Hey, I have never understood why such arguments about mandates stop at a "living wage." If we are going to give the government the right to dictate outcomes regardless of economic reality, why stop at a living wage? Why not dictate that everyone should be paid at least $150,000?

What is striking in this living wage argument is how no one advocating for it talks about who will pay for the resulting higher costs? Somebody will have to pay. It will be either the families who own the small businesses whose costs just went up or it will be the families using the service when the higher costs are passed on to them. We are back to robbing Peter to pay Paul. What makes it morally acceptable to rob Peter?

And, while we are at it, why doesn't the government just mandate that everyone also be able to buy a home, whether they can afford it or are creditworthy. Oh wait, didn't we just try that?

Which is why I think Don Boudreaux has it right.

The oft-unspoken point about living wage type arguments is that the government mandate to require it involves replacing market forces - which is what allows each of us to make or not make free deals with others - with government coercion. Which means we have made the decision that the likes of Barney Frank, Harry Reid, and remote nameless/faceless/unaccountable government bureaucrats are better arbiters of how we should live our daily lives than our local families and communities. How could that possibly make us better off?

On a grander scale of thinking, Nobel Laureaute Hayek had some thoughts on social justice.

"Is it too much to ask for that American workers who work full time be paid a living wage with affordable and accessible health insurance?"

Hmmmm. All those interested in organizing the slave-laborers of the Yum corporation (Pizza Hut, Taco Bell, KFC) are asked to forward their comments to:
M. Jerzyk
(address deleted)

Yum Yum
Hypocrite Scum

Hey now, Mike. If those workers were unionized and being paid a 'living wage' then Matt "Lucky Sperm" Jerzyk probably wouldn't have been able to afford to go to the Ivy League school of his choice on rich daddy's dollar. And then Rhode Island would have one fewer future ambulance chaser. And we can't have that. It would screw up his political aspirations.

Ha! Yes, clearly you're right: too much to ask. After all, it's not as if any other country on earth has managed to provide health care to all of its citizens.

It is truly amazing that liberals such as Jerzyk, can overlook such germane aspects of an argument, and produce the nonsensical statements they do.

It will be interesting to see how he presents such arguments if he ever makes it into a courtroom.

His absurd argument can be characterized as follows:

There are 20 people on a boat. The boat is sinking and will be completely underwater in 60 seconds. There is one lifeboat that can fit 4 people. And there is Jerzyk, the bleeding heart, stating that everyone should have a seat on a lifeboat.
OK, Matt, now what are YOU going to do about it?
This is the typical stupidity we have to listen to from liberals.

Wow.

Being down in the polls by a huge margin really gets you conservatives all riled up!

First things first.

I believe in safety nets.

Should a full-time factory worker earn the same pay as a full-time doctor?

No.

But both workers should earn enough to raise a family on: ie. "a living wage."

In the same way, we should have a safety net for health care. Should the wealthiest person in the world have the same health insurance as the poorest person in the world? No. But that doesn't mean that everyone should have access to a baseline of care that shows dignity and respect for everyone.

In terms of jobs, it used to be that way.

A factory worker made enough in a 40 hour work week to raise a family. And the other parent could stay home with the kids!

Imagine that!

Then again, that's when the union density in this country was 30%+ in the private sector.

Do you all disagree that the Greatest Generation that created the Greatest Middle Class in American history was created - in part - by high rates of unionization rates?

Finally, since I have responded in kind to these personal attacks before and it hasn't stopped you from repeated your false allegations, I feel no need to respond here.

So all of your dad's employees are making a 'living wage', right?

Matt-how about this?Illegal aliens depress wages by being available at a lower cost and being employed in work conditions that wouldn't be tolerated by American or legal resident workers.
You consistently defend the "right"of illegal aliens to live here without fear of being deported.How can you square this with your concept of a "living wage"?Believe me,you can't have both.
I use a landscaper who has signed on to E-Verify and I've never seen a suspect illegal show up on his truck(I would know just due to my prior experience)-I pay a little more,but it's worth it to me.How much of a hypocrite would I be to use illegal landscapers?The same goes for ANYONE who works on my house or property.I am sure a lot of people would pay a little more to ensure legal workers were taking the available jobs.And those workers would make a better,probably"living"wage.

Greg - Since you seem unwilling to address the issue at hand, let me direct you to this resource on YUM (which I have posted to you before).

http://www.ciw-online.org/agreementanalysis.html

Joe - Illegal immigration stunts the growth of the labor movement because employers can call immigration when a factory of immigrants is trying to organize a union. If undocumented immigrants could organize unions in this country AS THEY USED TO, then, no, wages would not be depressed.

"Do you all disagree that the Greatest Generation that created the Greatest Middle Class in American history was created - in part - by high rates of unionization rates?"

Back when unions were started, they were a result of the abuse of the workers by few people that were in control of the company. Things were very different, there were fewer laws protecting workers, there were fewer choices for the workers. It was almost an abusive parent-child or spousal relationship which is not appropriate in the workforce.

But here is the problem: Today, the circumstances are NOT the same. It is the unions that want to exploit their power at the expense of the employer. You may think that is fair and just based on the abuses of the past but the reality is that the union, as they exist today, have no different agenda than the employers that took advantage of the employees back befoe unions were formed. It's all about them and they only represent their wishes.

Unions are just another powerful employer.

Matt,

Let me use a real life, real RI example to rebut your argument. Let's assume that your theoretical factory owner in fact owned a jewelry factory. Now let's look at what happened to his economics over the past decade. As an economist would say, they were "non-stationary" -- there was a major structural break called the entry of China into the global economy, followed closely by radical fall in the cost of communications and computing. Now what did this mean to our jewelry factory in Pawtucket?

First, our factory owner now faced competitors who had drastically lower wage costs. Second, many Asian competitors had invested in the latest generation of equipment. For example, such equipment enabled them to translate designs into finished products much more quickly. Third, the odds are quite high that the Asian (read Chinese) competitors probably had a more educated workforce.

The result was superior productivity and time to market on the part of Chinese competitors, which translated into brutal competition for our Pawtucket based jewelry factory. Rather than raising their wages to the "living wage" you propose, most of them went out of business instead.

Now I know what you will say at this point. The difference is all about China's weaker environmental laws, labor laws and undervalued exchange rate.

And I say to you: not true. You could raise the level of environmental compliance in the Chinese factory to Western standards, and the productivity difference alone would sill give them an incredible pricing advantage. Evidence? Most Western countries operating in China (due to pressure from their shareholders, the media, watchdog groups and the like) actually comply with Chinese environmental laws (unlike many of the locals) -- and China's environmental laws, on paper at least, are quite stringent. Actually most Western companies have to comply with global company standards, which are generally even more strict. But do you see this additional cost driving those companies from China? No, you don't.

Ditto for the labor laws. Western companies in China actually do quite a good job treating their workers -- if they didn't, the NYT would be writing front page stories about it. But here's what they don't report (often enough): the relatively stunning level of education and training available in huge quantities in India and China. I know of a global chemical company with a plant in India where all the first line operators are degreed chemical engineers. Think about that. And guess which of this company's plants is number one in productivity and quality on its internal benchmarking charts? Right -- the one in India.

Finally, let's look at your inevitable argument that our Pawtucket factory owner can't offer a living wage to his workers (or keep them employed at all) because China undervalues it exchange rate. I will not deny that this has happened, as part of China's strategy (the same one used by other Asian countries) to rapidly grow its economy via exports. But if you take the IMF's analysis of where an equilibrium exchange rate for the Renminbi might lie, and you then impose it on the Chinese company's cost structure, guess what? The Chinese company is still more than competitive because of its superior productivity, which is enabled by newer capital and better educated workers.

So turning back the clock a bit, was there anything our factory owner in Pawtucket could have done to preserve jobs and, in Matt's wildest dreams, pay the mythical living wage?

Since some companies have successfully competed against Chinese competitors, it is obvious that the answer is yes. Our factory owner could have invested in new equipment, or, over time, built strong customer relationships (e.g., based on integrated IT enabled supply chains), funded in renminbi denominated debt, and focused on improving productivity.

But the more important question is whether this would have been possible in RI, as opposed to, say, North Carolina. Capital investment per worker across multiple industries in RI has long been among the lowest in the country. Why? Part of the reason has been high energy and tax costs, which depress the return on capital and thereby discourage new investment. Improving worker productivity requires highly educated workers as well as superior equipment and organizational changes. RI's public schools have done a terrible job at creating a highly educated workforce, while its high costs and taxes have discouraged highly productive workers from moving here.

Finally, it is also likely that our Pawtucket factory owner had what I call the "RI attitude." Top down, command and control, I'm in this for myself, I know a guy, etc. Basically, the antithesis of what modern management researchers say is the attitude needed to compete in today's world. So, even if the superior equipment and educated workforce was there, I'm not sure our factory owner would have been capable of the organizational change required to maximize productivity. Why not just suck out as much profit as you can and then, like so many other private and public sector workers, retire to Florida? The cynicism bred by RI's highly dysfunctional political culture has inevitably infected the private sector here too -- just ask any business person who has moved to RI from another state, and wondered what time warp they hit.

Finally, Matt, let's make the further assumption that our factory in Pawtucket is a public company, whose CEO decides to tell his shareholders that he is going to cut their returns in order to pay workers a "living wage", despite the competitive conditions facing the company. How long do you think it would be before he or she was fired? With institutional investors (like those from union and public sector -- who, in order to pay pension benefits, must earn high returns) leading the charge?

Matt, there is a word for all this: it is called "reality." But don't take it from me. Call your father, and ask him where he disagrees with what I've written.

Basically, your writing provides consistent evidence that you don't have a clue about what goes on in the private sector, whose struggles you degrade and whose success you seem to deeply resent.

Have any of you noticed that there's a global financial crisis created by the practices of PRIVATE companies and not unions, immigrants, or socialists.

phil,
There is a global financial crisis created by a liberal mindset that started out by saying that everyone has a right to own a home - forget about the fact that they can't pay for it. No different than Jerzyk's stupid argument that everyone should make a living wage, the reality of that stupid mindset be damned.
It's the old stupid liberal lie that everyone has rights - nobody has responsibilities. Now that has been taken to the extreme and we have a real mess. The same jackasses that were yelling about banks "red-lining" and came up with CRA are now saying that same banks were "green-lining" - giving loans to people they knew couldn't pay.
Well gooooollleee! What goes around comes around.
You know, there are some people who just shouldn't own a house. I know people who have been given a house - with no mortgage - and they have lost it! In fact, there are three people who have gotten homes from Extreme Makeover who have lost them. Imagine that?
One fallacy of Jerzyk's moronic thinking is that all people work with the same industrious attitude. We all know people we work with that are lazy. What does Jerzyk propose that everyone gets paid no matter how hard they work? Or, how about if they don't show up to work, do they still get the "living wage"?
You see, it's so damned easy to be a stupid liberal, it requires no thinking whatsoever. That's why they are always promoting the laziest, stupid members of society. That's exactly who they are themselves. It's self preservation.

>Have any of you noticed that there's a global financial crisis created by the practices of PRIVATE companies and not unions, immigrants, or socialists.

Yeah, and the Federal Reserve (under whose auspices the dollar has lost something like 90% of its value), Barney Frank, Chris Dodd and the rest of the Fannie / Freddie affirmative action subprime mortgage financing hallelujah chorus had nothing to do with it.

>>Joe - Illegal immigration stunts the growth of the labor movement because employers can call immigration when a factory of immigrants is trying to organize a union. If undocumented immigrants could organize unions in this country AS THEY USED TO, then, no, wages would not be depressed.

The myth on unionization being a panacea.

The reason the illegals can thrive here is that they provide lower cost labor - if you brought them up to unionized scale, they'd be unemployed too. Just like the hundreds of thousands of unemployed (former union) native born autoworkers, steel workers, etc.

Union or nonunion, ultimately supply and demand impacts compensation - for like everything else that is for sale, labor is in a market. Artificially (by not enforcing immigration laws) tens of millions of unskilled laborers inevitably has a downward pull on wages for everyone.

It's not that they do jobs that Americans won't do, it's that they do them at wages that Americans won't accept. In turn, that exerts a downward pull on labor on the next tier of the skill level, and on up the ladder.

If we could Star Trek transport them all back to their home countries tomorrow, you'd see employers scrambling to fill those slots, and wages would have to rise until those employers found an American willing to do that job at that wage. Wages would rise without unionization.

P.S. John, your post concerning the jewelry factory was excellent.

Matt-my experience with Immigration being used as a union-buster is somewhat different than what you brought up.I know in Chicago,where we did a lot of industrial raids(as opposed to RI where we mainly arrested criminal aliens)there was a policy in effect that we did not raid locations where there was an ongoing strike or labor dispute,specifically to avoid being perceived as being on one side or the other of a situation that was out of our jurisdiction or responsibility,whichever was most applicable.
When did illegal aliens form labor unions?I'm truly at a loss to think of an example,unless it's something recent,but it didn't sound like that was what you were saying.
If you are referring to Cesar Chavez,his relationship with illegal aliens was complicated and oftentimes he opposed their presence here because they lowered already minimal wages.

>When did illegal aliens form labor unions?I'm truly at a loss to think of an example,unless it's something recent,but it didn't sound like that was what you were saying.

Illegals are a major portion of SEIU's membership. To SEIU a dollar in dues from an illegal is just as valuable as a dollar in dues from a legal immigrant or citizen.

SEIU bankrolled the pro-illegal immigrant demonstrations a year or two ago (recall the demonstrations where in the first on the organizers forget to tell the marchers to leave their Mexican / Guatemalan flags at home).

mrh,

Ah, there's the tone that all miss when it's absent: The young Ivy Leaguer with knowledge that we all lack or ignore.

Dig down into your countries and see whether there aren't important differences from the United States and/or circumstances that mitigate the wonder of Providing Healthcare to All (TM).

Matt writes:

A factory worker made enough in a 40 hour work week to raise a family. And the other parent could stay home with the kids!

Imagine that!

Funny how we all see a particular bit of information differently. Has it occurred to you that maybe the reason a single income can no longer support a family is because the workforce now includes more workers from every household? In other words, wouldn't it be consistent with basic economics to suggest that doubling the available employees would decrease the value of each when it comes to payscale?

Okay Tom-thanks for enlightening me.I thought Jerzyk was talking about something more in the past.He has been an SEIU organizer if I'm not mistaken,so he must be speaking from experience.I certainly remember the demonstrations-they fell off sharply after the first year,and I don't think they'd go over too well about now.

"You consistently defend the "right"of illegal aliens to live here without fear of being deported.How can you square this with your concept of a "living wage"?Believe me,you can't have both."

Great point, Joe. The "living wage" is further and artificially depressed by the presence of an illegal workforce. To advocate for both is to attempt to simultaneously push and pull on a door.

>>A factory worker made enough in a 40 hour work week to raise a family. And the other parent could stay home with the kids!

That was true in the 1950's and 1960's.

Back then the average family's tax burden was something around 10% of gross income.

Taxes started spiraling up in the 1970's - precipitated by the 1960's Democrat "Great Society" binge of welfare expansion; allowing unionization of public sector employees as a payoff to the AFL-CIO; and then the early 1980's increases in Social Security taxes (while reducing the "benefit" by increasing the retirement ages).

And under Clinton they made the received SS "benefits" subject to income taxation (the contribution was already subject to income taxation, so we're now taxed twice on Social Security, with the obvious consequence of a dramatically reduced "net" benefit).

The result being that the rebating of "benefit" back to the government via two series of income tax payments means that the SS "benefit" is largely a nonexistent fraud. And let's not even talk about the opportunity costs had the individual been able to have had the "contributions" in an investment account.

Here in RI the Democrat General Assembly saddled us with an income tax in 1971 (remember Frank Licht lying about it)? They first allowed public sector unionization of RI state and municipal employees in 1966, and the bills were coming due.

After that they kept "temporarily" jacking up the sales tax rate over the years.

And of course every Rhode Islander is well aware of what property taxes have been doing in RI in recent decades (between property taxes and income taxes, for many seniors their Social Security benefit has been entirely negated by income taxes on it and increased property taxes. They get no net benefit from Social Security because all of the proceeds from that check from the government immediately go back to government.

Today the total tax burden for the average family hovers between 40-50% of gross income.

That is why one spouse has to work - to cover the taxes (and now they both pay FICA taxes, even though there will only be one "benefit" check if they remain married).

Roll back total tax burden to 1950's levels and watch how many more spouses can afford to stay at home with their children.

And, as another poster observed, this reduction in the supply of available labor will also have the effect of raising wages as employers will have to attract a workforce from a shrunken pool.

Shrink government and expand the economy.

"That is why one spouse has to work - to cover the taxes (and now they both pay FICA taxes, even though there will only be one "benefit" check if they remain married)."

Tom W. Not sure I follow your reasoning. Assume Mr. & Mrs. Taxpayer bot work in SS covered jobs and they both make their appropriate contributions. At retirement age, say it is 66 for their age group, they retire and go down to the SS office and file. Two separate individual checks will come their way, whether or not they remain married. They will also both be eligible for Medicare. How do you conclude there would be only one "benefit" check?

Observer,

I'm ready to be corrected, but my understanding is that married couples are entitled to only one SS check, and that the total amount / cap is lower than the total amount / cap for two individuals.

This even as they both pay full freight in on their respective paychecks.

Thus if they get divorced and stay living together (as some have done to avoid the income tax marriage penalty) they could get more.

As said, that's my understanding, but I stand ready to be corrected, as I haven't researched it (haven't seen much point in that, because by the time I get there the program will be changed, e.g., "means testing" or other forms of "benefit reduction" ... or totally collapsed).