Wednesday, September 17, 2008

SHOCK and SURPISE from a minimum wage study!?

Re: It's the wages, stupid! [A time magazine article]

Mostly on the minimum wage:
On the New Jersey study showing fast food jobs were NOT lost when the minimum wage was raised: SHOCK and SURPRISE (!); fast food restaurant labor costs are far higher (33%) higher than typical labor costs -- and use MOSTLY (2+X 33%) minimum pay labor. If fast food restaurants can handle a healthy minimum wage raise, any other business surely can.

Don’t become over anxious from stories of a few pockets of depressed employment that a higher minimum wage supposedly would keep going -- such are always going to occur in big economies and big nations change: can’t drag down the whole workforce’s wages for the inevitable few (Keynes -- in a possibly related situation -- showed that lowering wages in a depression actually keeps the downturn going) -- let them move to where wages are better; that’s economic history. When the mines play out or the steel mills move overseas (or farming goes mechanized) you can only move to where the action is.

If we were not discussing any immediate legislative action but just shooting the breeze abstractly, I think most might agree that IF the USA could pay a $400/wk (2008 dollars) minimum wage in 1968 (at half today’s average income yet), then, "probably" the USA could pay a minimum wage of $500/wk in 2008 without any strain. I say "probably" -- at the least very possibly.

If I can con you into "probably", then, I have conned you into agreeing that a great economic tragedy has "probably" -- at the least very possibly -- taken place (my "Great Wage Depression" which I thinks speaks better than mere "inequality" which sounds like the few taken advantage of by the many). We only have to look around to see that, exclusively in the USA, labor bargaining power has been allowed to deteriorate, to lapse to near zero (more a culture of complacency than exploitation) -- to make a good guess what the source of the wage depression "probably" -- or at least very possibly -- is.

Posted by: Denis Drew | Link to comment | September 17, 2008 at 09:23 AM

No comments: