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Dec. 2, 2008

Melanie Phillips: The Mumbai atrocity is a wake-up call for a frighteningly unprepared world

Stratfor Geopolitical Intelligence Report: Strategic Motivations for the Mumbai Attack

Dec. 1, 2008

Max Freidlander, as told to Jacklyn C. Wadler: India Inkings

Mark Steyn: Whodunit!?

Nov. 28, 2008

Rabbi Ahron Rapps: An evil seed that didn't have to be

Melanie Phillips: Carpe diem --- or can we all relax now?

Nov. 26, 2008

Michael Feldberg: Meet the Orthodox Jew who laid groundwork for scientific development of ordnance that undergirds America's current world leadership

Andrea Simantov: Shades of life

Nov. 25, 2008

The Jewish Ethicist by Rabbi Dr. Asher Meir : Getting Emotional For Influence

The Kosher Gourmet by Ethel G. Hofman : Thanksiving feast!

Nov. 24, 2008

Rabbi S. Binyomin Ginsberg: 'I just Became a grandchild!'

Barry Rubin: Don't flatter your enemies, protect your friends

Nov. 21, 2008

Rabbi A. Henach Leibowitz: Money matters?

Caroline B. Glick: Civilization walks the plank

Nov. 20, 2008

Rabbi Avi Shafran: Bronfman's blindness

The Kosher Gourmet By Linda Gassenheimer: Portobellos add a hearty flavor to pasta with pesto

Nov, 19, 2008

The Jewish Ethicist by Rabbi Dr. Asher Meir : Spread the wealth? Jewish tradition and income equality

Elliot B. Gertel: 'Mad Men': Tackling prejudices or reinforcing them?

Nov, 18, 2008

Dr. Debby Schwarz Hirschhorn: The End of the Age of Reason

Jonathan Tobin: Does Barack + Bibi = Disaster?

Nov, 17, 2008

Rabbi Yonason Goldson: The End of the Age of Reason

Diana West: Gulling Americans into making terror legit?

Nov, 14, 2008

Rabbi A. Henach Leibowitz: The Power of Spiritual Inertia

Caroline B. Glick: The perils ahead

Nov, 13, 2008

Stratfor Intelligence Briefing: How Bush and Obama together could change the Middle East dynamic

The Kosher Gourmet by JeanMarie Brownson: Sweet and savory, crispy and meltingly tender bestilla

Nov, 12, 2008

The Jewish Ethicist by Rabbi Dr. Asher Meir : Tyrannical Co-Workers

Michael Doyle: High Court to consider today donated monuments that may have religious messages in public parks

Nov, 11, 2008

Frank J. Gaffney, Jr.: Will Obama stop government officials considering institutionalizing financial jihad?

Jonathan Tobin: They Will Decide Their Own Fate

Nov, 10, 2008

Rabbi Avi Shafran: $8 billion, modern-day Tower of Babel being built?

Barry Rubin: A letter to the president-elect from a Middle East realist

Nov, 7, 2008

Rabbi Francis Nataf: Of Children and Immortality

Caroline B. Glick: Livni's Obama strategy

Nov, 6, 2008

Rabbi Yonason Goldson: How I tricked a classroom of apathetic students into grasping the fallacy of moral relativism

The Kosher Gourmet By Gina Kim: Tips for making the perfect soup --- includes recipes

Nov, 5, 2008

The Jewish Ethicist By Rabbi Dr. Asher Meir: Destitute Debtors

Bruce Weinstein: 'Religulos': Bad title,even worse movie

Nov, 4, 2008

Frank J. Gaffney, Jr.: Treasury Dept. submits to Shariah law

Frida Ghitis: A surprise for Obama in the Middle East

Nov, 3, 2008

Jonathan Rosenblum: Who says Jews are Smart?

Jonathan Tobin: Was He Wrong About Everything?

March 22, 2007

J-Rhythms with Avraham Rosenblum: JWR's cutting-edge music program showcasing performers -- singers, song writers, musicians, and bands -- who learn and live the Torah lifestyle (OUR NEWEST IGODCAST !)

Oct. 29, 2003
Mortimer B. Zuckerman: Graffiti On History's Walls (MUST-READ!)

Jewish World Review August 9, 2006 / 15 Menachem-Av, 5766

The minimum wage vision

By Walter Williams


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http://www.JewishWorldReview.com | There are decent people, without a selfish hidden agenda, who support increases in minimum wages as a means to help low-skilled workers, and there are other decent people, with the identical goal, who strongly oppose increases in the minimum wage. So the question is: How can people who share the same goals, helping low-skilled workers, come up with polar opposite means that produce polar opposite results?


It all depends on one's initial premise. It would do us some good to make our initial premises explicit and check them against reality. One initial premise is that an employer needs a certain number of workers to accomplish a given task. That being the case, increasing the minimum wage simply means that all low-skilled workers will enjoy a higher salary and employers will have lower profits and/or customers will pay higher prices. With this vision of how the world operates, the logic of increasing the minimum wage as a means of helping low-skilled workers is impeccable.


Another initial premise is that there is no fixed number of workers necessary to accomplish a given task. Employers might be able to substitute capital for labor such as using dishwashing machines instead of dishwashers, automatic elevators instead of elevator operators, self-service gasoline stations rather than full-service gasoline stations, online reservations rather than reservation clerks or relocating their operation overseas. People who share this initial premise can still have concern for the welfare of low-skilled workers but argue that increasing minimum wages will cause unemployment for some of them and deny job opportunities for others. Given their initial premise, the logic of their argument is also impeccable.


Thus, the question to decide is which initial premise best describes how the world operates. Is it the one that says there's a fixed number of workers necessary to perform a given task, or the one that says employers have flexibility in the mix of workers and capital they use and where in the world they can choose to manufacture? I think the latter description more properly describes how the world operates.


Place yourself in the position of an employer and ask: If a worker costs me, say, $7 in wages, plus mandated fringes such as Social Security, unemployment compensation, sick and vacation leave, making the true hourly cost of hiring a worker $9 an hour, does it pay me to hire a worker who's so unfortunate to have skills that enable him to produce only $5 or $6 worth of value per hour? Most employers would conclude that doing so would be a losing economic proposition.


There are a couple other villains in the piece that force employers to respond to increases in wages that exceed a worker's productivity. If he did hire such workers, he would earn lower profits. Soon, investors would abandon him and put their money where returns are higher.


There's another villain — the customer. If the employer retained workers whose wages exceeded their productivity, to cover his costs he would have to charge you and me higher product or service prices. I don't know about you, but I prefer lower prices to higher prices, and I'd switch my patronage to those firms who adjusted to the higher labor cost.


Congress can easily mandate higher wages, but they cannot mandate higher worker productivity or that employers hire a particular worker in the first place. Those of us who truly care about the welfare of low-skilled workers should focus our energies on helping them to become more productive, and a good start would be to do something about the rotten education that many receive.

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© 2006, Creators Syndicate.

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