Showing posts with label Minimum Wage NJ. Show all posts
Showing posts with label Minimum Wage NJ. Show all posts

Tuesday, February 12, 2019

‘We’ Did Not Create the ‘Mighty Middle Class’: ‘I’ Did


In a January 2019 editorial, The $15 wage: Reaffirming what New Jersey stands for, the New Jersey Star-Ledger lauded Nj politicians for enacting a phased-in $15 minimum wage. What’s important here is not the rise in the minimum wage, bad as that is. What caught my eye is the Star-Ledger’s rationalization for it.

This historic act, made by people who value the dignity of work, will enable nearly a million more New Jerseyans to soon make something that approximates a living wage.

Our state took a prodigious step toward addressing decades of economic injustice, and all it took was for our elected leaders to affirm what we believe in. For centuries, when we saw someone who needed a hand up, we had the compassion and wisdom to do it without overdoing it. We welcomed immigrants from every corner of the world and brought them into the circle of opportunity. We took the poor and made them middle class. We took the middle class and made it mighty.

I left these comments, somewhat expanded and edited for clarity:

“When we saw someone who needed a hand up, we had the compassion and wisdom to do it”

There’s a fundamental difference between a voluntary ‘hand up’ and a government-forced hand out. The first is compassion, the second injustice. Notice the heartless collectivist repudiation of individual self-reliance; “We took the poor and made them middle class. We took the middle class and made it mighty.” No, “We” didn’t. The middle class stands for individual productiveness and upward mobility, achieved through individual effort and voluntary association based on mutual consent. Each individual earned it. The collectivist worldview of the Star-Ledger and its ilk leaves no room for the value of the individual. It’s all about some mystical “We” to which each of us is only a helpless cog. But in fact, “We” didn’t create the middle class. “I” created the middle class.

Collectivism is the weapon of the statist who imagines that he can simply legislate a “living wage.” There is no economic justice in getting a wage forced on your employer, the job creator. There is no dignity in an unearned “living wage”. There is no dignity in losing a job, or being unable to find a job, because your skill level doesn’t yet warrant the $15 some politician mandates. And if you manage to keep your job at the higher coerced wage, there is certainly no dignity is profiting at the expense of someone else’s being forced into unemployment by the same law that “gave” you your raise.

The economic destructiveness of price controls is well-known and undisputed. Force up the price of something, including of labor, and you get less of it--in this case, fewer jobs and fewer sustainable businesses. But minimum wage laws are also immoral, because they not only force businesses to pay more than voluntarily agreed to, but deny entry level and low-skilled workers the right to accept a job at less, thus denying them access to the economic opportunity that the lower rungs of the “economic ladder of success” offers.

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Once again we can see the “You didn’t build that” weapon that Obama set up. The worst thing Obama did was to establish a philosophical springboard for American socialists to complete the task of fundamentally transforming America into a socialist state. If “you didn’t build that”--if “We” made the middle class--then created wealth is a tribal product. If wealth is due to tribal “effort”, rather than at root an individual effort, then there is no reason that the tribe’s--i.e., society’s--wealth should not be controlled and distributed by the tribal chiefs, the government.

If you don’t understand how markets work--how wealth is created and distributed by individuals contracting, collaborated, and trading---and how the infinitely intricate price mechanism sorts out who built and thus deserves what--then you will always be susceptible to the kind of poison Obama has fed us. Unfortunately, too many Americans buy into what is essentially the savages view of wealth as a tribal product. Too many Americans either are ignorant or, worse, know better but buy into the “you didn’t build that”/“We built the Middle Class” view for their own sinister reasons. Welcome to a socialist America.

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Monday, February 27, 2017

Martin Luther King: Right On Racial Justice, Wrong On ‘Economic Justice’

In support of the adoption of a $15 minimum wage in New Jersey, the NAACP invoked Martin Luther King. Richard T. Smith, president of the NAACP New Jersey State Conference, had this to say in a May 2016 New Jersey Star-Ledger guest column ( N.J. NAACP president: For economic justice raise the minimum wage):

Some ask if the minimum wage battle is the new civil rights movement.

The topic has received new attention this month, as leaders of the legislature renewed their push to raise New Jersey's minimum wage to a more equitable $15 per hour.

It's natural for people to feel the need to draw comparisons between hotly contested topics. But in this case, I think the question only draws unnecessary distinctions.

Racial and economic justice are, and forever will be, intertwined. History can be a useful guide when it comes to drawing the connections.
Martin Luther King Jr. is a national hero for helping end racial segregation in the United States. Yet he spent the last years of his life working as much for economic justice as for racial justice.

I left these comments, edited for clarity:

Martin Luther King was either right in his fight for political justice—which he backed up by drawing upon the principles in the Declaration of Independence—or he was right about government-imposed economic “justice,” which violated the Declaration’s principles of political equality before the law. But he couldn’t be right about both, because they are mutually exclusive.

King was right only about political justice; all men are created equal possessing inalienable individual rights—rights being understood as guarantees to freedom of action to pursue personal advancement, not automatic claims on economic rewards that others must be forced to provide against their will.

“Economic justice” as meant by the likes of the NAACP is not justice at all. There is no justice in forcing employers to pay more than they are willing. There is no justice in denying any individual the right to work for any wage he is willing to accept. There is no justice in forcing employers to pay or legally granting to employees wage raises not earned. There is no justice in overriding the rights of employers and job seekers to voluntarily negotiate mutually beneficial, mutually agreed-upon compensation agreements. There is no justice in outlawing jobs; any jobs.

Minimum wage and similar laws and regulations are unjust and immoral, because based on legalized armed aggression by government against private individuals for the unearned benefit of other individuals. There is no justice in cronyism. There is no justice in aggressive force: Justice belongs to voluntary agreement only. Such laws are anti-justice, anti-individual rights, anti-Declaration of Independence, and anti-“I Have a Dream.”

In actuality, there is a very necessary “distinction” between racial and Smith’s version of “economic justice.”

There is no conflict between economic and political justice, properly understood. In fact, they are corollaries. Consistent adherence to the principles of the Declaration of Independence leads inexorably to freedom of contract regarding compensation, where each side negotiates from the standpoint of each own’s pursuit of her personal pursuit of happiness, each dealing with the other by voluntary mutual agreement rather than force. Force is the enemy of voluntarism and thus freedom and individual rights. When aggressive, initiatory force enters the economic equation—in any form, including the legal kind—economic justice, and justice of any kind, necessarily retreats.

“Racial and economic justice are, and forever will be, intertwined,” Smith says. No, they’re not—not in the way he means. When King fought to rid the country of legally enforced racial segregation, under which black Americans were cut off from broader society, he was enforcing racial justice based on the equality of rights laid down in the Declaration. Minimum wage laws, on the other hand, are a form of legally enforced economic segregation, where lower skilled/inexperienced workers are cut off from the broader economy because jobs they qualify for have been outlawed. There is a clear distinction between racial and Smith’s concept of “economic justice.” In reality, economic and racial segregation are corollaries. Likewise, political and economic freedom are corollaries. It’s either/or.

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Capitalism: The Unknown Ideal—Ayn Rand

Tuesday, December 20, 2016

On 'Deserving' a Higher Minimum Wage

The two most powerful New Jersey Democrats, State Senator Stephen Sweeney, President of the New Jersey Senate, and Assemblyman Vincent Prieto, Speaker of the New Jersey Assembly, argued in a New Jersey Star-Ledger guest column for a much higher state minimum wage, even though NJ voters just three years ago amended the NJ Constitution to raise the minimum wage and index it to inflation. In Sweeney and Prieto: N.J.'s workers deserve a higher minimum wage, the two legislators wrote:


Too many of our fellow New Jerseyans go to work every day, some to two jobs, and do not make enough money to put food on the table, pay the heating and electric bills, and clothe and put a roof over their children's heads.


For too long, the ranks of the working poor have been growing, the middle class has been shrinking, and more and more of the wealth of our society has been flowing into the pockets of the richest 1 percent.


That is why we have joined together to put New Jersey at the forefront of the "Fight For $15" movement by introducing legislation to raise the minimum wage from the current $8.38 an hour to $10.10, and to establish a schedule that will provide all of our state's workers a living wage of over $15 an hour five years after the new measure takes effect.


Sweeney and Prieto acknowledge that Governor Chris Christie will likely veto the minimum wage hike if it passed the legislature. If so, they say, “we will put it on the ballot as a constitutional amendment for the voters to decide.” They go on to add:


To condemn hundreds of thousands of our fellow citizens – many of them children – to live in poverty in one of the richest states in the nation is morally wrong.


I left these comments:


The premise implied in the above statement is that wealth is a collective product owned by the state as representative of the collective, to be distributed according to the politicians’ dictates. But since wealth is created by individual effort, the implication of collective wealth controlled by the state is that the individual’s life belongs to the state, to be disposed of at the will of government officials. This is not moral. This is the essence of tyranny, which is where the whole idea of collectivism in any of its manifestations leads.


New Jersey is not a rich state. NJ is a geographical area with a diversity of achievers. Only individual producers create and own wealth, before the tax men and regulators get their hands on it. A minimum wage doesn’t transfer wealth from “one of the richest states” to employees. It forces individual employers to pay more than they judge the employee to be worth to the productive process his business is engaged in. Minimum wage laws, like all forced redistributionist schemes, transfers individual wealth, not collective wealth.


People who oppose the minimum wage are not “condemning hundreds of thousands of our fellow citizens . . . to live in poverty.” We oppose forced redistribution of wealth, because when the state forcibly takes money from one person to give to another for no other reason than economic inequality or need, it does not lift anyone out of poverty. The state is merely making a slave out of one person and a moocher out of the other. Rising from poverty must be earned.


What’s morally wrong is for government to forcibly take from one person and hand it over to another. The word “deserve” implies justice. In justice, no one deserves to be forced to turn over his wealth to another against his will. When politicians vote to forcibly redistribute wealth, they are engaging in legalized theft. No one deserves wealth forcibly confiscated by politicians from another. When someone gains wealth by such means, they are essentially receiving stolen goods. No one “deserves” any level of income apart from what they earn, and what a person earns can only be justly determined by voluntary agreement between employer and employee. We who oppose legally mandated minimum wages have the moral high ground.


If the politicians really wanted to address the high cost of living, they should look to the ever-increasing burden imposed on production and trade—in the form of taxes, regulations, and government spending—and the ever-shrinking incentives to work that the welfare state fosters. The $15 minimum wage is a perfect example of this. It makes it less economical to employ people even as it relieves low-wage workers of the incentive to gather the experience, character, productiveness, and skills that actually makes them worth 15 bucks.


Toward the end of the article, Sweeney and Prieto offer this in support of the minimum wage:


As Ohio Republican Gov. John Kasich said when asked why he did an end-run around his own legislature to expand Medicaid coverage for the poor, "When you die and get to the meeting with St. Peter, he's probably not going to ask you much about what you did about keeping government small. But he is going to ask you what you did for the poor. You better have a good answer."


This is our answer: Let's join together and raise the minimum wage.

If you don’t yet understand why Republicans keep losing the battle for limited government, reread Kasich’s passage. If you agree with that moral sentiment, never ask for whom the bell of socialist poverty and tyranny tolls: it tolls for you.


Related Reading:





Star-Ledger letter: Raising the minimum wage to $15 would cost small businesses dearly—A businessman’s dissent against the minimum wage increase.

Why Don’t Most Americans Get that Government Wealth Redistribution is Theft?

Sunday, November 20, 2016

Christie on Vetoing $15 NJ Minimum Wage: “Sounds Great When You’re Spending Somebody Else’s Money”

New Jersey Governor Chris Christie vetoes $15 an hour minimum wage bill pushed by N.J. Democrats, reports the New Jersey Star-Ledger in a front page print article last summer. Titled “Tough Bananas”—a reference to the Pennington NJ supermarket where Christie announced his veto.

Christie argued forcefully against raising the minimum wage to $15 per hour. Refreshingly, Christie did not just restate the inexorable economic downside. He brought in the moral argument, saying that “the government doesn’t ‘have the right’ to impose increases on employers,” according to reporter Matt Arco. The Democrats had just one argument: People “need” the increase—never mind logic, morality, justice, or basic economic reality.


As the saying goes, these people aren't looking for handout, they're looking for a hand up. People who put in a full day should be able to afford food, a place to live, transportation and clothing without having to rely on public safety nets and charity.

I left these comments on Arco’s article, slightly altered for the editorial, edited for clarity:

In the Star-Ledger digital news article by Matt Arco, Christie is reported to have said “the government doesn’t ‘have the right’ to impose increases on employers.” He’s absolutely correct: Government has no right. The fact that he is inconsistent—he actually supports a lower minimum wage—doesn’t change that fact.

More specifically, minimum wage laws are immoral because they violate the rights of employers and job seekers to set their own terms of employment by mutually beneficial voluntary agreement. The proper purpose of government is to protect individual rights equally and at all times. This is the most fundamental principle of American government. Rights are guarantees to freedom of action, not an automatic claim on material benefits, including some pre-set minimum wage, that others must be forced to provide. Individual rights include the right to voluntary contract—an outgrowth of the right to freedom of association. Therefor, the government’s job is to protect contractual rights for all, not favor one economic faction at the expense of another, so long as the terms of the contract do not involve the intended or actual violation of anyone’s rights. A voluntary compensation agreement between an employer and a job seeker, whatever the hourly rate agreed upon, does not violate anyone’s rights, so the government has nothing to say about it until and unless one side or the other commits fraud or breach of contract.

Minimum wage laws are fundamentally immoral for several other reasons:

  • They are biased in their enforcement. If a minimum wage is violated, there are two law-breakers—the employer and the employee. Yet, only the employer is punished—and worse, the employee is usually rewarded for his law-breaking with back wages and the like, even though he voluntarily agreed to accept the sub-minimum wage and took the job willingly. Minimum wage laws violate equal protection of the law.
  • They are a handout to bigger, more established businesses that can afford the higher cost or can afford to automate. By forcing smaller, marginal, struggling businesses out, minimum wage laws suppress competition. This is cronyism.
  • They kick out the lower rungs of the economic ladder of advancement by killing  job opportunities for lower-skilled, mostly young people. Outlawing lower-paying jobs is a terrible injustice against the ambitious poor seeking a path to upward mobility.

The S-L claims that “these people”—workers demanding a higher mandatory minimum wage—“aren't looking for handout, they're looking for a hand up.” In fact, they’re looking for neither. Both a handout and a hand up imply voluntary charity or voluntary help. Minimum wage laws are not voluntary. They are force. That someone “needs” a higher wage is beside the point. What matters is the employee’s contribution to the productive mission of the business, as determined by voluntary employer/employee agreements in a free competitive labor market. Just as the businessman’s profit depends on creating value for the consumer, the worker’s compensation depends on creating value for the employer. Those who disconnect their compensation from their productiveness—by, say, claiming an entitlement to a “livable wage” just for showing up for work—are parasites. Need is not a license to steal—and those who get higher wages because the government forces the employer to pay are basically stealing the additional money, with the government as the hired gun. It’s legal organized crime. The only just wage is a wage voluntarily paid by the employer and agreed to by the employee. The only honorable way to “get a raise” is to make oneself more valuable to an employer by gaining experience and increasing work skills, or look for another job. Don’t tell me about “social justice.” Justice is getting what you deserve, and no one deserves to get by force what he cannot earn by voluntary consent.

And for those who will still have a job at the higher rate, that extra money is blood money, coming at the expense of the forced unemployment of other job seekers. As everyone knows, minimum wage laws are economically destructive. Employers are just like everyone else, including consumers—they consider cost before spending. If the price goes up, for labor as for goods, he is less likely to pay. The end result is fewer jobs, fewer businesses or less business expansion, and less worker opportunity for economic advancement and self-sufficiency, forcing more people onto the taxpayer-funded dole.

Supporters fancy themselves “compassionate” for wanting to help others by raising the minimum wage. They want to “give New Jersey workers a raise,” as the “liberal” New Jersey Policy Perspective put it. That’s really big of them. But as Christie pointed out, "All of this sounds great, raising the minimum wage, when you're spending someone else's money." But forcing others to pay for the luxury of their counterfeit compassion exposes them as phonies. Supporters of this bill are spiritual parasites, claiming credit for compassion without having to actually do anything. Minimum wage laws are gangster economics. They are immoral and economically destructive. Not only is Christie right to veto this bill. Existing minimum wage laws should be repealed.

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The Democrats are now saying they will but a NJ constitutional amendment for a $15 minimum wage before the voters in 2017. Anticipating this move, Christie “urged business leaders to ‘speak up.’”:

“There’s going to be a large and, I hope, loud public discussion about this,” he said. “Those who choose to stay under the radar will lose. We need to educate the public on this issue.”

Hopefully, that education will include not just the economics of the issue, but also the morality of it. Business leaders need to loudly speak up for their moral right to run their businesses as they judge best, without coercive political interference. By doing so, they’ll also be speaking up for their customers and for job-seekers’ moral right to seek their own terms of employment and exert control of their own path to economic self-sufficiency.

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Some Fallacies Behind the Drive for the NJ Minimum Wage Increase Amendment

Wednesday, December 2, 2015

Minimum Wage, Productivity, Incentives, and Polls

Two years ago, New Jersey voters took the unfortunate, ill-informed step of approving an amendment to the state constitution to raise the state minimum wage and lock in automatic annual cost-of-living increases, starting from a base of $8.25, one dollar above the then-current rate.


Now, the drumbeat for more constitutional increases has begun, with the New Jersey Star-Ledger, the state’s largest newspaper and leading left-wing voice, leading the charge. In an editorial Raise the New Jersey minimum wage. Yes, again, the Star-Ledger pointed to the [unfortunate] popularity of raising the minimum wage, even among Republicans, as justification. The Star-Ledger also employed the usual economic fallacies to promote a new constitutional amendment to drastically raise the base minimum to well above the $8.25—perhaps to as high as $15.00.


I left these comments:


This whole editorial misses the fundamental point: Minimum wage laws are immoral because they violate the rights of employers and job seekers to set their own terms of employment by mutually beneficial voluntary agreement. The proper purpose of government is to protect individual rights equally and at all times. This is the most fundamental principle of America. Rights are guarantees to freedom of action, not an automatic claim on material benefits, such as a “livable wage,” that others must be forced to provide. Individual rights include the right to voluntary contract—an outgrowth of the right to freedom of association. Therefor, the government’s job is to protect contractual rights, so long as the terms of the contract don’t involve the intended or actual violation of anyone’s rights. A voluntary compensation agreement between an employer and a job seeker, whatever the hourly rate, does not violate anyone’s rights, so the government has no legitimate say about it until and unless one side or the other commits fraud or breach of contract.


As to the practical aspects of minimum wage laws, every time government raises the minimum wage, it criminalizes more jobs—jobs that pay less than politicians approve of, thus shrinking the number of entry-level jobs that new, younger, lesser-skilled workers (among others) need to get started on the lower rungs of the economic ladder of upward mobility. Existing workers lucky enough to keep their jobs and get raises due to minimum wage laws forced on their employers did not earn the raise. They got a handout at the expense of opportunities denied to others. Earning a raise involves taking personal actions to increase one’s skills, knowledge, and experience so as to make themselves worth more to employers. The pay one deserves is based on the worker’s contribution to the productive process, as determined by voluntary market forces; i.e., what someone is voluntarily willing to pay the worker (or businessman, for that matter). Just deserts do not depend on what someone needs to live on. No one “deserves” a wage forced on an employer by legal aggression, any more than businesses deserve some minimum profit forced on consumers by “minimum product price” laws. Need is not a license to steal.


As to productivity, the truth is that productivity increases do not automatically justify wage increases, because the worker is not primarily the cause of his increased productivity. Productivity is created by innovators and businessmen who invent and invest in labor-saving technologies and production processes. Workers play a role, in that they must learn the new technologies and processes. But productivity is mostly a gift to workers. I spent 46 years in the plumbing trade. By the time I retired, I was producing much more than when I started, due to new tools, lighter materials, new methods, etc.—and I worked much less hard and much more safely than when I started. My contribution to my steadily higher real wages was to make the effort to learn the new stuff. But the stuff was the primary factor, and I’m grateful for those gifts. And while rising productivity always tends, over the long run, to raise real wages, it is an effect and it does not follow that raises should be forced on employers for that reason.


The idea that drastic increases in the minimum wage will be “the catalyst for a more motivated and competitive workforce” is particularly laughable. What motivation is needed when raises for some are automatically imposed on their employers, while the hordes of minimum wage-induced unemployed get welfare because jobs they are qualified for were made illegal? Why become competitive in the lower end of the job marketplace, when everything is automatic and your personal responsibility and personal choices no longer mean much?


Minimum wage laws only affect about 5% of the workforce presently, so the destructive economic effects are limited and not widely apparent. But if the current trend to criminalize more and more jobs continues, that will change, to the detriment of millions of workers and employers, as businesses automate more to offset coercively higher labor costs, and many new businesses fail to get off the ground due to unaffordable labor costs forced on them.


True, sometimes workers are paid less than they are objectively worth. But such inequities generally don’t last, due to competition. And temporary inequities certainly don't’ justify a government sledgehammer approach. The only legitimate way to foster rising wages is by fostering a robust economy, and that requires more economic freedom, not an ever-tighter economic straightjacket imposed by government officials—the exact opposite of what has been going on since the Great Recession. Regardless of their (unfortunate) popularity, minimum wage laws are immoral and economically destructive, and should not only not be raised, but should be repealed.


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My point about motivation now has empirical evidence behind it. I wrote:


The idea that drastic increases in the minimum wage will be “the catalyst for a more motivated and competitive workforce” is particularly laughable. What motivation is needed when raises for some are automatically imposed on their employers, while the hordes of minimum wage-induced unemployed get welfare because jobs they are qualified for were made illegal? Why become competitive in the lower end of the job marketplace, when everything is automatic and your personal responsibility and personal choices no longer mean much?


Gravity Payments made a splash with the media when it voluntarily raised its company minimum wage to $70,000 a year, only to find that it built resentment among experienced workers who had to work their way up the income scale, only to now find themselves working side-by-side with workers who got the same salary without having to earn it. As the New york Post discovered:


Price’s stand against income inequality made him an immediate darling of the left.

But key employees saw it differently.
Financial manager Maisey McMaster liked the idea at first — until she thought about it.
“He gave raises to people who have the least skills and are least equipped to do the job,” she told The New York Times. Meanwhile, “The ones who were taking on the most didn’t get much of a bump.”

She thought it would be fairer to give smaller raises, with the clear chance to earn more with experience. Price brushed off her doubts; she quit.

Also out the door: Web developer Grant Moran. He says, “Now the people who were just clocking in and out were making the same as me.” Plus, having your pay level a very public matter is a problem, with “friends now calling you for a loan.”

Moral of the story: Some people work harder than others; some have stronger skills — and they don’t think it’s fair that they’re paid the same as others.

Price will soon be left only with workers worth his chosen minimum wage — or less.

The company is already in chaos thanks to the policy — but the big problem is ahead, as it tries to keep growing and innovating with only mediocre talent.


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Friday, March 27, 2015

Minimum Wage Amendments Violate Rights and Subvert Proper Constitutions

Most states legally mandate minimum wages. But Colorado, Florida, and New Jersey have actually amended their constitutions to impose minimum wages.

Any government action to impose mandatory minimum wage rates is not only economically destructive but fundamentally immoral, because such measures violate employers’ and job-seekers’ moral rights to freely contract.

But as if Minimum wage laws are not bad enough, using the constitution to impose minimum wages, on whatever governmental level, compounds the evil. Such political tactics subvert the very crucial role of constitutions in protecting our liberties from governmental encroachment.

As philosopher Ayn Rand explains:

There are two potential violators of man’s rights: the criminals and the government. The great achievement of the United States was to draw a distinction between these two—by forbidding to the second the legalized version of the activities of the first.

The government was set to protect man from criminals—and the Constitution was written to protect man from the government.

These principles necessarily apply to government at any level. Otherwise, if the federal constitution protects rights, but the state constitutions can violate rights with impunity, then the federal constitution is in essence a hollow document. It is not. Though our constitution was approved on a state-by-state basis, it was instituted by “We the People,” not “We the States.”

Under minimum wage amendments and like “economic” constitutional provisions, man’s protection from the government vanishes. Rather than limiting the government to protecting individual rights, such provisions invert the constitution, turning it into a rights-violating tool of economic aggression at the behest of any victorious voting bloc.

As stated in the Declaration of Independence, the philosophic blueprint for the constitution, “. . . to secure these rights, Governments are instituted among Men.” If liberty is to be preserved and fully restored, Americans must rediscover the vision of the Founding Fathers as regards the proper role of government and purpose of a constitution.

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Minimum Wage Issue is Not "about what it’s like to live on $7.25 an hour"