The Minimum Wage Kills Jobs, Part 5529

Of all the sounded-clever-but-was-actually-idiotic things Obama said in the State of the Union address, this was the most cleverly-sounding-but-really-stupid:

And to everyone in this Congress who still refuses to raise the minimum wage, I say this: If you truly believe you could work full-time and support a family on less than $15,000 a year, go try it. If not, vote to give millions of the hardest-working people in America a raise.

As I said, sounds clever. A bunch of liberals in my Twitter feed said the equivalent of, “Oh, snap!” But the reality is that you’re not supposed to be raising a family on minimum wage. Minimum wage is an entry level wage, a wage to get your foot in the door for future better-paying jobs. I made minimum wage once. Actually, I made less than minimum wage because I was paid in cash under the table. But I was a teenager, so it was fine.

The biggest reason to oppose the minimum wage, of course, is the Law of Supply and Demand. If you artificially set the price of something high (low-skill labor), you will find that people learn to live without it (i.e., they stop hiring people). We’ve been told this is a myth, despite clear evidence that it’s not. Well, here’s another example of this thing that supposedly never happens:

In November, San Francisco voters overwhelmingly passed a measure that will increase the minimum wage within the city to $15 per hour by 2018. Although all of us at Borderlands support the concept of a living wage in principal and we believe that it’s possible that the new law will be good for San Francisco — Borderlands Books as it exists is not a financially viable business if subject to that minimum wage. Consequently we will be closing our doors no later than March 31st. The cafe will continue to operate until at least the end of this year.

Many businesses can make adjustments to allow for increased wages. The cafe side of Borderlands, for example, should have no difficulty at all. Viability is simply a matter of increasing prices. And, since all the other cafes in the city will be under the same pressure, all the prices will float upwards. But books are a special case because the price is set by the publisher and printed on the book. Furthermore, for years part of the challenge for brick-and-mortar bookstores is that companies like Amazon.com have made it difficult to get people to pay retail prices. So it is inconceivable to adjust our prices upwards to cover increased wages.

The change in minimum wage will mean our payroll will increase roughly 39%. That increase will in turn bring up our total operating expenses by 18%. To make up for that expense, we would need to increase our sales by a minimum of 20%. We do not believe that is a realistic possibility for a bookstore in San Francisco at this time.

I will point out something else that they gloss over. It’s true that businesses like the cafe side of Borderlands can cover the minimum wage hike by increasing prices. But you know who pays those increasing prices? Primarily poor and middle class people who go to the kind of places — fast food restaurants, cheap bookstores, etc. — that pay their employees minimum wage. So you’re giving them money with one hand while taking it with the other.

This is a liberal bookstore ownership. That’s clear from the way they talk about this. But they point out that the minimum wage hike will increase their operating costs by 18%. Other business will see similar hikes. Do you know how many business are operating at an 18% profit margin? Very very few. And certainly none that are patronized by the poor and middle class.

Minimum wage hikes sound good and make liberals feel good. But they are a nightmare for the job market. If you don’t believe me, believe the guys at Borderlands. They have no reason to spew “right wing propaganda”.

  1. The more Obama speaks, the more obvious it becomes that’s he’s an idiot. And they claimed Bush was the low-end of the gene pool – seriously, he looks like Einstein in comparison.

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  2. But the reality is that you’re not supposed to be raising a family on minimum wage. Minimum wage is an entry level wage, a wage to get your foot in the door for future better-paying jobs.

    I have to admit that I might see the logic Black Jesus bases this statement on though Hal. He might just be pointing out that’s where we are going to land when he finally finishes his promise of fundamentally changing America. If you look closely, you can see that the way the democrats have been legislating has consequences. They just might understand/know that the minimum wage will soon be something most people will have to live off. Their agenda currently is destroying the economy, and doing so in such a way that the middle class ends up imploding because of the burden (tax and otherwise) imposed on it by the wealth transfer nanny state. Couple that with years of low end “Do you want fries with that” jobs that mostly go to illegal immigrants anyway, and a future that looks like more of that. I ca see how you end up believing that people either now or soon will fall into 2 categories. The first will be the minimum wage workers: your serfs. The others will be the moochers.

    The left’s economic, political, and “social engineering” model always works towards and results into a 2 class system. The first and smallest group will be the elite. These people will have all the power and all the wealth (directly or indirectly) and will control the agenda. The rest will be those that are all now living equally in misery with ever dwindling resources. Kind of like the shit you had in the USSR, you know. That’s after all “social justice” in a nutshell. They can never deliver happiness and plenty, but misery and scarcity, are easy to do.

    So don’t dismiss this minimum wage argument: there is an important lesson to learn there. It may not be what the democrats want you to understand – in fact I bet they hope you don’t catch on – but there is a really valuable lesson there.

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  3. No, Obama isn’t dumb. It’d be better if he were dumb. Obama thinks *we’re* dumb.

    Obama is defenitely neither as smart as he thinks he is nor as smart as he has been told he is, as SO pointed out, only to get a downvote for saying so (I am sure I will get one too from our resident Obama cock sucking trolls), and the people he is surrounded by are fucking idiots and crooks. What he and the other people that peddle this marxism based bullshit are is a bunch of profiteers, pluderers, destroyers, and quite often, downright evil.

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  4. Oh, I’ll agree he’s not as smart as he thinks he is. But I think Obama’s problem is more than just smart-dumb. It’s a mentality that is common in politics and academia: he thinks he knows how to do things better than the people who actually do them. He thinks he knows how to run an economy based on Paul Krugman’s theories. He thinks he knows how to run a business even though he’s never run so much as a lemonade stand. He thinks he knows how to run foreign policy based on theories in the New Republic. He thinks he knows to run a healthcare system because he hired Jonathan Gruber. He thinks that all you need to do to fix the world is to put enough PhDs in a room, come up with solutions, and make everyone do them.

    The fundamental reason I’m a conservative/libertarian is because I don’t think *anyone* is as smart as they think they are, especially the kind of people who are drawn to politics. They think they know how to run our lives, run a business, run an economy, but they don’t. They think because they went to Harvard and the media worship them that this obviously makes them fit to rule, but it doesn’t. The most important things to have in a politician are humility, skepticism and curiosity: someone who knows he doesn’t know everything, knows the world is more complicated than it is either at Harvard or on Fox News, exercises caution in applying his incomplete knowledge and is willing to learn what he doesn’t know. Obama is none of that. There are very few politicians who are.

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  5. Oh, I’ll agree he’s not as smart as he thinks he is. But I think Obama’s problem is more than just smart-dumb. It’s a mentality that is common in politics and academia: he thinks he knows how to do things better than the people who actually do them

    That is for sure.

    The fundamental reason I’m a conservative/libertarian is because I don’t think *anyone* is as smart as they think they are, especially the kind of people who are drawn to politics.

    I will grant you that politics now is the refuge of irascible people. No matter how noble they start off as, they will be corrupted by the corrupt system. Decent and good people will never go into politics. Or they will try, then quit out of disgust. And that’s why we are where we are today.

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  6. “But the modern right wing, as Daniel Bell has put it, feels dispossessed: America has been largely taken away from them and their kind, though they are determined to try to repossess it and to prevent the final destructive act of subversion. The old American virtues have already been eaten away by cosmopolitans and intellectuals; the old competitive capitalism has been gradually undermined by socialistic and communistic schemers; the old national security and independence have been destroyed by treasonous plots, having as their most powerful agents not merely outsiders and foreigners as of old but major statesmen who are at the very centers of American power. Their predecessors had discovered conspiracies; the modern radical right finds conspiracy to be betrayal from on high.”

    http://harpers.org/archive/1964/11/the-paranoid-style-in-american-politics/4/

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  7. CM sure is getting a lot of mileage out of that Harper’s article, but it certainly isn’t definitive of anything. Nothing that CM has quoted has actually been refuted. Calling something “paranoia” doesn’t necessarily make it so, and it certainly doesn’t disprove anything.

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  8. You will never be able to tell a collectivists that the shit they believe in – because it is driven by jealous and envy of what others have, primarily – is wrong. My experiences with them have left me with the understanding that the only way to deal with them is to call them on it, and to not hold back punches. They will not. They will try to project their ill intent on you. There is no room for reasonable discourse with them, because they will never give an inch, and they are willing to burn it all down to get what they want.

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  9. “The paranoid spokesman sees the fate of conspiracy in apocalyptic terms—he traffics in the birth and death of whole worlds, whole political orders, whole systems of human values. He is always manning the barricades of civilization. He constantly lives at a turning point. Like religious millennialists he expresses the anxiety of those who are living through the last days and he is sometimes disposed to set a date fort the apocalypse. (“Time is running out,” said Welch in 1951. “Evidence is piling up on many sides and from many sources that October 1952 is the fatal month when Stalin will attack.”)

    As a member of the avant-garde who is capable of perceiving the conspiracy before it is fully obvious to an as yet unaroused public, the paranoid is a militant leader. He does not see social conflict as something to be mediated and compromised, in the manner of the working politician. Since what is at stake is always a conflict between absolute good and absolute evil, what is necessary is not compromise but the will to fight things out to a finish. Since the enemy is thought of as being totally evil and totally unappeasable, he must be totally eliminated—if not from the world, at least from the theatre of operations to which the paranoid directs his attention. This demand for total triumph leads to the formulation of hopelessly unrealistic goals, and since these goals are not even remotely attainable, failure constantly heightens the paranoid’s sense of frustration. Even partial success leaves him with the same feeling of powerlessness with which he began, and this in turn only strengthens his awareness of the vast and terrifying quality of the enemy he opposes.

    The enemy is clearly delineated: he is a perfect model of malice, a kind of amoral superman—sinister, ubiquitous, powerful, cruel, sensual, luxury-loving. Unlike the rest of us, the enemy is not caught in the toils of the vast mechanism of history, himself a victim of his past, his desires, his limitations. He wills, indeed he manufactures, the mechanism of history, or tries to deflect the normal course of history in an evil way. He makes crises, starts runs on banks, causes depressions, manufactures disasters, and then enjoys and profits from the misery he has produced. The paranoid’s interpretation of history is distinctly personal: decisive events are not taken as part of the stream of history, but as the consequences of someone’s will. Very often the enemy is held to possess some especially effective source of power: he controls the press; he has unlimited funds; he has a new secret for influencing the mind (brainwashing); he has a special technique for seduction (the Catholic confessional).”

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  10. I repeat: Calling something “paranoia” doesn’t necessarily make it so, and it certainly doesn’t disprove anything. And mental masturbation isn’t definition.

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  11. Calling something “paranoia” doesn’t necessarily make it so

    Doesn’t mean it isn’t either.
    It’s certainly illustrative and illuminating.

    And mental masturbation isn’t definition.

    Dismissing it as “mental masturbation” all over the place would also seem to fit the narrative nicely.
    You man that barricade! No compromise!

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  12. Doesn’t mean it isn’t either.

    Oooh, clever!

    It’s certainly illustrative and illuminating.

    Mental masturbation often is.

    Dismissing it as “mental masturbation” all over the place…

    Considering how you’re using it “all over the place”, this response seems disingenuous.

    …would also seem to fit the narrative nicely.

    The mental masturbation does indeed “fit the narrative nicely”.

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  13. CM, copying and pasting from an article isn’t making an argument, and there couldn’t be a lazier approach to online discussion. Post your own thoughts, not someone else’s. paraphrase an idea if you must, but what you’re doing there is pathetic.

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  14. From Slate, Richard Hofstadter, the pundits’ favorite historian (italic emphasis added):

    [W]ith The Paranoid Style in American Politics (1965) and other works, Hofstadter initially won praise for replacing crude rationalistic accounts of political motivation with subtle psychological understandings, especially regarding the hard right of Joe McCarthy and Barry Goldwater. But today academic fashion holds, as one historian has written, that Hofstadter’s “excessively psychological interpretation distorted our understanding of American conservatism.” Even the historian’s 1948 gem, The American Political Tradition, has long drawn scorn for embodying the now-discredited “consensus history”—the notion that broad agreement on basic principles, more than ideological conflict, defined the American past.

    Like I said, calling something paranoia doesn’t necessarily make it so, and responding, “Doesn’t mean it isn’t either” is essentially a non sequitur that begs the question. There is a major difference between admitting something could be true and declaring that it absolutely is true. The phrase “excessively psychological interpretation” can rather easily be argued as another, more diplomatic way of saying “mental masturbation”, and the historian is quoted as saying said masturbation resulted in a “distorted” view of conservatism.

    Frankly, dismissing a view one disagrees with as “paranoia” or even just based in “paranoia” is intellctual laziness, in my view. Like I keep saying, McCarthy was right about the existence of communist spies in our government. Sure, we can argue that McCarthy’s methods were questionable, but his underlying premise turned out to be true. Calling it “paranoia” only serves to dodge that fact.

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  15. And mental masturbation isn’t definition.

    This whole blog is ‘mental masturbation’. That’s essentially what blogging is.
    What have you ever written here that can’t be described as ‘mental masturbation’?

    CM, copying and pasting from an article isn’t making an argument, and there couldn’t be a lazier approach to online discussion. Post your own thoughts, not someone else’s. paraphrase an idea if you must, but what you’re doing there is pathetic.

    I thought it would be fairly obvious that I stumbled on a 50 year old article that so neatly explains the attitudes of some on this blog now that it’s uncanny. It wasn’t intended to be a substitute for a detailed argument (it wasn’t even on-topic).

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  16. Fair enough Iconoclast. In all seriousness I can’t really argue against what you’ve written there.
    I do find it fascinating that what he described more than 50 years ago seems to fit some people so well now. It was quite striking. That Slate piece you’ve linked to and quoted is equally as fascinating. I’m going to look into this some more,

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