Or, not answering, as the case may be.
Here is the video; see the question asked about 16 minutes in.
The questioner has to re-ask his question a couple times because the Governor doesn’t answer the question whether he believes $7.25 is a living wage.
Note that the Governor never mentions that DWD was merely abiding by the 2009 determination by DWD, and hence conforming to the law, as some observers have argued, without any documentation that that was indeed DWD’s argument.
Raising the national minimum wage to $15 an hour, for all firms, levels the playing field.
I’ve explained before how a $15 minimum wage will raise productivity and reduce other production costs.
And, the positive effects of higher wages for workers with the highest marginal propensities to consume.
The higher minimum wage will cause higher prices. However, real wages of low income workers, e.g. up to $25 an hour, will increase more than real wages of high income workers, over $25 an hour, will decrease.
Here’s a real example (also, I may add, after the increase in wages, few new workers were hired and existing workers rose to the higher standard):
There was a fast growing firm that was also very disorganized, because it was so busy. One of the recommendations was raising the starting wage from $11 to $13 an hour for all factory workers. However, management decided that was a bad idea. One reason was there were always plenty of applicants for $11 an hour, over the past few years, and of course, there was concern profits would fall, substantially.
However, roughly six months later, management raised the starting wage to $13 an hour and something miraculous happened.
Turnover rates dropped like a rock, overtime was almost completely eliminated, including six day weeks, injuries fell dramatically, hardly anyone called in sick, damage to equipment and products almost disappeared, including steep declines in reject rates, quality rocketed, morale was lifted, management no longer had to spend enormous time interviewing workers, with related paperwork and training, supervisors no longer had to cover for sick workers, to do their jobs, and had time to actually do their work, and profits increased substantially.
Experienced workers who rejected the job when they learned it was $1 or $2 an hour less than they were willing to work for took the jobs at the higher rate. Management had much more time to manage and supervisors had much more time to supervise. So, operations became much more organized and efficient.
Why raising the minimum wage is a good idea:
1. Stimulate economic growth.
2. Correct a market failure.
3. Lower production costs.
4. Raise productivity.
5. Reverse the collapsed teen labor force participation rate.
6. Expand better managed businesses.
7. Create less income inequality.
8. Reduce the saving glut.
9. Boost weak demand.
10. Create better jobs in capital goods.
11. Reduce government and parental support for low wage workers.
12. Lift morale.
The (positive) income and multiplier effects may be stronger than the (negative) employment effect up to $15 an hour.
Peak Trader, (what are you trading) is this an economic discourse nor a
political rally?
I think you are stuttered in somewhere and need to come out of the dark.
Better yet, please start a business with your prescribe fixes and see how
long you last.
For those who don’t want to click over and see the horror show:
First attempt – blah blah blah someone going back to school to become a welder blah blah blah
Second attempt – we don’t have a job problem we have a work problem blah blah blah
Third attempt – blah blah blah technical college
The questions were:
Do you think someone could support themselves on the WI minimum wage?
Do you think the state has an obligation to make sure people earn some sort of minimum wage?
And if so, what do you think that should be?
Lots of people out there want to make this guy US President? In what alternative universe would that be?
Menzie,
Walker answered the question clearly but did it in a way to avoid having his quotes taken out of context. He said the focus of government policy should be to help people get jobs that pay 2-3 times the minimum wage, rather than on raising the minimum wage, which he regards as a transitional (he had a minimum wage job at one time ) and not something that people should be permanently relying on as some sort of “living wage.” Walker talked about the importance of getting people trained in skills that pay much better than the minimum wage. He mentioned that there are over 70,000 jobs available on a state website but that the jobs offered by employers are not necessarily aligned with the skills of the workers. The way to get people a living wage is not to set a level by government fiat, which will always be too low and which will be hurt as many people as it helps, but rather to help people get the proper education and training so that they can earn a true “living wage.” Walker’s views on the minimum wage as poor public policy align nicely with the academic evidence, well summarized by this review.
Walker did not answer the question as a simple yes or no as the reporters and his political opponents wanted because that simple yes or no would be immediately clipped, taken out of context, and then used in attack ads. But he clearly differentiated his policies from Burke.
Rick Stryker: Well, that is double-speak on your part. He never answered any of the specific questions posed. Just admit it. That’s his prerogative, but it he should be held accountable for deciding not to answer.
Oh, and have we dispensed with your “howler” that DWD couldn’t make a determination regarding the living wage because it had to abide by the 2009 DWD decision? I look forward to you trying to squirm out of that one. (In your spare time, we can return to the 500,000/mo net job creation as recovery norm, too).
Maybe Walker thought (probably correctly) that the questioners would have been too stupid to understand the point Paul Krugman made back when he wrote for Slate; Bad jobs at low wages are better than no jobs at all. That the minimum wage raisers, ‘are not entitled to their self-righteousness. They have not thought the matter through.’
Nor that they would be able to digest the point he could have made, that his opponent misunderstands the comparative efficacy of raising the minimum wage v. other methods of government assistance. That was a real howler on her part.
Of course, a professional economist would see that, right?
Patrick R. Sullivan: I am still waiting to hear you admit you were in error regarding depth of the downturn in Canada vs. US during the Great Depression. As you recall, you stated unequivocally:
And this statement is wrong.
Menzie,
No, Walker answered those questions but not in the way you and other Democratic activists wanted, because he didn’t want his answers to be taken out of context. The questions and answers were:
1) Can a Wisconsin worker live on our minimum wage? Walker’s answer was no, we need jobs for people that pay 2-3 times that much and training should be the focus of policy to help that happen
2) Do you believe that the state has any obligation to pay a minimum wage and what should that wage be? Walker’s answer was no, the state should not set some arbitrary limit on wages but should rather work to help people get jobs that pay much better than some arbitrary minimum
Also, you continue to misstate my points. I didn’t say that DWD can’t make a determination because it has to abide by Jim Doyle’s Administrative law decision in 2009. Of course 104.04 of the statute will allow the governor to kick off a minimum wage rule change at any time if he wants to for any reason. My point was that he doesn’t necessarily have to under 104.05. The activists who brought the complaints under 104.05 thought that must of necessity trigger a review and a decision to propose a new rule (in consultation with the wage council in 104.06) or state that there is no need to do that. The idea was to attempt to force the Administration on the record. My point is that 104.05 is vaguely written and gives complete discretion to the sitting governor in how to investigate. DWD is free to use the fact that Democratic governor Jim Doyle in DWD272 has already legally defined the living wage just 2 years earlier to be $7.25 per hour. You might think this interpretation of the statute is wrong. Maybe the Wisconsin journalists think this is wrong. But as far as I know this section of the statute has never been tested. The activists and you wanted to use the statute to make a legal argument to force the Walker Administration to decide. I’m making an argument back that the statute doesn’t require that. This is why we have a judiciary–to decide these questions.
But I also made the point to you earlier that even if I grant that 104.05 must trigger a review as to whether a new rule is required, the decision not to do so does not imply that the current $7.25 per hour is a “living wage” in the sense that people can really live on that wage. “Living wage” has a precise definition under Wisconsin law and allows DWD to consider the effects on the general economy, disemployment effects, etc. So, the decision not to act in no way implies that Walker Administration asserted that someone can live on $7.25 hour, as your post headline misleadingly suggested.
Don’t know why you can’t let the 500K thing go. If anything, you should really go back and ask yourself why you counted the number of times in history that we got a 500K increase without doing the obvious correction for the size of the labor force. If I were making a list of Howlers, that would have to be on the list. But it’s a minor point from a couple of years ago and not worth arguing about.
Rick Stryker the minimum wage, which he regards as a transitional (he had a minimum wage job at one time )
Walker might be entitled to his own opinions, but not his own facts. According to the BLS, 80% of those earning minimum wage or less are age 25 and older. If you’re still earning the minimum wage or less at age 25, that’s not a transitional wage. That’s the rest of your life. Like a lot of comfortable conservatives, Walker thinks everyone’s personal life experience are just like his. It’s a peculiar kind of egotistical conceit that I find with a lot of conservatives his age.
the focus of government policy should be to help people get jobs that pay 2-3 times the minimum wage
He also wants world peace, an end to hunger and a cure for cancer. Maybe a pony for every little girl. That’s not a government policy, it’s an aspiration. Learn the difference.
Walker talked about the importance of getting people trained in skills
So that would explain why Wisconsin under Gov. Walker is one of only 6 states to cut higher educational spending (-3.3% per student) over 2013-2014?
http://www.cbpp.org/cms/?fa=view&id=4135
Walker’s views on the minimum wage as poor public policy align nicely with the academic evidence
I see. Walker’s view is to cut education spending, cut taxes for non-productive rentier crony friends, fight public transportation, and break public sector unions in monopsony sectors.
Walker is a good politician because he recognizes that voters are nitwits with very short memories and no class consciousness. The only think more double-crossed than Walker’s promises about job growth are his goofy eyes.
2slugs,
You are not entitled to your own facts either. 80% of workers 25 years and older are earning minimum wage or less? Not according to the BLS publication Characteristics of Minimum Wage Earners 2013. According to the BLS, 49.6% of minimum wage or less earners are 25 or older. However, that is misleadingly high, since 59% of those 25 years and older are below minimum wage, meaning that the majority work in the food industry and receive tips. It’s also important to realize that 64% of minimum wage workers work part time and are supplementing their income.
It’s true that for many people, but not anything close to 80%, the minimum wage is their hourly rate. However, Walker’s point is that it shouldn’t be so and the way to get people to higher paying jobs is to improve their skills and thus their productivity. The answer from the Left is for these people to become permanent vassals of the state, relying on their minimum wages and other government programs. Low income people deserve better.
Scott Walker says: “Jobs that involve the minimum wage are overwhelmingly jobs for young people starting out in the workforce.”
BLS statistics show that half of all minimum wage earners are 25 years of age or older. Almost 30% are age 35 or older.
Here’s real news: Great White shark in Wellfleet Harbor, Cape Cod. This is where we go kayaking with the kids.
From the article:
“While Monomoy’s (Island, Cape Cod) gray seal population went from just a few individuals 30 years ago to more than 15,000 spotted in just one day, other parts of the Cape, such as Jeremy Point at the mouth of Wellfleet Harbor, can also be shark magnets with hundreds, if not thousands, of seals hauled up on the beach sunning themselves.”
Jeremy Point is our kayaking destination, typically.
The shark in question is named Katherine. In Cape Cod, if you’re going to be eaten by a shark, at least you know it’s name!
Apparently, the town will be advertising for tourist sharks: “Come for the seals. Stay for the people.”
http://www.capecodonline.com/apps/pbcs.dll/article?AID=/20141009/NEWS/410090308
Steven,
Looking at the EIA website the drop in the price of Brent per barrel compared to the EIA’s reporting of supply and consumption for 2014 actual and forecasted to 2015 seem to cause doubt that the $90/barrel price will long prevail unless a substantial world slow-down occurs. Next time a post deals with GDP, oil supply, consumption and price, sure would like to see your thoughts.
Professor Chinn,
Can we assume away the Walker problem? Assume Walker is defeated and assume the minimum wage is raised (attempt at a little humor).
Let’s see: raising the minimum wage stimulates the economy so therefore raising everyone’s wages will return the economy to full employment, solve the lousy labor market, eliminate poverty, and soon we’ll all be rich.
Why didn’t we think of this before???
Otto, over the past few decades, real wages of fast food workers, for example, declined, while their productivity rose.
Corporate profits as a percent of GDP rose from 8% to almost 15% of GDP.
Per capita real income roughly doubled. And, income inequality increased.
Worker wages: Wendy’s vs. Wal-Mart vs. Costco
August 6, 2013
“Costco seems to be investing some of those profits back into its employees.
Cesar Martinez, a 37-year-old fork lift operator, has worked at a Costco in North Carolina for 19 years. He makes $22.82 an hour, gets health benefits and a pension plan. He manages to save, and doesn’t worry about hospital bills for his daughter, who suffers from asthma.
“That’s the reason why I’ve been here for so long,” he said. “The company gives you a decent wage and treats you with respect and takes care of you. That’s why we all give 100%.”
Research shows that it pays to pay employees well, because satisfied workers are more productive and motivated, according to MIT Sloan School of Management professor Zeynep Ton, who focuses on operations management.
“How many times have you gone to a store, and the shelves are empty or the checkout line is too long, or employees are rude?,” she said. “At Costco, you see a huge line that disappears in minutes.”
The productivity translates into sales, she said.
According to Ton’s research, sales per employee at Costco were almost double those at Sam’s Club, its direct warehouse competitor owned by Wal-Mart.
The median pay for fast food workers nationwide is $9.05 an hour, or about $18,800 a year.
While the fast food and retail industry is making record profits, its workers are forced to rely on public assistance just to afford the basics.”
And, we did “think of this before:”
Since the minimum wage was established, U.S. per capita real GDP has grown at a much faster rate (of course, there are other factors that contributed to faster growth).
Average annual per capita real GDP growth:
1863-1937 (75 years): 1.33%
1938-2012 (75 years): 2.44%
Source: Census data and the BEA.
many years ago i swore off kmart in favor of walmart, because the service and stores were better (not saying good, just better in comparison). the same thing happened with walmart in favor of target. perhaps not cheaper, but i could walk in, buy my item and walk out without the aggravation of waiting in a sloppy store. now they are all surpassed by costco. i can be through a long line in costco in a fraction of the time it takes at walmart-target is still pretty good. the customer service is great. and they have a 7 pound chocolate cake! paying minimum wage to operate a store is not the path to my pocket book.
The BEA publishes a series of real restaurant sales. If you deflate that by restaurant employes from the BLS it shows that real restaurant sales per employee is now about 95 as compared to 100 at January, 1992.
I know this is not exactly fast food restaurants, but what is your source for the claim that fast food worker productivity has risen?
COSCO has always paid wages above their competition and finds that it pays large dividends.
It would be better, for example, to use output per hour, average the series, and define “employee.”
I suspect, one fast food restaurant today is capable of serving many more people than several decades ago.
It seems, all, or more than all, of the productivity gains went to profits and upper management salaries.
Perhaps, customers also gained.
What about the low wage workers?
http://www.bls.gov/opub/mlr/2008/02/art4full.pdf
Low wages may cause low productivity.
I have an idea. Let’s turn this from an economics blog into another media mouthpiece for the Democrat Party.
or we could take a news media outlet like faux news and turn it into a media mouthpiece for the republican party. what’s your point?
Ricardo,
Well, that might prove to be embarrassing. Here’s a real example of a politician dodging a question. Democrat Alison Grimes, who is opposing Mitch McConnell in the Kentucky Senate race, ducked a direct question 4 times whether she voted for the President.
hey rick,
last time i checked, a person’s vote in an election was private. what right do you or anybody in the media have of questioning somebody’s vote in the ballot box? this was not a legislator’s vote in office on a bill-it is a private citizen’s right to governance. kind of shameful when you want to politicize and try to penalize somebody’s constitutional right as a citizen. but free elections are probably not your priority anyways.
Baffles,
Yes, she is standing on principle. This has nothing to do with the President’s 30% job approval rate in Kentucky.
ricky,
and the question was asked out of honest curiosity for knowledge? why do you acknowledge a political game on one side but not the other?
but it still does not change the issue that a person’s vote is their own, and should not be subject to public scrutiny? or should i be able to ask my employees their voting record?
Ricardo, I am afraid this is what is happening; this is not the quality of
reporting I am expecting from Professor Chinn.
Rick,
How about Wendy Davis
attacking her Republican paraplegic opponent for suing to recover for his injuries. She is such a class act. A Democrat darling!
Why is it Democrats hate so much?
You know full well why she is attacking him. She is attacking him because he wants to make it harder for victims to recover compensation for their injuries…like he was able to! “OK for me but not for thee.” That is the attack.
So tell us Ricardo, are you saying you favor making it easier for victims to recover compensation for their injuries?
Ricardo,
Yes, they do have an unfortunate tendency to attack and mock the unfortunate. Let’s not forget that the President on the Jay Leno show joked that his whitehouse bowling score was “like the Special Olympics or something”. He was later forced to apologize. Joe Biden famously asked Chuck Graham to stand up, even though Graham’s confined to a wheelchair. Bill Maher, who donated $1million dollars to a Democratic party super pac, called Trig Palen “retarded.” Democrat Barbara Walters defended him (albeit weakly), saying that “he didn’t intend to be mean-spirited.” Maher also called Sarah Palin the c-word. Let’s also not forget Trig-trutherism, which was principally led by Left blogger Andrew Sullivan and taken up by a good bit of the Left wing Palin haters. Trig-trutherism holds that Sarah Palin is not Trig’s true mother. According to Trig-truthers, Palin faked her pregnancy to hide the fact that Trig is actually the son of her other daughter Bristol. You can only think that hatred would motivate such a belief.
And speaking of Palin’s daughters, let’s also not forget prominent Democrat David Letterman’s “joke” that when Palin and her daughter were in New York attending a Yankees game, he commented “One awkward moment for Sarah Palin at the Yankee game, during the seventh inning, her daughter was knocked up by Alex Rodriguez.” Palin was with her daughter Willow at the game. Willow is 14 years old. Imagine if a Republican tv host had made such a joke about a prominent Democrat’s daughter. Imagine if that had been one of the President’s daughters. That Republican tv host would have been immediately fired. But Letterman was not punished at all. Such is the double standard.
Rick Stryker,
I finished the book you recommended THE SCIENCE OF SUCCESS. I have read a lot of business and management books in my career and taken all kinds of corporate sponsored courses and if I get 1 thing that is useful I consider it surprising. This book had gems on almost every page. I can understand why the Koch Brothers are so successful. They do capitalism the right way. Thanks for the suggestion.
Ricardo,
I’m very glad you enjoyed it. Charles Koch is truly an unheralded genius in business. The book should be required reading in business schools.
Randon,
I was going to let your comment sit because it was so absurd but as I have listened to Wendy Davis squirm because of this ad I thought there may be some who do not think it through. If what you are saying is true Davis could have made her point without making an issue of Greg Abbott’s injury and the fact he is in a wheelchair. It is this attack against his conditions that is front and center in her ad. She is making sure the his infirmity is front and center. It is a poor cheap shot at his physical limitation in a desparate attempt to salvage her campaign.
If you still hold you view, please tell us why she didn’t criticize his policy without making is wheelchair an issue? My question still stands, bu tI will refine it. What do Democrats hate the handicapped so much? (remember the attacks against Sarah Palin’s son!)
ricardo, you don’t see the hypocrisy in abbott’s position? you have some funny ideological definitions of hate! i don’t know any democrats who attacked palin’s son, and i don’t know of any democrats who would condone such an attack. i do, however, know some people who want to repeal the ADA.
My Dear Ricardo, champion of people with disabilities:
Hypocrisy in politics is certainly a time honored tradition. If it disqualified a candidate, well, there would be few candidates running.
For every shameless family values candidate on the right caught carrying on like “Diaper Dave” Vitter, you have one on the left like Eliot Spitzer (or maybe Spitzer had some shame…he actually resigned). For every Raphael Eduardo Cruz who demagogues sealing the border, we have a fat Al Gore flying a private jet to a global warming conference. Except he’s not a politician anymore but you know what I mean!
The man suffered a terrible accident. He was able to seek redress in the courts. He won compensation estimated in excess of ten million dollars. Now he wants to make it more difficult for people in similar circumstances to seek redress in the courts. Don’t you see the rank hypocrisy here? Not only that, but then he wants to continue to deny them healthcare under the Medicaid expansion of the ACA! Make it more difficult to sure. Make it more difficult to get healthcare.
He’s a big boy. He can take a negative political ad. He’s a Republican in Texas after all. He has dished out plenty of dirt in his day. He has no right to be aggrieved except in service to his rank hypocrisy!
Regards.
Randomworker,
Thank you for admitting that Wendy Davis is a political hypocrite. That takes a big man.
Mr. Abbott suffered an unfortunate industry (a tree limb struck him in a windstorm and crippled him), he sued and was made comfortable, economically, for life, not in terms of his health, of course. My twin was in a wheel chair due to a puberty onset disease, although it would have been nice if a tree limb had struck him, at least economically. So I have sympathy for Mr. Abbots very real health issues.
And, as a Republican official in Texas he has consistently restricted the ability of citizens to sue business. In every way that he possible could do so. There has been no discrepancy in this record. And there is nothing surprising in that. What’s not to like and what’s not consistent in his public actions, such as they are? His public actions as Attorney General speak for themselves and he will, of course, win office in Texas. You would have to be a child abuser not to win as a Republican candidate and even that could be spun, if you have a Democratic female opponent.
It’s unfortunate that his circumstances are so comfortable as a result as a lawsuit on a landowner who owned a treelimb that fell, but, hey, that landowner didn’t own a busines.
You can interpret this public record for Abbott as a horrible Wendy Davis hypocrisy, or you can focus on the hypocritical discrepancy between Abbot’s personal history and his public positions. Twist away. I find him, given his history, to be almost charmingly obtuse.
I do admire his unwillingness to submit to his circumstances, but withdrawing the plank that benefited oneself seems almost willful malignity.
Ahh yes, the old “government should be about creating jobs that pay many times the minimum wage” reply to the question about a proper minimum wage. Isn’t it getting so old though that Republican politicians repeat this mantra, or some variation on it, but never say what has to be done, in any tangible way, or showing any understanding of what would create such conditions, those well paying jobs? The typical spiel about cutting taxes on the wealthy (job makers), raising taxes on the middle class and the poor (always in there phrased misleadingly as some cut, using imaginative math), and cutting government spending (again, cutting the safety net-but never specifically saying what when asked) has no factual justification as causal to anything about creating high paying jobs. The fantasy replies of these extremists avoid all facts, any delving into intelligent discussion about economics, demographics, or numbers and data.
LOL peak trader’s first 3 posts are hilarious.
You’ve only proved you’re the joke.
Don’t be so ignorant.