PeakTrader.com

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PeakTrader:

It’s much harder to start a restaurant today, even with a low minimum wage and an abundance of teen labor:

Subway Founder Blasts Gov’t Regulations: ‘Subway Would Not Exist’ If I Started My Business Today
Feb. 27, 2013

“Fred Deluca founded Subway in 1965…said if he tried to start the very same business today “Subway would not exist” due to burdensome government regulations that seem to continuously increase.”

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I see a lot of businesses giving more work to employees, finding ways to boost productivity, and paying more overtime.

Those workers don’t have time or are too tired to cook.

And the unemployed & under-employed? I don’t know if they’re buying fast food with food stamps.

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They may need a job first.

I’m sure, at least one person believes that evil minimum wage, created in 1938, is why there’s been so much joblessness.

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Morganovich:

more obfuscation from peak.

a higher min wage sure does not help. of course, neither do lots of things including an anemic economy, massive regulatory burden, extended unemployment benefits, and an unusual lack of labor mobility due to underwater mortgages.

you like to claim a one factor world when it suits you and then claim “it’s complicated” when it doesn’t.

it’s just sophistry and charlatanry masquerading as an economics education.

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PeakTrader:

Morganovich, you don’t even know there are variables within variables, positive and negative variables, net effects, and everything in economics fits together.

And, there are many sound economic models, not just one (a production function, to start, makes more sense).

Moreover, you haven’t disputed or contradicted anything I stated with any proof. You’ve just been piling-up more nonsense.

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http://www.aei-ideas.org/2013/02/todays-economic-reports-restaurant-performance-up-weekly-rail-traffic-up-and-financial-stress-down/#comments

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PeakTrader:

“Consumers are spending, confidence is rising, manufacturing activity is accelerating, car sales are booming, and the stock market is up 10% YoY.”

Americans will pay more for less government services, which also means less money for everything else.

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Since 2009, real GDP has been about $1 trillion a year below potential real GDP, which is output lost forever, even with an additional $1 trillion a year in federal spending.

While monetary policy keeps saving low, fiscal policy piles-up more debt, which aren’t conditions for future economic growth.

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The weak “recovery” has become even weaker:

US GDP in 4Q grows 0.1 percent
Mar 1, 2013

“The U.S. economy grew at an annual pace of 0.1 percent in the last three months of 2012. A month ago, the government estimated that the economy shrank at a 0.1 percent annual rate in the quarter.

The latest revisions added less to fourth-quarter growth than financial markets expected. The consensus forecast had been that the economy grew at a 0.5 percent annual clip.”

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“I am convinced that if the market system were the result of deliberate human design, and if the people guided by the price changes understood that their decisions have significance far beyond their immediate aims, this mechanism would have been acclaimed as one of the greatest triumphs of the human mind.”

~Friedrich Hayek, Nobel economist

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PeakTrader:

What about negative externalities?

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MP:

Are people responsive to 25% changes in price or not?

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PeakTrader:

And what if income or productivity rise 25%? Or, consumption rises and saving falls?

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PeakTrader:

Yet, some people confuse protecting the American people by setting reasonable standards. e.g. for labor, environment, food, drugs, etc., or making sure there are equal opportunities, for all Americans, is the same as forcing the American people to help the poor.

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morganovich:

and oddly, others seem to think that mandating unemployment for the unskilled helps them.

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PeakTrader:

Of course, you don’t know.

“The standard criticism of the minimum wage is that it raises employers’ costs and reduces employment opportunities for teenagers and disadvantaged workers. However, several studies have found that the last two increases in the minimum wage had an insignificant effect on employment. Furthermore, an extension of the time-series studies that had previously been used to claim that raising the minimum wage decreases employment, no longer finds a significant impact.

In a recent review of the literature, Professor Richard Freeman of Harvard, a widely respected labor economist, wrote: “At the level of the minimum wage in the late 1980s, moderate legislated increases did not reduce employment and were, if anything, associated with higher employment in some locales.”

In discussing the minimum wage, Robert M. Solow, a Nobel laureate in economics at the Massachusetts Institute of Technology, recently told the New York Times, “The main thing about (minimum wage) research is that the evidence of job loss is weak. And the fact that the evidence is weak suggests that the impact on jobs is small.”"

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And, there are many explanations why the teen unemployment rate is high and labor force participation low. For example, a teen living in his plush bedroom at his parents house may have extensive cable TV, computer games, stereo, etc. in his room. He may not want to give that up for (only) $7.25 an hour (or less without a minimum wage) hanging out at McDonalds with stinky workers and customers.

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http://www.aei-ideas.org/2013/03/milton-friedman-and-penn-jillette-on-helping-the-poor/#comments

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MP:

Well, we know this for sure: The minimum wage discriminates against workers with the least skills. It takes away the most effective weapon that workers with no skills have: the ability to work for less.

An example Walter Williams has used is steak vs. hamburger. With market prices, lower-quality hambuger can “compete” successfuly and effectively against higher-quality steak because it is priced lower. If there were a “minimum price of meat” law passed, consumers would then “discriminate” against hamburger in favor of steak.

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PeakTrader:

Are we trying to achieve equality with the least skilled when firms are able to pay less than a subsistence wage for the most desperate people, and increase profits, while excluding more and more productive workers, who aren’t as desperate?

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PeakTrader:

If “Joe” isn’t worth $7 an hour, maybe he should move out of China.

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And people made Whole Foods happen (e.g. from zero to $10 billion), including minimum wage workers.

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I wonder how many minimum wage workers, like Rosita the cleaning lady, shop at health food stores?

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So, to a minimum wage worker, shopping at a health food store is like shopping for a luxury car or house.

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So, when there’s abundant, and expendable, labor, it’s right for some people to work for almost nothing.

And, if every firm has to pay at least a minimum wage, that’s unfair for some investors?

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No, if Joe isn’t worth $7 an hour, he must be living in a country like China.

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Morganovich says: “mine (housecleaner) make $150 for a 2 person team over 3 hours which works out to about $25 an hour.”

I’m glad you agree people shouldn’t be paid less than they’re worth.

Do I need to state again the minimum wage has been a low standard to make sure workers are paid not too less than they’re worth?

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http://www.aei-ideas.org/2013/03/quotation-of-the-day-john-mackey-on-capitalism/#comments

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