John Edwards Continues To Be A Foolish Tool

By Erick Posted in Comments (16) / Email this page » / Leave a comment »

Just a regular reminder that John Edwards is a charlatan and a fool. He's decided to tweet little factoids like this one:

Did you know? If the min.wage was increased by $1 in 2001, 900,000 people would not be living in poverty.

Really John?! Is that so? Because the government ups the wage by $1.00 an hour, magically these 900,000 people get out of poverty?

That craptacular brand of thinking ignores the very basic Econ 101 fact that raising the minimum wage causes a lot of people to either lose jobs or not get jobs. So, I guess you're okay with the unemployed, just not the employed poor.

Or are you going to New Deal us a mandate that everyone get a job? Maybe cleaning your 20,000 sq. ft.

What. A. Tool.


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John Edwards Continues To Be A Foolish Tool 16 Comments (0 topical, 16 editorial, 0 hidden) Post a comment »

John Edwards is not a tool. Tools are useful, tools have a purpose. Edwards is just an idiot playing to idiots.

His self importance is only out matched by arrogance. The arrogance that we, the people, will buy what ever he has to say. I am just sick of him insulting our collective intelligence.

and slick operations.

from the NYT today:
"The $1.3 million the group raised and spent in 2005 paid for travel, including Mr. Edwards’s “Opportunity Rocks” tour of 10 college campuses, consultants and a Web operation. In addition, some $540,000 went for the “exploration of new ideas,” according to tax filings.

Nonprofit groups can engage in political activities and not endanger their tax-exempt status so long as those activities are not its primary purpose. But the line between a bona fide charity and a political campaign is often fuzzy, said Marcus S. Owens, a Washington lawyer who headed the Internal Revenue Service division that oversees nonprofit agencies"
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"Enlightened statesmen will not always be at the helm." -- James Madison

John Edwards is not a tool. Tools are useful,...

That is hilarious, though I might have to quibble a little. He is a tool to the right because he makes useful statements that, in essence, debunk the Democrat(ic) platform. :-)

I am just sick of him insulting our collective intelligence.

Absolutely, they speak in platitudes and various types of class envy as if we are all so stupid and can't see through the smoke and mirrors. Sometimes, I feel like I am trying to reason with a spoiled child that is mad because I won't play their game.

Peter R - Praetorium.org

Logically with that kind of thinking, Edwards should advocate the raising of the minimum wage to $100.00 per hour. Not only would poverty be ended... but we'd all be rich like Johnny boy.

Sorry, no magic wand from the government will help the poor, the middle class, or the rich... except to wave that wand and get government out of the economy regulating business.

Jack
The World's Ruined

in order to study wealth and prosperity.

Like "working" for a hedge fund to find out about poverty.

Ask not what you can do for your country, ask what your country can do for you. Washington Elected Elite

Econ 101 to some more advanced versions. Econ is not that simple and whether or not I agree with your premise please remember Economics is VERY COMPLICATED.

So I will go into a reason why raising the minimum wage may NOT hurt the American worker. I will say I believe a large increase in minimum wage over a short period of time will do a lot of damage. I don't expect everyone to understand all the terms I am about to use so if anyone has a problem just ask and I will do my best explaining.

Minimum Wage Intro

Ok first we must remember the minimum wage rate is specified in NOMINAL terms not in RELATIVE terms. Basically what the minimum wage was almost 10 years ago was much higher in relative terms do to inflation. In 1997 was the last time the minimum wage was changed, which was the time of one of my first jobs, fastfood, and a time where the U.S. experienced tremedous growth.

Next we must remember that different states cost of living is different than others. In Indiana the minimum wage can buy much more than it can in New York.

Finally before going into more detail we must also remember that the federal minimum wage is different from the State mandated minimum wage. Some states have higher minimum wages so an increase in federal will do little to change the economy in the states if it is less than what the state has mandated.

Minimum Wage Costs and Benefits

Minimum Wage Costs and Benefits

First we must take into account what businesses are most likely going to be hurt by a rise in minimum wage and what businesses could be helped.

Obviously low-paying jobs like at fastfood and other areas like that could be hurt. Though in areas like Used Car businesses and others a rise in minimum wage could lead to a greater ability to buy used cars and increase jobs. (I am trying to keep this somewhat short).

This is do to scale and substitution effects. Substitution effects stem from changes in how firms choose to produce, while scale effects are rooted in consumer adjustments to change in product price. An increase in minimum wage can lead to different effects on product prices among different parts of covered sectors. Not all areas of business are covered for minimum wage so it is possible that scale effects of the increased wage will serve to INCREASE employment among some firms in the covered sectors.

In the end a big part of whether or not a minimum wage increase will be effective will come down to where the deadweight loss appears.

Final Explaination

Finally I will explain 2 things

1) Different studies have produced different results on what happened the last time the minimum wage was changed. Some studies show no effect on employment and some showed a decline in the probability of employment implied that the labor demand curve facing these workers has an own-wage elasticity of roughly -.15. (Now if you all haven't realized yet I am using some book information because I don't remember all these facts off the top of my head).

2) As I mentioned earlier deadweight loss. Deadweight loss is usually in terms of what the effect can be caused do to tax increases, but it can be applied the same way here. In many situations it is unlikely for Employers to raise prices, for example in heavily elastic demand markets, because if they do they will lose a lot more business so instead they lose profits. Employers many times can't afford to cut workers because that will decrease service and productivity. But, in some cases it will force Employers to raise prices. A large minimum wage increase over a very short period of time will likely cause this. But again it is still uncertain of what will happen.

----------------------------------------------

Most economists do believe minimum wages have negative effects and I agree with them to the most part. Raising the minimum wage $1.00 may hurt the economy, but at the same time if most businesses pay above the minimum wage it will have little impact or may help workers by forcing the deadweight loss on employers.

drone decides when and how much to raise the minimum wage? See that's the problem, and the reason the government needs to keep it's stinking nose out of setting wages - something the market does quite well.
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"Enlightened statesmen will not always be at the helm." -- James Madison

is kinda like not having minimum wage.

That economics isn't so simple so don't make it out to be. The fact is that Reaganomics was designed to say that at a certain tax rate the government will gain more income than at other tax rates. If you tax people 100% no one will work so government will receive no money and if you tax people at 0% the government will still receive no money. Who is the drone to decide what is the best rate?

WRONG by sdh

"If you tax people 100% no one will work so government will receive no money and if you tax people at 0% the government will still receive no money. Who is the drone to decide what is the best rate?"

That is assuming the goal of government is to maximize the amount of revenue it collects. The goal of government is to MINIMIZE the amount of revenue it collects and still provide the MINIMUM services that we need as a society.

for a lot of years, though not directly concerned with MW. The State of Alaska is far and away the State's largest employer and our wages set the wage pattern for the rest of the State outside Davis-Bacon construction and the oil industry. Both federal and State MW, State is much higher, are pretty much irrelevant here; it is the entry wage in fast foods, video stores, movie houses, some retain and the like - mostly kid work. It is also the legal floor in restaurants and bars, but those people really live off tips and what they can steal. State wages and benefits set the standard for clerical, technical, professional, and semi-skilled and skilled trades maintenance work wages and benefits.

For the more skilled occupations, recruitment and retention drove our actions. If we could keep our positions filled with reasonably competent people, we were paying enough. If we were losing employees to other employers or just couldn't fill positions, we usually needed to pay more. Our usual tool was salary surveys to see what other employers were paying for a given field, though we didn't slavishly adhere to them; there are too many distortions: some jobs are solely in the public sector and different employers have different political and bargaining dynamics - on the West Coast there's always the California factor where everyone either makes an obscene amount of money or works under the table. Also, the private sector is very uncooperative about sharing salary and benefit information, though always eager to scream about what we did to their competive wage position. There are also other factors such as location differentials and certain general shortages, e.g., nurses and other healthcare workers and any kind of law enforcement employee; America is pretty much out of people who can pass a background check and a pee test. But fundamentally, if we could get employees, we were paying enough, and I have gone so far as to bring in the stacks of applications to the table and tell the union, "these are the people who want your jobs."

More germane to the MW issue, the lower level jobs are vexatious. First, most state laws require integrated salary schemes that allow for career progression and require "like work for like pay," so what you do at the bottom impacts all the levels above it, at least withing general occupational fields. But the real issue for a government is that you really only have a choice of what budget you pay your lower level people out of: your programmatic operating budget or your health and social services, law enforcement, and corrections budget.

Building custodians are a good example. In the urban areas, I could easily contract with the private sector for that work. First, I don't like contracting out for ongoing government work because it is inevitably a cesspool of corruption, and for most of my career I had enough influence that this was generally the State's policy, though we would threaten the unions with it if they got too greedy. Secondly, and more importantly, those contractors would pay at or slightly above the MW and hire the scum of the Earth over which we had limited control. At those wages, any but young people still living with parents are a social welfare problem and all to frequently they or their children are law enforcement and corrections problems. I'd much rather pay a custodian $30K-$40k a year to keep my buildings clean than pay the same amount a year to keep him locked up.

This is where most of the arguments analogizing past immigration waves to the current situation fall apart. There was no social welfare system in the past; an immigrant had to find a way to get by and get ahead. An unemployed or low wage worker these days can be comfortably uncomfortable on other people's money these days.

The MW piece of the Fair Labor Standards Act was primarily enacted to attempt to break the vicious cycle of poverty in The South caused by the vast surplus of unskilled/low-skilled agricultural workers. All attempts to deal with it through industrialization had failed because the wages and conditions remained so low because of the readily available replacements from the agricultural labor pool, or at least the threat of replacement. Race was also an element, since the usual threat was to replace the badly treated White millworkers with even worse treated Black millworkers. The FLSA and draconian New Deal agriculture policy did a remarkably good job of raising the general standard of living in The South but at the expense of a diaspora of those agricultural workers, many of which, especially the Blacks, wound up in enclaves of poverty in or near the Country's cities. We now have the same issue with illegal aliens as The South had with surplus agricultural labor; they keep the wages for entry level jobs so low that the lower rungs of American citizens, many of them the decendents of the agricultural diaspora, are much better off on welfare than they are working for wages set by illegals.

If American business needs to control costs to stay competitive in international markets, it can start by pressuring the government to reform the federal tax system and remove the cost of the income tax from the price of everything made in America. The current emphasis on creating labor surplus thru immigrants causes the rest of the Country to have to subsidize the livelihood a everyone who is forced out or opts out of the low wage jobs held or competed for by illegals and low-skilled immigrants.

In Vino Veritas

handle setting wages in today's economy? This isn't the New Deal South and labor is much more 'liquid' today. The government does a poor job at assessing the ramifications of MW wage increases because the real economy is very difficult to model accurately.

Your comments regarding government contracting are interesting - I had very different experiences. I always tried to contract work out to the 'civilian' sector since I could hold those contractors accountable far easier than I could the GS slackers that filled many government positions. Over 23 years, I found this true in quite a few areas, including engineering, manpower, personnel, procurement, instructors, maintenance and others.

The more burdensome government intervention becomes, and it's currently at obscene level here in the US, the more creative businesses and folks become at getting around the rules. When I first moved to Iceland, I was amazed at how expensive goods and services were for both individuals and businesses. After living there a while, I realized there was an enormous barter economy - especially between businesses (I'll do your printing free and you provide my phone/internet service for free ect). This was a result of the burdensome taxes and high minimum wage laws - much of the economy was off-the-books - many folks were 'unemployed' but worked off-the-books sometimes for several employers.

The federal government does a poor job of self-containing itself. It tends to grow in size and increase its scope of influence unless it is routinely pruned back by the citizens. Governments meddlesome influence in business is one area that needs plenty of pruning.
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"Enlightened statesmen will not always be at the helm." -- James Madison

as I'd seriously like to discuss it. Been out on the boat all day, tired, and had my fair share of adult beverage once we got back, so I'll respond when I'm a little more lucid. Got fish though! And personal use King Crab season is only a week away.

In Vino Veritas

except that we do not live in a textbook. In the real world minimum wage hikes merely drive up inflation so that poor people are no better off. But it also causes some slow down in employment for the least skilled (or a substitution by illegal immigrants), so they are worse off.

"Nothing works like freedom, Nothing succeeds like liberty"
Kyle

we would all be rich. Yippeeee!!!

 
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