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bobbyw24
05-07-2010, 05:50 AM
By Jacob Hornberger

Liberals say that they love the poor, needy, and disadvantaged. Unfortunately, however, the economic philosophy that liberals favor constitutes a direct assault on the economic well-being of the poor, along with nearly everyone else in society.

Liberals claim to combat poverty in two principal ways.

First, they use the force of government (e.g., income taxes) to take money from those who have earned it in order to give it to the poor.

Second, they restrict people's use of their property to enable the poor to have access to such property.

What liberals fail to understand, however, is that the very means they choose to combat poverty -- socialism and interventionism -- actually exacerbate the problem that they claim to address. Their war on poverty hurts the very people they say they are trying to assist.

In proposing welfare-state programs, by necessity liberals always make an important assumption. They assume that there is wealth in society. After all, if there is no wealth then what good would welfare-state policies do? The welfare state operates on the assumption that there are people who are earning wealth or have accumulated wealth. Those are the people from whom the government takes money in order to redistribute it to the poor.

Let's consider a hypothetical case based on science fiction. Astronomers discover that an inhabitable planet is hurtling toward our solar system and will soon join the other planets in orbit around the sun. Faced with overcrowding of its prisons, the federal government decides to exile 50,000 prisoners on a spaceship to the planet. Everyone is given six months of supplies on which to survive -- food, water, and clothing -- and nothing else.

When the prisoners arrive on the planet, they call into existence a federal government, democratically elected. Federal officials are empowered to do everything and anything they can to combat the extreme poverty that is immediately facing society.

http://www.campaignforliberty.com/article.php?view=832

adolescents
05-07-2010, 06:14 AM
Liberals aren't very liberal when it comes to freedom of speech.

Exibit A.
http://wheretruthlies.com/Tipper/TipperBig2.jpg

YouTube - kids of the black hole!!!!! (http://www.youtube.com/watch?v=hMDEJOoFw1c)

Todd
05-07-2010, 06:16 AM
Bobby...

I sent one of his articles about the minimum wage to a friend of mine earlier in the week and here was his response.


What about the 1930's & 1940's. There was no wage control for uneducated fruit pickers in California (formerly tenant farmers in Oklahoma, Kansas, Nebraska)? When mechanization ended their only source of income and livelihood (tenant farming), they lost homes and income and were forced to pack up everything and move to California where there was a glut of unskilled labor. The orchard and plantation owners were able to fix prices. The Okies barely made enough to survive. Sometimes, they'd pick less than they spent on food at the company-owned store. Then they were in debt and couldn't leave. Thousands of Okies starved to death. Would a fixed wage or minimum wage have prevented that? In the absence of such oversight and control, with a free-economy (for the landowners) they paid peanuts and people literally starved to death. Maybe this author Hornbeger would say the Okies could have stayed in Oklahoma. But the dust bowl and mechanization eliminated their jobs. They had no income, no homes, and very little hope of a new source of income. They would starve in Oklahoma, or starve in California.

I don't think Hornberger exhibits a very accurate picture of what happened to poor, unskilled laborers in the past when the government didn't impose some checks on employers.

This wasn't my area of expertise, so I didn't really know exactly how to respond except to tell him that the outcomes of such measures are much different than what was hoped for. Basically along the lines of the quote:

Regardless how beautiful the plan, sometimes you have to look at results?

bobbyw24
05-07-2010, 06:21 AM
Bobby...

I sent one of his articles about the minimum wage to a friend of mine earlier in the week and here was his response.

This wasn't my area of expertise, so I didn't really know exactly how to respond except to tell him that the outcomes of such measures are much different than what was hoped for. Basically along the lines of the quote:

Regardless how beautiful the plan, sometimes you have to look at results?

Todd:

I work for a welfare agency and have done so for 17 years. All of my clients are poor.

When I started, the mantra was "Empowerment"--get the poor people empowered with jobs and homes and they will be middle-class taxpayers no longer dependent upon the government.

However, there was a change a few years back from Empowerment to "Entitlement"--what can the government do for me? What does the government owe me: housing, medical care, jobs, transportation.

Very disheartening.

Todd
05-07-2010, 06:29 AM
Todd:

I work for a welfare agency and have done so for 17 years. All of my clients are poor.

When I started, the mantra was "Empowerment"--get the poor people empowered with jobs and homes and they will be middle-class taxpayers no longer dependent upon the government.

However, there was a change a few years back from Empowerment to "Entitlement"--what can the government do for me? What does the government owe me: housing, medical care, jobs, transportation.

Very disheartening.

I know the system very well.
When I was 22 years old my wife and I were struggling with a child and living in a one bedroom apartment. We were working two part time jobs and trying to go full time to college. We were just trying to get by and I tried to apply for food stamps just to get through the last year until I got a job. I was denied because we made "too much money". I learned right there and then that in order to get a boost, I would have to basically be a loaf in order to get the aid. Your right the system isn't there to help anyone become an independant citizen. It's to enable an entitlement class. And that was around 1993.


I like Hornberger's points about the minimum wage, but I probably would prefer someone with a bit more skill in arguing against it. His last couple of articles on the subject haven't been very compelling to sway me much less my liberal friends.

Bruno
05-07-2010, 06:37 AM
I know the system very well.
When I was 22 years old my wife and I were struggling with a child and living in a one bedroom apartment. We were working two part time jobs and trying to go full time to college. We were just trying to get by and I tried to apply for food stamps just to get through the last year until I got a job. I was denied because we made "too much money". I learned right there and then that in order to get a boost, I would have to basically be a loaf in order to get the aid. Your right the system isn't there to help anyone become an independant citizen. It's to enable an entitlement class. And that was around 1993.

.

I had almost the exact same experience in Phoenix in 1996. One month we got about $280 in food stamps. The next month I worked a few more shifts, reapplied, and was denied. Same lesson dawned on me, but I decided to keep working harder instead of loafing (as did you, I'm sure).

bobbyw24
05-07-2010, 06:39 AM
probably would prefer someone with a bit more skill in arguing against it. His last couple of articles on the subject haven't been very compelling to sway me much less my liberal friends.

Here's another author's take



How To Help Low-Wage Workers
(Without Raising the Minimum Wage)

by James Ostrowski


This article was originally published by Free New York as Policy Report No. 5.

The minimum wage law is in the news again, largely because the Democrats have misinterpreted the election as something other than a protest against the Iraq War and one-party rule.

Why do politicians love to propose increases in the minimum wage?

1. It costs them nothing other than the ink and paper the bill is printed on.
2. The vast majority of the law’s supporters simply do not understand the technical economic reasons why the law fails to help the working poor.
3. Many people do not understand what the law actually means.
4. Powerful special interests favor the minimum wage for reasons unrelated to the welfare of low-wage workers.
5. The minimum wage promises to give us something for nothing.

What the Law Actually Means

A minimum wage law does not force an employer to hire or retain a worker at the minimum wage. In responding to a rate increase, the employer is perfectly free to fire any worker paid less than the new minimum wage and is certainly free to abstain from hiring new workers at the new minimum wage. Because many employers initially do in fact choose to raise wages instead of laying people off, we lose sight of the fact that this is purely at the employer’s discretion. Thus, the stated aim of the law is only achieved at the option of the employer whose hands the law sought to tie in the first place. The employer retains the option of hiring workers or retaining workers and paying them the increased wage, or firing them and replacing them with a smaller number of more highly paid workers and/or replacing workers with technology. The "greedy" capitalist gets the last move.

Thus, we might call this policy the optional minimum wage law to more realistically describe its legal impact. On the other hand, the law absolutely forbids the employment of workers at less than the minimum wage. There is no option there. Thus, again in the interest of using more accurate terminology, we could call the law a mandatory unemployment law. If the employer deems a worker’s productivity to be less than the newly required wage, and chooses not to retain that worker for purely sentimental reasons, it is mandatory that that worker be fired.

The Minimum Wage Law Causes Unemployment

This discussion of the legal ramifications of the minimum wage laws leads directly to an economic analysis of the law. The law will cause all those workers whose productivity falls below the new wage rate to be fired. Keep in mind that raising the minimum wage imposes new costs on the employer for Social Security, unemployment insurance and other costs. All these costs and not just the marginal wage increase will be considered by the employer in determining whether and which workers to fire. Also, it is a mistake to assume that merely because a certain worker is retained under the new law, that such retention will be permanent. The sudden firing of a worker can cause disruption that outweighs the marginal lost profits from temporarily keeping a worker who produces less gross revenue than he or she is paid. Rather, the true effects of the law are best seen in the longer term. For example, where have all the theater ushers gone? They were not all fired at once but gradually disappeared as it became more expensive to hire them.

There are studies that purport to disprove with statistics what economic logic tells us: the minimum wage causes unemployment. One study concluded that employment in fast food restaurants increased when the minimum wage increased. However, all economic logic says is that, all things being equal, the minimum wage will cause unemployment, or to put it differently, the minimum wage will lead to a situation in which fewer people are employed than if there was no minimum wage. Thus, we can say that, in the example cited, without the minimum wage, employment would have grown even faster. It is also true that an empirical study that showed that employment rose when the minimum wage was repealed would not definitely prove the theory because employment might have risen for some other reason!

Economic logic tells us that the minimum wage causes unemployment compared to economies without a minimum wage. In the real world, there are so many variables that affect the level of employment that no empirical study can definitely disprove our thesis. Without veering into the complex subject of the methodology of economics, suffice it to say that we use economic theory to explain real world experience, not the reverse.

Tragically, those priced out of the labor markets by the minimum wage are often young, unskilled, high school drop-outs, or minorities. Those who most need that first unskilled, low-wage job are most likely to be economically and legally unemployable after the wage rate is raised.

Thus, the first obvious effect of the minimum wage is to cause unemployment among the least skilled and most disadvantaged workers!

Can’t employers keep such workers on the payroll and simply shift the cost to their customers in the form of higher prices? Economist Walter Block says no:

It is my view that in equilibrium nothing will be shifted onto consumers. Instead, what will happen is that those whose marginal revenue product (MRP) (productivity) falls below the new minimum wage level will simply no longer be employed.

The only additional costs will not be those of paying someone more than his MRP. For example, paying $7.00 per hour to someone who is only worth $6.00. (At a minimum wage of $5.15 such a person could be employed. But at $6.00 MRP, he can no longer be employed, in equilibrium.) No, the only costs will be rearranging things so that there is now a greater demand for a few people with higher productivity, say $10 per hour (and more sophisticated capital equipment) to take the place of all those whose productivity falls into the range $5.15–$7.00. These people, like our guy with MPR = $6, can no longer work. This disruption is costly.

Other Costs of the Minimum Wage Law . . .

http://www.lewrockwell.com/ostrowski/ostrowski77.html

Working Poor
05-07-2010, 06:49 AM
I like Hornberger's points about the minimum wage, but I probably would prefer someone with a bit more skill in arguing against it. His last couple of articles on the subject haven't been very compelling to sway me much less my liberal friends.

I agree his writing is bringing up some good points but, his writing skill does leave something to be desired. I think he could say much more using fewer words. He needs an editor.