ThMPwKP_1400x1400is week, the normally congenitally congenial Larry Kudlow the usually rationally reasonable Tim Pawlenty kick it way up to debate the coming government mandated raises in the minimum wage. Larry argues that it inhibits growth and creates more government intervention and regulation. Tim counters that the law is meant as a base wage that should be used to keep workers from falling below the poverty line. What do you think? Let us know in the comments below.

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There are 14 comments.

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  1. Dan Hanson Thatcher
    Dan HansonJoined in the first year of Ricochet Ricochet Charter Member

    A minimum wage is a terrible way to prevent poverty. Fixing prices destroys information and makes the market less efficient. Setting a floor on wages freezes out workers whose productivity is too low to justify the wage.

    Also, minimum wage jobs are predominently entry level jobs, typically held by young people lacking skills, job experiene and education. In my region, over half of all minimum wage jobs are held by people under 24 years of age, and more than half have been on the job less than a year and have less than a high school education.

    16 year old students do not need a high minimum wage, and in fact a high minimum wage may be detrimental if it discourages them from getting further education because the minimum wage is comfortable enough.

    For those few workers who earn minimum wage and yet are full time workers trying to survive indefinitely with no prospects of advancement, we would be better off using tools like the EITC to improve their standard of living. At least there we can target the intervention to those who need help the most and skip over the students living at home and second wage earners who don’t need and shouldn’t receive financial assistance to that degree.

    Incidentally, I do not trust the recent studies suggesting that minimum wage increases have no effect on employment. These seem to be coming from left-wing labor economists in the U.S., and studies in Canada and the OECD do not find the same result. For example, the consensus survey of Canadian minimum wage studies finds a fairly consistent 1-3% decrease in minimum wage employment for each 10% increase in the effetive minimum wage. That’s a lot of people having the first rung of the career ladder cut out from under them.

    • #1
    • May 27, 2015, at 8:48 AM PDT
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  2. David Carroll Thatcher
    David CarrollJoined in the first year of Ricochet Ricochet Charter Member

    Tim Pawlenty is just a big government guy. He seems to be under the weird misimpression that the Constitution authorizes Congress to legislate generally on health, safety and welfare. It doesn’t. State governments might (and certainly can have that power). There is no clear Constitutional basis for a federal minimum wage. Folks pretend that the commerce clause gives the federal government that power. There is no clear basis for OSHA legislation and regulation. Again, the commerce clause is the pretense.

    • #2
    • May 27, 2015, at 2:44 PM PDT
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  3. Arnold Falk Member

    I live in Switzerland, but follow US politics. About minimum wage, Mr. Kudlow is correct in my opinion. We have no minimum wage or monthly income here, and our standard of living is, I believe, higher. The Socialist Party has been seeking for years to insert the minimum wage/income wedge into our political scene.

    The Swiss people have always, through legally binding referendums, declined. Why is that, you might ask? Simple. It would destroy our apprentice system. Young people learning their professions, whether manual (the trades) or academic (e.g., engineering, medical, legal) must customarily work under the apprentice system in order ultimately to become licensed/certified. The market decides what should be paid.

    We have about 3% unemployment in our part of Switzerland because of the sound primary and secondary school system coupled with an industry-supported apprenticeship and the canton-defined certification process. The federal government in Bern has little or nothing to do with setting standards except in the universities.

    Americans would be wise to reject the minimum wage premise and work to improve primary and secondary school quality. And incidentally, we have nothing like “Common Core” here. The cantons run their primary and secondary school systems, but do collaborate with one another on a broad basis. Again, Bern is not involved.

    Arnold Falk

    Stans, Nidwalden

    Switzerland

    • #3
    • May 28, 2015, at 12:42 AM PDT
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  4. Reldim Inactive

    I was a little surprised that in discussing the LA minimum wage idea, Larry didn’t mention the news that the local labor unions are seeking an exemption from the new minimum on the grounds that collective bargaining allows management and “employees” (read labor union bosses) to prioritize their desires. So unions should be able to limit members to sub-minimum wages in exchange for other benefits like pensions and health insurance that usually requires employers to pay union affiliates and fatten the bosses still more.

    So if unions can prioritize something over higher wages why shouldn’t every person have the ability to do the same on their own behalves?

    • #4
    • May 28, 2015, at 5:55 AM PDT
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  5. The Question Inactive

    Who needs our love and compassion more, people who have jobs but would like to make more money, or people who want jobs but can’t get hired? How does the minimum wage do anything but make life harder for those struggling to find a job? I think that’s the general problem with unions and the Democrat’s policies. They focus on making sure that people who have jobs have great jobs, while reducing the actual number of jobs. It’s very perverse that the people who harp about equality want to deny employment to those with low skills.

    I think that Tim Pawlenty is probably correct that in the current political climate, ending the minimum wage probably isn’t the smartest tack for a politician to take. But for those of us who are not running for office, we need to spread the word that the minimum wage is a dumb law.

    Actually, it’s not necessarily a dumb law, if you’re skilled labor and you want to avoid low skilled labor under bidding you, or if you’re a Democrat politician trying to signal that you care about workers. Then it’s a fantastic law.

    • #5
    • May 28, 2015, at 7:44 AM PDT
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  6. Adriana Harris Inactive

    This was a particularly annoying episode. Tim Pawlenty argued for a minimum wage with health and safety and popularity polls. I thought he was a better debater than that. And I’m tired of hearing Larry Kudlow accuse most Republicans of being anti-immigrant. We aren’t anti-immigrant we are anti-illegal immigrant. Leagalizing all the illegals does nothing to slow down the problem of people coming in illegally or overstaying visas. It also punishes people who are trying to follow the law by completely clogging the system with illegals. Boo to both Kudlow and Pawlenty this week.

    • #6
    • May 28, 2015, at 1:28 PM PDT
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  7. PJS Coolidge
    PJSJoined in the first year of Ricochet Ricochet Charter Member

    “Abolition,” Mr. Pawlenty, not “abolishment.” I wanted to scream. Also, as many have pointed out, the real minimum wage is zero.

    Does anyone know the actual number of workers earning the minimum wage, and what the demographics are? How many minimum wage earners are actually trying to support a family at that wage? Even at my first job in high school, I had a review after three months and got a raise. How long does a person taking a job at the minimum wage actually earn that wage?

    • #7
    • May 28, 2015, at 1:28 PM PDT
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  8. JimGoneWild Coolidge

    End Federal minimum wage. If states want it, fine. Then we get to see which state does better by new/young/unskilled employees.

    • #8
    • May 28, 2015, at 4:40 PM PDT
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  9. Speed Gibson Coolidge

    Adriana Harris:This was a particularly annoying episode. Tim Pawlenty argued for a minimum wage with health and safety and popularity polls. I thought he was a better debater than that. And I’m tired of hearing Larry Kudlow accuse most Republicans of being anti-immigrant. We aren’t anti-immigrant we are anti-illegal immigrant. Leagalizing all the illegals does nothing to slow down the problem of people coming in illegally or overstaying visas. It also punishes people who are trying to follow the law by completely clogging the system with illegals. Boo to both Kudlow and Pawlenty this week.

    Ditto, and I’m a Minnesotan. I can accept some pragmatism – the minimum wage will likely never be repealed, nor will campaigning for its repeal likely succeed. But to so transparently and falsely conflate this with workplace safety is but one more reason (including breaking multiple campaign promises) why Mr. Pawlenty got absolutely no traction in Iowa last cycle, let alone the national stage.

    • #9
    • May 28, 2015, at 4:47 PM PDT
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  10. Stad Coolidge

    There should be no Federal, state, or local government laws for a minimum wage.

    Entry level workers who are really good won’t stay at low wages long. They’ll either get raises from their current jobs, or move on to better paying jobs.

    Raising the minimum wage to achieve a “living wage” only increases the number of people who earn the real minimum wage – which is zero, because they lost their jobs.

    • #10
    • May 29, 2015, at 5:14 AM PDT
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  11. David Carroll Thatcher
    David CarrollJoined in the first year of Ricochet Ricochet Charter Member

    Could somebody please send Tim “Big Government” Pawlenty a copy of Milton Friedman’s Capitalism and Freedom?

    • #11
    • May 29, 2015, at 6:21 AM PDT
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  12. SParker Member

    The alternative to a minimum wage law is a direct subsidy like Friedman’s negative income tax or the current EITC (which could use some work to be a workable equivalent). Everybody agrees you don’t want someone to work 40 hours a week and not be able to feed, clothe, and house themselves to some minimum standard. The question is: who pays? A direct subsidy says the taxpayer does. And since it’s done out of humanity, this seems to be the right party. A minimum wage law says some combination of employer, employee (including potential employees), or customers pay. That has the unfortunate feature of having the government sticking its nose into a contract between an employer and employee (being able to negotiate down on the price of labor is important to an entry level laborer–it might get him in the door). And, it looks like price fixing to consumers. Well-hidden, but there.

    • #12
    • May 29, 2015, at 10:39 PM PDT
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  13. HankRhody Freelance Philosopher Contributor

    Cyber Cyber Cyber!!!

    It seems to me that hacking attracts more histrionics as opposed to actual information than most issues.

    • #13
    • May 29, 2015, at 11:18 PM PDT
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  14. HankRhody Freelance Philosopher Contributor

    Adriana Harris:This was a particularly annoying episode. Tim Pawlenty argued for a minimum wage with health and safety and popularity polls.

    I find this podcast generally frustrating. This one wasn’t the worst as far as that goes, or maybe my expectations have shifted coming into it.

    I’ve stated before on this site I’d give up my steel-toed boots subsidy if it meant the factory being able to hire another guy. I’d be willing to forgo mandatory safety glasses as well. With a couple exceptions most of the machines I work with just don’t make that kind of eye hazard, even in emergency circumstances.

    I dislike Mr. Pawlenty’s assertion that the positions of credible Presidential candidates show where the Republican Party is at. The first rule of Politics is “don’t spook the horses”; any candidate will moderate his positions in order to get into office. And also, by limiting it to “credible” politicians you beg the question; any who take a tack you don’t like are therefore no longer credible.

    That said I don’t see abolishing the minimum wage winning any elections. The best thing to do would be to grow the economy such that the minimum wage is a dead letter law (you hear what they pay at the McDonalds in North Dakota?).

    • #14
    • May 29, 2015, at 11:32 PM PDT
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