Destroying Jobs Is a Feature, Not a Bug!

If a libertarian had written this New York Times op-ed as a piece of Swiftian satire, I can only assume it would have been regarded as ham-handed and over-the-top. But barring some recent and little-publicized reversal of ideological polarity, I've got to suppose quondam presidential aspirant Mike Dukakis and UCLA prof Daniel Mitchell are in earnest. Their core idea:

If we are really serious about turning back the tide of illegal immigration, we should start by raising the minimum wage from $5.15 per hour to something closer to $8.

Following this modest proposal, we're treated to an unnecessarily long rehash of the argument that it's a canard to talk about "jobs Americans won't do" when, after all, Americans will do most anything at some wage. This is, of course, an obtuse response, though I lay the blame for its familiarity with the immigration advocates who provoked it by crafting their talking points for an audience brighter than the average toaster. The obvious rejoinder is that very, very many of those jobs simply wouldn't exist at the wage levels necessary to fill them purely domestically, unless we assume that the demand for landscaping is totally inelastic.

But don't worry, Dukakis and Mitchell have anticipated that objection. In fact, it's the crux of their case! You see:

If we raise the minimum wage, it's possible some low-end jobs may be lost; but more Americans would also be willing to work in such jobs, thereby denying them to people who aren't supposed to be here in the first place.

Again, but for that byline, I'd read the satirist's ironic understatement here: It's not possible that a minimum wage hike would destroy jobs, it is—notwithstanding the hoary progressive tradition of insistence to the contrary—the crucial presumption underlying their plan. Because Dukakis and Mitchell reject, for eminently sound reasons, schemes to seal the borders with fences or create intrusive national ID systems and verification requirements for employers. So in effect we're being promised that raising the minimum wage will entail "turning back the tide of illegal immigration" as a purely economic consquence.

But gosh, since "[m]illions of illegal immigrants work for minimum and even sub-minimum wages," wouldn't pumping up the minimum hourly wage by a few dollars entice still more workers over the borders? Well, no, not if you assume that whatever incentive is provided by the higher wage gets washed out by such dramatic job shrinkage that the expected value of hoofing north drops despite the significant income boost for those lucky enough to find a job. (And add the assumption that you don't just drive that many more into the illicit economy paying those "sub-minimum" wages.)

I'm guessing any conservative economist who predicted employment contraction of that magnitude following a $3 hike in the minimum wage would get roundly blasted as an alarmist wingnut and shill for business. I'm morbidly curious to see whether Michael Dukakis can get away with it, as long as the mojados are supposed to bear the brunt of the losses. [Cross-posted @ Notes from the Lounge]

Comments

Eryk Boston | July 25, 2006, 5:27am | #

I'm curious as to why they don't seem to understand that "illegal" means they aren't working in the boundries of the law and, thus, won't be directly affected by any rate hike.

I've long held that the appeal of hiring illegal workers isn't just the wages or the flexiblity of the labor pool, it's the fact that they work under the radar and thus you can hire them without having to deal with the byzantine system of labor regulations in the country. Even a small firm hiring legal Americans has to keep a team of human resource professionals around just to handle all the paperwork that comes from committing the crime of providing jobs. On the other hand, if you hire a illegsl Mexican, you can have him start in the morning, work the day, then pay him his duly earned wages, in cash, and that is the end of it.

Matt | July 25, 2006, 8:01am | #

You seem to be basing your criticism of the article on classical liberal economic theory, and within that framework you are right. The problem is that the evidence in the real world is against you. Australia, for example, has one of the highest minimum wages in the world (I believe around 10 australian dollars per hour), basically for the purpose of keeping cheep Asian labor away from low-skill job sectors. It works. Australia has a very strong economy and is able to manage its immigration effectively.

perilisk | July 25, 2006, 8:14am | #

Australia is also the only country on its continent.

Julian Sanchez | July 25, 2006, 8:14am | #

Ah yes, Australia. That would be the country where, about a week ago, the economist appointed by the government to study the issue concluded that 290,000 more people could have jobs today (in a workforce of 10 million) had the minimum wage grown with inflation for the last decade, and twice that if it had been frozen in nominal terms? Consider me duly chastened.

The Great Ape | July 25, 2006, 8:20am | #

Matt,

It's a lot easier to manage immigration if you are an island country with shark-infested waters, huge swathes of uninhabitable desert, and a populace where non-natives from Asia are gernerally easily identifiable by looks alone. I could call it apples-to-oranges, but apples-to-cacti might be more appropriate.

Swillfredo Pareto | July 25, 2006, 8:40am | #

As usual in the pro-living wage/astronomical minimum wage argument there is no mention of where employers are going to get the extra $3-$5.00 an hour they are supposed to pay, and no mention of the loss of standard of living to all those who now must face higher prices for goods and services, followed by the subsequent loss of employment throughout the economy as real national income decreases. It is fatuous to brag about how California and Massachusetts have successfully increased their state minimum wage when they still fall well below the prevailing wage floor determined in the market.

John | July 25, 2006, 8:52am | #

"I've long held that the appeal of hiring illegal workers isn't just the wages or the flexiblity of the labor pool, it's the fact that they work under the radar and thus you can hire them without having to deal with the byzantine system of labor regulations in the country."

That is exactly right. It is regulation that drives the market for illegal immigrants as much as anything. Regulation also gives illegals a built in advantage over equally skilled Americans. The illegals of course get all of the benefits of our welfare system as well as the advantages of being able to work sans the regulation and paperwork. But, you can't mention the welfare problems associated with illegals, wonderful things like middle class Americans turning to midwives to deliver their babies at home because they can't afford hospital deliveries while our hospitals pump out first rate hospitalization to illegals giving birth by the thousands. The crime and social costs associated with huge numbers of displaced masses. Nope recognition of sovereignty or an understanding of the political realities associated with the welfare state is not the libertarian way. Free immigration would be a wonderful idea if there wasn't a welfare state and people and capital were truly fluid. Since they are not, it is not such a great thing, unless of course you honestly love to pay taxes to educate, feed and cloth the entire world at the expense of the people who are here legally.

John | July 25, 2006, 8:55am | #

One other thing about the NYT. Are they really that stupid? The workers are fucking illegal. That means you could set the minimum wage rate at $100 an hour and it wouldn't make any difference because the employers are breaking the law by hiring them in the first place. An increased minimum wage would just make hiring illegals more attractive. Why hire an American at $10 an hour when you can hire and illegal at $5 and stick the government with the cost of his healthcare? The higher you raise the minimum wage the greater the demand for illegals and the more of a disadvantage there will be for Americans. How is it that you can work for the paper of record and have no understanding of basic economics?

joe | July 25, 2006, 9:05am | #

Swilfredo,

"It is fatuous to brag about how California and Massachusetts have successfully increased their state minimum wage when they still fall well below the prevailing wage floor determined in the market."

The fallacy in your argument is that not every business pays the prevailing wage floor determined by the market. Even if the statutory minimum wage is lower than the average wage for a certain job, it will still be higher than what some % of employers would offer.

You can't always just look at the aggregate numbers.

Jason Ligon | July 25, 2006, 9:07am | #

"basically for the purpose of keeping cheep Asian labor away from low-skill job sectors. It works."

In the same sense that I can keep prowlers out of my house by burning it to the ground, yes.

lannychiu | July 25, 2006, 9:16am | #

This is the same Michael Dukakis who served on the board of Amtrak, that wonderfully run government monopoly. Color me completely unsurprised by his incoherent argument.

mike in ftw | July 25, 2006, 9:23am | #

I wonder if it is true that most illegals are cash employees. In my experience (which is limited to construction in Texas), they are hired as regular employees with all the related paperwork. They provide falsified social security cards as ID. Minimum wage is not even an issue here, you can't hire any construction worker legal or illegal for 5.15, starting wages are 8.25 to 8.50 an hour. Usually no health benefits, but two weeks vacation would not be uncommon.

I don't know what wage you would have to pay to get a chronically unemployed redneck meth head to work a shovel 8-10 hours a day in 105 degree heat. Not saying that all unemployed people are above mentioned losers, but I am saying that you don't find a lot of hard working upstanding Americans who just happen to be down on their luck applying for entry level construction jobs even at 8-10 dollars an hour so what good is raising the minimum wage going to do.

Its not going to affect construction or any of the trades who already pay more than that, its just going to squeeze the fast food joints who hire kids after school. Fewer supermarket check-out clerks and more self-checkout kiosks.

Dan T. | July 25, 2006, 9:24am | #

That is exactly right. It is regulation that drives the market for illegal immigrants as much as anything. Regulation also gives illegals a built in advantage over equally skilled Americans. The illegals of course get all of the benefits of our welfare system as well as the advantages of being able to work sans the regulation and paperwork.

The one point you're forgetting is that there is no reason that you couldn't hire an American illegally if you're willing to hire a Mexican illegally.

John | July 25, 2006, 9:31am | #

"The one point you're forgetting is that there is no reason that you couldn't hire an American illegally if you're willing to hire a Mexican illegally."

Good point. Certainly some Americans probably are hired illegally. Ultimately, Americans don't really have a reason to work illegally since we have a low unemployment rate. The one area of American society that does have a high unemployment rate even in good times is young black males. Why are they not working illegally? I think some of it has to do with the culture around illegal employment. I think there is a very good 60 minutes like piece to be done where a black man goes around and applies for jobs in areas dominated by immigrants with a hidden camera. It would be facinating to see the response he got. I don't know, but I am guessing it would not be positive.

Dan T. | July 25, 2006, 9:41am | #

I think there is a very good 60 minutes like piece to be done where a black man goes around and applies for jobs in areas dominated by immigrants with a hidden camera. It would be facinating to see the response he got. I don't know, but I am guessing it would not be positive.

True. I guess one reason you would not want to hire an American citizen illegally is that if you have a falling out with him, he might report you as having violated labor laws. A person who is in the country illegally himself is not likely to do such a thing.

I suppose Americans, given the choice, would rather work legally than illegally. Someone here illegally doesn't get that choice.

Back to the issue here, even though I support raising the minimum wage I agree that the NYT piece makes no sense as far as it lowering illegal employment.

Xmas | July 25, 2006, 9:49am | #

Of course, the assumption is that illegals are working for below minimum wage. It is very likely that they are working at pay rates above minimum wage, but they are either a) getting paid under the table; or b) working with forged documentation.

The employer in case 'a', is still saving money even though he is paying more than the minimum wage because he is avoiding taxes, paperwork, more taxes, mandatory insurance, etc. etc.

The employer in case 'b', is at least pretending the illegal is actually a legal worker, and he is therefore going to pay at least the minimum wage rate.

And don't forget farm workers, who are probably being paid by the bushel-picked or some other measure that is based on output not on time.

I'd have to find it, but I read something about illegal Los Angeles landscapers creating a cartel that set their minimum wage at 8 dollars per hour. They enforced this minimum wage through fists, bats and guns.

Garth | July 25, 2006, 10:04am | #

At $8 per hour when you drive up to the McDonald's drive through to place your order it will be taken down by someone in Calcutta and instantaneously broadcast back to the restaurant where one or two employees will oversee the burger-o-matic and the fry-maker-2000.

In other news, at that rate here in New Mexico we will finally get rid of all the remaining lawns and flower gardens and no one will be agitating for nicer medians along the highway.

helzapoppn | July 25, 2006, 10:16am | #

From the article: "All it takes is a willingness by the federal government to inspect workplaces to determine which employers obey the law."

Here is the critical element, quite apart from the minimum wage argument -- enforcement. When employers are held accountable for hiring illegal immigrants, hiring of illegals goes down.

The refusal of this Administration to enforce the laws on the books in anything but the most egregious cases sends a strong message to employers that it's OK to flout the law, hire illegals and exploit the hell out of them.

All while Tom Tancredo, Steve King and the GOP House leadership want to militarize the border and create 12 million felons by legislative fiat.

If they don't want to be bothered with workplace enforcement, where do they expect to get the resources to track down, round up, detain and deport all those people?

As for the counter that small employers would be unduly burdened by the regulations of hiring citizens or legal immigrants -- this is untrue. A franchise owner draws upon the parent corporation's HR department. An independent business owner can turn to a staffing provider, who sends over workers as needed. The staffing provider specializes in hiring, handling pay and benefits, that sort of thing.

There's a reason why Manpower is the nation's single largest employer -- the business model works.

Rimfax | July 25, 2006, 10:18am | #

I think that Dukakis is really onto something here, only he's trying to do it indirectly. Basically, he's saying that if we ruin our economy, or at least wreck it a little, the incentive to come here for jobs will be gone, because the jobs will be gone.

I say, forget all that fiddling around with namby-pamby measures like rasing the minimum wage. If you really want to screw up the economy, just have the government flush tons and tons of cash down the toilet.

Of course, our leerless feeders are already all over that strategy. They just need to pick up the pace a little and we'll have that emigration deficit reversed in no time.

Brian24 | July 25, 2006, 10:19am | #

Lots of Americans get hired illegally now. It's called "under the table." Of course, I don't remember ever getting paid under the table at below minimum wage; it was more about avoiding those pesky income and social security taxes.

Joe Majsterski | July 25, 2006, 10:20am | #

I can't even begin to explain how much this enrages me. It's like a horrible recurring nightmare, or the worst deja vu in history. Way back in the mid 1990s, when the previous minimum wage increases had gone through, I was working at Subway sandwiches. After sticking with it for a long time, and getting lots of tiny raises, I had increased my hourly wage to $4.75 just in time for that to become the standard minimum wage, basically making all that effort for nothing. I was once again getting paid the same as any schmoe off the street.

Today, after working at the same bar for eight years, progressing through the ranks, and getting a couple fairly nice sized raises, I am getting paid quite a bit more than the average worker at that place. Increasing the minimum wage to approx. $8 would once again wash away all my efforts and put me back with the plebs. I'm sick of it, I tell you, just sick of it! Why have any loyalty, or put any effort into your job, if you know that, sooner, or later, some asshole politician will just give everyone a free pass, no matter how worthless.

I suppose I can take some solace in the fact that at least the very worst potential employees just won't get a job at all. Ah, yes, how satisfying. I feel better already.

| July 25, 2006, 10:23am | #

Australia has a very strong economy and is able to manage its immigration effectively.

Yes, Australia's policy of immigrant detention is the perfect model of "management". Tancredo et al would love it.

downstater | July 25, 2006, 10:31am | #

Joe Majsterski,

experiences such as yours aren't always the result of a politicians meddling.

similar situations have occured at my workplace where older employees get seriously bitter toward new hires who are hired for more money than the older ones were paid when they were hired. consequently new hires are closer to pay parity with more experienced employees without having put in the time of service.

but the organization has deemed such increases for new hires necessary to lure new talent.

in short - it's a function of the labor market. not necessarily the result of politicians manipulating wages.

of course - i'm not saying they can't have that affect - as evidenced by your own experience. i'm just saying that such results can happen on their own as well.

P Brooks | July 25, 2006, 10:33am | #

"As usual in the pro-living wage/astronomical minimum wage argument there is no mention of where employers are going to get the extra $3-$5.00 an hour they are supposed to pay, and no mention of the loss of standard of living to all those who now must face higher prices for goods and services...."

But that's the beauty of the thing- it pays for itself. The government, via the miracle of fiat money and the printing press, provides those additional dollars to the employers. Employers raise their prices and pass the money along to the employees, who then take their new windfall to the store and- pay themselves! An additional benefit of this plan is that all the numbers in the economic reports automatically go up; the economy booms. Everybody wins- it's the land of milk and honey; a chicken in every pot; hot and cold running virgins; free lunch all round. What could possibly go wrong?

mike in ftw | July 25, 2006, 10:39am | #

"The failure of this administration..." - why don't we say every administration since this is hardly something that has come up in the last 6 years.

"...exploit the hell out of them" - that is one of the reasons why it is so hard to hire citizens in construction, people keep telling them that getting paid a fair wage for a fair days work is exploitation.

As far as the idea of using a staffing service, it might be a business model that works in some instances, but hardly all. I tried it, did okay with clerical spots did lousy with labor. Besides staffing services aren't exactly cheap.

I don't think any of the business owners I know would have any problem hiring legal immigrants or citizens. In fact if the gov made a program where we could sponsor our workers who we may have some suspicion may or may not be legal for legal immigration status we would. Before you can replace the illegal immigrants with citizens or legal immigrants there has to be a pool of citizens or legal immigrants with the skills and desire to take those jobs.

The argument keeps going back to the assumption that illegal immigrants are substitutes for other workers. In our industry that is not the case, they are the only applicants.

The Wine Commonsewer | July 25, 2006, 10:41am | #

Speaking from a strictly pragmatic viewpoint rather than a moral or ethical one, it won't help and here's why:

As Swilfredo pointed out in a general sort of way, in Californicate the going rate for illegals performing casual labor is at least $10.00 per hour and it is customary to provide them lunch if they are working at your house. Don't think contractors are obligated for lunch.

The other thing that bugs is that everyone assumes that any well tanned person with an accent is illegal and that ain't so.

Ammonium | July 25, 2006, 11:30am | #

Daniel Mitchell was chief economist for the "Pay Board" in the 70s -- that's the board that set wage controls.

Randy | July 25, 2006, 11:32am | #

Federal Minimum Wage should be $15 per hour.

~home, gasoline and many car prices grew over 6% annually since 1974 suggesting that the federal minimum wage should have grown from $2 per hour then to over $14 per hour today.

~according to the U.S. Department of Labor, changes in the federal minimum wage from 1938 to 1968 jumped by a factor of 6.4. Meaning the 1976 minimum wage of $2.30 should be $14.72 today.

~and during the forty years from 1938 to 1978 the federal minimum wage climbed by a factor of 10.6 from 25-cents to $2.65. Meaning the late 1966 wage of $1.40, later this year should pay $14.84 per hour... about the average wage for an American worker today.

Prices, productivity, corporate profits and Congress' salaries have all inflated imposingly, so why not workerbee wages?

The argument that American exports would suffer abysmally due to higher labor costs is likely mute, as many foreigners already enjoy more disposable income than Americans do... where do you think all that cheap capital (money to lend us) comes from? And cut-rate foreign labor now making corporate logo T-shirts for under a buck hasn't led to $4 Ts; they're still $14 Ts in the US.

Misspent social programs like Medicare and Social Security could again be made secure with the increased tax revenue generated by higher wages. But it seems capitalists (those with money) want the working class (now without money) to borrow and pay interest to them for lifetime-long home, car and credit card loans.

And that is not capitalism, my friends. It's capitalizing. Just like allowing some companies to undermine markets by using illegal labor...

Liquid capital serves. Liquidating capitalism devours.

The Wine Commonsewer | July 25, 2006, 11:47am | #

How about this? Let's abolish minimum wage altogether and let the market have it's way.

kevrob | July 25, 2006, 11:58am | #

P Brooks's comment about fiat money hits home. A minimum wage defined by a dollar that floats is no minimum at all. If the pols raise it by a buck, in no time at all the buying power of that $6.15 erodes to that of the old $5.15 level. Even if businesses didn't lay off workers or not hire new ones in response to the MW increase, this works out to the detriment of low wage workers. When one asks for a (secular) raise, the employer can respond, "You just got a buck increase." If you hold on to all your hours, your adjusted gross income goes up, which can screw with you several ways. You wind up paying more FICA and Medicare tax, for one thing. If you get any government benefit that depends on income, you might get pushed out of the program. If you keep your job, but your employer reduces headcount in order to afford the increase, you wind up working harder for what is, in time, efffectively the same wage. Joe M's complaint about having his climb a rung or two above starting wages nullified is also fair. In some industries, a minimum wage increase triggers bumps for everybody, either because there is a collective bargaining agreement that requires it, or because the market for those kinds of workers will make employers pay up. Wages for some other jobs are stickier, and it could be awhile before those doing Joe's job put some daylight between themselves and the newbies.

I've long liked to say that the U.S. dollar is defined as 11 and a half minutes of the least productive labor you would ever bother to hire.

Kevin

lunchstealer | July 25, 2006, 11:59am | #

I've long held that the appeal of hiring illegal workers isn't just the wages or the flexiblity of the labor pool, it's the fact that they work under the radar and thus you can hire them without having to deal with the byzantine system of labor regulations in the country.

This is part of it. The other part is that illegals by the very nature of their illegality must stay off the government's radar. They therefore have no recourse when their jobs are unsafe or pay below-minimum-wage. Take away the threat of deportation, and now any of these immigrants can go to the authorities if they are not paid the minimum wage or are not provided with a safe work environment. If employers do not have the threat of government sanction to hold over their illegal employees, they lose some of the leverage to keep employee disatisfaction from boiling over.

Kebko | July 25, 2006, 12:24pm | #

Randy, I just have one disagreement with your very acute observations:

"Meaning the late 1966 wage of $1.40, later this year should pay $14.84 per hour... about the average wage for an American worker today."

I think you're aiming too low. Why settle for average? If the minimum wage was raised to something like $20/hr., then workers could earn above average wages. And, who could be against that? And, as you say, the corporations would still be selling T-shirts at $14 - you know they would.

Swillfredo Pareto | July 25, 2006, 12:27pm | #

Even if the statutory minimum wage is lower than the average wage for a certain job, it will still be higher than what some % of employers would offer.

Perhaps, although in any given regional market segment I think you are unlikely to find much wage variation. Absent any actual research I would still bet that starting compensation (an hourly wage is rarely the only thing you get from an employer) at the McDonald's, Wendy's and Burger King down the street from my house are virtually identical, and well above minimum wage. In Florida unemployment is somewhere around 4-4.5%. If Hardees tried to pay even close to the minimum wage, absent any real strong leverage like hiring only senior citizens or the handicapped, they would completely fail in their effort to staff.

An additional benefit of this plan is that all the numbers in the economic reports automatically go up; the economy booms.

I know you are being sarcastic (well played), but that is why I emphasized that real income sinks like a stone. People are infatuated with nominal wages and prices, so let's not confuse them with reality.

nmg | July 25, 2006, 12:40pm | #

Whatever happened to the idea of valuing liberty?

Who cares about the efficacy of minimum wage or not? Why does my government have the right to step in and tell me I'm not paying my babysitter or my employee cashier enough money after we have agreed to it? It's ridiculous.

nmg

NoStar | July 25, 2006, 12:49pm | #

Raising the mimimum wage can stop the influx of illegal aliens, but it must be raise to $200 per hour. This would allow most of us to work part time and still live in luxury. Our free time could be spent in our air conditioned RVs patroling the borders to keep out the riff-raff.

In fact, I think I'd have enough to not only work for half the year, but I'd be able to pay an underpriviledge foreigner to man my shift on the homeland security minute man border patrol.

Oops. Better lower that to $100 per hour.

Randy | July 25, 2006, 1:44pm | #

The NeoCon-stitution

We the Republicrats of the disUnited States, in order to form a more perfect regime, establish social control by global market influence, insure Government servant tranquility and provide for our common legal defense, promote the general political power structure, secure the blessings of liberty to ourselves and our posterity entirely at taxpayer expense, do ordain and establish this federal authority's NeoCon-stitution for these disUnited States of America.

God Bless the Republicrats!

Joe Majsterski | July 25, 2006, 1:57pm | #

As long as the price of a combo meal at your local fast food joint, the universe is in balance. Round these parts (suburbs of Houston) those prices are between $5-6, and minimum wage is $5.15, so all is right with the world.

stubby | July 25, 2006, 2:33pm | #

My grasp of economic theory - or even just economics, or even just numbers - is way too slippery for me to understand more than the very basics of what is being discussed here, but I feel confident that Messrs. Dukakis and Mitchell's arguments are without merit because a) everyone on this board thinks they are crap, and I think that regular denizens of these boards know what they're talking about when it comes to economics and b) one of the authors is Michael Dukakis.

And also - this practice of changing a word to make it insulting to the target of your ire - it's really annoying, and peurile and juvenile and just really damn silly and I don't know what else. No matter how much I may be agreeing with something I'm reading, or listening to, as soon as I start running across words like Rethuglican, Dimmicrat, Untied States, euroweenies, AmeriKKKA, neo-CON, etc., I shut it off completely.

Having said that, I really like "leerless feeders." That's just fun.

Joseph Wright | July 25, 2006, 3:04pm | #

You are all fools who are going to Hell.

Thomas Paine's Goiter | July 25, 2006, 3:22pm | #

Who cares about the efficacy of minimum wage or not? Why does my government have the right to step in and tell me I'm not paying my babysitter or my employee cashier enough money after we have agreed to it? It's ridiculous.

I pay my babysitter more than minimum wage AND I'm taking her and a friend on vacation with my wife and I - she's going for free. The only stipulation is that she babysits for three days out of the week. My wife got her a birthday present and a christmas present.

Great babysitters are hard to find - there's no way in hell I'm giving her any incentive to go find another job.

Randy | July 25, 2006, 4:24pm | #

Real minimum wage growth has been just 3 percent annually since 1974, meaning today the equivalent price of:

gasoline should be around $1.17, not $2 or $3 per gallon,
a shiny Nissan Z-model car should sticker for $11,750, not almost $30,000,
a new home in the Pacific Northwest should close under $80,000, not well over $200,000,
even the 1974, 8-cent postage stamp should cost only 22-cents, not 39.

So while many real prices and worker productivity have skyrocketed, effective wages and benefits have tanked, mostly masked by extensive financing.

It’s no surprise then that according to census figures, one in eight Americans now live in poverty and as many as one in three visit poverty at least 2 months each year.

For the middle class and our kids, the constitutional right to the pursuit of happiness, by wage prosperity, has been filibustered.

P J J | July 25, 2006, 5:02pm | #

Randy is right, as far as he went. Why not take care of all our social ills in one fell swoop.

US citizens don't take minimum wage jobs because they can't support a family, even with both parents working on the current scale scale.
IT ISN'T THAT AMERICANS WON'T TAKE THE JOBS, THEY CAN'T AFFORD TO. WITH THE CURRENT SYSTEM IN PLACE,INDIGENTS, INCLUDING ILLEGALS, RECEIVE MORE "BENEFITS" THAN DO MINIMUM WAGE WORKERS. Especially when minimum wage workers are often limited to 30 hr work weeks, thereby falling outside of the benefits paid a full time worker. RAISING THE MINIMUM SIGNIFICANTLY WOULD CUT DOWN ON CRIME, NEED FOR JAILS, WELFARE PROGRAMS AND THE IMMIGRANTS THAT ARE NOW TAKING THOSE CURRENT MINIMUM WAGE JOBS. OF COURSE THE EMPLOYERS WILL BALK, BUT THEIR UNDERGROUND ECONOMY IS DRAINING AMERICAS' RESOURCES, WHEREAS THOSE NEWLY EMPLOYED WOULD PAY TAXES AND CUT DOWN ON THE WELFARE COUNTRY WE HAVE BECOME.
Among the reasons the immigrants work for this rate, and less, is because the worker in being paid by the underground economy in play, and can't complain because they know their bosses can find others lined up behind him waiting for the job. They live in cramped, horrible housing, have no medical insurance.(of course we pay this, as for all indigents) don't pay taxes or, for their light, water, air/heat. It is manifestly unfair to them and to the our economy.

A beginning solution:

1. Develop a Health Care System possibly based on the one Massachusetts recently adopted. Universal Health Care would take the employer out of the insurance business and would allow those employed to be paid a "living wage." The tax on wages would help pay for the Universal Health Care, but still put more in the workers pocket.

2. Eliminate the "underground" employment of immigrants. Fines on the employer would be a start. Then, ferret them out with the intent of subsequently making them US citizens. Not a "free pass." If those illegal workers have been here for a number of years, register them to BEGIN their process of becoming legal citizens. They MUST learn ENGLISH, be SCHOOLED, and eschew their allegiance to their foreign country. They could continue their employment and LEGALLY contribute to their own retirement and pay taxes while going through the Americanization process. They currently avail themselves of medical treatment and American schools for their children as well as the services of Police and Fire departments without contributing to the cost. They would, at least, be legally covered by a system into which they have paid taxes. Employers could afford to pay a "living" wage when they are not shackled by health care and Social Security costs.

3. Establish a Universal Retirement Fund into which workers would automatically invest by having it deducted from their pay as Social Security now is. The worker could take the fund to subsequent jobs and not be tied to a particular employer for fear of losing their company pensions. TIAA-CREF, a fund used by Educators, among other groups, is a good example. Its well managed and provides security for those unable to "save." If "matched" by the employer, it would still be less costly than a separate pension fund. This is better than the current system of, as Bush stated, having IOU's in a filing cabinet.

4. Those immigrants not employed, except for those who are part part of a worker's family, would be given a temporary one year worker pass. After the one year, if still unemployed, they would be returned to their native country. Once employed, they'd be started on the rode to becoming US citizens. If, within that year, they start to learn english and stay out of trouble, they'd be ahead of the game.

5. Those incarcerated would be returned to their native country thereby eliminating the costs of housing, feeding, clothing the miscreants and, perhaps, making a life of crime highly undesirable This saving could immediately fund US Immigration personnel to round up illegals for processing. Raising that minimum wage would also take more of our citizens off the streets, and again take the burdens of incarceration and welfare out of the equation.

I don't pretend to think any of this could/would be initiated concurrently, but it sure would be a start.

happyjuggler0 | July 25, 2006, 5:23pm | #

the constitutional right to the pursuit of happiness

I wish that was in the Constitution. Unfortunately the Declaration of Independence doesn't qualify as an amendment or preamble.

Swillfredo Pareto | July 25, 2006, 5:23pm | #

Real minimum wage growth has been just 3 percent annually since 1974

How much computer could you buy with the minimum wage in 1974? How much of a 32" color television?

Randy, I would love it if you could introduce me to the sentient individual who managed to stay at the minimum wage for 30 years. That probably took more effort than actually acquiring job skills.

The minimum wage is neither designed to buy you a shiny new Nissan, nor is its purpose to finance a home in the Pacific Northwest. To the extent that there is any rational argument for it whatsoever, it is to give you some modicum of compensation when you first enter the job world, either bereft of employable skills or freshly minted with a Liberal Arts degree. You are then free to accumulate skills that drive your marginal productive up to the heavens. Or not.

happyjuggler0 | July 25, 2006, 5:25pm | #

the constitutional right to the pursuit of happiness

I wish that was in the Constitution. Unfortunately the Declaration of Independence doesn't qualify as an amendment or preamble.

. | July 25, 2006, 6:13pm | #

home, gasoline and many car prices

Yep, that's all I ever buy.

Oh wait. My house is almost paid off (just 15 years!), and I take the bus to work most of the time. When I got my mortgage, I was only making 48K. I make twice that now, but whaddaya know, I actually had to WORK to improve my market position to get a higher wage. But I guess Randy thinks that people's wages are supposed to rise while their skill set remains exactly the same. Tell that to the rest of the world where people actually try improving their skills so that they can make more money.

Funny how illegal immigrants work hard and improve their skills, thereby adding value, while others do absolutely nothing to improve themselves or their positions and think they're entitled to keep pace.

Thomas Paine's Goiter | July 25, 2006, 7:33pm | #

the constitutional right to the pursuit of happiness, by wage prosperity, has been filibustered.

Someone needs to reread their constitution, though I'm quite sure that it would be too much to ask for someone like you to know what's in there.

eric | July 26, 2006, 12:58am | #

actually the supreme court during the civil war used the " in order to form a more perfect union" clause as a reason the south couldent secede

eric | July 26, 2006, 1:03am | #

also the first computer with a desktop was $1000 or was it $9999.99

Randy | July 26, 2006, 4:06am | #

Touché Š
I stand corrected. Allow me to clarify:

For many, but of course not for all, the declared right to the pursuit of happiness, at least in the arena of federal minimum wage prosperity, has been hampered.

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Yet for others, no matter prior earnings, continued education, changed careers or improved skills, there exists a slide down an evermore-slippery class ladder.

Yes, let this minimum wage stand for two hundred years. Accept today's thirty to fifty-percent high school drop out rate. Even stomach our growing obesity malady. Survival of the fittest! Right?

Now of course, the US still holds personal success stories - we all know greater tales than those professed here. However there exists an ever-growing economic miscarriage precipitated by recurring job loss due to company closures and exported careers, rising divorce and legal matters, and especially financially-sinking family health woes.

But frankly, while defending our manifest narcissism is energizing, it doesn?t change the fact that we drop the ball when it comes to caring for our own fallen teammates. Ask an emergency room doctor, a psychiatrist or pharmacist, a teacher or police officer, paramedic or even stock trader.

David Nieporent | July 26, 2006, 4:32am | #

The one point you're forgetting is that there is no reason that you couldn't hire an American illegally if you're willing to hire a Mexican illegally.

Yes, there is. The reason is that the American can complain to the authorities and/or file a lawsuit, and be rewarded for it. (Most states penalize violations of wage and hour laws quite heavily, including providing full attorneys' fees for the employee if he prevails.) The Mexican can't, because he'll be deported.

eric | July 26, 2006, 9:15am | #

what about that articale in national geographic 21st century slavery http://magma.nationalgeographic.com/ngm/0309/feature1/
this kind thing only compounds the problem

Adriana | July 27, 2006, 12:15pm | #

Two points that I have been making

a) Low wages lead to lack of desire to innovate and automate. It is hard to hold on to a technological edge if your potential customers would rather employ someone more cheap.

b) At some point low wages lead to family that to make ends meet must ask for assistante, eitehr from Government or from private sources. That is, must beg. The idea that you cannot conduct business unless you dump a lot of beggars for the community to worry about probably indicates that you should not be in business in the first place.