Friday, April 01, 2016

Odd, that

Would you like fries with that?
A kiss may be grand but it won't pay the rental
On your humble flat or help you at the automat

Jerry Brown is ready for his pucker:
Shortly before California Governor Jerry Brown announced a plan to boost the state’s pay floor to $15 per hour, President Obama’s economic advisers released an ominous report warning that low-paying American jobs were particularly vulnerable to automation. 
The numbers aren't good, either:
The results are striking: Low-paying jobs (those paying less than $20 an hour, or under $40,000 a year for full-time workers) have an 83 percent chance of being automated. Medium-paying jobs ($20 to $40 an hour, or $40,000 to $80,000 a year) have a 31 percent chance, and high-paying ones (more than $40 an hour, or more than $80,000 a year) have only a 4 percent chance.
Clearly, if high-paying jobs only have a 4 percent chance of being eliminated, the answer is to raise the minimum wage to $40/hour. I'm not sure how many available positions there are to make picket signs for a $40/hour minimum wage, either, but it seems like a lucrative enough business, especially if you head the SEIU. And, as the invaluable Walter Russell Mead reminds us, it's a scam:
Brown’s minimum wage scheme will, of course, artificially raise the cost of hiring the most at-risk workers. Though the robots are not ready to take over quite yet, an onerous wage floor only incentivizes further research into automation. This whole situation is a bizarre illustration of the layered contradictions contained in the blue coalition: anti-inequality crusaders want a radical minimum wage hike, which will likely have the effect of raising unemployment (and welfare eligibility) among economically deprived blue constituencies. Meanwhile, those most likely to benefit down the line from these kinds of moves are the socially liberal Silicon Valley executives and venture capitalists, who bankroll the Democratic Party despite some of their dearly held libertarian beliefs.
Feel the love
Mead doesn't mean libertarian beliefs in an Austrian economics sense. He's talking Burning Man. It's easier to be a libertarian if you can afford it.
And this is but one example of how the blue model functions as an engine through which savvy wealthy people use the illusions of the Left to extract profit from the poor and working class. Other examples include: Guild protections for elite professionals that raise prices and reduce opportunity for less-credentialed workers; finance regulations that give hedge funds a leg up on less-sophisticated investors; and a constellation of higher ed regulations that enrich top administrators while impoverishing adjuncts and sending students deep into debt.
Yep. It's a great world if you're part of it. But it will come to an end eventually. And it's not going to end well.

22 comments:

jerrye92002 said...

I think somebody is wrong about one thing. The robots ARE ready to take over. Walk into any McDonald's in Europe and you will order from a kiosk, not an expensive human being. That technology is already here in a few places and needs only the incentive to wipe out thousands of entry-level jobs.

Another company is rolling out its completely automated "burger flipper" that makes 300 burgers per hour, cooked to order (half buffalo, half pork sausage, lettuce, pickle, mustard, whole wheat bun), and it pays for itself in SIX MONTHS! If wages go from a mandatory $7.50 to $15, it's 3 months and game over.

The robots are coming for every job on the planet, and we need to worry about slowing that process down a bit, not incentivizing its acceleration.

Gino said...

Without living wage paying factory jobs for lower skilled peeps to go in to, expect more minimum wage hikes. It all fits together folks. If you don't allow the 80% a fair shot at a decent life, they will demand it from the 20%, and get it one way or another.

Gino said...

$15 won't do much anyway. A one bedroom rental in Los Angeles county starts at about 1400 on the very low end.

Bike Bubba said...

Having earned well less than $15/hour in my first few jobs, I shudder to think what that wage would have done to my employment chances in life. It is as if Silicon Valley executives and other liberal ne'er-do-wells don't remember earning less than six figures in a year.

I used to correspond with a gentleman in Germany who'd gotten on the wrong end of that equation. Poor economy with no jobs in his field, and unemployment insurance was so generous, he couldn't get started anywhere else without losing money. Not a good situation.

Anonymous said...

Yet we still have excellent job growth -- another 215k created in March and continuing a streak dating back six years. I think the American economy and our ability to adapt is much greater than you give it credit for.

Mr. D said...

Let's see how those numbers look when the $15/hour goes into full effect.

R.A. Crankbait said...

Meanwhile, the elites push for more visas to import high-skilled and high-tech workers to do the high-wage jobs that Americans won't do.

Bike Bubba said...

Wait a second here. 215k/month is just a touch above the 190k/month needed to keep up with population growth. Given the huge problem with workforce participation and the stagnation of wages, this is NOT excellent job growth. It is treading water. Drop low wage jobs by a couple of million, and you're in a recession again. That is exactly what responsible economists predict with a nationwide minimum wage hike.

Really, Obama is lucky in a way to have inherited a deep recession, and when you factor that out, job growth in his terms in office is really, really pathetic.

jerrye92002 said...

Well, these "noted economists" (liberal ones, certainly) always tell us that they cannot "find" where employment is affected by a MW hike. But that is because past hikes have basically been to keep up with inflation-- small increases that most employers were already paying, just to attract employees. But when you start talking about nearly doubling that wage, you start to get into that territory where the sensible start asking, why not $100 per hour? We could all be rich, right? Maybe that is still the reductio ad absurdum argument. Why not $16, or $17, or $20, or ...?

Gino said...

But the point still remains... There are not enough loving wage jobs to go around. This problem needs to be addressed. Trump is the only one doing it, if indirectly. But he's wrong for America.

jerrye92002 said...

Curious as to what specific Trump proposals you believe "address" this problem? And what makes anybody think that government action can HELP?

Gino said...

Much of the problem was created by govt, with regulations forcing factories overseas, and free trade agreements creating an unfair playing field for American workers. Not to mention anti labor immigration policies. Only trump is addressing these issues.

Bike Bubba said...

Loving wage? I'd like to sign up for that one. :^) (sorry, Gino, just couldn't resist)

Jerry: those noted liberal economists have apparently never looked at inner city and minority unemployment rates among the young, have they? Walter Williams points out that if you look at the right groups, you'll see exactly who can't find a job due to the minimum wage.

jerrye92002 said...

OK, as non-specific as Trump has been, he has raised the issue of immigrants, legal or otherwise, taking American jobs, and he has argued we could make better trade deals. I have not heard him talk consistently and clearly about fixing over-regulation and taxes (like minimum wage) that prevent US businesses from being competitive.

Gino said...

It's all connected. People March for a min wage because they don't have other options to get more.

Bike Bubba said...

My take is that Drumpf has exactly the wrong prescription for loving (or living) wage jobs; the tariff of abominations. It plays well to the uninformed, but let's see how popular he is when prices rise 25% at Wal-Mart.

And personally, the very idea of making trade deals scares me. I have looked at the actual text of NAFTA and GATT, but did not read through it for an obvious reason; the table of contents in each is hundreds of pages. Overall, they're 14,000 and 28000 pages; these agreements are many things, but free trade is not one of them. Deal-making is an abysmal failure here.

Let's go back to getting reasonable taxes on imports and exports to help pay for the Navy and Coast guard, and cut income taxes so the poor and middle class are more employable. Encourage other nations to do the same. And by reasonable tax, I mean 10% or so, not 45%, as the Combover wants.

Gino said...

but let's see how popular he is when prices rise 25% at Wal-Mart.
(btw: i dont consider myself uninformed)
for starters, a lot of crappy cheap stuff would leave the shelves, and eventually fewer people would be needing to use food stamps to buy milk because they'd have better paying factory jobs.

you cant build a middle-class, or sustain one, with bare subsistence wages at home... unless the middle class you seek to promote is in some other nation.

jerrye92002 said...

The export imbalance pretty much goes away if you enact the FAIR tax. First off, our goods become 23% cheaper overseas, and the corporate tax rate gives us a FAVORABLE advantage. Get rid of some stupid regulations and too many smart lawyers, and the rest of us can compete just fine.

Bike Bubba said...

Gino, the trick is that what Mr. Combover is suggesting would ignite a trade war, which would leave the poor with (a) much higher prices at Wal-Mart and (b) no job. Responsible estimates of the consequences of his policy are a loss of about five million jobs. ouch!

Plus, you've got the same problem as does Jerry's suggestion of a national sales tax (which I like in principle); you've got to persuade the bulk of voters that it would only make official what Paul Wellstone noted about 15 years back; that the rich and corporations do not pay taxes. They pass them on to their customers.

And once you make clear that it's the poor and middle class that actually pay taxes, then you'll be able to push for any number of things--huge changes in the tax structure, but also the quick elimination of corporate welfare.

jerrye92002 said...

Actually, under the FAIR tax, the poor pay NO taxes, where under Cruz's flat tax they still pay sales and FICA. People would get 100% of their paycheck, and that's got to make the new tax popular, and prices will stay the same so the elimination of corporate income taxes will not "bite" anybody. Sounds like a winner to me. And all of the millions of lines of the tax code devoted to "special interests" (corporate welfare and other junk) go away. And the need for tariffs goes away and brings MORE jobs here.

Bike Bubba said...

Had forgotten that part--you get a certain payment for basically breathing that covers the first part of your sales tax, right?

Still, though, you're going to end up paying tax for everything taxable--everything but food, medical care, and housing, right? So it's not quite correct that the poor are tax free--it's taxed, but you get a credit that covers part of your costs, right?

jerrye92002 said...

Well, let's see. EVERYBODY from Bill Gates on down gets the same "rebate," based on family size and intended to cover the sales tax on poverty-level spending. That is, we assume you have to spend x amount to stay alive and you don't pay tax on that. If you can live on less, you actually come out ahead. If you're already in the millionaire's club it won't even pay for golf tees, and so your resulting sales tax bill will be at very close to the nominal percentage. So zero rate at poverty level and full rate at high incomes means this tax is "perfectly progressive" but with a single rate. And of course if you save the money or plow it back into your business or give it to charity or buy used goods, you pay no taxes on that; all desirable things.

BUT, it is a "retail sales tax" on everything else sold, for the first time, to the final consumer. That includes, food, doctors, and a house! But the tax is designed to be "price neutral" because, with all the hidden taxes removed, the sales tax at the final sale should bring the price right back to what it now is, and there is a "pre-existing inventory" clause for the transition time. And we save hundreds of billions of dollars in compliance costs (and more in confusion) every year.