Minimum Wage Madness
By Thomas Sowell - September 17, 2013
Political crusades for raising the minimum wage are back again. Advocates of minimum wage laws often give themselves credit for being more "compassionate" towards "the poor." But they seldom bother to check what are the actual consequences of such laws.
One of the simplest and most fundamental economic principles is that people tend to buy more when the price is lower and less when the price is higher. Yet advocates of minimum wage laws seem to think that the government can raise the price of labor without reducing the amount of labor that will be hired.
When you turn from economic principles to hard facts, the case against minimum wage laws is even stronger.
Countries with minimum wage laws almost invariably have higher rates of unemployment than countries without minimum wage laws.
Most nations today have minimum wage laws, but they have not always had them. Unemployment rates have been very much lower in places and times when there were no minimum wage laws.
Switzerland is one of the few modern nations without a minimum wage law. In 2003, "The Economist" magazine reported: "Switzerland's unemployment neared a five-year high of 3.9 percent in February." In February of this year, Switzerland's unemployment rate was 3.1 percent. A recent issue of "The Economist" showed Switzerland's unemployment rate as 2.1 percent.
Most Americans today have never seen unemployment rates that low. However, there was a time when there was no federal minimum wage law in the United States. The last time was during the Coolidge administration, when the annual unemployment rate got as low as 1.8 percent. When Hong Kong was a British colony, it had no minimum wage law. In 1991 its unemployment rate was under 2 percent.
As for being "compassionate" toward "the poor," this assumes that there is some enduring class of Americans who are poor in some meaningful sense, and that there is something compassionate about reducing their chances of getting a job.
Most Americans living below the government-set poverty line have a washer and/or a dryer, as well as a computer. More than 80 percent have air conditioning. More than 80 percent also have both a landline and a cell phone. Nearly all have television and a refrigerator. Most Americans living below the official poverty line also own a motor vehicle and have more living space than the average European -- not Europeans in poverty, the average European.
Why then are they called "poor"? Because government bureaucrats create the official definition of poverty, and they do so in ways that provide a political rationale for the welfare state -- and, not incidentally, for the bureaucrats' own jobs.
Most people in the lower income brackets are not an enduring class. Most working people in the bottom 20 percent in income at a given time do not stay there over time. More of them end up in the top 20 percent than remain behind in the bottom 20 percent.
There is nothing mysterious about the fact that most people start off in entry level jobs that pay much less than they will earn after they get some work experience. But, when minimum wage levels are set without regard to their initial productivity, young people are disproportionately unemployed -- priced out of jobs.
In European welfare states where minimum wages, and mandated job benefits to be paid for by employers, are more generous than in the United States, unemployment rates for younger workers are often 20 percent or higher, even when there is no recession.
Unemployed young people lose not only the pay they could have earned but, at least equally important, the work experience that would enable them to earn higher rates of pay later on.
Minorities, like young people, can also be priced out of jobs. In the United States, the last year in which the black unemployment rate was lower than the white unemployment rate -- 1930 -- was also the last year when there was no federal minimum wage law. Inflation in the 1940s raised the pay of even unskilled workers above the minimum wage set in 1938. Economically, it was the same as if there were no minimum wage law by the late 1940s.
In 1948 the unemployment rate of black 16-year-old and 17-year-old males was 9.4 percent. This was a fraction of what it would become in even the most prosperous years from 1958 on, as the minimum wage was raised repeatedly to keep up with inflation.
Some "compassion" for "the poor"!
17 September, 2013
09 September, 2013
Unserious Commander-in-Chief
Unserious Commander-in-Chief
If Obama can’t tell us what his objectives for attacking Syria are, Congress should vote no.
Charles Krauthammer
Senator Bob Corker: “What is it you’re seeking?”
General Martin Dempsey, chairman of the Joint Chiefs of Staff: “I can’t answer that, what we’re seeking.”
— Senate hearing on the use of force in Syria, September 3
We have a problem. The president proposes attacking Syria, and his top military officer cannot tell you the objective. Does the commander-in-chief know his own objective? Why, yes. “A shot across the bow,” explained Barack Obama.
Now, a shot across the bow is a warning. Its purpose is to say: Cease and desist, or the next shot will sink you. But Obama has already told the world — and Bashar Assad in particular — that there will be no next shot. He has insisted time and again that the operation will be finite and highly limited. Take the shot, kill some fish, go home.
What then is the purpose? Dempsey hasn’t a clue, but Secretary of State John Kerry says it will uphold and proclaim a norm and thus deter future use of chemical weapons. With a few Tomahawk missiles? Hitting sites that, thanks to the administration having leaked the target list, have already been scrubbed of important military assets?
This is risible. If anything, a pinprick from which Assad emerges unscathed would simply enhance his stature and vindicate his conduct. Deterrence depends entirely on perception and the perception in the Middle East is universal: Obama wants no part of Syria.
Assad has to go, says Obama, and then lifts not a finger for two years. Obama lays down a red line, and then ignores it. Shamed finally by a massive poison-gas attack, he sends Kerry to make an impassioned case for righteous and urgent retaliation — and the very next day, Obama undermines everything by declaring an indefinite timeout to seek congressional approval.
This stunning zigzag, following months of hesitation, ambivalence, contradiction, and studied delay, left our regional allies shocked and our enemies gleeful. I had strongly advocated going to Congress. But it was inconceivable that, instead of recalling Congress to emergency session, Obama would simply place everything in suspension while Congress finished its Labor Day barbecues and he flew off to Stockholm and St. Petersburg. So much for the fierce urgency of enforcing an international taboo and speaking for the dead children of Damascus.
Here’s how deterrence works in the Middle East. Syria, long committed to the destruction of Israel, has not engaged Israel militarily in 30 years. Why? Because it recognizes Israel as a serious adversary with serious policies.
In this year alone, Israel has four times launched airstrikes within Syria. No Syrian response. How did Israel get away with it? Israel had announced that it would not tolerate Assad’s acquiring or transferring to Hezbollah advanced weaponry. No grandiloquent speeches by the Israeli foreign minister. No leaked target lists. Indeed, the Israelis didn’t acknowledge the strikes even after they had carried them out. Unlike the American president, they have no interest in basking in perceived toughness. They care only about effect. They care about just one audience — the party to be deterred, namely Assad and his allies.
Assad knows who did it. He didn’t have to see the Israeli prime minister preening about it on world television.
And yet here is Obama, having done nothing yet but hesitate, threaten, retract, and wander about the stage, claiming Wednesday in Sweden to be the conscience of the world, upholding not his own red line but the world’s. And, incidentally, Congress’s — a transparent attempt at offloading responsibility.
To his dovish base, Obama insists on how limited and militarily marginal the strike will be. To undecided hawks like Senators John McCain and Lindsey Graham, who are prepared to support a policy that would really alter the course of the civil war, he vaguely promises the opposite — to degrade Assad’s military while upgrading that of the resistance.
Problem is, Obama promised U.S. weaponry three months ago and not a rifle has arrived. This time around, what seems in the making is a mere pinprick, designed to be, one U.S. official told the Los Angeles Times, “just muscular enough not to get mocked.”
That’s why Dempsey is so glum. That’s why U.S. allies are so stunned. There’s no strategy, no purpose here other than helping Obama escape self-inflicted humiliation.
This is deeply unserious. Unless Obama can show the country that his don’t-mock-me airstrike is, in fact, part of a serious strategy for altering the trajectory of the Syrian war, Congress should vote no.
If Obama can’t tell us what his objectives for attacking Syria are, Congress should vote no.
Charles Krauthammer
Senator Bob Corker: “What is it you’re seeking?”
General Martin Dempsey, chairman of the Joint Chiefs of Staff: “I can’t answer that, what we’re seeking.”
— Senate hearing on the use of force in Syria, September 3
We have a problem. The president proposes attacking Syria, and his top military officer cannot tell you the objective. Does the commander-in-chief know his own objective? Why, yes. “A shot across the bow,” explained Barack Obama.
Now, a shot across the bow is a warning. Its purpose is to say: Cease and desist, or the next shot will sink you. But Obama has already told the world — and Bashar Assad in particular — that there will be no next shot. He has insisted time and again that the operation will be finite and highly limited. Take the shot, kill some fish, go home.
What then is the purpose? Dempsey hasn’t a clue, but Secretary of State John Kerry says it will uphold and proclaim a norm and thus deter future use of chemical weapons. With a few Tomahawk missiles? Hitting sites that, thanks to the administration having leaked the target list, have already been scrubbed of important military assets?
This is risible. If anything, a pinprick from which Assad emerges unscathed would simply enhance his stature and vindicate his conduct. Deterrence depends entirely on perception and the perception in the Middle East is universal: Obama wants no part of Syria.
Assad has to go, says Obama, and then lifts not a finger for two years. Obama lays down a red line, and then ignores it. Shamed finally by a massive poison-gas attack, he sends Kerry to make an impassioned case for righteous and urgent retaliation — and the very next day, Obama undermines everything by declaring an indefinite timeout to seek congressional approval.
This stunning zigzag, following months of hesitation, ambivalence, contradiction, and studied delay, left our regional allies shocked and our enemies gleeful. I had strongly advocated going to Congress. But it was inconceivable that, instead of recalling Congress to emergency session, Obama would simply place everything in suspension while Congress finished its Labor Day barbecues and he flew off to Stockholm and St. Petersburg. So much for the fierce urgency of enforcing an international taboo and speaking for the dead children of Damascus.
Here’s how deterrence works in the Middle East. Syria, long committed to the destruction of Israel, has not engaged Israel militarily in 30 years. Why? Because it recognizes Israel as a serious adversary with serious policies.
In this year alone, Israel has four times launched airstrikes within Syria. No Syrian response. How did Israel get away with it? Israel had announced that it would not tolerate Assad’s acquiring or transferring to Hezbollah advanced weaponry. No grandiloquent speeches by the Israeli foreign minister. No leaked target lists. Indeed, the Israelis didn’t acknowledge the strikes even after they had carried them out. Unlike the American president, they have no interest in basking in perceived toughness. They care only about effect. They care about just one audience — the party to be deterred, namely Assad and his allies.
Assad knows who did it. He didn’t have to see the Israeli prime minister preening about it on world television.
And yet here is Obama, having done nothing yet but hesitate, threaten, retract, and wander about the stage, claiming Wednesday in Sweden to be the conscience of the world, upholding not his own red line but the world’s. And, incidentally, Congress’s — a transparent attempt at offloading responsibility.
To his dovish base, Obama insists on how limited and militarily marginal the strike will be. To undecided hawks like Senators John McCain and Lindsey Graham, who are prepared to support a policy that would really alter the course of the civil war, he vaguely promises the opposite — to degrade Assad’s military while upgrading that of the resistance.
Problem is, Obama promised U.S. weaponry three months ago and not a rifle has arrived. This time around, what seems in the making is a mere pinprick, designed to be, one U.S. official told the Los Angeles Times, “just muscular enough not to get mocked.”
That’s why Dempsey is so glum. That’s why U.S. allies are so stunned. There’s no strategy, no purpose here other than helping Obama escape self-inflicted humiliation.
This is deeply unserious. Unless Obama can show the country that his don’t-mock-me airstrike is, in fact, part of a serious strategy for altering the trajectory of the Syrian war, Congress should vote no.
04 September, 2013
Barack Obama’s Staggering Incompetence
Barack Obama’s Staggering Incompetence
Peter Wehner
09.02.2013 - 11:00 AM
It’s reported that President Obama was ready to order a military strike against Syria, with or without Congress’s blessing, but “on Friday night, he suddenly changed his mind.” According to the Huffington Post:
Senior administration officials describing Obama’s about-face Saturday offered a portrait of a president who began to wrestle with his own decision – at first internally, then confiding his views to his chief of staff, and finally summoning his aides for an evening session in the Oval Office to say he’d had a change of heart.
In light of all this, it’s worth posing a few questions:
1. Why didn’t the president seek congressional authority before the administration began to beat the war drums this past week? Did the idea not occur to him? It’s not as if this is an obscure issue. When you’re in the White House and preparing to launch military force against a sovereign nation, whether or not to seek the approval of Congress is usually somewhere near the top of the to-do list.
And why has the urgency to act that we saw from the administration during the last week–when Assad’s use of chemical weapons was referred to by the secretary of state as a “moral obscenity”–given way to an air of casualness, with Obama not even calling Congress back into session to debate his military strike against Syria?
2. The president didn’t seek congressional approval for his military strike in Libya. Why does he believe he needs it in Syria?
3. Mr. Obama, in his Rose Garden statement on Saturday, still insisted he has the authority to strike Syria without congressional approval. So what happens if Congress votes down a use-of-force resolution? Does the president strike Syria anyway? If so, will it be an evanescent bombing, intended to be limited in scope and duration, while doing nothing to change the war’s balance of power? Or does the president completely back down? Does he even know? Has he thought through in advance anything related to Syria? Or is this a case of Obama simply making it up as he goes along?
This latest volte-face by the president is evidence of a man who is completely overmatched by events, weak and confused, and deeply ambivalent about using force. Yet he’s also desperate to get out of the corner he painted himself into by declaring that the use of chemical weapons by the Assad regime would constitute a “red line.” As a result he’s gone all Hamlet on us. Not surprisingly, Obama’s actions are being mocked by America’s enemies and sowing doubt among our allies. (Read this New York Times story for more.)
What explains this debacle? It’s impossible for us to know all the reasons, but one explanation appears to be a CYA operation.
According to Politico, “At the very least, Obama clearly wants lawmakers to co-own a decision that he can’t back away from after having declared last year that Assad would cross a ‘red line’ if he used chemical weapons against his own people.” And the Washington Post reports:
Obama’s proposal to invite Congress dominated the Friday discussion in the Oval Office. He had consulted almost no one about his idea. In the end, the president made clear he wanted Congress to share in the responsibility for what happens in Syria. As one aide put it, “We don’t want them to have their cake and eat it, too.”
Get it? The president of the United States is preparing in advance to shift the blame if his strike on Syria proves to be unpopular and ineffective. He’s furious about the box he’s placed himself in, he hates the ridicule he’s (rightly) incurring, but he doesn’t see any way out.
What he does see is a political (and geopolitical) disaster in the making. And so what is emerging is what comes most naturally to Mr. Obama: Blame shifting and blame sharing. Remember: the president doesn’t believe he needs congressional authorization to act. He’s ignored it before. He wants it now. For reasons of political survival. To put it another way: He wants the fingerprints of others on the failure in Syria.
Rarely has an American president joined so much cynicism with so much ineptitude.
Peter Wehner
09.02.2013 - 11:00 AM
It’s reported that President Obama was ready to order a military strike against Syria, with or without Congress’s blessing, but “on Friday night, he suddenly changed his mind.” According to the Huffington Post:
Senior administration officials describing Obama’s about-face Saturday offered a portrait of a president who began to wrestle with his own decision – at first internally, then confiding his views to his chief of staff, and finally summoning his aides for an evening session in the Oval Office to say he’d had a change of heart.
In light of all this, it’s worth posing a few questions:
1. Why didn’t the president seek congressional authority before the administration began to beat the war drums this past week? Did the idea not occur to him? It’s not as if this is an obscure issue. When you’re in the White House and preparing to launch military force against a sovereign nation, whether or not to seek the approval of Congress is usually somewhere near the top of the to-do list.
And why has the urgency to act that we saw from the administration during the last week–when Assad’s use of chemical weapons was referred to by the secretary of state as a “moral obscenity”–given way to an air of casualness, with Obama not even calling Congress back into session to debate his military strike against Syria?
2. The president didn’t seek congressional approval for his military strike in Libya. Why does he believe he needs it in Syria?
3. Mr. Obama, in his Rose Garden statement on Saturday, still insisted he has the authority to strike Syria without congressional approval. So what happens if Congress votes down a use-of-force resolution? Does the president strike Syria anyway? If so, will it be an evanescent bombing, intended to be limited in scope and duration, while doing nothing to change the war’s balance of power? Or does the president completely back down? Does he even know? Has he thought through in advance anything related to Syria? Or is this a case of Obama simply making it up as he goes along?
This latest volte-face by the president is evidence of a man who is completely overmatched by events, weak and confused, and deeply ambivalent about using force. Yet he’s also desperate to get out of the corner he painted himself into by declaring that the use of chemical weapons by the Assad regime would constitute a “red line.” As a result he’s gone all Hamlet on us. Not surprisingly, Obama’s actions are being mocked by America’s enemies and sowing doubt among our allies. (Read this New York Times story for more.)
What explains this debacle? It’s impossible for us to know all the reasons, but one explanation appears to be a CYA operation.
According to Politico, “At the very least, Obama clearly wants lawmakers to co-own a decision that he can’t back away from after having declared last year that Assad would cross a ‘red line’ if he used chemical weapons against his own people.” And the Washington Post reports:
Obama’s proposal to invite Congress dominated the Friday discussion in the Oval Office. He had consulted almost no one about his idea. In the end, the president made clear he wanted Congress to share in the responsibility for what happens in Syria. As one aide put it, “We don’t want them to have their cake and eat it, too.”
Get it? The president of the United States is preparing in advance to shift the blame if his strike on Syria proves to be unpopular and ineffective. He’s furious about the box he’s placed himself in, he hates the ridicule he’s (rightly) incurring, but he doesn’t see any way out.
What he does see is a political (and geopolitical) disaster in the making. And so what is emerging is what comes most naturally to Mr. Obama: Blame shifting and blame sharing. Remember: the president doesn’t believe he needs congressional authorization to act. He’s ignored it before. He wants it now. For reasons of political survival. To put it another way: He wants the fingerprints of others on the failure in Syria.
Rarely has an American president joined so much cynicism with so much ineptitude.
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