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Archive for August, 2008

It’s not that we hate the poor…

Posted by Chance on August 7, 2008

Economic conservatives are criticized because of seemingly heartless opinions, for instance, the stance on the minimum wage. But I don’t oppose the minimum wage simply because I hate poor people, or I don’t care about the least of these… just the opposite.

The Political Calculations Blog writes

This chart confirms that for teenagers, those between the ages of 16 and 19 years old, all of the jobs that disappeared in 2007 were minimum wage jobs. In essence, a total of 94,000 hourly jobs disappeared for this age group overall. This figure is the net change of this age group losing some 118,000 minimum wage earning jobs and gaining some 24,000 jobs paying above this level.

This represents what we believe to be the effect of the higher minimum wage level increasing the barriers to entry for young people into the U.S. workforce. Since the minimum wage jobs that once were held by individuals in each age group have disappeared, total employment levels have declined as those who held them have been forced to pursue other activities.

Now consider this: The minimum wage was just reset on 24 July 2008 to $6.55 per hour, a 27.2% increase from where it was in early July 2007. Our best guess is that a lot of additional teenagers will be pursuing those other activities.

Meanwhile, the lack of employment opportunities for the least educated, least skilled and least experienced segment of the U.S. workforce will likely have costs far beyond the benefits gained by those who earn the higher minimum wage. The government might be able to make the minimum wage earning teenage worker disappear, but they didn’t do anything to make the teenagers themselves disappear.

Now, with any economic research there are tons of variables, but the conclusions presented are intuitive, simply because of supply and demand. If something is not truly worth the price at which it is offered, we don’t buy it. Why would an hourly worker be any different? Companies with inferior products price them lower to increase demand. Why wouldn’t an unskilled laborer be the same? Why should an unskilled laborer not have the option to negotiate their wage without government interference? Is a job with a low wage worse than no job at all?

Many politicians realize that raising the minimum wage does no good, yet they support it to pay lip service to their constituents. Others think they have the companies in a bind. They know Safeway needs workers, so they think Safeway has no choice but to pay them the mandated wage. But Safeway can hire fewer workers, create more self checkout lines, or raise the prices of their goods, which has the most dramatic effect on the poor anyway.

Hat tip to the Market Power Blog.

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Posted in Politics | 2 Comments »

The role of incentives

Posted by Chance on August 7, 2008

OSNews links to a blog entry titled “Why Free Software has poor usability, and how to improve it”. Even if you are not a software developer, the article is interesting because it explores the roles of incentives in the overall quality of a product. Open Source software is developed mainly by volunteers, as opposed to Microsoft or Apple products that are developed by paid programmers and cost money.

Open source software is a noble idea, and there are many useful tools out there. However, getting paid motivates programmers to focus on aspects of software that make it more usable for the average person. Now, Microsoft is not a great example of this, simply because it does have many features of a monopoly. It is the software that everybody has and every hates. I think if distributors of Linux would focus more on the commercial market – and even keep the software open source – the computing world overall would be better off. Even if you aren’t into software development and tools, one could probably see how the overall quality of a product could improve if someone has financial incentive.

Posted in Uncategorized | Leave a Comment »

Caring for the unborn after they are born.

Posted by Chance on August 5, 2008

I had talked about the topic of Conservatives supposedly not caring about babies after they are born, and Neil has this topic as well.

There is another thought about this argument, and I wonder what the point of it is. Let’s say that I realize the liberals are right, that I should support more government programs, that I should vote Democrat, etc…. At the very best, these arguments would convince me to be pro-big government AND pro-life. So what’s the point?

Posted in Politics, Pro-Life | 7 Comments »