How Raising the Minimum Wage May Be Contributing to Riots

In the book, Freakonomics, there’s a story about the downfall of Romanian dictator Nicolae Ceausescu. The author’s of the book, Dubner and Levitt, suggest that a ban on abortion and restricting contraception — intended to increase the population of Romania — may have led to a more unwanted children who grew up under less than ideal conditions and when they came of age they rebelled and took the dictator down.

I have a similar thought about riots.

Raising the minimum wage is a reliable vote getter of the political left. Advocating the raising of it sounds good enough to get votes in a classic example of what Frederic Bastiat called the Seen and the Unseen.

The seen: It’s easy to see the benefit to those minimum wage workers who keep a job and get a raise.

The unseen: It’s not so easy to see that a higher minimum wage reduces legitimate job opportunities for these very same workers.

It’s not so easy to see that the benefits of an entry-level job isn’t just the wage earned. It’s also the gaining of job experience and learning how to be useful and productive, which makes these workers — often teenagers — more valuable and more likely to earn a higher wage in the future.

It’s also about having opportunities to occupy your time doing something productive rather than whine that ‘there’s nothing for us to do,’ so when you get the text or Facebook message from your friend that says, “let’s riot,” you’re more likely to respond, “Can’t, gotta work,’ instead of, “I’m in!”

Unemployment among teenagers is high, even higher among black teenagers. The opportunity cost of rioting is low.

Smart guys tell us that studies show that the minimum wage have little, no, and sometimes positive effects on unemployment. Many believe them without question. They’re smart, after all. But, we forget, smart people can be dangerous. They have the ability to rationalize anything. To filter the evidence and present to support their forgone conclusions. Like magicians create illusions. And one affliction these smart people have, that magicians don’t, they are prone to believing their own bullshit. Magicians know their tricks are tricks.

These smart folks don’t tell us about the problems with such studies, or the studies that find the opposite, or the plain evidence that’s right in front of their eyes — unemployment is the highest among the very population who make low wages.

That’s the illusion. The smart people turn your attention away from that plain fact. Or, if they acknowledge it, they convince you (and themselves) that it’s better to be unemployed and wait for a job with a higher wage than it is for them to accumulate productive experience — even if the minimum wage does happen to have an ill effect on unemployment.

They also don’t acknowledge that while they’re holding out for such jobs (when they will magically appears, who knows), they are also more likely to show up and riot.

“How Every Company in America Can Save 23% on Wages”

We need more videos like this (thanks to Carpe Diem for the pointer):


True measure (at 48 seconds):

Do you want to know how I know that women aren’t being paid 23% less than men for the same amount of work? Because if they were, women would make up the overwhelming majority of the workforce. If companies could simply save 23% on salaries just by hiring women, why wouldn’t they?

Exactly. People who cite the ‘gender pay gap’ are often the same folks who believe that companies will go to great lengths to cut corners and pay as little as possible for things. If that’s true, why wouldn’t they exploit this cost difference and hire more women in place of men to save money?  Because it’s not true.

Oh yeah, I forgot. While employers are cheap and greedy, they are also willing to let their biases cost them big money and all of their competitors are complicity. Give me a break.

Kudos to this guy for doing his homework and producing a video to call BS.

The problem with many issues is that they really aren’t issues, they are bad stats. There seems to be an ample supply of people who want to make that bad stat their pet cause, rather than do their own homework to find out that the injustice they staked a claim is really BS.

What’s more is that most of these issues can be debunked with just a little bit of thinking and not a lot of research, like the guy in the video did. If women really were paid less for the same work, women would make up a greater share of the work force.

The Wal-Mart of Presidential Candidates

From Don Boudreax at Cafe Hayek:

It’s intriguing that the people who most self-righteously criticize the likes of McDonald’s, Anheuser-Busch, pop rock, and builders of ‘cookie-cutter’ houses for being bland and failing to experiment with the Bold and the Edgy – those who condemn conformity, sneer at the crowds in Wal-Mart, and trumpet their devotion to diversity – are especially likely to be among those who glorify politics and to find in democratic elections the possibility of transcendence and of discovering and empowering the bold, the different, and the courageous trend-bucking leader.

What’s he talking about? Elections. Here’s more:

Suppose that you are charged with selling a single food item to at least a hundred million people in a highly diverse society.  You can pick whatever item you wish, but you can pick only one.  If you fall short of getting at least 100,000,000 people to voluntarily choose your item over a rival item that will be offered by a competitor, you lose.  (Your competitor is playing by the same rules that you are playing by.)

His point? By definition, presidential candidates who stand a chance of winning are as bland as mass market products in order to appeal to wide set of tastes. Many people who sneer at these products don’t seem to realize just how bland and mass market their political choices are.

Not a “perfect study?”

I saw a segment on The Today Show was about a study “finding a link between the use of bleach and childhood respiratory problems.”

The expert doctor made it clear that the results weren’t conclusive. Natalie Mourales said, “It wasn’t a perfect study.”

NEWS FLASH…There are no perfect studies. So, this study was just like all others.

Sign of a sports crazed culture

A parent complains and the school asks a special needs kid not to wear a varsity letter jacket. The school principal says that would not be appropriate because he did not participate in the sport at the varsity level.

What’s next? Will parents complain about schools awarding diplomas to graduates who cannot read, write or do arithmetic at the appropriate level? Don’t hold your breath.

It’s a sure sign of a sports crazed culture when a varsity letter holds a higher standard of merit than a high school diploma.

If you really cared about income inequality, you’d be interested in these questions

There’s a lot of noise about stagnating income for the lower classes and income inequality, with strong desires to use government to fix these problems.

Something occurred to me as I was reading Alan Reynold’s excellent Wall Street Journal piece discussing some of the problems with such data, problems that those pushing the stagnating message don’t seem willing to address.

But let’s ignore the data problems for now and give them the benefit of the doubt.

Many government programs — Federal, state and local — intended to reduce poverty and reduce inequality have been put in place and ballooned over the very time frame that the income inequality groups squawk about.

One question they don’t seem interested in asking or answering is: Why haven’t these programs worked?

“More” seems to be the only thing they are interested in.

Another question that might be worth asking is: Have some of these programs caused the problems?

That they are unwilling to consider these questions reveals something that I find disturbing, so disturbing that it caused me to question my liberalness when I was young: they do not care about works and what doesn’t work for the people they purport to want to help. They only care about what makes them look good to the people they wish to identify with and what will get them votes from the same.

Your imagination is fallible

Don Boudreaux at Cafe Hayek responds to someone who

“simply can’t imagine” that raising the minimum wage by $2.85 [per hour]… “will trigger businesses to hire less workers.”

I’ve been amazed over the years at how many form their opinion solely only at what they can or cannot imagine in the moment.

Have they never had experiences where reality turned out differently from what they imagined?

Have they considered that they may simply lack imagination?

Have they considered that it is difficult to imagine what business owners will do when you are not a business owner?

Even if you are a business owner, it can be difficult to imagine what you will do when faced with changes to your business. You can easily say what you think you would do, but then do something entirely differently when faced with the actual costs and benefits and not even realize it.