wage hikes.

But the U.S. already has a fairly high minimum wage, as shown on this neat-o infographic from ZH:

Hourly minimum wages around the world, adjusted for Purchasing Power Parity

Note that Australia’s vaunted minimum wage is under $10, in real terms (adjusted for PPP). Add in the fact that Australia is actually a freer country than the U.S. – #3 for economic freedom, where the U.S. under Obama has sadly sunk to #10 – and a resource-producer for China, and one can see why Australia has not had more glaring damage from their minimum wage…yet.

I’m sure that Nancy Pelosi, Barbara Boxer and others will not rest until the U.S. is “Number One!” in minimum wage – and in unemployment.

Classic Nancy Pelosi

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I don’t know where Peter Schiff got this old footage, but it’s kind of interesting. Nancy Pelosi, known for her positions in favor of raising the minimum wage (which only raises unemployment and hopelessness, but lefties don’t care), refuses to answer an interviewer’s tough-but-fair questions about why she pays her own entry-level staff below the minimum wage, or even nothing at all:

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Schiff gets around to Pelosi at 11:10, and takes her apart clip-by-clip. Such answer as she gives the original interviewer is a variation of the classic, “It’s OK When I Do It, Because I’m In Congress” – mixed in with a pretty strained appeal to religion.

But the interviewer doesn’t give up. The last clip shows Pelosi telling her staff to “call the guard” to throw him out. Haughty yet anxious; what a mix.

If anyone knows the original interviewer’s name, please post it in the comments.

UPDATE: It’s Jan Helfeld. (Thanks Juan!)