Posts tagged value
Should The Minimum Wage Be Raised?
Some years ago when I was Business Week’s columnist an up-and-coming academic economist published his conclusions that raising the minimum wage did not cause unemployment. An implication was that labor unions did not cause unemployment by forcing up wages.
These conclusions flew in the face of economic theory. Theory held that employees were paid the value of their marginal product. The value of the marginal product of labor is a measure of labor’s contribution to the firm’s revenues. As a factory, for example, increases its work force, after initially rising the contribution of each additional employee to output falls. Think of it in this way. As the work force expands, the fixed size of the factory means that additional workers have less technology and capital per capita with which to work.
Thus after some point the marginal product of additional workers falls. The value of the worker’s marginal product is his output times the price of the product.
Translated that means that employers expand the work force to the point that the last person hired adds as much value to the firm’s output as the cost of his wage.
Therefore, arbitrarily raising wages beyond this point by legislation or strikes would mean that the last employees hired cost more than they contribute to the value of the company’s output. (The wage rises, but not the marginal product of labor). In other words, the work force would be downsized to the point that the value of the marginal product of the last unit of labor hired equaled the higher wage. Think of it this way. As the number of employees shrink, the capital and technology of the firm is spread among fewer workers making them more productive.
I pounded the up-and-coming economist pretty hard for his conclusions. Having grown with age more skeptical of all explanations, today I probably would report his views, commend him for his courage in taking on established wisdom, and say that his findings should be examined for their correctness.
Like physics or chemistry or law or history or literature or whatever, there are far too many areas of economics for one economist to be informed about and to keep up with. I don’t know whether the economist I took to the woodshed prevailed and changed the theory of wage determination or whether some fault was found in his work.
California entrepreneur Ron Unz has reopened the case for raising the minimum wage. Unz advocates for a $12 per hour minimum wage. Allowing for an eight hour five day work week with two weeks vacation, this would produce an annual income of $24,000 the poverty level income for a family.
Unz has received more favorable attention than I gave the academic economist back in the 1980s or 1990s.
Unz makes a good case (see, for example, http://www.unz.com/article/the-conservative-case-for-a-higher-minimum-wage/ ). If Americans were paid a living wage for the jobs that Mexicans manage to do by living 10 to a trailer, illegal immigration would decline. Unz can convincingly argue that a higher minimum wage would actually increase the employment of American citizens as they would be able to scrape by on the wages from the higher minimum wage.
I endorse Unz’s proposal with reservations. My doubts about a healthy rise in the minimum wage are not based on the economic theory that the value of the marginal product curve of labor is the firm’s demand curve for labor. Nor am I opposed to a reduction of illegal immigration or to paying people a living wage. If the working poor made enough to live on, the social welfare budget could be cut.
From my standpoint, the problem with raising the minimum wage to a survivable level is that it pacifies the millions of Americans who are being oppressed by the greed of the one percent and the public officials who serve them. Making the survival of the oppressed easier keeps them from being in the streets protesting the rising inequality of income and wealth that jobs offshoring, financial deregulation, and cuts in social welfare programs such as food stamps have produced in America.
The ladders of upward mobility that made America an opportunity society have been dismantled by the movement abroad of America’s high value-added, high productivity jobs, leaving displaced Americans with only lowly paid domestic service jobs, such as retail clerks, waitresses, bartenders, and hospital orderlies. Making low pay jobs more livable makes the dismantling of the opportunity society more acceptable.
I think that Unz is correct that a significant rise in the minimum wage would both reduce illegal immigration by making it possible for Americans to survive on minimum wage jobs and provide a poverty level income for millions of Americans who currently live below the poverty line. But this amelioration of hardship suppresses protests and rebellion.
To recover justice, a reasonable distribution of income, the accountability of government, corporations, and banksters to the rule of law, and to revive the growth of consumer demand on which the success of the US economy depends, the existing order that serves the one percent needs to be altered. The ladders of upward mobility must be restored.
What is more imperative, a rise in the minimum wage that pacifies the work force and the downtrodden by making their survival easier, or a rising swell of disaffection that ultimately reforms or overthrows a government that is unaccountable both to law and to the people?
What I learned as a Washington insider for a quarter of a century is that Washington buys compliance. By purchasing compliance Washington can continue to masquerade the US as “the indispensable people, a light unto the world,” while Washington murders people in half a dozen countries and destroys the infrastructure, housing, and environment of those countries, simultaneously dispossessing the American middle class, destroying civil liberty, and locking the poor into an underclass.
Until the government is brought back into compliance with the rule of law and the will of the people, ameliorating hardships sustains the evil empire.
Unz is a genuine reformer. But reforms can have unintended consequences, and that is what worries me about raising the minimum wage.
Reprinted with permission from www.paulcraigroberts.org
About Dr. Paul Craig Roberts
Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. His latest book, The Failure of Laissez Faire Capitalism and Economic Dissolution of the West is now available.
Posted by Robert Wenzel
The Yin and Yang of Government Power
One of the areas where government would like to have absolute control is in the area of money creation. By having control of money creation, the government can, of course, control a monetary spigot that allows it to spend well beyond its ability to the raise funds via taxation and borrowing.
That said, it is instructive to understand the many ways the free market is attempting to circumvent government monopoly of money control. It is an object lesson in understanding that government is not all powerful and that there is a yin and yang to government power. At times, there can be a major jump in government power in a sector, but, over time, a counter response from the free market can occur that is difficult for the government to understand and defeat. Below is an important TED talk delivered by Paul Kemp-Robertson. He discusses the many points of free market responses to government money. He is a little weak in understanding completely how and why these currencies are emerging and doesn’t seem to understand their emergence in relation to Ludwig von Mises’ Regression Theorem, but it is a solid tour of the early-stage free market counter punch to government money.
Taken with a wide spectrum view, it is a great sign of hope that shows how free markets can emerge to counter government power.
Follow more of Robert’s posts here.
Published on Oct 22, 2012 by RapsAlive
Alex Jones remembers American icon Russell Means, a valuable member of society and the freedom movement. Means sadly passed away on October 22nd after a battle with esophegal cancer.
Means joined the American Indian Movement in 1968, and was involved in numerous protests. Unlike the majority of AIM activists, Means was a libertarian. He came second in the 1987 Libertarian Nomination process, to none other than Ron Paul. In January 2012, Means endorsed Ron Paul’s 2012 presidential campaign.
Means is well known for his move to declare the Republic of Lakota a soverign nation, occupying the Mayflower II, and engaging in a standoff against FBI at Wounded Knee.
Thank you for the great work you have done Russell, you will be missed.
Please find below the documentary mentioned: Russell Means: Welcome To The Reservation
Uploaded by THElNFOWARRlOR on Jan 19, 2011
The United States is one big reservation, and we are all in it. So says Russell Means, legendary actor, political activist and leader for the American Indian Movement. Means led the 1972 seizure of the Bureau of Indian Affairs headquarters in Washington, D.C., and in 1973 led a standoff at Wounded Knee, South Dakota, on the Pine Ridge Indian Reservation, a response to the massacre of at least 150 Lakotah men, women, and children by the U.S. Seventh Cavalry at a camp near Wounded Knee Creek.
American Indian Russell Means gives an eye-opening 90 minute interview in which he explains how Native Americans and Americans in general are all imprisoned within one huge reservation. Means is a leader for the Republic of Lakotah, a movement that has declared its independence from the United States and refused to recognize the authority of presidents or governments, withdrawing from treaties it made with the federal government and defining its borders which cover thousands of square miles in North Dakota, South Dakota, Nebraska, Wyoming, and Montana.
By Madison Ruppert
Editor of End the Lie
Fusion centers are also involved in rolling out nationwide biometrics systems as well as centralized biometrics databases coordinated by the federal government.
In the past, Napolitano has claimed that fusion centers are “one of the centerpieces of our counterterrorism strategy,” while reality paints a completely different picture.
The Senate panel, which combed over 80,000 fusion center documents, determined that they could not “identify a contribution such fusion center reporting made to disrupt an active terrorist plot.”
Furthermore, unnamed DHS officials told the senate panel that fusion centers put out “predominantly useless information” and “a bunch of crap,” according to Danger Room.
This is somewhat surprising coming from any DHS official given that their official risk assessments have a tendency to wildly underestimate actual risks, but perhaps even DHS employees are beginning to see the absurdity of these fusion centers.
Hilariously, an internal assessment from 2010 – which DHS unsurprisingly did not share with Congress – reveals that a whopping third of all fusion centers do not even have defined procedures for sharing intelligence, which is “one of the prime reasons for their existence.”
Even more troubling is the fact that the Senate has found that at least four fusion centers identified by DHS “do not exist.”
The sad reality is that the Senate’s finding, as noted above, is not in any way shocking. For instance, the Constitution Project (TCP), a national, bipartisan think tank determined, “without effective limits on data collection, storage and use, fusion centers can pose serious risks to civil liberties, including rights of free speech, free assembly, freedom of religion, racial and religious equality, privacy and the right to be free from unnecessary government intrusion.”
“Legalized Plunder of the American People” – G. Edward Griffin
Published on Oct 2, 2012 by CaseyResearchFAN
To order the complete audio set from the Navigating the Politicized Economy Summit, available in CD and MP3 format, http://bit.ly/2012FallSummit
G. Edward Griffin discusses the Federal Reserve and it’s role in the declining economy at the recently concluded conference, Navigating the Politicized Economy.
To subscribe to the free Casey Daily Dispatch newsletter: http://bit.ly/Caseys_Daily.
Michael Badnarik spoke to NE Tarrant Tea Party on the Federal Reserve System and fiat money.
Posted by Sherrie Questioning All
We know the manipulation of metals has been happening for decades. The manipulation has been good for everyone who previously had no clue it was going on before the whole economic melt down began. People have been able to buy metals at a manipulated price all these years.
The expectations from experts at this point is the manipulation will continue unless people get active and start buying the physical metals on the market.
What is the best thing you can do for another? Give them something that is of real value and will help them in the future.
Helping others understand what is happening and how to protect themselves in the financial crisis that is now occurring is something we should all do.
Spending a little money on an ounce of silver for yourself and for another would be a great service to all.
You can buy 1/2 ounces, 10th of ounces besides one ounces of silver. Buy various sizes and give them as gifts as needed. Also think about asking your children about them getting silver for an allowance instead of dollars. What a great way of showing your Love for your child, by giving them their future as an allowance!
So … who is with me with this movement?
Update 3/6/12 3 Pm – ***** Special Note***** People have contacted me about buying the coin shown above exactly as it is with CFTC on it. I contacted a friend and the coin is real and a limited amount were minted. My friend is talking to that mint to see about them minting more, since he is friends with the mint. If you are interested, as it seems some people are in acquiring one of the coins, please contact me. If there is enough interest, my “silver” friend may be able to get a limited quantity minted again.
Please contact me if you would be interested in buying one of the coins, so a list of interested can be given to the mint to help convince them to mint a few one more time.
Update 6 PM – they may mint 250 of the coins, this is not set in “silver” yet, but getting closer. I already have an email list of people going, that would be able to get one if they are minted.
sherriequestioningall at yahoo .com
What would happen if the Federal Reserve was shut down permanently? That is a question that CNBC asked recently, but unfortunately most Americans don’t really think about the Fed much. Most Americans are content with believing that the Federal Reserve is just another stuffy government agency that sets our interest rates and that is watching out for the best interests of the American people. But that is not the case at all. The truth is that the Federal Reserve is a private banking cartel that has been designed to systematically destroy the value of our currency, drain the wealth of the American public and enslave the federal government to perpetually expanding debt. During this election year, the economy is the number one issue that voters are concerned about. But instead of endlessly blaming both political parties, the truth is that most of the blame should be placed at the feet of the Federal Reserve. The Federal Reserve has more power over the performance of the U.S. economy than anyone else does. The Federal Reserve controls the money supply, the Federal Reserve sets the interest rates and the Federal Reserve hands out bailouts to the big banks that absolutely dwarf anything that Congress ever did. If the American people are ever going to learn what is really going on with our economy, then it is absolutely imperative that they get educated about the Federal Reserve.
The following are 10 things that every American should know about the Federal Reserve….
#1 The Federal Reserve System Is A Privately Owned Banking Cartel
The Federal Reserve is not a government agency.
The truth is that it is a privately owned central bank. It is owned by the banks that are members of the Federal Reserve system. We do not know how much of the system each bank owns, because that has never been disclosed to the American people.
The Federal Reserve openly admits that it is privately owned. When it was defending itself against a Bloomberg request for information under the Freedom of Information Act, the Federal Reserve stated unequivocally in court that it was “not an agency” of the federal government and therefore not subject to the Freedom of Information Act.
In fact, if you want to find out that the Federal Reserve system is owned by the member banks, all you have to do is go to the Federal Reserve website….
The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation’s central banking system, are organized much like private corporations–possibly leading to some confusion about “ownership.” For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.
Foreign governments and foreign banks do own significant ownership interests in the member banks that own the Federal Reserve system. So it would be accurate to say that the Federal Reserve is partially foreign-owned.
But until the exact ownership shares of the Federal Reserve are revealed, we will never know to what extent the Fed is foreign-owned.