AEIdeas

The public policy blog of the American Enterprise Institute

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Discussion: (13 comments)

  1. Vic Volpe

    Well said. Now in the richest civilization that ever existed, we will see what happens.

    1. Che is dead

      The poor? Who are they?

      This is what happens.

      Living the good life off government benefits‏

  2. Jon Murphy

    “self-righteous bullying laziness….” heh…I like that

  3. PeakTrader

    Yet, some people confuse protecting the American people by setting reasonable standards. e.g. for labor, environment, food, drugs, etc., or making sure there are equal opportunities, for all Americans, is the same as forcing the American people to help the poor.

    1. morganovich

      and oddly, others seem to think that mandating unemployment for the unskilled helps them.

      1. PeakTrader

        Of course, you don’t know.

        “The standard criticism of the minimum wage is that it raises employers’ costs and reduces employment opportunities for teenagers and disadvantaged workers. However, several studies have found that the last two increases in the minimum wage had an insignificant effect on employment. Furthermore, an extension of the time-series studies that had previously been used to claim that raising the minimum wage decreases employment, no longer finds a significant impact.

        In a recent review of the literature, Professor Richard Freeman of Harvard, a widely respected labor economist, wrote: “At the level of the minimum wage in the late 1980s, moderate legislated increases did not reduce employment and were, if anything, associated with higher employment in some locales.”

        In discussing the minimum wage, Robert M. Solow, a Nobel laureate in economics at the Massachusetts Institute of Technology, recently told the New York Times, “The main thing about (minimum wage) research is that the evidence of job loss is weak. And the fact that the evidence is weak suggests that the impact on jobs is small.””

        1. Che is dead

          Even Obama’s former economics advisors aren’t biting:

          “First, what’s the argument for having a minimum wage at all? Many of my students assume that government protection is the only thing ensuring decent wages for most American workers. But basic economics shows that competition between employers for workers can be very effective at preventing businesses from misbehaving. If every other store in town is paying workers $9 an hour, one offering $8 will find it hard to hire anyone — perhaps not when unemployment is high, but certainly in normal times. Robust competition is a powerful force helping to ensure that workers are paid what they contribute to their employers’ bottom lines. …

          Some evidence suggests that employment doesn’t fall much because the higher minimum wage lowers labor turnover, which raises productivity and labor demand. But it’s possible that productivity also rises because the higher minimum attracts more efficient workers to the labor pool. If these new workers are typically more affluent — perhaps middle-income spouses or retirees — and end up taking some jobs held by poorer workers, a higher minimum could harm the truly disadvantaged.

          Another reason that employment may not fall is that businesses pass along some of the cost of a higher minimum wage to consumers through higher prices. Often, the customers paying those prices — including some of the diners at McDonald’s and the shoppers at Walmart — have very low family incomes. Thus this price effect may harm the very people whom a minimum wage is supposed to help.” — Christina Romer, professor of economics UC Berkley, and former chairwoman of President Obama’s Council of Economic Advisers, writing in the New York Times

        2. PeakTrader

          And, there are many explanations why the teen unemployment rate is high and labor force participation low. For example, a teen living in his plush bedroom at his parents house may have extensive cable TV, computer games, stereo, etc. in his room. He may not want to give that up for (only) $7.25 an hour (or less without a minimum wage) hanging out at McDonalds with stinky workers and customers.

          1. And if an unskilled teenager prefers to stay home, so much the better for low skilled and unskilled adults who could really use the jobs.

            It’s hard to understand how a teen, who has never worked and won’t go to work, is considered to beunemployed.

            Besides that, why do you think teens should be lured from home to work at some wage above their value to an employer if they don’t want to? Leave the poor slugs alone. They’re happy with their lives as they are.

    2. Che is dead

      “Yet, some people confuse protecting the American people by setting reasonable standards. e.g. for labor, environment, food, drugs, etc., or making sure there are equal opportunities, for all Americans … blah, blah, blah.”

      Yes, we are all aware of the conceit, but that is not what these “standards” are all about.

    3. Setting standards by force isn’t “reasonable” in any situation. Additionally, the private sector is far better at this than any government agency. I trust ISO’s stamp of approval far more than anything that is crammed down the throats of business owners and consumers. Lastly, government efforts made on the list you make things worse more often than not, meaning government intervention into the things you’ve listed has on balance made things worse.

  4. Modern Capitialism has never existed without government at its side.I wonder how long it would or could thrive without it,my guess is not too long.I believe Capitialism would eat itself alive,and everybody with it left unfettered to its own device.

    1. Kevin, since markets and trade predate the rise of the modern state, maybe it’s the other way around.

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