More simple stuff

It appears now that raising the minimum wage increases employment. This is directly opposite of the "small bakery" micro-analogy that conservatives appeal to and everyday voters imagine.

I offered students "Raising the minimum wage will/will not raise prices or lower employment." I warned my students in advance that, no matter what they thought, no matter what "common sense" told them, if they did what I required them to do and accessed scholarly reviews, they would find virtually no support for the "will" position. I warned them that academic economists saw the issue as complex, with various effects.

Of about 22 papers that chose the topic, two chose "will not." The rest chose "will," and they either used no scholarly evidence (a consensus) -- opting instead for Hurtage Foundation and Kato Foundation papers that wouldn't fool anyone and newspapers -- or used websites. All of the "will" people, though -- every last one of them -- informed me of the Iron Clad Rule of Capitalism.

If you have someone make you pay your employees more all of a sudden, then you have to make that money up. You either have to increase the prices or fire an employee. Suppose you ran a bakery...

That little canard was inescapable. I read it and read it and read it.
The problem is that this mythical bakery didn't exist in Adam Smith's day, and it sure doesn't exist in 2014. The bakery they imagine is a zero sum, and that's typical of a childhood imagination. Actual bakeries, and we'll drop the bakery as soon as possible, pay for their materials, their labor, their advertising, their insurance, their licensure, their utilities, and then charge extra. The cost of the cupcake is not zero sum. The bakery is costs + profit = price.

Profits, in most small businesses, grow and get shared with the employees, or else they go toward growth. The owner gets richer, sure, but the small business doesn't keep very many workers at minimum wage. As it grows, it rewards its employees.

Who pays minimum wage? 1. Restaurants, 2. "big box" retail. There was a study of a local environment that showed inflation when there was a minimum wage increase, but it was of Chicago, when it mandated waiters and waitresses getting minimum wage. The restaurant business hadn't be set up to handle that, and so it did have a bulge in prices. Otherwise, true minimum wage (non-tipped) tends to show up in fast food.

Mike's Manufacturing doesn't keep a large part of his staff at minimum wage. McDonald's does. Papa John's demands it.

So, aside from some businesses with high turn over and manual labor, who holds the bag? Mal-Wart and McWendy King. The problem with worrying over their labor costs is that the true nature of capitalism is that non-publicly traded companies have the duty, as Henry Ford said, "To make the highest quality possible for the lowest price possible while paying the highest wages possible." Once a corporation is publicly traded, though, its board's duty is to gain profit at all costs, and reducing labor is the easiest way to achieve an illusion of profit. No board can voluntarily increase labor costs (pay) without facing an investor law suit or loss of stock value.

$ = Labor + Materials + Rent on capital + Profit

In low unemployment, employers are forced to increase wages. In a recession or depression, employers have no market force compelling an increase in wage. Furthermore, publicly traded corporations are compelled to increase profits. Since the Great Recession began, corporations, most especially including those that page minimum wage, have increased their profits. McDonald's has turned a huge profit, and Wal-Mart continues to be the most affluent non-oil or drug business one can imagine, but neither may pay employees more without being sued. Neither is compelled to pay more. The balance of the integers in the formula of capitalist price are out of whack. P > L, and it keeps going up.

The companies can't break the cycle.

There is a need for government (the external regulatory authority) to act as a guarantor of the continuing function of capitalism. I.e. it has to negate the impulse of boards of directors in order to make some of the vastly increased profit go to labor.

"If someone says you have to pay your people more, where is that going to come from," students would ask. It would come from PROFITS, of course. If you are one of the main industries paying minimum wage as a large component of your labor, you have been growing in profit and passing none of it down.

Advice for the Love Shorn

No. . . I spelled it right.

I have some experience with being the one left behind at the end of a love affair. The love lorn are, you know. . . lorn. "Lorn" is from Middle English, "leosan" (i.e. "lose"). It's the past participle, and you know it most often with its prepositional friend "for," as in "forlorn." Since the love lorn are those who are without love, that's everybody. The love shorn, though, are the ones who were not expecting anything, even though they should have been.

If you are a normal, functioning human being, then when your boy/girl friend (or wife/husband) says, "It's over" -- with or without the "I'm seeing someone else" (I rather think the people who don't announce the breakup until they're in the arms of someone else are cowards; they need that other person to be a shield or an insult that will make the breakup "stick," or they aren't going to break up until they know they can "do better" (even though, of course, they never will do better than YOU)), then you won't take it lying down. No: you'll pace back and forth, throw yourself at the wall and door, and then demand that she or he tell you WHY it's ending.

You poor sap.

Think about what you're asking for. You're asking for a set of reasons for an emotional state. Second, you're not going to listen to anything the other person says, because your question is corrupt. You don't want to know why he is dumping you. You don't want to know why she feels that things are working out. Even if your former lover were possessed of Orphic clarity, even if the beloved could say why love has gone, it wouldn't mean anything to you.

What you really want is a list of reasons why you would break up with you, why you would end the relationship. You're asking to be convinced to not love the other person in the same way that she doesn't love you.

She says you're taking her for granted. You say that you're not. She says that you show no affection, and you say that real love means not having to do that.

Parse this, or its inverse (you want all her time), and what you see is that she's saying, "I feel," and you're saying, "I think" or "That feeling isn't justified." The argument only confirms the premise (the real premise: "This relationship is over") because it's taking place. What's worse is that no one can beat another person into loving.

This isn't a very deep insight I'm offering, is it? It's obvious that no one can argue another person, much less threaten another person, into liking him or her. Nor is it possible to accept the kind of damage being dumped brings without protest. All in all, it doesn't help to know the fruitlessness of arguing. What the love shorn needs and wants is to be validated, to be worthy or worthier.

This really basic dynamic works on humans from their early to their late years. In fact, I know of an institution that, having been rejected, has resorted to argument. It's hard to sue the country club into making you a member; if you win, you won't want to go.

Þæs ofereode,
	þisses swa mæg.

With respect, of course.