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Progressive Philosophy of Minimum Wage
I was catching up on Jonah Goldberg’s piece of last week on Elizabeth Warren and the broader progressive desire to keep big business as a lap dog, and clicked through to David Harsanyi’s piece at The Federalist on Elizabeth Warren more generally. David, in turn, linked to Warren’s “Eleven Commandments of Progressivism,” one of which is: “We believe that no one should work full-time and still live in poverty, and that means raising the minimum wage.”
After quelling my reflexive irate reaction about the economic idiocy pertaining thereto (lost jobs at the margin, fewer first jobs for teenagers, etc., etc.), I started thinking about the implications of the above “commandment” and realized that the key phrase is “work full-time and still live in poverty.” The progressive worldview implication, I believe, is the plain reading of the words: a belief that no one should fill their days with work, but still be poor. (I’ll leave alone for now the begged question of the definition of ‘poor,’ at least as pertains to life in the U.S.)
One of the practical aspects of the modern global economy that has bothered me for quite some time is the question of how those U.S. citizens with too few or too limited skills to support themselves are to make their way. It seems to me neither practical nor moral to tell an otherwise able-bodied citizen with, say, a $4/hour earning potential, “Sorry, the only jobs that pay what your skills are worth are in Laos and rural India. Have a safe trip!” Education is the best solution, I figure, but complicated to achieve without the active participation of the individual and slow to have a significant effect.
I’m beginning to suspect the Progressive solution to this question is Warren’s fourth: Set the minimum wage at a level “sufficient for long-term sustenance of existence,” and then provide wealth transfer payments to anyone unable to find work at that wage. Yes, total employment will overall go down, but by this vision, in the resulting situation no one will work full-time but still live in poverty. That the ‘losers’ in this approach will in general be chained into government dependence is just another feature, not a bug, potentially.
Published in General
Consider that the total of Federal, State and Local funding for education in FY2014 is projected to top $1.1 TRILLION*. (Progressives compare everything to the Pentagon budget but never deal in the totality of the numbers.) It’s not like we’re not throwing a lot of money at that problem. No, the question is not merely economic. It’s also cultural.
The charge of racism quiets all talk about the real reason for our economic underclass. It’s not lack of opportunity, it’s lack of taking advantage of the opportunities offered. And you can’t fix stupid.
*Amended. See conversation below.
I think you misplaced a decimal point. Total GDP is “only” 16T (thereabouts) and at least according to this source total gov’t education spending is just a smidgen over 1T.
I copied from the wrong column. Thanks for the catch! My post has been amended and footnoted. (ATTN JOE WALSH)
“Education” doesn’t educate. People only learn and retain the things that they need/want to, which means they forget 95% of what they “learn.”
Education only sorts people into their various abilities to learn something, meaning “more education” is a zero sum game after basic literacy and numeracy, which is why so many people have college degrees and are working as Starbucks. They got an education but someone else got a little more.
One other point, I think the average individual in rural India would kill to make $4 an hour when most people are living on less than a dollar a day. $4 is closer to Chile (PPP) or Estonia (nominal) median wage.
This post beats me to the punch on the next one I’m going to write. It may be a political feature for Dems, but it’s a societal bug. Just as Rome couldn’t forever keep up handing out 200,000 tons of free grain to the poor forever, neither will the U.S. be able to forever provide entirely for a significant portion of population.
When the funding dries up, and these people have no capital and no skills to earn them employment, it’s going to get ugly.
That quote from Warren is indeed the hinge of this Hell-Sent proposal. The core value proposal of Marxism (as they fail to advance a Theory of Value, but rely upon unargued assumptions) is the “Labor Theory of Value” or LTV which states simply that the value of a thing is (directly proportional to) the amount of labor used to produce it. Unextracted minerals are valueless, labor extracts them and makes them valuable. The necessary zero value of all things in nature, and the lack of a quality or productivity metric for labor itself means that the worst worker adds the most value. It also adds a perverse motivator to a popular Marxist goal; for “the workers” to own the means of production. If the only source of value is a laborer, then simply own those and be done with it. Which is precisely what happens each time a marxist paradise gets tried for real, and collapses into a totalitarian hellhole.
That’s not really the case. Whether someone gets more education than you or not only speaks of what they may be able to earn more than you. Not how much you’re able to earn.
Your example assumes a fixed demand and fixed number of jobs, which once captured by someone with a higher level of education, relegates the rest to Starbucks.
Obviously, this isn’t happening, given that the average wages increase substantially with each education level a person attains.
The economy clearly demands more skills and more education, and new jobs are always created. Hence it cannot happen the way you describe it.
That being said, the major roadblock is location. Labor is fairly immobile. The demand for labor is fairly immobile.
People simply do not want to move where their best matched jobs are. No reason to live in NYC on $8 and barely survive. Go move to Kentucky or Nebraska where $8 will go a long way. No reason to go to India.
No, the purpose of a high minimum wage, in the short term, is to create dependent people, in the long term, it is to slow-kill the economy so Socialism can take over.
It’s hard to argue against this as a moral principle.
I think that’s why we’re losing this debate despite the economic arguments in our favor. In a recent poll 71% of Americans (and 54% of Republicans) support raising the minimum wage.
I think Warren lacks imagination. Instead of raising the minimum wage, why not mandate lowering prices so everything is affordable for the low-to-no income population? Raising the minimum wage might cause inflation and job loss. Instead just mandate lower prices and take difference out of the pockets of the 1% that provides all that stuff. No inflation and everybody except the fat cats would be happy. What could go wrong?
The liberal belief that they can end poverty by outlawing it is pernicious.
You assume the left means it when they talk about helping the poor. I think Kevin Williamson nailed it in this piece. The money quote:
If we want to help poor people, direct wage subsidies are a better way to go (negative income taxes work the same way, but with only annual returns, workers get a lump sum when they need a constant flow). Notably, this is what Paul Ryan is proposing.
Admitted, I’m 90% of the way there already, but if Republicans can’t sell this idea as superior to the minimum wage, we just fold up now.
People have filled their days with work and still been poor since time immemorial. My father was one of seven children. Their father died young. My grandmother, my father, and his siblings had to support themselves. They were poor. The children were bright and were able to obtain higher education through hard work and scholarships. Being poor does not mean that one will remain poor, if he seeks to improve his lot. And being poor in the U.S.A. in 2014 is not so very bad, compared to the 1930s, when my father was poor.
It is worth considering that there is something worse than being “poor” by U.S. government standards. That is having the U.S. government assure certain citizens that they can remain comfortable in a minimum-wage-type job. To be sure, there are those who will never have the smarts, ambition, etc. to rise from such a position. There are many who do have those qualities, though, and the danger is that some of them may be tempted through artificially-inflated wages and government largesse to remain at their station of employment. It is similar to the economic mischief that welfare has wrought.
There’s no reason the IRS couldn’t issue checks monthly. It would be a nice symmetry to withholding taxes–which Milton Friedman would surely appreciate. Someone at Forbes even suggested a way to build in work requirements (site down, or I’d provide a link). Not needed IMHO, but I can see an argument for.
What kills me is that commandment 4 is so durable. I saw a discussion after the 2012 along the lines of wished-for features for O 2.o. Some daring radical thought the time had come for a Guaranteed Minimum Income. Like that hadn’t been proposed (and slaughtered by Progressives) in the Nixon administration. My Progressive brothers and sister: why are you so damned dumb?
1) EJHill, Mike H: When I use the term ‘education’ I mean something rather different than the present travesty given that name. Different post entirely…
2) Joseph Stanko, Sabrdance: Agreed–whatever solution we devise, it has to be widely marketable. I propose calling it something like “Alternative Minimum Wage”
3) Sabrdance, Johnny Dubya, SParker: Just like tax withholding warps workers’ incentives by removing the continuing emotional sting of the paying of taxes, a workable wage support plan would have to yield (a) an ongoing emotional boost of having gotten paid for doing good work; and (b) an ongoing emotional ‘sting’ of requiring external assistance. It also would need to avoid perverse incentives for workers to halt at a particular wage, or for collusion b/w employers/employees. What about a system where a worker could submit paychecks showing less than some hourly rate, whereupon those wages would be supplemented up to a defined pay rate. That defined pay rate could increase smoothly but sub-linearly until it intersects the actual wage line:
The AMW curve shape, zero point, initial slope, and earned wage intersection point could all be adjusted, as long as it’s monotonically increasing.
My point (at least the one I tried to make diplomatically) is that among certain segments of the “poor” in America, a culture has been created that refuses to adopt a work ethic because it’s “too white.”
To demand that blacks and Hispanics adhere to expectations of staying in school, working hard and then getting a job is some sort of cultural imperialism/racism.
As re “education,” I perhaps should have said “learning,” since the former term clearly is loaded in the present context.