Thursday, October 26, 2006

Hey, dude! You got ENOUGH jobs already! 

Is there ever enough jobs, or enough of the "right kind" of jobs? If you read the New York Times, the answer is no. Discussing minimum wage laws and Social Security taxes, the author starts with this premise:
If the country cared only about creating jobs � rather than, say, lifting living standards � it would also be wise to get rid of Medicare and the payroll taxes that come with it. Workplace safety rules, with their costly requirements that workers not be injured on the job, should go, too.
As the old joke goes, who are you calling "the country", Kemosabe?

The country does not care about things; people do. People do not "care about" creating jobs; they care about hiring someone to help them produce something, or being hired to help someone else produce something. Nor does "the country care" about lifting living standards; people take up tasks, including employment, in order to better their own lives, not to raise median per capita GDP. They do this quite naturally, without need of direction from the New York Times.

People trying to further themselves by gaining experience in working may choose to accept lower wages now in return for higher wages later. Minor league baseball players do not lobby for higher wages even though their salaries may be more than ten times less than the major league minimum. Nor do they argue much over the residue of the old reserve clause that bound a player to a team from year to year (they are bound for six years, the latter three being at a salary that can be arbitrated.) Why do they accept this? In return for the opportunity to make more later.

It is not any great secret why the youth accept low-wage jobs. They have little experience and they want to gain it. They have not yet developed many job skills. Minimum wage laws, even if the worker manages to stay employed, discourage on-the-job training and the provision of other employee benefits. On net, raising the minimum wage may be a wash.

Felix Salmon
notes this as well, which makes this statement by the NYT even more curious:
The American economy has done so well at creating jobs in recent decades that almost anybody who wants work can find it. The problem is that too many jobs still don�t pay a decent living. So even if a minimum wage increase does eliminate a small number of jobs, that may be an acceptable price for improving the lot of millions of low-wage workers.
And yet we still have black teen unemployment over 30%, and 20% of black wage earners make the minimum wage. Is it an acceptable price to them? So not only is increasing the minimum wage an extremely expensive way of helping a very few people out of poverty, but the cost falls on those least able to afford it.

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