Sunday, April 3, 2016

Mish Makes Big Data Mistake

Mish has a chart showing the increase of the min wage laws in California going back to the 1910s, over 100 years.  His chart picks one date in Aug of 1971 as an example, which shows the minimum wage of $1.65 an hour.  Ooooops.

That is exactly what I was making working in a hospital kitchen on that date.  That is to say, his chart is not adjusted for inflation, rendering it meaningless.  According to the Feds a $1.65/hour then is like 9.66/hour today.  There is no doubt wages have slipped.

Now I am an adamant opponent of minimum wage laws, which are designed to keep women and minorities impoverished.

The real problem is that malcredit so distorted the market USA manufacturing was gutted and then China stepped in to keep the capitalist game going.

Today's minimum wage laws are entirely driven by government workers, the house unions, whose wages are tied to "minimum wage plus."  Well, with a 50% increase in min wage that plus becomes exponential.  But the joke will ultimately be on them when the taxes are raised to sop up that windfall.

But back ti the point - minimum wage will not solve the original problem, just make the next phase more complex.

Feel free to forward this by email to three of your friends.


Anonymous said...

Governments make money by taxing the population and spend the money accordingly. People are under the delusion that they will be getting $15 net income per hour of work but that is not so. In fact, lower income families will now fall out of favorable tax brackets and be subject to more taxable income while giving up any subsistence benefits. It is also my opinion that many businesses will now leave the Golden State (California) by 2022 when the $15/hour minimum wage threshold will be reached due to the higher cost of doing business.

Jason said...

Hi John, I'm curious how minimum wage laws are designed to keep women & minorities impoverished. Can you provide a brief explanation, or link to a story/post so I can read further? Thanks.

John Wiley Spiers said...

Hey Jason,

Here is a start, read the comments as well.

Also, those "cheap labor" countries with no effective min wage laws, such as China, see workers get hired on at exploitative wages, and then become valuable and begin dictating their wages. For the last 20 years (it may be changing now) the big complaint of China factory owners was labor shortage (at the ages they wanted to pay). Chinese wages went up because workers started low and pushed.

In USA when we forbid people (including kids) from contracting wages (a fairly basic human right) we keep the door to the elevator shut.

And always keep in mind, the world economy depends on the interest-free loan float made by labor to industry 24/7/365. The more your employees are paid (because they have become valuable) the more loan a business gets. A never before addressed aspect.

John Spiers

Jason said...

thanks John, that's really helpful.