{"id":712,"date":"2013-12-08T22:50:00","date_gmt":"2013-12-08T22:50:00","guid":{"rendered":"http:\/\/admin.patheos.com\/blogs\/janetheactuary\/2013\/12\/scattered-thoughts-on-the-minimum-wage-and-income-inequality.html"},"modified":"2013-12-08T22:50:00","modified_gmt":"2013-12-08T22:50:00","slug":"scattered-thoughts-on-the-minimum-wage-and-income-inequality","status":"publish","type":"post","link":"https:\/\/www.patheos.com\/blogs\/janetheactuary\/2013\/12\/scattered-thoughts-on-the-minimum-wage-and-income-inequality.html","title":{"rendered":"Scattered thoughts on the minimum wage and income inequality"},"content":{"rendered":"\n<\/head>

So the minimum wage and income inequality are in the news again.<\/p>\n

First of all, I\u2019m really getting tired of the assertion that \u201cOne of Henry Ford\u2019s great insights as a businessman was to realise that in order to create a mass market for his automobiles, he had to pay his workers sufficient to buy his products,\u201d as Jeremy Warner at the Telegraph<\/a>, and countless others,\u00a0assert.\u00a0 This is debunked by Tim Worstall at Forbes<\/a>, in an article in which he provides the background that Henry Ford had a serious turnover problem, which the $5 wage remedied.\u00a0 The wage was also conditioned on good citizenship \u2014 that is, among other things, immigrants learning English.\u00a0 Not mentioned in Worstall\u2019s article (and please excuse my not finding a proper source for this) is the reason for the high turnover:\u00a0 as long as Ford paid roughly the same as similar jobs, his repetitive assembly-line jobs were simply less desirable than a job which involved a variety of tasks during the day.\u00a0 He needed to pay more than other employers to make up for the monotony of the work.<\/p>\n

The reality is that no business could imagine that paying its own workers a higher wage, and having that wage be partially directed back in the form of purchasing the company\u2019s products, would be a recipe for business success.\u00a0 It simply doesn\u2019t make sense, to imagine that, if I sell widgets, I could build a successful business if my only customers were my own employees.<\/p>\n

Second, there\u2019s Obama\u2019s recent speech on income inequality<\/a>. Here are his solutions: <\/p>\n

\u201cPush a growth agenda\u201d \u2014 which is pretty vague. <\/p>\n

Corporate tax reform: close loopholes and end \u201cincentives to ship jobs overseas\u201d to broaden the base, and lower rates plus \u201cuse some of the money we save to create good jobs rebuilding our roads and our bridges and our airports, and all the infrastructure our businesses need.\u201d Of course, those must be a large number of loopholes, if this funds both tax reductions and extra spending. <\/p>\n

Growing exports \u2014 everyone\u2019s dream. \u201cStreamlining regulations that are outdated or unnecessary or too costly\u201d (has Obama ever taken any action in this regard?). A fantasy budget with implied spending increases. <\/p>\n

Education: Race to the Top, blah, blah. Reining in college costs, inclulding a special announcement on working with college presidents and non-profits to help more low-income students attend and succeed in collge. Increased technical education for the non-college-bound. <\/p>\n

Preschool for all (based on the fantasy that this makes a different, vs. the stubborn facts that it doesn\u2019t). <\/p>\n

\u201cEmpowering workers\u201d by making it easier for unions to organize. Paycheck Fairness Act and Employment Non-Discrimination Act. <\/p>\n

And \u2014 ta da! \u2014 raising the minimum wage because \u201cthere\u2019s no solid evidence that a higher minimum wage costs jobs.\u201d And he cites some exceptional companies that pay their service workers well \u2014 such as REI \u2014 because \u201cthey recognize that paying a decent wage actually helps their bottom line, reduces turnover.\u201d (Great applause line for the audience, regardless of the math.) <\/p>\n

Special targeted programs for \u201cthe communities and workers that have been hit hardest by economic change and the Great Recession.\u201d Something new called \u201cPromise Zones\u201d which he says are \u201cnot handouts, but a hand up.\u201d (How much you wanna bet they\u2019re handouts?) <\/p>\n

Plus a promise of a future announcement of help for the long-term unemployed. <\/p>\n

And a goal to \u201crevamp retirement\u201d in an unspecified way, to \u201cencourage private savings and shore up the promise of Social Security for future generations.\u201d <\/p>\n

A throwaway line for Congress to extend the already-extended unemployment benefits. <\/p>\n

A plug for the ACA. <\/p>\n

And that\u2019s pretty much it. Ultimately, there\u2019s not much of substance and, really, the number of teasers is a bit disconcerting: Promise Zones? A new program to bring poor kids to college? No wonder the news articles all focused on the minimum wage increase support \u2014 there\u2019s not much else there. <\/p>\n

Certainly, underlying this is a simplistic view of the past, in which the post-war economic growth was due to strong unions and a harmonious \u201csocial compact,\u201d not the devastation of the rest of the world. But the solutions he trots out are simply the usual Democratic prescriptions of more government spending, not a serious grappling with the issues. <\/p>\n

Here\u2019s an idea: how about cutting immigration of low-skilled workers, to reduce the competition that low-skilled Americans face for jobs? <\/p>\n<\/body><\/html>\n","protected":false},"excerpt":{"rendered":"

So the minimum wage and income inequality are in the news again. First of all, I\u2019m really getting tired of the assertion that \u201cOne of Henry Ford\u2019s great insights as a businessman was to realise that in order to create a mass market for his automobiles, he had to pay his workers sufficient to buy […]<\/p>\n","protected":false},"author":2209,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-712","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"yoast_head":"\nScattered thoughts on the minimum wage and income inequality<\/title>\n<meta name=\"description\" content=\"So the minimum wage and income inequality are in the news again.First of all, I'm really getting tired of the assertion that "One of Henry Ford's great\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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