Factual Reality: Increases In Minimum Wage Do Not Increase Unemployment

I recently encountered a libertarian online who was peddling a slew Reason-dot-com and Mises-dot-org articles to prove the proposition: ‘when minimum wage is increased, unemployment will go up.’ We’ve all heard this one a million times before. But what puzzled me was the prescriptive nature of all these articles. They simply claim this relationship is necessarily the case, like some immutable physical law. Minimum wage goes up; unemployment goes up. The sun always rises in the east.

This position puzzles me because a ‘minimum wage’ is not some new economic idea that doesn’t have a historical track record, like, for instance, a ‘Universal Basic Income’ (which is the idea that everyone should be given no-strings-attached cash to have a minimally decent-and-normal human life by the standards of the day, even if their jobs have been eliminated by macroeconomic gains in mechanical and logistical efficiency). No: ‘minimum wage’ has been around for nearly eighty (80) years! Do we then really need, at this late historical hour, yet more prescriptive inferences of what ‘will happen’ if we raise it? Or can we just look at what actually does happen in factual reality?

Turns out what happens when minimum wage is increased in factual reality is pretty easy to find. To begin, I looked up the years in which the Federal minimum wage was first established and later raised at the Department of Labor’s website. These years are: 1938 (first established), 1939, 1945, 1950, 1956, 1961, 1963, 1967, 1968, 1974, 1975, 1976, 1978, 1979, 1980, 1981, 1990, 1991, 1996, 1997, 2007, 2008, and 2009.

Then I looked up the unemployment rates in (i) the years in which minimum wage was increased and (ii) the years prior to those increases (when the minimum wage was lower), through the Census Bureau and the Bureau of Labor Statistics. If, in factual reality (and not in prescriptive, inferential, theoretical right-wing think-tank fantasy-land where Lord Ludwig von Mises sits upon the Iron Throne), increases of the minimum wage bear a clear, direct, and unavoidable causal relationship to increased unemployment, it then follows we should see an increase in unemployment in the wake of every single increase in the minimum wage. If we don’t, it means either minimum wage increases are (i) not related to employment figures at all, or (ii) have too weak an effect to overpower other economic variables, like capitalism’s predictably harmful boom-and-bust cycles, historical events, etc., in which case we shouldn’t pay the weak effect too much mind when making real human beings’ lives better with stronger wages.

So I sat here on my Saturday with the sun shining outside and voluntarily looked at tables, numbers, and percentages for our mutual benefit, so that we together can put this Chimera to sleep once and for all. I created the chart at the bottom of this article which demonstrates that no causal relationship exists between minimum wage increases and unemployment. Sometimes when the minimum wage goes up, unemployment goes up. Sometimes unemployment stays exactly the same. And sometimes unemployment goes down after minimum wage is increased.

In any event, these factors are not related in any way near the extent that those on the political Right try to have us believe. If minimum wage increases were in fact inextricably tied to increased unemployment, we should see a consistent drop in national employment every single time national minimum wages were was raised. We clearly, certainly, most definitely don’t. I see, in factual reality, no clear, direct, and unavoidable causal relationship between the two factors based on what actually happened in actual historical reality upon looking at the actual numbers. Do you? This Chimera conjured by the Right needs the pentobarbital needle post-haste.

The libertarians can show us as many Reason-dot-com and Mises-dot-org articles making the religious claim that increased minimum wages cause higher unemployment as they want. Like religion, this position is a silly article of faith not born out by factual reality. Below, you can view the chart demonstrating the actual history of minimum wage increases and unemployment rates. I will finish with a quote by billionaire venture capitalist and businessman Nick Hanauer, a much smarter person than me, on this very topic:

“To understand how wage suppression works, it’s important to understand . . . the idea that drives that, [which] is this incredible, insidious, repeated thing, which is [the idea that] if wages go up, employment goes down. . . . It has been repeated endlessly in our country. And the facts are there is no evidence for this whatsoever. But if you can get the broad public to believe that if wages go up, employment will go down, you get forty years of wage suppression. . . . In fact, the fundamental dynamic in a capitalist economy is that when workers have more money, businesses have more customers and hire more workers.”

Chart: Increases In Minimum Wage Bear No Clear Relationship to Unemployment

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A Libertarian Thought Experiment

Anarchy Symbol

I have quite a few libertarian and anarchist friends. They are infinitely correct on the horrific degradation of civil liberties and American imperialism, which are out of control, unsustainable, and completely immoral. With our incessant aggression and drone strikes upon nations that never attacked us, regularly killing civilians including women and children, the United States is the largest terrorist organization in the world today. And we all pay for it with our tax dollars, as we eat our submarine sandwiches and watch men in tights pummel one another on giant screens for our distracted enjoyment.

Here, however, I will explain why libertarianism/anarchy is not a tenable societal arrangement. I use those words interchangeably here, although I realize on the margin there is a distinction. Other than that, feel free to point out the errors in my thinking, if you find some.

To begin: libertarianism, like all minority positions, has the luxury of being an argument-in-principle, and never a practical policy. And minority position you libertarians are: have a look around your cohort. You are, as a general rule — subject as are all generalities to exceptions — young, able-bodied persons, or older persons who have already accumulated wealth to be protected (whether by chance-of-birth or a combination of good genes and motivation). Generally, you are white males. I do not encounter many poor libertarians; aged libertarians without money; disabled libertarians; libertarians of racial or ethnic minority backgrounds; mentally retarded libertarians; mentally ill libertarians; sick libertarians; etc. Yet the total population is an amalgam of all these types. So minority position you will remain, and thus you can argue in principle forever, because you will never make actual policy.

However, for the sake of argument, let’s conduct a thought experiment. Let’s put libertarians in power. They must now make the policies by which our entire grouping of humans, called a ‘nation,’ lives. The first libertarian principle translates to an easy-enough policy: ‘everyone is free to behave as they see fit, because everyone’s life is their own.’ Great!

But then anyone with a lukewarm I.Q. asks: ‘wait, what if you murder someone?’ The libertarian policy responds deftly: ‘. . . . so long as you do no harm to others!’ Great! Now we have fleshed out libertarian policy #1, the only law: ‘do no harm to others.’

But then the three questions arise which sink the political ship. The questions that someone arguing in principle can avoid with abstract axioms, but someone making actual policy must actually deal with: (1) what is ‘harm to others’? (2) What do we do when persons break the one law? (3) What about potential harm? How on earth do our libertarian policymakers handle these questions? In turn:

1. Overt harm to others is easy. One person invades another’s bodily autonomy. Great! This is illegal in our libertarian nation. But what about less direct harms? The secondhand smoke of cigarettes? Can we smoke in bars? Perhaps ‘smoking bars’ and ‘non-smoking bars,’ so persons can freely choose what type of bar to patronize. How about public parks, or the sidewalk, where someone might pass who does not want to inhale the secondhand cancer? Or what about the peddlers of cigarettes? We know this product is deadly. Should an ‘I just sold it and nothing more’ argument protect the vendor? How about a vendor who builds a nuclear bomb packaged with deft instructions on how to smuggle it into a metropolitan center? Is an ‘I just sold it and nothing more’ defense airtight?

2. Second: in our libertarian reality, someone breaks the one law of ‘no harm to others.’ Perhaps he harms someone with some uncommon weapon, like a personally-owned tank or fighter jet (after all, all weapons are legal and available on the anarchic market). How do we stop him? Must the citizenry band together with their own weapons? Grandma included? And if the Kitty Genovese effect takes over, and no one stops the criminal, is he free? Or do the citizens pool their money together to pay something akin to a police force that has a mandate to stop such criminals? Who oversees this force for corruption, and who commands it? Once the criminal is caught, do we have a public court system? Who pays for it? Do we have prisons, executions, or something else, and who pays for those? Or are all crimes merely punishable by fines? What if the perpetrator does not pay? Who decides what kinds of crimes get what punishments, and by what process? If you’ve instituted a police force, courts, and legal concepts, you’ve just created a government bureaucracy with authority and force, out of necessity. Perhaps much smaller than the current mess, but government nonetheless.  Un-anarchy.

3. Finally, what about potential harm? In our libertarian world, am I free to build weapons of mass destruction in my basement, if I can figure out how? Or am I free to shoot bullets perpendicularly across a busy highway to my heart’s delight, so long as no bullet actually strikes a motorist? Libertarian thinking is wholly reactive, and never regulatory or preventative. The axiom ‘no harm, no crime’ implies any number of such absurdities should be legal: building nukes in home kitchens, shooting wantonly across freeways, suspending toxic and carcinogenic chemicals in a giant vat above the town’s drinking water with a single string of dental floss, so long as the dental floss does not break . . . . There is no limit to this for the imaginative. Or, for a real-world example, should that mentally ill and suicidal man in Ohio a few years back have been allowed to keep a private zoo of tigers and lions?

This is why libertarianism/anarchism can never be more than a tug affecting policy. It is not a tenable social policy on its own, because all actualized policies must answer complex questions. It is a useful anchor in the social dialog to drag the policy towards more freedom and less bureaucracy, but it is not itself a policy. It is a mere principle. When advocating for actual policy, you must answer the above questions and countless more somehow, concretely, and realize other self-described libertarians will answer them differently.

We are on a spectrum, not living in a binary world of the ‘free’ and the ‘unfree.’ Real life is infinitely complex, and common sense demonstrates that the ‘actual freedom’ of one individual in many cases is less valuable than ‘freedom from potential harm’ for the many. So I say: raise your valuable voices to move the marker on the spectrum toward freedom. But stop thinking, implying, or stating as though an anarchic form of societal arrangement can or will ever happen among we humans, who are, after all, a tribal, social, and hierarchical species that depends on one another to survive. Not happening.

Undo the Damage of Reaganomics

You may say: ‘the nation’s economy is weak, so we must deregulate further to stimulate business!’ To which I will reply: ‘Why? In fact, we should further regulate business, and further tax it. Tax it, and wealthy individuals and estates, much, much more. We had the strongest economy and middle-class our country has ever known between World War II and the ascendance of Saint Reagan, when the top income tax rate was between 70% and 94%; the top corporate tax rate constantly flirted with 50%; the long-term capital gains tax rate was between 25% and 40%; and the estate tax exemption was never higher than a lowly $147,000. (Today, these rates have all been garroted: top income tax rate – 39%; corporate – 35%; long-term capital gains – 15%; and the estate tax exemption increased to a whopping $5,000,000).

Now compare the successes of the post-WWII era with the preceding period, where we had massively deregulated markets – the period prior to the Progressive Era and the New Deal. For much of this period, we had no income taxes, no Federal Reserve, no minimum wage, no maximum hours, and no child labor restrictions. Women had to jump out of the Triangle Shirtwaist Factory, to their deaths, because their employers had locked them into the factory building to prevent ‘hooky’, and it caught fire. Bakers in New York City were dying at age 40 due to the incessant inhalation of flour while working eighty-plus hour weeks. Children were injured in industrial accidents. No OSHA then, remember. And income inequality was as high as it would ever be in our nation in 1929. Until 2008, that is, after a generation of undoing the palliative, redistributive tax rates we had established the last time such inequality occurred.’

About the strong economy after World War II, you may say, ‘but it was a fluke! The rest of the world’s manufacturing base had been leveled in a giant, continental war!’ To which I will reply: ‘That is an interesting hypothesis. But does factual reality support it? If our nation’s prosperity after World War II was only due to becoming the world’s temporary crisis manufacturer, then our exports as a percentage of our GDP should have been higher after WWII than before. Were they? Nope! In fact, not at fucking all! Our exports as a percentage of GDP were exactly the same in 1937 (a few years before we entered WWII) as in 1950 (a few years after we exited WWII). Exactly the same. Exports meant no more to our economy after the war than before, and therefore our prosperity was not due to becoming the world’s manufacturer. Sorry, nice hypothesis, but it is, in fact, bullshit.’

And about the terrible working conditions for average people before we instituted Progressive Era taxes and New Deal regulations, you may say: ‘but technology! Things certainly won’t be as shitty today as in the industrial revolution, because we are much more advanced – so we should deregulate!’ To which I will reply: ‘but, as someone speaking of economics, you should be well-aware of that field’s most basic precept: the law of supply and demand. And this simple precept shows us things will be worse, and not better, for average people if we further deregulate.

First, the world’s population in 1930 was only one (1) billion. Today, it is seven (7) billion. Seven times more. Second, we had tariffs on international trade even prior to the Progressive Era and New Deal, which protected us from direct competition with the rest of the world’s subsistence-wage-slaves. For instance, under the Payne-Aldrich Tariff of 1909, the average tariff on imports was over 19%. Smoot-Hawley raised this even further in 1930. Today, the average tariff, thanks to our self-chosen policies after 1980, is a mere 1.5%. We have taken the condoms off our infected global trade partners. And there are now seven times more of them involved in the gang-bang.

‘Technology’ is a word, not an analysis. Supply-and-demand, on the other hand, always provides an analysis, and we have both (1) less need for workers in the U.S. now thanks to our unprotected domestic market and global free trade, and (2) a seven-times-greater supply of global workers available to buy labor from. More supply equals lower price, and the price of labor is called ‘wages.’ Hence, lower wages for all. This is why deregulation, my interlocutor, is full-on-insane-head-up-your-ass bullshit. We must raise taxes to their pre-1980 levels to undo the damage we have done, and again prosper as a nation.’

Thank you,

Sterling

‘Socialism’!? Go Fuck Yourself.

Excuse me: before anyone else ever again calls the current Federal government we have “socialist,” please take a minute to ponder going and fucking yourself, and then go learn something instead. Or do both. In 1942, Franklin Roosevelt and the Treasury Department recommended Congress pass a 100% — yes, one-hundred-fucking-percent — income tax on all salaries above $25,000. In today’s dollars, that’s $380,000. Then capped out. No more. No mas. It was actually *in the public fucking discourse* in your grandparents’ lifetimes to set a *maximum wage* — a maximum-fucking-wage! Imagine that! — at under half-a-million puny bucks in today’s dollars.

And guess what, kiddos? The compromise: 88%! Eighty-fucking-eight-percent, on everything earned over $200,000! Yet somehow *I am now asked to sit there and listen to ignorant morons* shit-mouthedly claim President fucking Obama, who governs to the right of Richard Nixon, represents the “left wing,” “liberalism,” “progressivism,” or “socialism”? Suck a fucking bleached-white egg. We have two parties in this country: the right-center Democrats and the far-right Republicans. And they are both engaged in Mussolini’s precise definition of Fascism: the merger of corporate and state interests.

Remember, again, the big piece of “socialism” we’ve gotten under the current regime — Obamacare — is a mandate to give profits to *private businesses*, and a version of it was pushed by Richard-fucking-Nixon. So let’s not pretend anymore there is a left-wing movement with a voice in this country, shall we? Because if there were, they’d be calling for things like maximum wages, and electing the human who pushed for them again, and again, and again, and again.

And then that human would put Arabs in internment camps.

Thank you,

Sterling

FDR’s Proposed Maximum Wage:  http://www.presidency.ucsb.edu/ws/?pid=16363

What the Fuck Is the Matter with Us?

In yet another of the countless daily reminders of how broken our fucked up, corrupt, Fascist (yes, that is the correct term, the marriage of corporate and state interests, as defined by Mussolini) society is:

Remember when comedian Tracy Morgan got creamed by a Wal*Mart delivery truck because the Wal*Mart driver had been up for 24 hours straight?

Well, current regulations limit truck drivers to 70 hours of driving per week, plus 3 hours per day of loading and unloading, which need not be paid (some Union drivers do get paid for that). Count that up. That’s 13 hour days, on average, driving. Ever drive a long day trip? Ever do it with a multi-ton rig trailing behind you? Ever do it *every single day*, indefinitely, without end?

Well, here’s how our fucking troglodyte, degenerate, sub-human fucking Senate responds. Susan Collins (R – Maine) slipped a provision into an appropriations bill to be voted on this summer to *increase* — yes, FUCKING INCREASE — the maximum hours drivers can drive to EIGHTY FUCKING TWO. 82. That’s now twelve hour days of driving, every day, always, plus the three hours loading/unloading. Eat in car, piss in jug, huff something to try to stay awake, collapse, repeat. Great.

Seems now that since all those who fought for human working conditions 80 – 100 years ago are dead, we have to re-learn the lessons of the past. We’re legislating away basic humanity so the Stateside corporate retail fronts of a Communist autocracy can sell more shitty, planned-obsolescence goods here, and further fuck our trade deficit and therefore national debt. What . . . the . . . fuck . . . is . . . the . . . matter . . . with . . . us?

The full story:  http://teamsternation.blogspot.com/2014/06/tell-congress-vote-no-on-letting-truck.html

Fuck I Wish I Were Rich

What would happen if some benevolent and rich person, for LULZ, bought a controlling stake in the Corrections Corporation of America, and then transferred those shares to those caged in America’s private prisons? Guard: ‘Okay Mr. Jones, I’d appreciate it if you went back to your cell. I’m asking politely this time. Please don’t cause the board of directors to lower my salary again.’ Fuck I wish I were rich.

http://cca.com/

Something Happened in the 1980s

See the dark blue and light blue lines? They are ‘economic productivity’ and ‘wages,’ respectively. They used to love one another so much that they traveled merrily, hand-in-hand, step-for-step, hugging and kissing one another. Until the 1980s. Then they divorced. ‘Economic productivity’ continued to soar, but it left its scorned spouse, ‘wages,’ behind. ‘Wages’ flattened out, stopped growing, and gave up in despair. So much so, it probably started drinking mouthwash. Something happened in the 1980s . . . something happened in the 1980s . . . what could it be . . . what could it be . . .download

Alms for the Shareholders

Every single cent of tax you pay into welfare for persons that are working but still in poverty is a direct payment into the pocket of private corporate shareholders. By subsidizing the housing and food of impoverished workers through your tax payments, you are allowing the corporate shareholders that employ them to not have to do the same. They work for the corporations, the corporations capture the private profit, and you pay the workers from your own check. Fair is indeed fair. You are allowing private corporate shareholders to enrich themselves off your largess, while simultaneously not providing a basic standard of living for the workers devoting their precious life-times to the shareholders’ private wealth accumulation. Corporations such as McDonald’s and Wal*Mart have turned this perversion into an explicit business model.

Capitalism: Lift All Boats!

Apple, Google, Intel, and Adobe settle a class action lawsuit for $325,000,000 to a class of 60,000 engineers, for agreeing with one another to not hire the engineers away from one another. This *voluntary contract* among the big four software companies served to artificially reduce demand for high-tech, high-skilled workers, to keep the wages down through collusion. The capitalist markets at work, to lift all boats!

The full story:  http://www.forbes.com/sites/timworstall/2014/04/27/apple-google-intel-adobe-escape-cheaply-from-the-engineers-class-action-suit/

Movie: Terms and Conditions May Apply (2013)

The best horror movie I’ve seen in a long time is actually a documentary about online Terms & Conditions, which may apply, when you sign into basically any online service you kind-of-feel is “free.” This includes the medium we’re talking on now [this was originally posted on Facebook -- Sterl], and pretty much any other you can think of in the online domain: e-mail, cloud-based docs, search engine inquiries, browsing history, VOIP voice data, et-fucking-cetera.

Now we all know the NSA is fucking us super hard. But that’s a big, unspecific idea. You want to know *how* we’re being fucked? And how really, really bad it is? (Hint: more than you had even imagined, you cynical prick.) Check out this movie (Netflix! — who, by the way, is also collecting your searching and watching habits).

Movie info:  http://www.imdb.com/title/tt2084953/