Minimum Wage Or The Price We Pay For Stupid
February 4, 2012 Leave a comment
I have noticed a definite pattern emerging ever since before the 2008 election of BHO: many voters have given up thinking and have decided to vote for the popular shills of humanism, otherwise known as the educated elite.
BHO, the POTUS, is surrounded by Harvard grads, each of whom has been steeped in liberal mores taught by educators who have risen to the level of their incompetence (the Peter Principle). I like what Tomas Sowell, economist, said about these professors:
“Too often what are called “educated” people are simply people who have been sheltered from reality for years in ivy-covered buildings. Those whose whole careers have been spent in ivy-covered buildings, insulated by tenure, can remain adolescents on into their golden retirement years.”
And, Walter E. Williams:
“People who denounce the free market and voluntary exchange, and are for control and coercion, believe they have more intelligence and superior wisdom to the masses. What’s more, they believe they’ve been ordained to forcibly impose that wisdom on the rest of us. Of course, they have what they consider good reasons for doing so, but every tyrant that has ever existed has had what he believed were good reasons for restricting the liberty of others.”
In my estimation the American voter, though often degreed, has become less educated and intellectually apathetic. This voter has become a stage-one thinker – someone who finds some humanist value in a policy, votes for the person promoting it and doesn’t want to think any further about it, believing that they have done their good deed for the day. Yet, the policy does not operate in isolation and, typically, havoc and damage control ensues when the policy is implemented. Our nation is left ever more crippled. The Minimum Wage Law (MWL) is one prime example of this stage one thinking implemented and voted for by people who let others do their thinking.
Thomas Sowell in his excellent book the Thomas Sowell Reader, a compendium of his many newspaper articles and essays, wrote an article titled Minimum Wage Laws. Here are some of his thoughts from that article to ponder deeply before the next election:
“By the simplest and most basic economics, a price artificially raised tends to cause more to be supplied and less to be demanded than when process are left to be determined by supply and demand in a free market.”
“The unemployed are made idle by wage rates artificially set above the level of their productivity. Those who are idled in their youth are of course delayed in acquiring the job skills and experience which could make them more productive – therefore higher earner – later on.”
“Although most industrial societies have minimum wage laws, not all do. Switzerland and Hong Kong have been among the exceptions – and both have had very low unemployment rates.”
“Higher costs for a given quantity and quality of labor tend to produce less employment, just as higher prices for other things tend to produce fewer sales. Moreover, higher costs in the form of mandated benefits have the same economic effect as higher costs in the form of minimum wage laws. The explicit minimum wage rate understates the labor costs imposed by European governments, which also mandates various employer contributions to pension plans and health benefits, among other things. Europe’s unemployment rates shot up when such government-mandated benefits to be for by employers grew sharply during the 1980 and 1990s.”
Average hourly compensation in Europe of manufacturing employees in the European Union countries in general is higher than in the United States or Japan. So is unemployment.”
“Labor unions also benefit from minimum wage laws, are among the strongest proponents of such laws, even though their members typically make much more than minimum wage rate.”
“Just as businesses seek to have government impose tariffs on imported goods that compete with their products, so labor unions use minimum wage laws as tariffs to force up the price of non-union labor that competes with their members for jobs.”
“…when all is said and done, most empirical studies indicate that minimum wage laws reduce employment in general, and especially the employment of younger less skilled, and minority workers.” (emphasis mine)
Thomas Sowell’s article is chock full of empirical information and common sense economics. I could continue to quote many of his insightful words. I’ll provide one more series of quotes about minorities and the implementation of MWLs the past century:
“Again, it is necessary to note how price is a factor even in racial discrimination…It was only after a series of minimum wage escalations began that black male teenage unemployment not only skyrocketed but became more than double the unemployment rates among white male teenagers.” (emphasis mine)
Stage-one voting creates unemployment. Obama, the educated One, Jesse Jackson and the Congressional Black Caucus should know the facts. But in ignoring the economic data they choose “navel-gazing, hand-wringing or self-dramatization” to preach a Liberal Utopia that will never arrive on this earth. MWLs produce the opposite effect, in fact!
Don’t ignore the data. Read. Understand. Think beyond stage-one. Uncle Sam needs You more than ever.
Again, Thomas Sowell:
“People who cannot be bothered to learn both sides of the issues should not bother to vote.”
 Thomas Sowell, The Thomas Sowell Reader, p. 401
 Ibid., p. 108
 Ibid., p. 108
 Ibid., p. 109
 Ibid., p.110
 Ibid., p.111
 Ibid., p. 115 & 117
 Ibid., p.397
Note: Mitt Romney has come out in favor of auto-increasing the MWL. I am voting Newt Gingrich in the Illinois GOP primary.
Update: In a 02/07/2012 RCP article regarding Mitt Romney’s faux conservatism, Thomas Sowell said:
“Nor are such consequences of minimum wage laws peculiar to blacks or to the United States. In Western European countries whose social policies liberals consider more “advanced” than our own, including more generous minimum wage laws and other employer-mandated benefits, it has been common in even prosperous years for unemployment rates among young people to be 20 percent or higher.
The economic reason is not complicated. When you set minimum wage levels higher than many inexperienced young people are worth, they don’t get hired. It is not rocket science.
Milton Friedman explained all this, half a century ago, in his popular little book for non-economists, “Capitalism and Freedom.” So have many other people. If a presidential candidate who calls himself “conservative” has still not heard of these facts, that simply shows that you can call yourself anything you want to. “
Thoughts from Uncle Miltie: