Think Freely Media presents Common Sense with Paul Jacob

When a professional academic economist and poverty specialist like Prof. Robert Plotnick defends a radically higher minimum wage law, as has been put in place in SeaTac, Washington, and was just enacted (with elaborate postponement/implementation periods) in Seattle, I raise an eyebrow. What am I missing?

But then I read what he actually said: “People aren’t going to stop flying out of Sea Tac [airport] because it costs a little more to buy a hamburger or a beer,” he says.

No. They won’t.

But that’s irrelevant. With prices higher for fast food, there’s certainly going to be no increase in fast food purchases. People will still go to the airport, but more often avoid the fast food joints, in SeaTac or Seattle.

And, over time, as businesses struggle with reduced revenue, or at least reduced profits, fewer of those businesses will survive. And folks with better qualifications — say, better language skills, better people skills, or a higher work ethic  — will move in to the forced higher-wage area (the $15/hour minimum in both Sea Tac and Seattle is the highest city rate in the nation) and will replace less skilled workers.

Increasing poverty, not decreasing it: stultifying progress, both personal and in general.

Already the horror stories are piling up: check out the stories in the Seattle Times. (See economist David Henderson’s discussion on EconLog.)

One of the problems was inadvertently suggested by our president, who recently intoned, “Let’s declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty.”

Great. We’ll have fewer low-income workers working full time.

This is Common Sense. I’m Paul Jacob.

By: Redactor

10 Comments

  1. Rick says:

    Thank the Federal Reseerve for all this. Their policies are going to ultimately kill the economy with inflation. Naturally everybody likes low prices. But, Fed policy is ONLY interested in keeping prices higher, much higher, to float the banks out of the mess they made during the early part of the last decade.

    Join Ron and Rand Paul in their effort to AUDIT THE FED.

    Seems like a nobrainer, but the institution that controls everything in the economy including the 8000 tons of American gold at Ft Knox or wherever it is, indeed, if it even still exists, will not allow an audit!

    It’s time to find out what happens behind the curtain.

  2. IHeartDagney says:

    I think you can thank pro-(re)gressivism. Oh, yeah, I forgot, the Federal Reserve was instituted by the pro-(re)gressives. Anyway, the minimum wage is another deceptive policy by these unhappy people to ensure the poor stay poor and dependent on government for their livelihood. Therefore ensuring them power since they run our government and, more importantly, the bureaucracy. Time to think about term limits for ALL Federal government offices, not just the president. Also, the Fair Tax. Choke off the BEAST!

  3. Rincon says:

    Let’s see. The bottom 85% of us have lost half of our share of the wealth in this country to the top 15% in the last 30 years. This represents a massive pay raise for the top 15%, but nobody has anguished that this pay raise has increased prices. But when it’s proposed to pay the poorest workers (encouraging them to get off welfare) a living wage, we agonize over this far smaller pay raise.

    If a raise for the poor causes job losses, then a raise for the rich does too.

  4. Drik says:

    The only group that has had an increase in their net worth in the last 6 years has been the top 1%. This while a substantial number of middle class folks have been moved over to the pverty level, although still working, and a larger number of the working poor have moved into the non-working poor group.
    Our future is where Venezuela is now. There, only the political class and the extremly wealthy do well. Only the military is guaranteed basic sustenence in return for enforcing the dictates of the political class. And the poor and formerly middle-class have shortages of both food and water.
    70 years ago, 73,000 Americans landed in Normandy to drive the socialists out of France. 10,000 of them died.
    Those 10,000 did not live to see socisalists ensconced in our own capital and encroaching on our cities.

  5. Ross says:

    One sad thing is the lack of reversibility of many of these decisions. Even were a dramatic rise in, say, teenage unemployment lead Seattle to recognize their error and reverse their decision in a year or so, if a business has already spent money to replace minimum wage employees with, say, iPad tablets allowing customers to self-order, the businesses won’t reverse course on a dime.

  6. Rincon says:

    If half the money that went into Bill Gates’ pocket had gone to the middle and lower class workers in the Seattle area, the area unemployment would be near zero and the minimum wage would be no problem at all.

  7. Rick says:

    rincon, that would be redistribution. a socialists way out. but in time, we may all have to go waaaay left in order get to the right. in thinking it through, if conditions get as bad here as they are in venezuela, for example, we all would become active revolutionaries, join with the far left in order to escape that kind of oppression .

    here’s just another example of how the bureaucracy is turning fascist right before our eyes:

    http://dailycaller.com/2014/06/06/judge-orders-nsa-to-stop-destroying-evidence-for-the-third-time/#ixzz33tDAXPfF

  8. Rincon says:

    Redistribution has already been occurring for the last 35 years. I merely want to mitigate the damage. Why, for example, are Mitt Romney and Warren Buffett in lower tax brackets than their secretaries? THAT is redistribution.

  9. Drik says:

    Rincon: Capital gains involves much higher risk of loss and no gains. Tax the things that you desire less of.
    Higher taxes decrease the return and increase the risk and make for fewer investments.
    Since capital investments grow the economy and provide more income to the citizens AND to the government, that is something that should be encouraged. Without that, you end up with economies like Venezuela and North Korea. Even at slightly lower exorbitant rates, you get stagnation, like in most countries in Europe who are tanking. New jobs come from new businesses, not from government protection of the old ones.

  10. Rincon says:

    No matter how much good you think it does, that’s redistribution with a capital R. A good Conservative would say let the market decide instead of trying to goose the economy with tax policy.

    In some times, increased investment is desirable, but for the last 5 years or so, the problem has been lack of demand. Note the huge amount of capital laying around today that’s not being invested. We clearly don’t need to encourage people to invest at this time; we need them to spend and special treatment for capital gains has worsened this situation dramatically.

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