Power & Market
Minimum wage laws hurt the most unskilled and least experienced workers in society. They cut off the lower rungs of the ladder to that it becomes far more difficult to enter the workforce without substantial experience. After all, how many employers are willing to take the risk of hiring a workers at 8 dollars an hour when that workers has no references and no experience? Some would. But many more would be willing to do it for 5 dollars per hour.
In practice, fewer than 3 percent of workers earn the minimum wage because as soon as most workers prove they can learn on the job and show up for work, they move above the minimum wage. But, it's that crucial opportunity to get the foot in the door and get a little experience that is hurt by minimum wage laws. Given that 97% of workers are already working above the minimum wage, this illustrates the key importance of allowing wages to be flexible for those not already in the 97%.
Entry into that 97% of workers making above-minimum wage is only hurt by minimum wages because the mandate erases opportunities for workers to prove themselves, even when they have zero experience. Thus, those who are the least promising prospects simply have no chance of getting their foot in the door because they are perceived as being too much of a risk when the employer must pay a minimum wage far above the worker's apparent value.
Were wages more flexible, brining on an unskilled workers would be a far less risky proposition for employers.
As a result of the minimum wage, however, unemployment rises among the least skilled, and income inequality grows.
As we learn in Politico this week, however, supporters of the minimum wage have a ready scapegoat for the minimum wage's failure to bring the most vulnerable workers up to higher wage levels. They'll blame a lack of enforcement by government agencies:
This failure to enforce both the minimum hourly wage — $7.25 under federal law — and rules requiring higher pay for overtime distorts the economy, giving advantages to employers who break the law. It allows long-term patterns of abuse to take root in certain service industries, especially restaurants, landscaping and cleaning. Advocates for lowest-wage workers describe families facing eviction and experiencing hunger for lack of money that’s owed them. And, nationally, the failure to enforce wage laws exacerbates a level of income inequality that, by many measures, is higher than it’s been for the past century.
“Low-income workers are already in this fragile balance,” said Victor Narro of the UCLA Labor Center. “One paycheck of not being able to get the wages they’re owed can cause them to lose everything.”
Minimum wage laws increase income inequality by discriminating most against those "in the fragile balance," but when we fail to see that the least skilled workers are getting work, we will just blame enforcement instead.
This, it seems, is a variationon the "socialism has never been tried!" argument, in which if we just do socialism "harder," this time it will work. This appears to be the mentality in Venezuela right now. When we find that minimum wages don't actually put unskilled workers on the path toward high wages, we'll say "the minimum wage has never truly been tried" and we'll fix it by ramping up enforcement.
In truth, these loophole through which many of these employers - mostly small businesses and other low-capital operations - are passing, are all that's keeping these workers employed at all. If forced to compete with workers at more reliable and highly capitalized operation, they may very well find themselves completely unemployed. Moreover, the small businesses that we're told are cruelly withholding wages are often not paying wages because they're missing payroll due to low revenues. Properly enforcing the laws will just drive these companies out of business. We might say "serves them right" when that happens, but the outcome will also be that all the workers lose their jobs.
February 19 is the Day of Remembrance for those who wish to recall that on February 19, 1942, President Franklin Roosevelt issued Executive Order 9066 authorizing military personnel to lock American of Japanese descent in concentration camps that are often euphemistically called “internment camps.”
The internment of the Japanese Americans is one of our greatest examples of how majority rule functions in a democracy. Fueled by the usual war hysteria so often and enthusiastically propagated by the American voter, Roosevelt’s government was virtually unrestrained in its wartime powers, and it’s drive to jail innocent Japanese civilians was not just national, but international in scope.
As Rothbard noted in an article on Peru, the American government wasn’t content with merely jailing Americans. No, it was important to actually import people destined for the concentration camps:
The first Japanese were imported into Peru at the end of the 19th century to work as slaves on the coastal sugar plantations. The Japanese, however, rebelled within weeks, and moved to Lima, where they are now located. Fujimori’s parents emigrated to Lima in the mid-1930s where his father, along with other Japanese, created hundreds of successful small businesses.
After Pearl Harbor, the U.S. government pressured Peru to go to war with Japan, to confiscate Japanese-owned businesses, including the elder Fujimori’s tire repair shop, and to ship almost 1,500 Japanese to internment in the U.S. Hence, the Peruvian Indians’ embrace of Fujimori as a fellow non-white rising up against the Criollos. The fact that Fujimori’s immigrant mother does not speak Spanish works in his favor with the Inca masses, who don’t speak Spanish either; Spanish is the language of Vargas Llosa and the Criollo conquerors.
In California, where the Japanese Americans, like the Japanese Peruvians, were treated like dirt, they set up a large number of highly-successful small business (most notably in small-scale agriculture and plant nurseries). In both cases, the success of the Japanese merely made the whites jealous, and the middle-class Anglos in California decided to wage class warfare on the Japanese immigrants in the early 20th century and passed a series of laws designed to outlaw Japanese-owned businesses. Fortunately, many of their plans failed. But when the opportunity came to ship the competition off to concentration camps, who would complain?
Camps helped cripple Japanese business well beyond the end of the war, since as Douglas Carey noted: “Over 110,000 Japanese civilians were detained in this way. Not one of them had been accused of any crime. After the war was over, the majority of those detained went home to find their property looted and destroyed.”
In a democracy, this is of course a win-win situation for the majority. The democratic system ensured that the Japanese, as a small minority, possessed virtually no political power either on the West coast or nationally, and were therefore at the mercy of the state. The few politicians who provided even mild resistance to stripping the Japanese of all rights, such as Colorado governor Ralph Carr, were promptly voted out of office.
The U.S. Government has never repudiated the legal principle behind concentration camps, and maintains the legal right to use them again. Often, when libertarians or others point out that the United States is not a free country, the defenders of the status quo point to the fact that people can vote. This magical talisman held out by government apologists, known as “the vote” doesn’t seem to have worked out very well for the Japanese Americans during World War II, who also had “the vote.”
Governor Rick Scott of Florida has called on the FBI director, Christopher Wray, to resign after it was revealed the FBI failed ot follow up on leads related to this week's school shooter. The FBI also failed to even follow its own protocol in terms of forwarding information to the local field office:
Robert Lasky, FBI Special Agent in Charge of the Miami field office, said agents in the Miami field office were never notified about the tip.
"The FBI has determined that protocol was not followed. The information was not provided to the Miami field office and no further investigation was conducted at that time," Lasky said Friday at a news conference. "We will conduct an in-depth review of our internal procedures for responding to information that is provided by the public."
The FBI was also notified about a comment on a YouTube video posted by a "Nikolas Cruz" last year.
"The comment simply said, 'I'm going to be a professional school shooter,'" Lasky said Thursday. "No other information was included with that comment, which would indicate a time, location or true identity of the person who made that comment."
Lasky said the FBI was unable to identify who made the remark.
A statement released Friday by the FBI said that the most recent tip should've been investigated thoroughly and forwarded to the Miami field office because it was a potential threat to life.
"We are still investigating the facts," FBI Director Christopher Wray said. "I am committed to getting to the bottom of what happened in this particular matter, as well as reviewing our processes for responding to information that we receive from the public. It's up to all Americans to be vigilant, and when members of the public contact us with concerns, we must act properly and quickly."
No doubt the FBI will "get to the bottom" of this just as it gotten to the bottom of how it failed to notice anything was amiss in the lead-up to 9/11. Perhaps the FBI will receive another big budget increase, as tends to happen after the FBI botches a major investigation.
A star high school basketball player was incidentally mentioned in an FBI probe because he was allegedly paid $15, 000 for “committing” to play for the University of Arizona. The student has recently committed to another university but may be ineligible to play college basketball next year.
A study in 2011 estimated that the average college basketball player at a university in the top tier (FBS) of Division 1 athletics earned approximately $120, 000 including grants-in-aid to fund tuition, room and board, etc, coaching services, media and public relation services, free tickets, and other valuable services. Another study in 2017 suggests that the average Division 1 player is worth $170,098 to their employing institutions. However players on elite teams such as the Louisville, Duke, and Kentucky would be worth $1.72 million, $1.16 million and $1.02 million, respectively, on a free market.
This raises a very serious question about college athletics—but not the one that you would expect. Why is it that Federal police operate as an investigative and enforcement arm for the National Collegiate Athletic Association, the multi-billion dollar college athletics cartel whose main purpose is to ruthlessly suppress the wages of college athletes far below the additional revenue that they generate for the colleges and universities that employ them?
Last month, I noted how Colorado's Congressional delegation was incensed at Jeff Sessions' posturing on the drug war and his efforts to override Colorado's constitutional measures against marijuana prohibition in the state.
Both Republicans and Democrats from Colorado condemned Sessions, and this should surprise no one. Marijuana legalization would never have passed in the first place without significant amounts — even majority support — from a number of Republican counties.
Even rural Colorado is far from the sort of Bible Belt politics that impels Jeff Sessions to blithely call for federal meddling in the daily lives of private citizens. More inclined toward libertarian leave-me-alone politics, Colorado Republicans are (slightly) less likely to go running to the federal government to manage their personal habits than in some other parts of the country.
On the matter of marijuana, rejecting federal marijuana prohibitions has now become widespread in Colorado in both parties where a good economy and relatively low crime rates are not exactly driving voters to call for a repeal of the the legalization measures a majority of them voted for in 2012.
So, it's not shocking to see yet another Colorado legislator join the anti-Sessions pile-on. The latest addition is this op-ed by Colorado Springs Republican Owen Hill who writes:
I have taken oaths to uphold the constitution as both a commissioned military officer and a state senator. Our state constitution clearly provides that marijuana, both recreational and medical, is legal by a popular vote of the citizens of Colorado. The US constitution also clearly states in the 10th amendment that any powers not expressly granted to the federal government are reserved to the states.
While some will wrongly argue that the supremacy clause or the commerce clause give the federal government the authority to meddle in our local issues, I side with conservative Supreme Court Justice Clarence Thomas: That if Congress can regulate this under the Commerce Clause, then it can regulate virtually anything — and the federal government is no longer one of limited and enumerated powers.
He goes on to say: “Whether Congress aims at the possession of drugs, guns, or any number of other items, it may continue to appropria[te] state police powers under the guise of regulating commerce.”
There are a couple of things to note here. Hill is from Colorado Springs which is the most right-wing part of Colorado, and is home to mega churches and military bases. It's about as Republican as you can get. Given the tone of his op-ed, however, it's clear Hill doesn't exactly fear blowback from his strident opposition to Sessions.
Secondly, Hill's defense of state autonomy using the Tenth Amendment is especially laudable and is the sort of thing we should routinely hear from state legislators.
Hill is right, of course, that there is nothing at all in the US Constitution autorizing federal control of substances like marijuana. It's simply not in there, and any claim of federal "supremacy" in this matter conveniently ignores the Bill if Rights.
For pragmatic reasons, Hill supports federal legislation making it clear that the federal government will leave states alone when they legalize marijuana. It is also clear from his argument, however, that such federal legislation isn't actually necessary. Federal prohibitions on drugs that void valid state laws are simply unconstitutional, whether there's any federal statute recognizing this fact, or not.