This has been really bugging me lately so I figured I'd share through one of my recent blog posts. Debate away.
Green energy, Clean innovation, Bio-fuel technology, etc. etc. Great buzz words at your local, uppity coffee house and now apparently at 1600 Pennsylvania, but let’s be honest, they mean NOTHING in the context of job creation. The president has been pushing for funding in these areas with the excuse that it’s going to promote job growth. Any business person with half a brain knows that research and development of unproven or underdeveloped products is basically a money pit until economic feasibility. I agree we should be innovating and investing in clean technology for the future of this country… but don’t try and sell me that crap as if it’s going to promote job growth in the near term. We need jobs NOW! The way you produce jobs in the short term is by providing funding or incentives to already implemented and proven industries like manufacturing and construction.
$500 million dollars to a road construction project will get you feet on the ground, literally the minute the contract is signed. People who were laid off by the struggling contractor that just won that bid will get rehired and be working and paying taxes in no time. $500 million dollars to research and develop clean energy will get you a handful of already employed scientists in a lab with erections and that’s about all. If there was truly a thriving, labor intensive market for this stuff I would be all for it, but the fact is there isn’t yet. So if you’re going to try and shove this environmental stuff down people’s throats, at least don’t put it in a bill made for job growth … It really makes you look like an idiot.
once we become one with nature jobs won't matter anymore man... we'll all live off hopes and dreams and eat rainbows... everything will be perfect and gaia will shower us all in her bounty of unobtanium... thats what we're striving for... you're ideology is just hindering the process.
"providing funding or incentives to already implemented and proven industries like manufacturing and construction" - You mean like saving GM and Chrysler from collapse and liquidation and keeping their employees and suppliers employed rather than watching the unemployment rate rise to 20%?
"$500 million dollars to a road construction project" - You mean like the stimulus bill that the Republicans call a "Failure"? I drove across the country last summer and I saw many highway construction projects underway with big signs saying they were funded with federal stimulus money. I wonder if the people and companies working on those projects considered them "failures".
Everything you're asking for has already been done in the last 3 years. Republicans were against it all.
True the unemployment numbers are still too high but if you think construction jobs are going to come back like they were during the housing bubble you're living in a fantasy world. That was all fueled by fraud - it happened previously in the early 1980s and collapsed in the same way and there was a similar bailout - google "Resolution Trust Corporation".
In case you've missed it, China is overtaking the US as the leading world economy. Both GM and Ford sold more cars in China last year than they did in the US. China is undercutting the US in oil deals with OPEC and Russia because their demand continues to grow and they have the economic power and stability to make long term deals. China's construction industry is booming with infrastructure projects.
I often wonder why the Republicans are so eager to spend money in Iraq or Afghanistan on war, but if you want to build roads, bridges, schools, water or sewage projects, or clean up the environment try to improve the living standards in this country you are somehow a Communist or hate America.
Political views always crack me up because every view point has two angles depending on how you want to look at it. Its is almost no use discussing them seriously on a public forum as given the time to research any topic, anyone can bend anything in any direction.
The wars are no longer republican wars. They are now Obamas wars. He has been president long enough to stop them. He kept Bush pull out dates in Iraq but then ramped up Afghanistan. But, I'm sure others have a different view of that. While it is always convenient to blame anything you don't like on a past president it doesn't make it true! Why, I believe Gitmo is still open as well. Thats probably Cheneys fault, right?
Government cannot create jobs. All government can do is take your money, skim a big chunk off the top, and give it to someone else.
That being said, the best thing the government can do if they want to "create jobs" is stop spending money and stop taxing people to death. Your average Joe like myself will have more to spend on "toys". I buy American wherever possible. This means my "play money" gets spent at American retailers and a usually to American manufacturing companies and small businesses. You want more American manufacturing companies? Eliminate environmental requirements, eliminate OSHA, eliminate all that crap that makes it cheaper for comapnies to make their products overseas. I spend a fair amount of money on automotive projects, both for myself and as side work. You wouldn't believe the amount of crap being made in China these days, and it really is crap. It performs poorly and is not as strong as American made parts. Just look at the junk coming from ProComp for a prime example. People actually buy that stuff.
While we're eliminating all that nonsense, eliminate minimum wage. Right there that'll get more American jobs. Eliminate entitlement programs like unemployment and welfare. Now people will go work at a job "below" them until they find something better. Money saved that I don't get taxed and can spend at American businesses that will create more jobs from increased sales.
At the end of the day "creating jobs" comes down to government getting out of the market. it's eliminating laws, not creating more.
As for "green energy"... Energy companies have always invested some of their revenue into R&D, and a fair portion of this is environmentally friendly methods. It's expensive at first but eventually a new tehnology is developed to a point that it is price competitive and marketable as a cheaper option, a slightly more expensive but cleaner alternative, or just failed because it's too expensive and may be revisited later when it may be profitable. Forcing this crap down people's throats makes the cost of living for everyone more expensive. This means I spend less "play money".
Another way to help "create jobs"... Stop rewarding failure. These bailouts are insane. It rewards failure and encourages more poor decisions. Beyond that, government has no place propping up private businesses. If a car company, bank, etc. fails then so be it. Someone else will step in if there're a market for the product or service and do it better, or fail.
Bottom line, take less from me at gunpoint and I'll put it back into our economy which benefits everyone.
You want more American manufacturing companies? Eliminate environmental requirements, eliminate OSHA, eliminate all that crap that makes it cheaper for comapnies to make their products overseas.
Yeah, lets bring our country down to the standards of the Chinese, You get hurt on the job, tough luck. Or in the case of my wife, shatter your elbow on the job, too bad so sad. I live in an area where we used to heat our Pear orchards with smudge pots to protect the fruit from frost damage. Back in the 60s and 70s it would get so bad here from the oil induced smoke that you could taste it. We had wigwam burners here to burn slash from unused timber products that burned 24/7, on a calm day your clothes smelled like you were sitting by a campfire.
Those pesky E.P.A. and OSHA standards. Myself and my wife may live a longer life because of them. I guess if that makes me a bad American for feeling like this I guess I will live with that.
Eliminate environmental requirements, eliminate OSHA, eliminate all that crap that makes it cheaper for comapnies to make their products overseas.
Yeah, just what I want. A bunch of pollution and injured people on diability so you can have cheap products. How about tarrif imports so that other countries that don't meet these standards don't have an advantage importing products?
"..eliminate minimum wage. Right there that'll get more American jobs."
You can't be serious. There are plenty of jobs at Taco Bell, McDonald's, etc, that pay significantly more that minimum wage, yet those companies have a hard time filling them. So you honestly think Americans will be lining up to work a job that pays less than that?
I have heard some bad ideas about creating jobs, but this one takes the cake.
Government is giving away free money. No need to take a job below you.
Humans, like most mammals, are creatures of convienence. They would rather be fed by anothers hard work, than earn it. When they get hungry, they will hunt for themselves. Hunger is a big motivator. Stop the free rides and the society will improve.
"..eliminate minimum wage. Right there that'll get more American jobs."
You can't be serious. There are plenty of jobs at Taco Bell, McDonald's, etc, that pay significantly more that minimum wage, yet those companies have a hard time filling them. So you honestly think Americans will be lining up to work a job that pays less than that?
I have heard some bad ideas about creating jobs, but this one takes the cake.
Actually, this very idea, has been studied by the University of Chicago Economics Department and the MIT Department of Economics. Both came to the same conclusion, that we would have significant entry level job growth. They also found that the minimum wage artificially keeps a large number of jobs at a lower income level than the free market would pay. Forbes also did a study that says the same thing.
What about people like a stay at home mom who would be willing to work part time in order to pay for her kids healthcare? She can't do that now, because the economics for the employer doesn't work. Now if she works for no wage, but works instead for healthcare for her kids it makes sense to the employer.
Here are a couple of articles by Art Carden, he makes a living studying this stuff...
I'm still waiting for a logical person to answer if they think we would have lines around HR depts with eager applicants willing to work for less than minimum wage. How would that be reasonable if we (U.S.) are unable to fill jobs that pay minimum wage?
I'm still waiting for a logical person to answer if they think we would have lines around HR depts with eager applicants willing to work for less than minimum wage. How would that be reasonable if we (U.S.) are unable to fill jobs that pay minimum wage?
I don't know what your idea of a logical person is, but YES, for some jobs people would line up.
Many people who are not qualified to work at McDonalds could find another job. Currently over qualified people are working at McDonalds. These people are competing for the McDonalds jobs and taking them away from the people who should be working there. Think about how many entry level jobs could be created. I could work for XYZ Company for $5 an hour until I prove to them that I am worth more.
This is already happening, out of my 36 student master’s program, approximately half of them went to work for FREE, as interns, hoping that the company would later hire them.
Just because the economic theory that I believe in, doesn’t match yours, doesn’t mean that I’m illogical. The Austrian School of Economics is based in logic.
Can you give me an example where the minimum wage helps people?
I would like a concise example of a person that is "not qualified to work at McDonalds" for starters (and disgruntled, ex-McDonald's employee does not fit the technical definition of someone not qualified). For argument's sake, let's say such a person exists. If you are a hiring manager of company ABC and a person's application lands on your desk and during the interview, you discover this person "is not qualified to work at McDonalds". Are you going to hire this person?
I was not necessarily accusing you of being illogical, but where I live, and where my travels have taken me over the years, there is an abundance of "entry level jobs" (in many various industries {restaurant, supply, retail, etc}) that are not filled, nor are they ever filled. I mean I know you are from AZ, but how hard is it to get a job as a clerk at a convenience store in AZ (or Mickey D's)? And almost all of these jobs offer scheduled raises, along with promotion opportunities (just go to the McDonald's website and investigate). And even if the hypothetical "person" that isn't qualified to work at Mickey D's, why can't they go to the Wal-Mart for a job?
In theory, what you say makes sense. But the abundance of minimum wage jobs that are currently available contradict the overall message.
As far as internships are concerned. The experience from said internship is far more valuable then what little pay may accompany the assignment. Let's face it, you have to distinguish yourself from the other candidates, and experience is crucial to landing a professional position.
I have worked at McDonalds and you have to be able to read at a basic level.
ProLiteracy estimates:
14% of U.S. Adults can't read
63 percent of prison inmates can't read
774 million people worldwide are illiterate
Two-thirds of the world's illiterate are women
From an article on literacy in 2009:
"More than 1 million people lost their jobs in 2008 and the new unemployment figures are the highest in 16 years," Harvey said. "A large number of the unemployed are low-skilled individuals who struggle with everyday reading, writing and math tasks. The administration wants to create new jobs with the stimulus packages, but to take advantage of those new positions, these adults need basic literacy skills."
Due to current economic conditions and unemployment numbers people who are over qualified are taking jobs at McDonalds forcing out the regular people who would actually work there. These people go on down the ladder and take the jobs of those who are not qualified to work at McDonalds. Those people in turn are left without work and have to rely on either the government, crime or both.
Ok, so we agree with the example regarding internships and that you can learn valuable skills during an internship. Let's look at a company that could use some extra help, but is not sure if they can either afford extra help, need it, or can find the right person for the job. If they could hire the guy for $5/hr without benefits they could evaluate all three questions and the guy doing the work would get valuable experience in an industry that he wants to work in. This same scenario could play out in every industry.
I think you should also consider the arguments of Murray N. Rothbard, Economist of the Austrian School of Economics:
Rothbard says that the Minimum Wage is actually compulsory unemployment.
Compulsory unemployment is achieved indirectly through minimum wage laws. On the free market, everyone’s wage tends to be set at his discounted marginal value productivity. A minimum wage law means that those whose DMVP is below the legal minimum are prevented from working. The worker was willing to take the job, and the employer to hire him. But the decree of the State prevents this hiring from taking place. Compulsory unemployment thus removes the competition of marginal workers and raises the wage rates of the other workers remaining. Thus, while the announced aim of a minimum wage law is to improve the incomes of the marginal workers, the actual effect is precisely the reverse—it is to render them unemployable at legal wage rates. The higher the minimum wage rate relative to free-market rates, the greater the resulting unemployment.[39]
Unions aim for restrictionist wage rates, which on a partial scale cause distortions in production, lower wage rates for nonmembers, and pockets of unemployment, and on a general scale lead to greater distortions and permanent mass unemployment. By enforcing restrictive production rules, rather than allowing individual workers voluntarily to accept work rules laid down by the enterpriser in the use of his property, unions reduce general productivity and hence the living standards of the economy. Any governmental encouragement of unions, therefore, such as is imposed under the Wagner-Taft-Hartley Act, leads to a regime of restrictive wage rates, injury to production, and general unemployment. The indirect effect on employment is similar to that of a minimum wage law, except that fewer workers are affected, and it is then the union-enforced minimum wage that is being imposed.
He also says it's a protectionist idea:
During the 1966 Congressional battle over a higher federal minimum wage, for example, the late Senator Jacob Javits (R-NY) freely admitted that one of his main reasons for supporting the bill was to cripple the southern competitors of New York textile firms. Since southern wages are generally lower than in the north, the business firms hardest hit by an increased minimum wage (and the workers struck by unemployment) will be located in the south.
I don't find anything in Sam's posts regarding minimum wage as wrong, I question the significance of targeting the minimum wage as a solution to any real problems. One argument that looks favorable wrt not having a minimum wage is that more people working and making less money is preferable to less people working and making more money. But at the minimum wage level I'm not convinced it's a major economic impact.
I wonder why instead of attacking minimum wage the GOP isn't targeting union laws. In a significant economic downturn both industry and govt should be considering across the board wage reductions as preferable to layoffs. Union contracts create a class of privileged workers enforced by law.
"Can you give me an example where the minimum wage helps people?"
Yes - there are millions of people working in crappy fast food jobs, whose companies would pay them less than they are now if they could do so legally. You may know of some examples of 'over-qualified' people working at McD's, but there are millions more who are not. I remember in High School, getting some lousy pay raises in my fast food job over a year's time, until the min wage got bumped along with my wage. It helped me, and it has and will help millions of others.
It's not very wise to try and say that minimum wage helps nobody and is all bad, if that's what you're wrongly trying to argue.
"Can you give me an example where the minimum wage helps people?"
Yes - there are millions of people working in crappy fast food jobs, whose companies would pay them less than they are now if they could do so legally. You may know of some examples of 'over-qualified' people working at McD's, but there are millions more who are not. I remember in High School, getting some lousy pay raises in my fast food job over a year's time, until the min wage got bumped along with my wage. It helped me, and it has and will help millions of others.
It's not very wise to try and say that minimum wage helps nobody and is all bad, if that's what you're wrongly trying to argue.
He took the bait!
It did not help you! Let's go back to McDonalds and analyze the minimum wage.
If McDonalds could pay anything they wanted to they would. Let's say that the market says less qualified employees should only make $4.00/hour. At McDonalds there are clearly different levels of workers. The lower level workers would make $4.00/hr and the higher up levels would make more. For arguments sake, let's say that the majority gets minimum wage, in other words the better employees carry the under qualified employees. The upper level should get paid more, but since they are already paying the lower level employees more than they should be making the better employees don't get raises. Everyone is lowered to the lowest common denominator. The better employees are stuck at their wage because the bad employees are dragging them down. There is no incentive for this group of employees to better themselves and stay in their current jobs. The lower level employees can just ride the better employees coat tails and the better employees have little incentive to improve themselves because they have a much higher ceiling to clear before they actually see a pay increase. When they do get a raise it will be artificially lower since they are still carrying the lower level employees.
The minimum wage didn't help you because you where probably a better quality employee than some of your peers - they were holding you back.
I'm sure someone else can explain this more clear and eloquently, but my mind works in a convoluted fashion.
The Minimum Wage also increases unemployment in other ways too, not just low skilled workers. Let's look at why things are made in China and the basic production cycle.
Things are made in China because the initial rate to produce an item is very, very cheap. A simplified basic production cycle includes value engineering and/or the reduction of the costs to produce an item due to continually increasing efficiencies in the product design and product manufacturing. Without the initially low wages the factories are never opened here and the efficiencies are never created, nor are profits.
When I worked at Intel I worked in Fab 6, we processed 6" wafers. I don't think anyone in the US is still processing 6" wafers on a major scale. Our #1 product was Bosch disk brake controllers. The Japanese were kings in manufacturing chips at the time, they were kicking our butts! They could make the same disk brake controllers for less than half of what we could make them for. Intel did an experiment though and sold their controllers at the same price. They let our 6" fab do anything we wanted. They let employees make decisions on their own in regards to manufacturing with the goal of reducing costs and improving output. We ended up pioneering many, many new processes and techniques that improved efficiencies and output. In the end they closed our 6" plant down, but we were making Bosch disk brake controllers for 10% of what the Japanese were making. Intel utilized the improvements that we made in the 6" fab in the newer fabrication plants increasing efficiencies and profits overall. We all got huge bonuses.
The moral of the story is the techniques that we made improved production overall. Without the 6" Fab originally being here the improvements would have never been made. Fab 6 was outdated and in normal operations would have been phased out and moved over seas.
By having a minimum wage we eliminate all the opportunities for increased efficiencies because the plant is never here to begin with, it is originally built in China.
Have you worked in a fast food place? There are not really too many levels of employees. Besides supervisors and managers, you've got all the other employees that do the cooking, serving, cashiering, etc. Some of these employees are better than others, but pretty much all of them are expendable in most shops. Their wage bracket is fairly narrow. If it wasn't for minimum wage, I can guarantee you that the majority of these employees would be making less.
Minimum wage may hurt workers in some industries in some areas. It helps them in many industries in many areas. Minimum wage being beneficial to employees or not is not a black and white issue across the board. Again, it'd be wrong to think so.
Myself and my wife may live a longer life because of them. I guess if that makes me a bad American for feeling like this I guess I will live with that.
Linear Mode
