Posts tagged ‘Economics’

Mo’ money, mo’ problems.

As the federal minimum wage increases to $6.55 today, I imagine I can hear millions of business owners screaming in agony.  Many people (especially Liberals) would argue that everyone in the country deserves to make a “living wage” and that even with today’s increase many people are still not making enough to make it out of poverty. 

The problem with increasing the minimum wage is that business owners that were paying their employees $5.15 last year are now paying those same employees over a dollar more per hour.  Most workers at the minimum wage level are teenagers with summer jobs or people with very few skills.  An increase in the minimum wage is a mandated raise for these workers, whether or not they’ve actually gained new skills or increased their productivity. 

Alan Greenspan famously recommended the abolishment of the minimum wage on grounds that it would exclude unskilled teenage workers from gaining the necessary experience to succeed in the work force.  The 1923 case Adkins v Childrens Hospital deemed the 1918 legislation establishing a minimum wage unconstitutional (it was later overruled, obviously). 

The real point here is that increases in the minimum wage hurt workers that are affected by the minimum wage.  If an employer doesn’t feel that a hire will provide $6.55 worth of productivity, then he or she has two choices: either do not hire the person and save the money it would take to train them to output their salary’s worth of production, or add those duties to another position and hire an already trained worker that is guaranteed to work to their expected output.

Eliminating the minimum wage would allow unskilled workers to be added to a payroll at a wage level proportional to their productivity, and would allow them to gain work experience and move up the pay scale as they gain new skills. 

Federal minimum wages really only apply to half the country, as most states have their own that are much higher.  The same problems apply, and many businesses as well as unskilled workers are being unnecessarily adversely affected.  Unfortunately most people feel that wage equality is the moral thing to do, and that it’s necessary to keep people out of poverty.  It really has no place in a capitalist system, and does more harm than good to the people who supposedly need it.

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July 24, 2008 at 6:06 pm Leave a comment

“What really grinds my gears” republished

A friend of mine, Kyle Brockman, just wrote this amazing piece on capitalism as a note on Facebook.  He’s allowed me to republish it here so I can share it with my Friendfeed and Twitter followers:

You know what really grinds my gears?
So, you are sitting around with your friends, having an intellectual discussion, and all of a sudden the word communism get mentioned. This in itself is not a problem, or at least, it wouldn’t be if it weren’t for a particular social nuance associated with the word. Inevitably as the bloody tides, someone will just have to add in a nasal ivy-league voice before acting smug:

“Well, communism is a good idea… in theory.”

NO. COMMUNISM IS A TERRIBLE THEORY.

Every time any reasonable number of people have attempted to establish a communist society, they have managed to bring about not only total economic failure, but an inevitably fascist state that throws human rights out the window and ushers in a newfound era of human suffering. If communism is a “good theory”, then it is officially the poorest implemented theory in human history… ever.

Oh wait, here comes the self-righteous anti-capitalism brigade, demanding that someone acknowledge the suffering capitalism causes. Except… wait a second… It is completely, 100% impossible for capitalism to cause suffering. The very idea of capitalism is that all exchanges are voluntary and optional. If you think a trade or exchange is going to make you worse off, don’t make it. If you don’t have a choice, surprise! That’s not capitalism! Any supposed sins of capitalism are not only fabricated outright lies, but completely overshadowed by the bloodbath that is communism anyway.

This isn’t an opinion piece. There is no viewpoints for us to share or respect. Humanity already figured this out guys, it’s a solved issue. The earth is round, not flat: arguing otherwise makes you both ignorant and stupid, not “respectful” or anything of the sort. A centrally planned economy and group ownership of resources sounds like a clever idea to maximize productivity; so did the idea of the Earth being the center of the universe surrounded by ether-filled spheres that the other planets and bodies glide around on. Clever, but completely wrong.

Communism brought out the worst in humanity, and speaking fondly of it only makes you sound like an idiot for digging it out of its well-deserved grave.

July 19, 2008 at 8:52 pm 2 comments


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