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Minimum Wages and Minimal Logic

Those mischievous economists at the Congressional Budget Office are back in the news, this time with a report suggesting that raising the minimum wage would also raise the unemployment rate.
The notion that raising the cost of something such as unskilled labor might also reduce the demand for it will seem reasonable enough to anyone with a rudimentary understanding of economics, but it has provoked an outcry among those with a more sophisticated view of these things. There apparently are studies out there by some experts or another suggesting that raising the cost of something doesn’t affect the demand for it and that people will gladly continue paying a higher price for something long after the cost has exceed its actual economic value, no matter how many centuries of economic history sense suggest otherwise, and we are told that it would be downright anti-science to argue with an expert’s study. Advocates for an increase in the minimum wage also note that the CBO has concluded that minimum wage workers would make more money if the minimum wage were increased, which will also seem reasonable enough to anyone with a rudimentary understanding of economics, and argue that so far as social justice and all the jazz goes the lost jobs would be offset by the gains those lucky enough to keep their swelled wages.
Neither argument is convincing. The president and any economists supporting his call for raising the minimum wage to $10.10 an hour clearly haven’t spent much time lately in the drive-thru lane of a fast-food restaurant, where they surely would have encountered uncouth and innumerate workers whose feeble efforts could not possibly provide a profitable return on that exorbitant amount, and we don’t doubt there are far more of them than the 500,000 or that the CBO has estimated will get the axe. There’s also the distinct possibility that a few million more over-paid workers will demand a bump up above the minimum and find that they are no longer worth the cost. Despite our dissatisfaction with these workers’ performances we are not so insouciant about their fates as the more high-minded activists seem to be, and we don’t share the view that they’re better of unemployed at $10.10 an hour rather than employed at the current rates.
This is a most unfashionable point of view, however, and it remains to be seen if it will prevail. The last time the CBO raised such a fuss was when it reported that more than a million people will be induced to leave the labor force rather than relinquish their Obamacare subsidies, and presidential and bien-pensant opinion concluded that they’d all better off and free to pursue careers in the arts. As much as we’re looking forward to the artistic renaissance that will surely flower from all those fast-food workers laid off to make room burger-flipping robots, it doesn’t seem likely to spur an economic revival any time soon.

— Bud Norman

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Liberty, Equality, Fries

A hamburger, like any other work of art, is judged by a purely subjective standard. Every person has his own peculiar preferences for this venerable American delicacy, but to our tastes it is best with a thick slab of ground beef and a thin slice of tomato, some onion, a bit of lettuce, perhaps a dash of relish if we’re in a fanciful mood, and most importantly with no ketchup or mayonnaise but plenty of mustard. This is our standard order on the rare occasions we find ourselves in a drive-thru line, always enunciated so clearly it cannot be mistaken over the tinny sound system we are shouting into, and we invariably arrive home to discover that even such a simple recipe is beyond the capabilities of your average fast food worker.
The incompetence, surliness, and general zit-faced stupidity of the average fast food workers are so widely acknowledged as t have become a staple stereotype of the popular culture, yet now they find themselves the celebrated heroes at the vanguard of the labor movement. A protest took place Thursday with picket signs outside a thousand of the big-name fast food joints in 50 cities demanding the right to collective bargaining and a substantial raise for the employees within, and the organizers at the Service Employees International Union are hoping it will eventually lead to an increase in the minimum wage for all workers to $15 an hour, force more raises for those just above that level of remuneration, and reverse the declining fortunes of the labor unions with thousands of grateful new members and their dues. They might just pull it off, as crazier things have happened, but we suspect the chances are about as good as getting the right items and correct change at a drive-thru window.
Fast food workers aren’t the grimy-faced miners or rosy-cheeked sweat shop seamstresses who were once the public face of the union movement, and although their lot in life is unenviable it is hardly the stuff of a Woody Guthrie folk song. They are often teenagers working part time for illicit beers, switch blade knives, rock ‘n’ roll recordings, or whatever else the young folks are spending their disposable income on these days, and in many cases they are people looking to supplement Social Security checks or other sources of income. News reports indicate that the modern economy has increased the average fast food worker’s age by several years, and that many are struggling to support family on the industry’s admittedly meager wages, but in any case they are not the most inspiring exemplars of the American work ethic. Worse yet, from a public relations point of view, fast food is shunned as a culinary evil by the same bossy bleeding-hearts that can usually be counted on to sympathize with a labor strike.
Should the fast food labor uprising win all of its demands, the victory will likely prove hollow. Many fast-food franchises will be forced to raise prices to pay for the higher wages, and the resulting decline in business will result in fewer jobs, while others will simply purchase labor-saving machinery that is suddenly cost-effective and actually knows the difference between mayonnaise and mustard. The inflation that inevitably follows a country-wide pay hike would eat up much of the increased wages of those who do get a fast food job, and those who don’t are unlikely to find work elsewhere in an economy further hampered by yet another will-intentioned law. With teen unemployment at record levels, this is a particularly inopportune time to insist on such job-killing measures.
On occasion we will encounter a fast food worker who is competent, polite, and seemingly intelligent, and we happily assume he will soon be doing something bigger and better. Denying these young people the opportunity to demonstrate these qualities to potential employers in order to over-pay their indolent co-workers seems a shame, like a hamburger with ketchup or mayonnaise.

— Bud Norman