Sunday, April 24, 2016

Capitalism and the Minimum Wage: “I Got Mine, Screw You.” - by Fred Reed

To understand the arguments of capitalists against the minimum wage, follow the money. In all the thickets of pious reasoning about the merits of capitalism and the market, and of freedom of contract, and of allowing this marvelous mechanism to work its magic, and of what Adam Smith said, the key is the dollar. The rest is fraud. Carefully ignored is the question that will be crucial in coming decades: What to do about an ever-increasing number of people for whom there is no work…….
(Full text at link below)
……People of IQ 130 and up tend to assume unconsciously–important word: “unconsciously”–that you can do anything just by doing it. If they wanted to learn Sanskrit, they would get a textbook and go for it. It would take time and effort but the outcome would never be in doubt. Yes, of course they understand that some people are smarter than others, but they often seem not to grasp how much smarter, or what the consequences are. A large part of the population can’t learn-much of anything. Not won’t. Can’t. Displaced auto workers cannot be retrained as IT professionals.
Few of the very bright have have ever had to make the unhappy calculation: Forty times a low minimum wage minus bus fare to work, rent, food, medical care, and cable. They have never had to choose between a winter coat and cable, their only entertainment. They don’t really know that many people do. Out of sight, out of mind.
Cognitive stratification has political consequences. It leads liberals to think that their client groups can go to college. It leads conservatives to think that with hard work and determination…..
It ain’t so. An economic system that works reasonably well when there are lots of simple jobs doesn’t when there aren’t. In particular, the large number of people at IQ 90 and below will increasingly be simply unnecessary. If you are, say, a decent, honest young woman of IQ 85, you probably read poorly, learn slowly and only simple things,. Being promoted, or even hired, requires abilities that you do not have. This, plus high (and federally concealed) unemployment allows employers to pay you barely enough to stay alive. Here is the wondrous working of the market.
As the stock market reaches new highs and the nation’s wealth concentrates in fewer and fewer hands, we hear that a rising tide floats all boats. This is fine if you have a boat. Maybe it only looks as though capitalists flourish while the middle class sinks and the welfare rolls grow and kids have to live at home and they will have no retirement. Well, some boats leak, I guess.
When the theorists of free enterprise imagine that our dim-witted young lady should be permitted the freedom to sell her labor for what it is worth, they do not worry that her labor isn’t worth enough to feed her. Some who say this simply do not understand what her life is going to be if she is paid what her labor is worth. Others, with the lack of empathy that characterizes conservatives, don’t care. If you look at the godawful conditions of their employees in the sweatshops of, say, Bangladesh, you will see that not caring is common. Let them eat cake.
The question arises: What does the country do with the large and growing number of people whose labor is worth nothing? Or, perhaps more accurately, whose labor isn’t needed? We see this in the cities today. An illiterate kid in Detroit has no value at all in the market for labor. Assuming that he wants to work, a questionable assumption, what then? Endlessly expanding welfare? What about the literate, averagely intelligent kid for whom there are no jobs? If people working in McDonald’s can barely live on their wages, and strike, or the state institutes a higher minimum wage, McDonald’s will automate their jobs, is automating their jobs, and conservatives will exult—the commie bastards got what they asked for.
This is capitalism in its perfection.
Full text at:  Capitalism and the Minimum Wage: “I Got Mine, Screw You.” - The Unz Review