Don's Tuesday Column

                THE WAY I SEE IT   by Don Polson   Red Bluff Daily News   4/19/2016

   The more you know, the worse it looks

In “Gov. Brown Admits $15 Minimum Wage Does Not Make Economic Sense, Approves It Anyway,” Reason.com writer Scott Shackford found a glittering jewel of liberal hypocrisy hiding in plain sight. He wrote, “California Gov. Jerry Brown simply does not care about what will happen to citizens in non-urban parts of the state under a $15 minimum wage. He didn’t literally say that, but what he did say was that he understood that there may be some bad outcomes for such a massive, unprecedented mandate. And then he signed it into law anyway.

“Here’s the quote of what he said: ‘Economically, minimum wages may not make sense. But morally, socially, and politically they make every sense because it binds the community together to make sure parents can take care of their kids.’” While he has previously been on record resisting it, it makes sense to him “politically” to pass the law.

Shackford: “Politics don’t hold communities together, but they can keep entrenched interests in power.” Please note that only a tiny percentage of parents with children work at minimum wage. The vast majority are teenagers still living at home. They have far greater need to learn the relationship of improving skills to commensurate nominal hikes in their hourly wages—leading to $10 plus rates that they earn—rather than having rates of pay they haven’t earned handed to them by mandate.

I believe the major papers in both California and New York (which also signed a wage hike) have spent little newsprint delving into the down side to minimum wage increases, although such evidence is easily found. Economically liberal think tanks have provided sufficient complexities and obfuscation—together with disingenuous, slanted research—to allow the news media to provide cover for the politicians’ efforts at income “justice,” aka “redistribution.” Likewise, they devote little space to the record low labor participation rate.

The Sacramento Bee, for example, provided readers with a bit of incredible spin: “Brown, a fiscal moderate, had previously expressed reservations about a wage increase.” They conveniently forgot Brown saying, in 1995, “The conventional viewpoint says we need a jobs program and we need to cut welfare. Just the opposite! We need more welfare and fewer jobs.” Objectively, he’s no “fiscal moderate,” but in 2016’s left-wing Sacramento, he might just be.

Look up “The Cruelty of the $15 Minimum Wage,” at Reason.com, where Nick Gillespie interviews economist Don Boudreaux, who blogs at Café Hayek (cafehayek.com). The 9-minute video is very enlightening on reality-based employment. The “cruelty” referred to is the hopelessness of the unskilled entry-level worker who has no option to work for an “entry level” or learner wage because he or she won’t be worth $15 an hour anytime soon.

Another aspect of the debate is that unions are reported to have carved out an exemption to the minimum wage hike. Here’s how their little shameless tactic works: They approach fill-in-the-blank business looking at a potentially skyrocketing labor cost due to the hike. They say “You’ve got a nice little business there…it’d be a shame somethin’ would happen to it.” No, that’s in the movie caricature, but not far off.

What they really say is that if Mr. or Ms. business owner agree to union representation for their workers, the union will exercise its prerogative under the law to allow the workers to be exempt from the higher wage mandate. Of course, the union gets sole representation for negotiating work rules and future wage and benefit packages. Get it? About those union dues…

I mentioned that workers, calculating the maximum income available under the elevated wages mandated in Seattle, have asked for fewer hours so as to not jeopardize subsidies and benefits. Just to be thorough, I used the phrase, “Is Seattle’s minimum wage killing jobs” in a search box. Source links left, right and center showed up: Seattle Times, LA Times, Fact Check, Forbes, Washington Post, and “therealmovement.wordpress.com.,” a genuine anti-capitalist blog. Sure enough, at mynorthwest.com, I found “They asked for a higher wage, but now they want fewer hours,” proving what I stated.

The $15 minimum wage, which just went from “laughable” to “viable” according to a New York Times headline, was implemented in Seattle, WA, about a year ago and has fueled a major debate on the issue. As you would expect, where one sits depends on where one stands ideologically. This is demonstrated by the reaction to an analytical study by the American Enterprise Institute, by writer Mark J. Perry on Feb. 18, titled “Early evidence suggests that Seattle’s ‘radical experiment’ might be a model for the rest of the nation not to follow.”

Conservative economists (I describe them as “reality based”) are inclined to follow the maxim that, under the immutable law of “supply and demand,” when other factors, like supply, remain the same, an increase in the cost of something will reduce the demand. If the supply of workers remains unchanged, then arbitrarily raising the hourly cost of those workers will inevitably result in a reduced demand for said workers. Liberal (non-reality-based) economists disagree.

In “Hey, Seattle! How’s that $15 minimum wage working out for ya?” American Thinker writer Rick Moran, citing AEI/BLS data, posits “the city has suffered the worst job losses since the Great Recession…the city’s employment has fallen by more than 11,000, the number of unemployed workers has risen by nearly 5,000, and the city’s jobless rate has increased by more than 1 percentage point (while) Seattle’s suburbs increased employment by nearly 57,000 jobs.” Just the facts, folks.