All errors should be reported to DonSurber@gmail.com

Saturday, April 27, 2019

Upside to $15 an hour

This is not an endorsement of minimum wage, and definitely not an endorsement of raising it to $15 an hour. The New York Times published an editorial on January 14, 1987, "The Right Minimum Wage: $0.00."



I agree. The government really has no say in private contracts.

The editorial said, "The idea of using a minimum wage to overcome poverty is old, honorable - and fundamentally flawed. It's time to put this hoary debate behind us, and find a better way to improve the lives of people who work very hard for very little."

But there is an upside to raising the minimum wage, a point that many writers try to use against raising the minimum wage.

Catherine Clifford at NBC wrote in August 2017, "There is new evidence that raising the minimum wage pushes business owners to replace low-skilled workers with automation. And it shows that old, young, female and black low-skilled workers face the highest levels of unemployment after a minimum-wage increase."

But that is the one benefit of artificially raising labor costs. Overpricing labor makes automation more feasible, which invariably improves the product, improves productivity, and in turn allows for lower prices.

The whole industrial age is based on replacing men with machines who do the job better and quicker.

Consider farming. In the 1830s, Cyrus Hall McCormick developed the mechanical reaper. But no one in his home state of Virginia was much interested because they had slaves to tend the fields.

So he left the state and eventually settled in Chicago where he laid the foundation of the company we call International Harvester. His invention helped turn the woodlands and prairie into amber waves of grain.

The South was left behind. Slavery led to a civil war which devastated it. Not until World War II was a practical mechanical cotton picker developed.

International Harvester produced it.

What will happen to the people who don't get jobs flipping burgers and whatnot? I do not know.

But the sons and grandsons of cotton pickers seem to be doing quite well these days. For every job a machine destroys, two new jobs seem to grow in its place.

20 comments:

  1. I'm not such a huge fan of PowerLineBlog, it's a bit RINOish for my tastes. But this podcast (which discusses labor saving devices along with much more) can be highly recommended. There's a podcast but here's the associated blog post.

    https://www.powerlineblog.com/archives/2019/04/the-power-line-show-ep-120-reckoning-with-race-americas-failure.php

    JimNorCal

    ReplyDelete
    Replies
    1. Read Powerline on Friday mornings. Ammo Girl's column will help tide you over until Clarice, American Thinker article, on Sunday.

      Delete
    2. Powerline: "The week in Pictures", on every Saturday, is always good for a few laughs.

      Delete
  2. We got the same thing when the city here mandated higher standards for rentals. All the low price units got renovated and the rent went up.
    Lots of liberals pushed the issue and saw their voters forced to move out of town.

    ReplyDelete
  3. Would be nice to have the option of automated clerks at the Post Office.

    ReplyDelete
    Replies
    1. They're already here. I deal with a desk clerk in the Post Office only if the kiosk is down for maintenance. I don't have a problem with the people. Behind the counter, but the kiosk, which is capable of everything from selling postage stamps to package postage & labels enables the quick in&out that I'm after. I actually prefer the USPS over FEDEX.

      Delete
    2. I deal with the folks at HyVee. They act like they actually care.

      Delete
  4. Ridiculous. The capital spent to automate would have gone to a more productive use if businesses weren't forced to automate by government regulation.

    So now you've proven that the minimum wage wrecks lives and causes the misallocation of capital.

    ReplyDelete
    Replies
    1. Go back to plowing your field with two sticks pulled by your wife and see if automation ainta great.

      Delete
    2. The answer is D, To make kwon. Thanks for playing.

      Delete
  5. I have a quibble with "more productive use." Dealing with governments is part of capitalism. Allocating funds to do this isn't necessarily misallocation. If it weren't for government capitalism would not succeed; might makes right would make contracts even more meaningless.

    ReplyDelete
  6. It's what they used to call progress before the progressives came along.

    ReplyDelete
  7. With you all the way until the very last: "But the sons and grandsons of cotton pickers seem to be doing quite well these days. For every job a machine destroys, two new jobs seem to grow in its place."

    That's true, but we still have far too many people out of work, particularly in big Democrat-run cities, who have nothing better to do than fight with & shoot at each other. The body-count is far too high & growing.

    What can be done about those who lack the ability to do a tech job, as manual labor & service jobs decline?

    ReplyDelete
  8. There is a question I do not hear asked: Who will fix the robots? I spent 38 years in medical technology, troubleshooting state-of-the-art robotics and automation systems. Droids are idiots, and rarely can tell you what is wrong when they don't work. There is a tremendous shortage of field service engineers. Do you know a little kid who likes to take things apart to see how they work? GIVE THAT KID A TOOL KIT FOR CHRISTMAS!

    ReplyDelete
    Replies
    1. Hear hear , no matter what you're dealing with, you need someone to fix it.

      Delete
    2. Yes someone has to work on the robots, and other labor saving machines. But try and convince young people to take on a service job traveling around the world repairing and commissioning equipment. Some sacrifice but in my day everything was provided except diner for a girl friend. The salary was fantastic, as in the low 6 figures as were the benefits if one was willing to forgo being away from family and friends for long stretches. But I did that in the military for next to nothing.

      Delete
  9. GMC and the UAW had this discussion many years ago. The UAW wanted more per hour for its members. GM said it could replace UAW workers with robots. The president of the UAW reminded GM that robots don't buy cars.

    ReplyDelete
  10. The right min. wage is $0.00.
    However, the gov't should offer a voluntary "National Service" that pays 80% of what the lowest paid enlisted person gets, and order that person to do useful work.

    It might be that the work product is not worth what is paid, which is sort of why no private company wants such a "useless" worker.

    We need more NGOs and profit oriented companies using low skilled folk for some valuable contributions, even if the value contributed is less than they're paid.

    All those willing to work should have some kind of job. It's better for folk to get private jobs, but having the gov't be "employer of last resort" is better than socialism. Few workers willing to work would stay at the bottom -- and all who are there, even those making mistakes, are at least trying to work, trying to improve skills.

    Example of clumsy restaurant worker - every day drops glasses & plates and makes an expensive mess. Does a lousy job cleaning up. Private company fires him; gov't Nat. Service transfers him to some other trash pickup job. Or something.

    ReplyDelete
  11. Higher productivity, better quality and lower costs? Automation sounds like the perfect solution to congress!!!

    ReplyDelete