$15 an Hour. Why Not $30? Why not $100? – John C. Goodman – Page full

John C. Goodman

There is a single thought that unites the political parties of the left all over the world (from welfare state liberals to socialists and communists) and it is this: incentives don’t matter. And since prices are the mechanism that coordinates incentives and clears markets, it follows that prices don’t matter either.

What other explanation can there be for something senseless that is about to happen in California: A $15 minimum wage, soon to be mandated for almost every employee in the state?

I suspect that most of the delegates to the Democratic National Convention this summer sincerely believe that if a price is judged too low (for example, a wage), the government should push it up – and nothing bad will happen. If a price is judged too high (for example, a rent), the government should push it down and nothing bad will happen.

If you don’t think that prices matter – that is, if you don’t think that prices through their incentive effects impact behavior – it inevitably follows that almost every economic event is a disconnected event.

Source: $15 an Hour. Why Not $30? Why not $100? – John C. Goodman – Page full

1 Comment

  1. I was watching Fox News this morning and they had on two millennials, with opposing views on this. One a white female, one a black male. The opinions from each are opposite who you would have guessed, the male was opposed. Okay I have to admit I couldn’t stomach the arguments for, and the clips of people celebrating these decisions. None of these jobs are intended to be careers, they are starter jobs, they are additional income jobs, they are pay for education jobs. And this is lost always in this argument.

    But what really got me was this argument, from the female in support. She claimed to have moved to New York is search of a career in journalism. A degree in tow, she complained about having to take a job as a coat check person and barley getting by so she had to take another job part time as well, until of course she landed that career job. Please let the previous sentence sink in. She was arguing the job she took to get by while she looked for and secured the job she spent years in college to educate herself presented. Kind of making the argument for getting the education don’t you think?

    What was more disturbing is she started talking about all those uneducated people who need jobs, and the single mothers who need jobs. And this always disturbs me. I don’t suppose the thought of getting educated so you could get a better job was or is an option, or maybe a skill that will demand more money other than say, checking a coat. Or perhaps maybe not having children before you are married and can afford them never is an option.

    But set aside all that social accountability as it is so hard to get agreement on that case.

    Let’s just deal with the economics. The restaurant that is told they must pay a coat check person $15 an hour will choose to have one, so how exactly does that help. Perhaps you have seen the news about Mac Donalds and Sonic and other Fast food chains moving to automated order taking systems because they can’t afford to pay unskilled workers more and then still sell their products at a price someone is willing to pay for them.

    Maybe you read the articles from Seattle where 35% of the work force that was in fast food and the hotel industry have been laid off since they passed their $15 an hour requirement, or how many of the small businesses have closed or left the city.

    There are always unintended consequences to government social engineering and it usually hurts the people it claimed to want to help.

    When was the last time you as a parent were thrilled to hear your son or daughter get out of bed and exclaim I want to go be a hamburger flipper for the rest of my life? Or you personally set your goal to have a family and work as a coat check to feed and house them.

    We are so backwards in our thinking.


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