Wintery Knight

…integrating Christian faith and knowledge in the public square

Minimum wage: doing what feels good doesn’t produce good results

Labor Force Participation down to 62.8%

Labor Force Participation down to 62.8%

Will Obama’s plan to raise minimum wage help people?

From the Daily Caller. (H/T Conway)

Excerpt:

The Obama administration’s proposal to raise the minimum wage to $10.10 an hour could result in as many 1,084,000 jobs eliminated from the work force, according to a new study conducted by the Employment Policies Institute (EPI)

“No amount of denial by the president and his political allies — and no number of ‘studies’ published by biased researchers — can change the fact that minimum wage hikes eliminate jobs for low-skill and entry-level employees. Non-partisan economists have agreed on this consensus for decades, and the laws of economics haven’t changed,” Michael Saltsman, research director at EPI, said in a statement.

He offered an alternative to the president’s plan: “Instead of raising small businesses’ labor costs and creating more barriers to entry-level employment, the president and the Senate should focus on policies that help reduce poverty and create jobs.”

The  study was released in the wake of an expected vote on a Senate bill that aims to raise the federal minimum wage from the current $7.25 an hour to $10.10 an hour — a nearly 40 percent increase.

Many Democrats argue that increasing the federal minimum will reduce poverty without having an adverse effect on unemployment.

EPI’s report, which used analysis from economists at Miami and Trinity University, reached a different conclusion.

Researchers used recently updated Census Bureau data from 2012 and 2013 to calculate how each individual state would be impacted by the proposed wage hikes. As a lump sum, Americans would see a loss of at least 360,000 jobs, and perhaps even over one million if hourly wages are increased to $10.10.

The number of job losses would be the most dramatic in large states, such as California and Texas. Economists found that California could lose as many as 100,016 jobs and Texas could see up to 128,617 jobs disappear from its economy.

But’s it’s not just this proposal that is the problem, it’s his past policies.

After FIVE YEARS of Obamanomics, we still have a record 100 MILLION people still out of work from when he became President. There has been NO RECOVERY since the housing bubble, which was caused by the Democrats in Congress. Policies like raising the minimum wage only make that worse, although it sounds great to Obama’s low information supporters.

Minimum wage raises cause higher unemployment

Government Spending Vs Jobs

Government Spending Vs Jobs

From Investors Business Daily.

Excerpt:

How amusing to watch Democrats wring their hands over what they can do to get businesses to create jobs, when one of the biggest job killers is the minimum wage they keep hiking.

Recall that it was Democrats who raised the federal wage floor a whopping $2.10 an hour in the middle of the recession. The record 41% increase has led to record unemployment among young people, especially black teens.

Congress started ratcheting up the minimum wage from $5.15 an hour in mid-2007, arguing it would help abate poverty. But retailers looking to slash costs eliminated low-skilled, entry-level jobs rather than pay the mandated increases.

Now 1.5 million fewer teens are working. Last year’s unemployment rate for workers ages 16 to 19 shot up to 26% from 2007′s 15%.

As for black teens, their joblessness soared to a record 43% after the final raise to $7.25 took effect in mid-2009. It helped put more than half of young black men out of work — a first.

The president proposes cranking the minimum wage even higher to $9.50. Then he wants to raise it every year thereafter as a “living wage” indexed to inflation.

Yes, this is the problem that happens when you elect someone who knows nothing whatsoever about economics. And when I say nothing, I mean he is in disagreement with virtually all economists across the ideological spectrum.

A large majority of economists agree

Moderate economist Gregory Mankiw of Harvard University lists the policies that are accepted by virtually all economists.

Here’s Greg’s list, together with the percentage of economists who agree:

  1. A ceiling on rents reduces the quantity and quality of housing available. (93%)
  2. Tariffs and import quotas usually reduce general economic welfare. (93%)
  3. Flexible and floating exchange rates offer an effective international monetary arrangement. (90%)
  4. Fiscal policy (e.g., tax cut and/or government expenditure increase) has a significant stimulative impact on a less than fully employed economy. (90%)
  5. The United States should not restrict employers from outsourcing work to foreign countries. (90%)
  6. The United States should eliminate agricultural subsidies. (85%)
  7. Local and state governments should eliminate subsidies to professional sports franchises. (85%)
  8. If the federal budget is to be balanced, it should be done over the business cycle rather than yearly. (85%)
  9. The gap between Social Security funds and expenditures will become unsustainably large within the next fifty years if current policies remain unchanged. (85%)
  10. Cash payments increase the welfare of recipients to a greater degree than do transfers-in-kind of equal cash value. (84%)
  11. A large federal budget deficit has an adverse effect on the economy. (83%)
  12. A minimum wage increases unemployment among young and unskilled workers. (79%)
  13. The government should restructure the welfare system along the lines of a “negative income tax.” (79%)
  14. Effluent taxes and marketable pollution permits represent a better approach to pollution control than imposition of pollution ceilings. (78%)

You can find out more about how raising the minimum wage increases unemployment, especially for young people and minorities, from this comprehensive, 50-year, government study.

This is why it is important for voters to understand economics. When you raise the price of labor, fewer employers will purchase labor. Supply and demand. This is so basic, that I am surprised that someone as educated as Obama doesn’t understand it. It’s probably because he has virtually no experience working in the private sector.

Filed under: Polemics, , , , , , , , , , , , , , , , , , ,

Convergence detected in the genetic structure of bats and dolphins

We have to start this post with the definition of convergence in biology.

In evolutionary biology, convergent evolution is the process whereby organisms not closely related (not monophyletic), independently evolve similar traits as a result of having to adapt to similar environments or ecological niches.

It is the opposite of divergent evolution, where related species evolve different traits.

On a molecular level, this can happen due to random mutation unrelated to adaptive changes; see long branch attraction. In cultural evolution, convergent evolution is the development of similar cultural adaptations to similar environmental conditions by different peoples with different ancestral cultures. An example of convergent evolution is the similar nature of the flight/wings of insects, birds, pterosaurs, and bats.

All four serve the same function and are similar in structure, but each evolved independently.

Jonathan Wells explains the problem that convergence poses for naturalistic evolution:

Human designers reuse designs that work well. Life forms also reuse certain structures (the camera eye, for example, appears in humans and octopuses). How well does this evidence support Darwinian evolution? Does it support intelligent design more strongly?

Evolutionary biologists attribute similar biological structures to either common descent or convergence. Structures are said to result from convergence if they evolved independently from distinct lines of organisms. Darwinian explanations of convergence strain credulity because they must account for how trial-and-error tinkering (natural selection acting on random variations) could produce strikingly similar structures in widely different organisms and environments. It’s one thing for evolution to explain similarity by common descent—the same structure is then just carried along in different lineages. It’s another to explain it as the result of blind tinkering that happened to hit on the same structure multiple times. Design proponents attribute such similar structures to common design (just as an engineer may use the same parts in different machines). If human designers frequently reuse successful designs, the designer of nature can surely do the same.

I’m a software engineer, and we re-use components all the time for different programs that have no “common ancestor”. E.g. – I can develop my String function library and use it in my web application and my Eclipse IDE plug-in, and those two Java programs have nothing in common. So you find the same bits in two different programs because I am the developer of both programs. But the two programs don’t extend from a common program that was used for some other purpose – they have no “common ancestor” program.

Now with that in mind, take a look at this recent article from Science Daily, which Mysterious Micah sent me.

Excerpt:

The evolution of similar traits in different species, a process known as convergent evolution, is widespread not only at the physical level, but also at the genetic level, according to new research led by scientists at Queen Mary University of London and published in Nature this week.

The scientists investigated the genomic basis for echolocation, one of the most well-known examples of convergent evolution to examine the frequency of the process at a genomic level.

Echolocation is a complex physical trait that involves the production, reception and auditory processing of ultrasonic pulses for detecting unseen obstacles or tracking down prey, and has evolved separately in different groups of bats and cetaceans (including dolphins).

The scientists carried out one of the largest genome-wide surveys of its type to discover the extent to which convergent evolution of a physical feature involves the same genes.

They compared genomic sequences of 22 mammals, including the genomes of bats and dolphins, which independently evolved echolocation, and found genetic signatures consistent with convergence in nearly 200 different genomic regions concentrated in several ‘hearing genes’.

[...]Consistent with an involvement in echolocation, signs of convergence among bats and the bottlenose dolphin were seen in many genes previously implicated in hearing or deafness.

“We had expected to find identical changes in maybe a dozen or so genes but to see nearly 200 is incredible,” explains Dr Joe Parker, from Queen Mary’s School of Biological and Chemical Sciences and first author on the paper.

“We know natural selection is a potent driver of gene sequence evolution, but identifying so many examples where it produces nearly identical results in the genetic sequences of totally unrelated animals is astonishing.”

Nature is the most prestigious peer-reviewed science journal. This is solid material.

There is an earlier article from 2010 in New Scientist that talked about one of the previous genes that matched for hearing capability.

Excerpt:

Bats and dolphins trod an identical genetic path to evolve a vital component of the complex sonar systems they use to pursue and catch prey.

The finding is unusual, because although many creatures have independently evolved characteristics such as eyes, tusks or wings, they usually took diverse genetic routes to get there.

Analysis of a specific gene has now demonstrated that although bats live in air and dolphins in water, where sound travels five times faster, they independently evolved a near-identical gene that allows them to accept high-frequency sound in the ear – vital for sonar.

The gene makes prestin, a protein in hair cells of the cochlea, which is the organ in the inner ear where sonar signals are accepted and amplified. Prestin changes shape when exposed to high-frequency sound, and this in turn deforms the fine hair cells, setting off an electrical impulse to the brain. So the protein has the important jobs of detecting and selecting high-frequency sounds for amplification.

When researchers examined the molecular structure of the prestin gene from a range of animals, they found that the variants in echolocating bats and dolphins were virtually indistinguishable.

Indistinguishable genes in animals that don’t share a common ancestor? Maybe a better explanation for the evidence we have is – common designer.

Filed under: News, , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

First black president: unemployment rate up for blacks and women since Obama’s election

From CNS News.

Excerpt:

 Unemployment for both women and African-Americans is higher today than it was when President Barack Obama first took office in 2009, according to federal government data.

Despite an economy that has technically been in recovery since June of 2009, many economic indicators are the same or worse than when President Obama gave his first address to a Joint Session of Congress in February 2009.

“We will rebuild, we will recover, and the United States of America will emerge stronger than before,” Obama said in that speech.

However, employment for African-Americans and women has not recovered and, in fact, is worse today than it was when Obama said those words.

At the end of January 2009, 12.7 percent of African-Americans were unemployed. Four years later, January 2013, the situation was worse, with unemployment higher at 13.8 percent.

Further, an additional 1.2 million African-Americans had left the workforce entirely during the same time period, with the number of those reported as not in the workforce rising from 10.3 million in January 2009 to 11.5 million in January 2013.

People not in the labor force are those who are younger than the retirement age who are unemployed and no longer looking for work, indicating they have either given up looking for work or gone into early retirement.

For women, the story is not much better. In January 2009, 6.9 percent of women in America were unemployed. By January 2013, 7.8 percent of women were unemployed.

He’s had four years, and his new plan to raise the minimum wage is not going to help younger workers, unskilled workers or minority workers.

Filed under: News, , , , , , , , , , , , , , , , , , , , , , , ,

Obama’s minimum wage hike will raise unemployment, especially for younger workers

Obama is proposing a hike to the minimum wage rate, so that employers are forced to pay the youngest and/or least skilled workers more money than they are worth. Will this lower unemployment?

When considering what economic policies to adopt, it is not enough to do what feels good. Liberals and conservatives agree that it is good to help the poor. Liberals think that higher minimum wage rates help the poor, and conservatives think that lower minimum wage rates help the poor. This is not a topic that is up for debate, though, because economists across the left-right spectrum agree on this one.

Take a look at this post from Harvard University economist Greg Mankiw.

He writes:

My favorite textbook covers business cycle theory toward the end of the book (the last four chapters) precisely because that theory is controversial. I believe it is better to introduce students to economics with topics about which there is more of a professional consensus. In chapter two of the book, I include a table of propositions to which most economists subscribe, based on various polls of the profession. Here is the list, together with the percentage of economists who agree:

    1. A ceiling on rents reduces the quantity and quality of housing available. (93%)
    2. Tariffs and import quotas usually reduce general economic welfare. (93%)
    3. Flexible and floating exchange rates offer an effective international monetary arrangement. (90%)
    4. Fiscal policy (e.g., tax cut and/or government expenditure increase) has a significant stimulative impact on a less than fully employed economy. (90%)
    5. The United States should not restrict employers from outsourcing work to foreign countries. (90%)
    6. The United States should eliminate agricultural subsidies. (85%)
    7. Local and state governments should eliminate subsidies to professional sports franchises. (85%)
    8. If the federal budget is to be balanced, it should be done over the business cycle rather than yearly. (85%)
    9. The gap between Social Security funds and expenditures will become unsustainably large within the next fifty years if current policies remain unchanged. (85%)
    10. Cash payments increase the welfare of recipients to a greater degree than do transfers-in-kind of equal cash value. (84%)
    11. A large federal budget deficit has an adverse effect on the economy. (83%)
    12. A minimum wage increases unemployment among young and unskilled workers. (79%)
    13. The government should restructure the welfare system along the lines of a “negative income tax.” (79%)
    14. Effluent taxes and marketable pollution permits represent a better approach to pollution control than imposition of pollution ceilings. (78%)

And that’s not all. There have actually been studies done on this, and they echo the consensus.

Consider this 2009 article from the Wall Street Journal that discusses some of the studies.

Excerpt:

Earlier this year, economist David Neumark of the University of California, Irvine, wrote on these pages that the 70-cent-an-hour increase in the minimum wage would cost some 300,000 jobs. Sure enough, the mandated increase to $7.25 took effect in July, and right on cue the August and September jobless numbers confirm the rapid disappearance of jobs for teenagers.

he September teen unemployment rate hit 25.9%, the highest rate since World War II and up from 23.8% in July. Some 330,000 teen jobs have vanished in two months. Hardest hit of all: black male teens, whose unemployment rate shot up to a catastrophic 50.4%. It was merely a terrible 39.2% in July.

[...]Two years ago Mr. Neumark and William Wascher, a Federal Reserve economist, reviewed more than 100 academic studies on the impact of the minimum wage. They found “overwhelming” evidence that the least skilled and the young suffer a loss of employment when the minimum wage is increased.

[...]State lawmakers are also at fault. At least 10 states have raised their minimum wages above the federal level in the last decade, largely in response to union lobbying and in the name of helping the working poor. Four states with among the highest wage rates are California, Massachusetts, Michigan and New York. Studies have shown in each case that their wage policies killed jobs for teens. The Massachusetts teen employment rate sank by one-third when the minimum wage rose by 88% between 1995 and 2008.

According to new numbers from the Labor Department, in 2008 only 1.1% of Americans who work 40 hours a week or more even earned the minimum wage. In other words, 98.9% of 40-hour-a-week workers earn more than the minimum. The data also show that teenagers are five times more likely to earn the minimum wage than adults. Minimum wage jobs are nearly all first-time or part-time jobs, and an estimated two of every three minimum wage workers get a pay raise within a year on the job.

You can read more about minimim wage and unemployment from my second favorite economist Walter Williams, and from my first favorite economist Thomas Sowell. This is an issue that matters to them, because they are both black, and blacks are the hardest hit by these policies – even though most blacks support these policies by voting overwhelmingly for socialists.

This issue is simple and straightforward. To help the poorest and least experienced workers, we have to take away any regulations that separate them from their first employer. From there, they will gain the experience to move up. Nobody stays in a minimum wage job all their lives. They move up when they get experience and a resume. That’s why that first job is so crucial. We have to make it easier for employers to get employees started in their careers.

Filed under: Polemics, , , , , , , , , , , , , , , , , , , , ,

Is a higher minimum wage good for younger workers and minority workers?

Let’s take a look at the data, and leave the feelings and rhetoric out of it.

Excerpt:

Battles are brewing in New York, California, Minnesota and the nation’s capital over hiking minimum wages, with Democrats having the votes to ram through hikes in all four cases.

These politicians are claiming the moral high ground, saying it will help the poorest in our communities. Don’t be fooled.

Hiking the minimum wage hurts — not helps — the lowest-paid workers, especially young black men. A 10% hike in the minimum wage causes a 2.5% drop in employment among young white men without a high school diploma and a staggering 6.5% drop among young black men without that degree.

Young black males get clobbered three times as hard because they tend to work in the fast-food and restaurant industries, where any increase in labor costs produces layoffs.

[...]Only 5% of American workers earn the federal minimum, according to the latest government data, compared with 13% in 1979. Minimum wage workers are largely first-time workers. They are learning what all of us learn on our first job: to be prompt, dress appropriately, do what the boss asks and be reliable.

First-time workers face the biggest risk of being priced out of the job market by a minimum wage hike. They aren’t worth much to an employer when they start working. They don’t have the skills.

When the government increases the minimum wage, it’s more expensive to hire first-timers. According to David Neumark and J.M. Salas, University of California economists, and William Wascher of the Federal Reserve Board, “minimum wages tend to reduce employment among teenagers.”

New York needs that like a hole in the head. Teen unemployment in New York City hit a stunning 35.6% last August, compared with 23.7% nationwide.

All teens are harmed, but black male teenagers are hit hardest by minimum wage hikes, according to a 2011 study by labor economists David Macpherson and William Evans. Unemployment among young black males is currently 29%, double the rate for young white males.

Macpherson and Evans found the reason is that one out of three young black men without a high school diploma works in the restaurant/fast-food industry, where profit margins are thin. Any labor-cost hikes compel these businesses to cut their workforce.

On top of the threatened minimum-wage hikes, businesses now face the certainty of ObamaCare, which will impose the largest government-mandated labor-cost hike in history.

In 2014, employers with 50 or more full-time workers will be required to provide a package of “essential health benefits” or pay a penalty. This government mandated package will add a whopping $1.79 an hour to the cost of hiring an employee. Maybe that’s affordable when you’re hiring lawyers or bankers, but not for hiring unskilled first-time workers.

When considering what economic policies to adopt, it is not enough to do what feels good. Liberals and conservatives agree that it is good to help the poor. Liberals think that higher minimum wage rates help the poor, and conservatives think that lower minimum wage rates help the poor. This is not a topic that is up for debate, though, because economists across the left-right spectrum agree on this one.

Take a look at this post from Harvard University economist Greg Mankiw.

He writes:

My favorite textbook covers business cycle theory toward the end of the book (the last four chapters) precisely because that theory is controversial. I believe it is better to introduce students to economics with topics about which there is more of a professional consensus. In chapter two of the book, I include a table of propositions to which most economists subscribe, based on various polls of the profession. Here is the list, together with the percentage of economists who agree:

    1. A ceiling on rents reduces the quantity and quality of housing available. (93%)
    2. Tariffs and import quotas usually reduce general economic welfare. (93%)
    3. Flexible and floating exchange rates offer an effective international monetary arrangement. (90%)
    4. Fiscal policy (e.g., tax cut and/or government expenditure increase) has a significant stimulative impact on a less than fully employed economy. (90%)
    5. The United States should not restrict employers from outsourcing work to foreign countries. (90%)
    6. The United States should eliminate agricultural subsidies. (85%)
    7. Local and state governments should eliminate subsidies to professional sports franchises. (85%)
    8. If the federal budget is to be balanced, it should be done over the business cycle rather than yearly. (85%)
    9. The gap between Social Security funds and expenditures will become unsustainably large within the next fifty years if current policies remain unchanged. (85%)
    10. Cash payments increase the welfare of recipients to a greater degree than do transfers-in-kind of equal cash value. (84%)
    11. A large federal budget deficit has an adverse effect on the economy. (83%)
    12. A minimum wage increases unemployment among young and unskilled workers. (79%)
    13. The government should restructure the welfare system along the lines of a “negative income tax.” (79%)
    14. Effluent taxes and marketable pollution permits represent a better approach to pollution control than imposition of pollution ceilings. (78%)

And that’s not all. There have actually been studies done on this, and they echo the consensus.

Consider this 2009 article from the Wall Street Journal that discusses some of the studies.

Excerpt:

Earlier this year, economist David Neumark of the University of California, Irvine, wrote on these pages that the 70-cent-an-hour increase in the minimum wage would cost some 300,000 jobs. Sure enough, the mandated increase to $7.25 took effect in July, and right on cue the August and September jobless numbers confirm the rapid disappearance of jobs for teenagers.

he September teen unemployment rate hit 25.9%, the highest rate since World War II and up from 23.8% in July. Some 330,000 teen jobs have vanished in two months. Hardest hit of all: black male teens, whose unemployment rate shot up to a catastrophic 50.4%. It was merely a terrible 39.2% in July.

[...]Two years ago Mr. Neumark and William Wascher, a Federal Reserve economist, reviewed more than 100 academic studies on the impact of the minimum wage. They found “overwhelming” evidence that the least skilled and the young suffer a loss of employment when the minimum wage is increased.

[...]State lawmakers are also at fault. At least 10 states have raised their minimum wages above the federal level in the last decade, largely in response to union lobbying and in the name of helping the working poor. Four states with among the highest wage rates are California, Massachusetts, Michigan and New York. Studies have shown in each case that their wage policies killed jobs for teens. The Massachusetts teen employment rate sank by one-third when the minimum wage rose by 88% between 1995 and 2008.

According to new numbers from the Labor Department, in 2008 only 1.1% of Americans who work 40 hours a week or more even earned the minimum wage. In other words, 98.9% of 40-hour-a-week workers earn more than the minimum. The data also show that teenagers are five times more likely to earn the minimum wage than adults. Minimum wage jobs are nearly all first-time or part-time jobs, and an estimated two of every three minimum wage workers get a pay raise within a year on the job.

You can read more about minimim wage and unemployment from my second favorite economist Walter Williams, and from my first favorite economist Thomas Sowell. This is an issue that matters to them, because they are both black, and blacks are the hardest hit by these policies – even though most blacks support these policies by voting overwhelmingly for socialists.

This issue is simple and straightforward. To help the poorest and least experienced workers, we have to take away any regulations that separate them from their first employer. From there, they will gain the experience to move up. Nobody stays in a minimum wage job all their lives. They move up when they get experience and a resume. That’s why that first job is so crucial. We have to make it easier for employers to get employees started in their careers.

Filed under: News, , , , , , , , , , , , , , , , , , ,

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