Tag Archives: free market economics

Washington Policy Center Spouts Minimum Wage Nonsense

In a guest column in today’s Seattle Times, the Washington Policy Center spouts nonsense that Washington State’s minimum wage’s minimal increase of 12 cents next year is going to push young people out of the work force. It’s nonsense because it’s not backed up by any facts.  The author selectively uses numbers to try to imply that it is somehow causal. Just citing numbers doesn’t prove anything.

The headline in the print edition claims “Minimum-wage increase pushes young people out of work force” The Internet accessible copy states “Washington minimum wage is on the rise and hurting young people’s prospects”. Neither headline is supported by any facts.

This column by the free market think tank Washington Policy Center is just another  example of the selective use of numbers by the right wing to distort what is happening. It is an attempt to distort policy discussions by throwing in numbers to try to imply a factual basis for conclusions that are not supported by any facts.

The author trys to make his case based on a number that the unemployment figure for 16 to 24 year olds is 20% and that somehow this is related to having a minimum wage. No reference is cited for the numbers used.

I question including 16 – 18 year olds in unemployment figures. These people should be in school. What 16 year old do you know who is a high school graduate? Hence they are unskilled workers, undereducated, competing in a high unemployment market against people with a high school education or previous experience.

Check out the unemployment numbers yourself and you’ll see very different figures and age breakdowns from those cited by the Washington Policy Center. The national tables break out 16 -19 year olds as a separate category which makes more sense than breaking out 16 to 24 year olds.

.Here is the most recent Economic News Release from the Bureau of Labor Statistics entitled “Employment Status of the Civilian Population by race, sex and age.”

Checking the reference above the Bureau of  Labor Statistics breaks out the black or African American population and cites ages 16 – 19 both sexes unemployment rate of 48% for Oct 2010.

For black men 20 and over the rate is 16.3%.

For whites, both sexes, aged 16 -19, the unemployment rate is 23.6%

For white men, 20 years or older the unemployment rate is 8.9%.

What does all this have to do with the minimum wage? The author’s claim raising the minimum wage is somehow contributing to high unemployment for youth is not supported by the use of the data they cite or data from  the Bureau of Labor Statistics. It is pure speculation not backed up by any facts. The Washington Policy Center is a free market think tank and opposes government regulations and laws like setting a minimum wage.

The reality is that many people are unemployed. If employers have an option of hiring a high school graduate or an older person with experience versus a 16 year old,  they are going to probably hire the high school graduate or experienced person.

Young people are better off going to school. They will have higher incomes over their lifetimes. Most minimum wage jobs are dead ends or last resorts.

The headline of this article is not supported by any facts.

More likely, lack of an education or high school diploma and lack of job skills keeps young people out of the work force, especially in a market where there is high unemployment in general and more skilled older people are out of work and competing for the same job.

Besides any other considerations, the reality is that a the minimum wage of $8.67/hour translates to just $346.80 per week or $18,364 per year if you work every week or get any paid time off, like a vacation. This is gross pay, not net. It is pre-tax and pre-social security. Hardly overwhelming.

Just Where is Rossi on Global Warming?

Listening to Republican gubernatorial candidate Dino Rossi’s answer to a question on where he is on global warming leaves one wondering just where he is. It seems he really is nowhere. He says “There’s still a lot of debate going on on this” and that “there’s going to be a big debate the next 2 to 3 years” and that he “doesn’t think anyone should panic”

Seem’s he hasn’t even talked with John McCain who says “the facts of global warming demand our urgent attention.”

You can see an interesting contrast on McCain and Rossi ‘s take on global warming on a YouTube clip posted by the Washington State Democratic Party.

See it here http://www.youtube.com/watch?v=Q6uJQoUIGqk

Rossi’s position on climate change really hasn’t changed since he was in the Legislature. As Craig Engelhardt, Sierra Club lobbyist noted in the last gubernatorial race:

Rossi voted against efforts to fight global warming: Rossi voted against a bill to create a privately funded Washington climate center that would research simple and innovative ways to reduce greenhouse gas emissions in Washington. The center would have also helped identify what types of impacts climate change could have on Washington and what we can do about it. (SB 5674, 2001)”

David Postman in his blog yesterday has a misleading headline saying “Rossi warms to climate change” but then presents Rossi’s doubletalk saying it’s important to have clean air but his spokesperson says that he would have vetoed one of the bill’s the Legislature passed earlier this year to try to reduce global warming. As Postman reports:

Rossi opposed “this year’s major legislative action on global warming. House Bill 2815 set up goals for carbon reduction, but does not fund those efforts. Gregoire signed the bill and has called it a major accomplishment.

Rossi, according to spokeswoman Jill Strait, would not have signed the bill. Strait said Rossi believes “we should focus on rewarding people, not punishing them.”

“The bill she just signed aims to use the power of the government to force people to cut vehicle miles traveled down to the level of 1980 in just ten years, and that is only the first step. Dino’s vision is based on personal freedom and engaging Washington’s creative economy. His plan provides incentives for people to use new, clean technology. “

The only problem is we’ve seen the free market approach that Rossi proposes. It does not respond to issues like global warming unless there is a personal cost attached to it. The cost of global warming is being passed on to the commons. The oil industry and coal industry and auto industry are extracting profits from their business interests but do not currently pay for the true costs of their industries. Besides pollution itself and dirty air affecting health we now have increased global warming which will affect everyone but which the producers who profit from their sales of coal and oil pay very little or nothing to mittigate.

The industries are operately in a profit motivated system that is passing the cost of their pollution onto the commons. The costs for pollution cleanup and global warming consequences are not being borne by industry but by the general public. The profit motivated free market system obviously does not adequately addreess the true costs to society of global warming and pollution.

This is where it is necessary for government to step in and change the rules because the consequencces are no longer just local or insignificant. A tax on carbon is one way to add the costs into the equation to address the true system costs of burning fossil fuels for energy. Investing this money in alternative renewable non-carbon energy systems is one way to correct the injustices and flaws in a free market system that puts individual profit above the common good.

It is obvious that Dino Rossi is not going to change the system to address global warming. The free market system has failed but Rossi continues to support the myth that individual consumers freely making choices will somehow do the right thing.

The free market system gave Americans SUV’s and minivans to the exclusion of small cars and public transit. The free market mantra gave corporations the incentive to make mistakes as they attempted to maximize profits making large cars. They were wrong and now people are buying Honda and Toyota hybrids and companies like Ford are money losers.

We’ve had 8 years of Bush denying global warming on the national level and it would be a big mistake to put someone in as Governor who really doesn’t see the problem and seems to be willing to say what he thinks the public wants to hear in a last minute election year conversion. The best gauge of what Rossi will do is to look at what he has or hasn’t done regarding global warming to date. The record suggests that it would be a mistake to think he’s going to do anything. Election year conversions are just another slick ad campaign gimmick.