Posted by Lewis Kamb
SeaTac1 voters will get the chance to decide whether the city should increase its minimum wage to a nation-leading $15 per hour, after a state appeals court today reversed a judge’s ruling from August that disqualified signatures needed to place the measure on November’s ballot.
More at the link. The only reason that this was in court was that 61 registered voters had signed more than one petition, and not the wording of the ballot initiative itself. The initiative will be on the ballot.
I participated in a discussion thread on this issue with my friends on the left2 on the Delaware Liberal. The good hearted Liberals in the First State somehow seem to believe that the minimum wage3 can be slightly more than doubled without an economic consequences other than to enrich current minimum wage workers.
If you raise the minimum wage from $7.25 to $15.00 per hour, the minimum wage workers would receive a $7.75 per hour raise. The question is: would the current $10.00 per hour workers receive a $7.75 raise, to $17.75 per hour, or the $5.00 increase to take them to the legally required $15.00? Would workers already earning $18.00 an hour go to $25.75, or would their wages stay flat?
The answer, of course, is that it would vary by company, but overall, the most probable result would be a crowding of wages closer to the new minimum, making workers now earning well above the minimum closer to minimum wage workers.
Even if we assumed that everybody would get that $7.75 per hour raise, it would create the same crowding, percentagewise. The $7.25 minimum wage worker who gets a $7.75 per hour raise will have received 106.9% raise; the guy making $15.00 now, who gets a $7.75 raise, would get a 51.7% increase.
Naturally, all of those mandated raises mean that prices will have to be increased, because businesses still have to make a profit. The new $15.00 minimum will wind up buying just about what the current $7.25 minimum does now, because that’s just the way economics works.
Alas! it isn’t only the good hearted but completely business-illiterate people of DL who have placed political desires above economic sense; from Donald Douglas:
You’ve heard it a thousand times: radical leftist ideology strives fundamentally for the total reengineering of society, the complete makeover of social relations, by any means necessary, including coercion and force.
But we don’t often have perfect case studies of this at the highest levels of institutional power and prestige, especially at Harvard University, a private university where the normal decelerating processes inhibiting disruptive social change would be least in play.
So read this piece at the New York Times as a window to the programmatic world of the leftist institutional subversion. Importantly, mentioned at the top of the piece is Harvard President Drew Gilpin Faust, a gender-drenched radical historian pushing an extreme-left program, including booting the university’s ROTC program from campus.
The country’s premier business training ground was trying to solve a seemingly intractable problem. Year after year, women who had arrived with the same test scores and grades as men fell behind. Attracting and retaining female professors was a losing battle; from 2006 to 2007, a third of the female junior faculty left.
Some students, like Sheryl Sandberg, class of ’95, the Facebook executive and author of “Lean In,” sailed through. Yet many Wall Street-hardened women confided that Harvard was worse than any trading floor, with first-year students divided into sections that took all their classes together and often developed the overheated dynamics of reality shows. Some male students, many with finance backgrounds, commandeered classroom discussions and hazed female students and younger faculty members, and openly ruminated on whom they would “kill, sleep with or marry” (in cruder terms). Alcohol-soaked social events could be worse.
“You weren’t supposed to talk about it in open company,” said Kathleen L. McGinn, a professor who supervised a student study that revealed the grade gap. “It was a dirty secret that wasn’t discussed.”
But in 2010, Drew Gilpin Faust, Harvard’s first female president, appointed a new dean who pledged to do far more than his predecessors to remake gender relations at the business school. He and his team tried to change how students spoke, studied and socialized. The administrators installed stenographers in the classroom to guard against biased grading, provided private coaching — for some, after every class — for untenured female professors, and even departed from the hallowed case-study method.
The dean’s ambitions extended far beyond campus, to what Dr. Faust called in an interview an “obligation to articulate values.” The school saw itself as the standard-bearer for American business. Turning around its record on women, the new administrators assured themselves, could have an untold impact at other business schools, at companies populated by Harvard alumni and in the Fortune 500, where only 21 chief executives are women. The institution would become a laboratory for studying how women speak in group settings, the links between romantic relationships and professional status, and the use of everyday measurement tools to reduce bias.
“We have to lead the way, and then lead the world in doing it,” said Frances Frei, her words suggesting the school’s sense of mission but also its self-regard. Ms. Frei, a popular professor turned administrator who had become a target of student ire, was known for the word “unapologetic,” as in: we are unapologetic about the changes we are making.
More at the links, both Dr Douglas’ and the references article from The New York Times. Emphases are Dr Douglas.’
I had a (brief) discussion with my friend Tim, who owns a small business, a bagel breakfast restaurant. He’s a minimum wage employer, and his wife and he work long, long hours. With the tourist season mostly winding up around here — we’ll still have our big Fall Foliage weekends in October — and he’s concerned about his business surviving the winter. He had a decent crowd in this weekend when I stopped, but the dead of winter means pretty dead business for him. Naturally, I stop every morning on my way to work — a 16 oz coffee and a sesame bagel, dark toasted, with butter — but that’s just $3.70 (of which 21¢ is state sales tax) and his breakfast stops just aren’t that many. That is real economics, and if the Delaware Liberals who think that Tim’s minimum wage employees should get $15.00 an hour or the President, who thinks that Tim should just be able to afford to pay for his employees’ health insurance or the Harvard Business School dean who thinks that feminism is somehow part of an economic equation don’t agree, Tim’s and Angie’s business will succeed, or fail, based solely on whether enough people enter his restaurant and buy bagels and coffee for breakfast and lunch, and not one other thing.
Economics has been called the dismal science since the mid 19th century, and not without cause. Economists measure past activity and try to predict future behavior on the part of economic actors, frequently with not much success — note the very learned economists’ projections of the impact of the 2009 stimulus plan, for example, or the simple fact that economists’ aggregate projections of what the August jobs report would reveal, a measure of past activity, were wrong4 — and if it is a behavioral science, it is a not-very-charitable or nice one. People as economic actors seem to behave in what they perceive to be their own best interests, and not at all the way that our friends on the left believe that they should behave.5
This is, of course, what our friends on the left simply cannot comprehend. Businesses are run to make a profit, period, and in their attempts to earn profits, not all businessmen are going to do so in ways that the Delaware Liberals would particularly approve. For my friend Tim to pay his current minimum wage workers $15.00 an hour would be to more than double his labor costs. To do that, he’d have to raise the prices on his bagels dramatically, which would hurt his business,6 of keep his prices constant, and go broke.
A gentleman styling himself “socialistic ben” put the DL’s position best:
If nothing else, it is just showing us what greedy slime-balls most “job creators” are. Actively trying to keep their employees at a low standard of living. Voluntarily keeping their beloved business small so they don’t have to lift a finger for another human. It’s disgusting…. and totally unnecessary.
Costco is doin’ just fine. They have put themselves at a competitive disadvantage by treating their human resources like humans. Dana, you are defending greed. If a company cant stay in business while playing fair, they don’t deserve to be in business.
I guess that Tim doesn’t deserve to be in business, according to Ben, because he’s just barely scraping by while paying minimum wage and not providing health insurance. Trouble is, there are a whole lot of small business owners like Tim and Angie; they’d be hourly employees somewhere else, and the jobs that they have risked their own money to create wouldn’t exist, were our economic system what Ben and the other liberals think it ought to be.
And that, in the end, is the problem with liberal economics: economics is what it is, and being “liberal” does not enter into the equation. Either a company makes a profit, and can stay in business, or it does not, and eventually fails. Adding more burdens, more costs, to businesses for well-intended liberal goals simply makes it harder for businesses to succeed, and increases the number of them which will fail. That’s why liberals need to be kept away from economics: they don’t know what they are talking about. If liberals really did understand economics, they wouldn’t be liberals anymore.
- SeaTac is a suburb of Seattle, Washington. ↩
- Perhaps “friends” is a bit of an overly optimistic term, since Jason330 doesn’t seem to like me very much. I cannot tell you how man tears of anguish over this situation I have shed. ↩
- The current federal minimum wage is $7.25 per hour. ↩
- The projections were for 180,000 new jobs and the unemployment rate to hold constant at 7.4%; the number of job creations reported was 169,000, but the unemployment rate fell to 7.3%, because so many people dropped out of the work force. ↩
- At this point, I’d note then-presidential candidate John Edwards and his whining about “two Americas,” saying that he wouldn’t buy from WalMart, because they were so evil, and then sending a staffer to get a Playstation 3 from WalMart for his kid. Naturally, it was all blamed on the staffer’s poor decisions. ↩
- He’s actually a few cents higher than the Dunkin’ Donuts a few miles away, but his shop is much more conveniently located for commuters coming from Jim Thorpe, simply because it is on the right, rather than the left, side of the street. ↩