There is no way to circumvent the inherently racist character and history of the minimum wage. There is no way to evade the reality that increase in MW also increase minority and youth unemployment, and typically overall employment. Stores and retailers, the primary working locations of MW personnel, simply hire older workers with better job skills, lower turnover rates, and better appreciation of timeliness and customer service. Kiosks for food orders are now much lower in cost than MW employees over 16 hours each day for a year. Kiosks are becoming ubiquitous, meaning no workers filling that role anymore. Unemployment is not a pay raise.
None of these observations is new: all have been well documented for decades. Liberals' denial of economics is also not new. As the great Thomas Sowell has said, the first law of economics is scarcity; the first law of politics is to ignore the first law of economics. Minimum wage laws epitomize this.
I'm not sure I completely agree with the conclusion "with more workers getting more skills, potentially millions of workers get higher pay than if the minimum wage were higher." If more workers have more skills, shouldn't that cause the price for high skilled workers to drop, all else being equal?
Why? Demand for the things produced by skilled labour isn't static. Indeed, our demand for low skilled production is far more static than for high skilled production.
No. The minimum wage was originally proposed--openly--as a means of preventing "undesirable" people (e.g., immigrants, blacks migrating northward, nonunion workers, etc.) from gaining a foothold in the economy and rising afterward. There was a progressive trope that held that it was better to keep such people on public or private charity or eject them than to allow them into the functioning economy. By and large, the minimum wage has always worked exactly as its originators intended. High-skilled workers are not competing with minimum-wage workers to any great extent. Furthermore, with more workers gaining skills, there's an overall positive effect on economic growth in general, which is likely beneficial to high-skill workers, as well. In the Middle Ages, after the Black Plague, subsistence laborers began earning enough to have some disposable income. This rise out of abject poverty fueled the rise of textiles, taverns, and other providers of goods that were previously unavailable to the masses. This is the process that fueled half a millennium of growth, including the Industrial Revolution. Similarly, dire poverty existed in America before the mid-20th century. The rising living standards about America's poor fueled incredible wealth gains among highly skilled Americans--who could now sell their wares to previously destitute millions.
“ By and large, the minimum wage has always worked exactly as its originators intended.”
I am positive we agree on stance about minimum wage. That said, even sans the word “exactly” I disagree that it to this day works as its originators intended.
For some fraction those who do get a job, the pay is a bit higher than it otherwise would be. And as your implied point, it causes more middle and upper middle class teenagers to get some low wage jobs that might have gone to others were the employer allowed to pay less.
It has also caused automation to reduce the number of low paid jobs available.
But the point is there are in fact multiple consequences of minimum wage laws today that are substantially different from what those originators intended. A substantial part of the difference is because of the much larger safety net that exists today.
It is an enormous stretch to claim that the distortions that minimum wage laws create today - benefits for a small number of those they are supposedly designed to aid, negatives to so many others (e.g. the inflation in the cost of fast food in CA, to name just one) - are just as its originators intended. I refuse to believe they could have conceived of a fraction of the consequences.
I understand the original motivation, both the Bootleggers and the Baptists. It's a very distasteful origin story for minimum wages. TBH, I often wonder how many people thought that versus thought they were honestly doing a charitable thing.
I think we're more in agreement than disagreement. For example, I agree low and high skill workers are not competing for the same jobs, not when they're in that skill state.
If I'm reading you right, you're saying if everything else stays the same, cutting low-skilled people out of the skilled workforce tends to increases wages of high-skilled workers who have a job. That was the 1900-era view of minimum wages. I'm just stating that from the reverse perspective: letting low-skilled people get jobs and gain skills (that's the key point) puts downward pressure on high skill wages because the original high skill workers now face increased competition.
Naturally, it's never the case that everything else stays the same. As you point out, increasing the pool of high skilled workers ought to grow the economy and raise everyone's wages. That's fine, I expect it's true, and I was intentionally ignoring this follow-on effect.
You wrote: "you're saying if everything else stays the same, cutting low-skilled people out of the skilled workforce tends to increases wages of high-skilled workers who have a job. " That's the opposite of what I'm saying. When you allow millions of low-skill workers into the economy unobstructed, they acquire purchasing power, thus offering greater income to high-skill people who sell things to the economic newcomers. And once the low-skill people enter the economy, they begin acquiring human capital, moving them higher up the economic ladder, where they can buy even more things from the high-skill people selling them stuff. (And even high-skill people who don't sell things to the newcomers see rising income, too, as the demand for skilled labor and human capital increases.
There is no way to circumvent the inherently racist character and history of the minimum wage. There is no way to evade the reality that increase in MW also increase minority and youth unemployment, and typically overall employment. Stores and retailers, the primary working locations of MW personnel, simply hire older workers with better job skills, lower turnover rates, and better appreciation of timeliness and customer service. Kiosks for food orders are now much lower in cost than MW employees over 16 hours each day for a year. Kiosks are becoming ubiquitous, meaning no workers filling that role anymore. Unemployment is not a pay raise.
None of these observations is new: all have been well documented for decades. Liberals' denial of economics is also not new. As the great Thomas Sowell has said, the first law of economics is scarcity; the first law of politics is to ignore the first law of economics. Minimum wage laws epitomize this.
I'm not sure I completely agree with the conclusion "with more workers getting more skills, potentially millions of workers get higher pay than if the minimum wage were higher." If more workers have more skills, shouldn't that cause the price for high skilled workers to drop, all else being equal?
Why? Demand for the things produced by skilled labour isn't static. Indeed, our demand for low skilled production is far more static than for high skilled production.
Right. I was simplifying the issue by assuming all else stays constant. We both know that's never actually the case.
No. The minimum wage was originally proposed--openly--as a means of preventing "undesirable" people (e.g., immigrants, blacks migrating northward, nonunion workers, etc.) from gaining a foothold in the economy and rising afterward. There was a progressive trope that held that it was better to keep such people on public or private charity or eject them than to allow them into the functioning economy. By and large, the minimum wage has always worked exactly as its originators intended. High-skilled workers are not competing with minimum-wage workers to any great extent. Furthermore, with more workers gaining skills, there's an overall positive effect on economic growth in general, which is likely beneficial to high-skill workers, as well. In the Middle Ages, after the Black Plague, subsistence laborers began earning enough to have some disposable income. This rise out of abject poverty fueled the rise of textiles, taverns, and other providers of goods that were previously unavailable to the masses. This is the process that fueled half a millennium of growth, including the Industrial Revolution. Similarly, dire poverty existed in America before the mid-20th century. The rising living standards about America's poor fueled incredible wealth gains among highly skilled Americans--who could now sell their wares to previously destitute millions.
“ By and large, the minimum wage has always worked exactly as its originators intended.”
I am positive we agree on stance about minimum wage. That said, even sans the word “exactly” I disagree that it to this day works as its originators intended.
For some fraction those who do get a job, the pay is a bit higher than it otherwise would be. And as your implied point, it causes more middle and upper middle class teenagers to get some low wage jobs that might have gone to others were the employer allowed to pay less.
It has also caused automation to reduce the number of low paid jobs available.
But the point is there are in fact multiple consequences of minimum wage laws today that are substantially different from what those originators intended. A substantial part of the difference is because of the much larger safety net that exists today.
It is an enormous stretch to claim that the distortions that minimum wage laws create today - benefits for a small number of those they are supposedly designed to aid, negatives to so many others (e.g. the inflation in the cost of fast food in CA, to name just one) - are just as its originators intended. I refuse to believe they could have conceived of a fraction of the consequences.
I understand the original motivation, both the Bootleggers and the Baptists. It's a very distasteful origin story for minimum wages. TBH, I often wonder how many people thought that versus thought they were honestly doing a charitable thing.
I think we're more in agreement than disagreement. For example, I agree low and high skill workers are not competing for the same jobs, not when they're in that skill state.
If I'm reading you right, you're saying if everything else stays the same, cutting low-skilled people out of the skilled workforce tends to increases wages of high-skilled workers who have a job. That was the 1900-era view of minimum wages. I'm just stating that from the reverse perspective: letting low-skilled people get jobs and gain skills (that's the key point) puts downward pressure on high skill wages because the original high skill workers now face increased competition.
Naturally, it's never the case that everything else stays the same. As you point out, increasing the pool of high skilled workers ought to grow the economy and raise everyone's wages. That's fine, I expect it's true, and I was intentionally ignoring this follow-on effect.
You wrote: "you're saying if everything else stays the same, cutting low-skilled people out of the skilled workforce tends to increases wages of high-skilled workers who have a job. " That's the opposite of what I'm saying. When you allow millions of low-skill workers into the economy unobstructed, they acquire purchasing power, thus offering greater income to high-skill people who sell things to the economic newcomers. And once the low-skill people enter the economy, they begin acquiring human capital, moving them higher up the economic ladder, where they can buy even more things from the high-skill people selling them stuff. (And even high-skill people who don't sell things to the newcomers see rising income, too, as the demand for skilled labor and human capital increases.