Thursday, August 03, 2006

The Minimum Wage: All Show, No Go

There's been some discussion of the Federal Minimum Wage--no surprise; the Senate's about to vote on raising it.

The discussion is mostly pointless. This is An Issue Which Plays Well; Democrats (generally) like to pretend that larger paychecks result from larger wage mandates; Republicans (generally) like to pretend that larger paychecks result in less jobs.

To an extent, they are both correct, but in an economy which is dynamic (that would be the one here in the USA,) any "effects" last about, oh, 6 months--maybe 10 days more or less.

Let's throw the stink into the postured debate:

Either of you twitterputzes EVER hear of "offshoring" and "Illegal Aliens?"

Those two realities have a LOT to do with Real Income in the USA--but we note that they are carefully avoided in the Two-Step-Two-Party-Dance-For-Votes.

Evidently the Boyzzzz all think that Barnum was right.


Billiam said...

That's because he was. Barnum, that is...

jp said...

Dear great stink thrower;

What is the answer?

M.Z. Forrest said...

I realize this wasn't intended to be a deep post on the topic. The minimum wage predominately affects people in captive (e.g. service) industries. The manufacturing wage tends to be higher than the minimum anyway, so I don't think it impacts offshoring near as much. China going from a 10:1 to a 11:1 wage advantage ain't gonna change the pie too much.

With raising the minimum wage polling at 60-70% or better, I think there is a lot more Republican support out there than commonly believed. On the intellectual side though, there is no support.

You are correct, the business establishment's angst over having unemployed folks lacks that truthiness when they are fighting tooth and nail to flood the market foreigners in every trade.

Dad29 said...

"Minimum wage" in SE Wisconsin is not an issue; fast-food is at least $2.00 over (up to $4.00 over) minimum; so are all retailers.

Maybe it's a service-industry problem elsewhere, though.

China should, by all rights, be eliminated as a supplier of US goods, or parts. Under even a cursory reading of MFN/PNTR, PRChina is in violation of 2 major clauses--religious persecution and IP theft.

So it won't be a 10:1 adjustment--it will be eliminated.

And to ignore massive illegal immigration is equally inane--or for that matter, the "shortage" of IT people--which really amounts to a shortage of TRAINING IT people for the latest/greatest foofoodust packages.

David said...

I hate to be the one to point out the obvious but a lot of unions have their wages indexed against the minimum wage.

Dad29 said...

So what?

Unions don't need the minimum wage as a measure of anything--all this does is give the Democrats another reason to play with it.

It's still largely irrelevant, so long as the escape valves of offshoring and immigration exist.