Wednesday, June 28, 2017

Raising the Minimum Wage Unfortunate Unintended Consequences

News
The invisible hand, like it or not, controls 'the show' called capitalism. Many believe capitalism should be replaced by system more sympathetic to humanity. Saying that I don't disagree neither makes me conservative or liberal. I am neither. Today's politics or political rhetoric (horseshit) can only bee seen as two sides of the same coin when viewed in terms of long term market trends. In my opinion, we must learn to live with capitalism until technology renders it obsolete. While obsolescence is inevitable, it will take a significant jump in technology in terms of how humanity transforms it resources to support life.

With that said, Seattle's attempt to legislate fairness within a society struggling to make ends meet is wrestling with a predictable outcome at least in terms of the invisible hand. Long story short, a higher minimum wage, while benefiting some, has hurt many others as jobs and hours worked have been reduced within the context of global economic slowdown the few recognize.

The solution to the problem, unfortunately, will not come from public policies. Public policies, even when created with good intentions, often makes things worse. Why? Humans have a terrible track record of managing the business cycle!

The sooner the politicians understand this point, the faster the solutions come. Those solutions will continue to elude us until proper education of all youth is given a full priority. That never seems to happen because capitalism tendency to concentrate wealth over time.

Headline: That new Seattle study is a big problem for fans of a higher minimum wage — or is it?

No two ways about it: The University of Washington’s new study of the jobs effect of Seattle’s higher minimum wage spells trouble for supporters of minimum wage increases.

That’s not merely because the study released Monday found a steep reduction in jobs and income among the city’s lowest-paid workers following the minimum wage raise to $13 an hour in January 2016, on its way to a nation-leading $15 for most employers within four years. It also found a strong increase in employment of workers earning more than $19 an hour. In the restaurant sector, for instance, the study found a 10.7% reduction in jobs paying less than $19, but no overall change in employment, implying that jobs paying more than $19 increased by 20%.


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