Minimum Wages Surged In 6 Cities Last Year; Then This Happened
Another failed hypothesis.

Hiring at restaurants, hotels and other leisure and hospitality sector venues slowed markedly last year in metro areas that saw big minimum-wage hikes, new Labor Department data show.

Wherever cities implemented big minimum-wage hikes to $10 an hour or more last year, the latest data through December show that job creation downshifted to the slowest pace in at least five years.

Will this experiment be treated like the climate models, or will its proponents actually pay attention to whether their predictions match reality?

I’m betting the former.

Reconciling the Union Leadership minimum wage rhetoric

AFL-CIO leader warns labor could sit out 2016 fight over trade

AFL-CIO President Richard Trumka threatens “no endorsement” for President, if Hillary supports the Trans-Pacific Partnership trade deal:

…that’s conceivable if both candidates weren’t interested in raising wages

They decided to pass something that was going to cost jobs and lower wages, and they’re going to have to answer to their constituencies for that whenever they face them.

So, unions oppose trade deals unless those deals would both create American jobs and raise American wages. Who would disagree?

Our trading partners, perhaps?

Speaking of wages vs. jobs, after leading the fight to get a minimum wage increase passed in Los Angeles, a California labor leader appears to contradict Trumka’s wage rhetoric: L.A. labor leaders seek minimum wage exemption for firms with union workers

On May 19th, Los Angeles City Council voted to increase the hourly minimum wage to $15.

But Rusty Hicks, who heads the county Federation of Labor and helps lead the Raise the Wage coalition, said Tuesday night that companies with workers represented by unions should have leeway to negotiate a wage below that mandated by the law.

“With a collective bargaining agreement, a business owner and the employees negotiate an agreement that works for them both. The agreement allows each party to prioritize what is important to them,” Hicks said in a statement. “This provision gives the parties the option, the freedom, to negotiate that agreement.”

In sum: To be free, you must join the collective.

Acknowledging that union members might lose jobs to lower-cost competition under a consistent set of rules, Mr. Hicks demands the privilege of being the lowest cost supplier. Reality-wise, Mr. Hicks would have the better of this argument with Mr. Trumka, except that it isn’t a disagreement at all. They both want to use government regulation to drive out competing labor.

So, if it would cost their members jobs to have a particular minimum wage, unions oppose minimum wage for their members. If it would cost their members jobs for other countries to have a lower minimum wage, they want to force higher labor costs on those other countries.

Maybe Trumka and Hicks should start thinking about what this – Robots Start to Grasp Food Processing – means to their membership.

I seem to remember another time where this type of disruption affected wages and jobs. Something about power looms? Some kid named Ned Ludd was said to be involved.

It seems to me, with the robotics threat generally looming on the horizon, that Trumka and Hicks are a bit shortsighted. Lower wages from foreign competition (for Trumka Chinese factory workers, for Hicks, the illegal immigrants in Southern California) are just practice for what’s coming to their members. It’s already started at McDonalds et. al., because they’re the early targets of the social justice cohort.

The Road to Serfdom

A radio interview this morning involving a Michigan GOP apparatchik reminded me of the abysmal economic knowledge and preening disingenuity of the average politician. I think the perp was Senator Ron Jelinek, but I didn’t actually note who this faceless ignoramus was. If I am wrong on this, I apologize. Whoever it was was from Three Oaks.

In any event, the looter in question was advocating floating the idea of an extension of the Michigan sales tax to include services, and a reduction in the rate to 5% from 6%. He attempted to make it sound confiscation revenue neutral, but was forced to acknowledge that it would represent a tax increase. The interviewer noted that advocating tax increases was an atypical Republican position. Wouldn’t this increase costs for consumers, the host asked?

The response was (I paraphrase), “No, we’re talking about a tax on business.”

This does make sense if we assume that every service business required to charge the new 5% tax decides to cut its prices by 5%. Otherwise, I’m afraid consumers will be paying it.

I know it is fashionable for Liberals to talk about taxing business as if this was somehow entirely divorced from taxing individuals, but the fact is that businesses do not pay taxes – taxes simply form part of the cost of their products and services. You pay their taxes when you buy those products or services.

For example, all the services that General Motors, Ford and Chrysler buy in Michigan, including health care for retirees, will go up by 5%. Let’s not expect the Shrinking-Three to absorb the increase.

The radio host noted that a services tax would hurt businesses in border communities. The response was that most Michiganders don’t live close enough to a border to be able to avoid such a tax. That this contradicts the idea of a “business tax” went unremarked. that it holds Michigan citizens in contempt is obvious. Maybe a change of this nature could contribute to a more effective tax regime, but when discussed in the terms above it is obvious that that is not the objective.

I think the real question is how many Michiganders will decide to relocate to another side of the State border – or be forced to.

It is certainly disappointing to hear a putative Republican talk this way, but that’s not the worst of it. At the National level we have the Democrats promising to raise both taxes and the minimum wage. A tax increase has the same effect at the National level as it does at the State level.

The increase in the minimum wage, however, has far more insidious effects. Minimum wages set above the value of the labor disproportionately damage small business, because small business provides most of those jobs. The truly damning point, though is this:

… only 5.3 percent of minimum wage earners are from households below the official poverty line; forty percent of minimum wage earners live in households with incomes $60,000 and higher; and, over 82 percent of minimum wage earners do not have dependents.

That last is excerpted from Amy Ridenour’s National Center Blog. The whole thing is worth reading, and you can do so here.

Update: 8:42PM
H/T BizzyBlog

…states that lacked an income tax saw stronger economic growth, stronger personal income growth, stronger population growth, and stronger job growth, than states with the highest income tax rates. States without income taxes also, shockingly enough (not!), had fewer budget problems than the states with the highest income taxes.

But income taxes are just one part of the tax equation. Let’s now turn to a comparison of the ten highest taxed states and the ten lowest taxed states. The Texas Public Policy Foundation crunched the numbers (.pdf), taking income taxes, sales taxes, property taxes, gasoline taxes, alcohol taxes, and all the other state and local taxes to determine the overall tax burden in each state.

Read it all, and find more at WILLisms: