Friday, August 3, 2012

Rodger Mitchell — I’m really surprised to find myself disagreeing with Marshall Auerback about minimum wage


I'll trade raising the minimum wage, which Marhall Auerback and Jamie Galbraith advocate, for Rodger's alternative any day. Roger's plan is what the US needs it is going to continue to claim world leadership. Otherwise the claim is hollow.

Read it at Monetary Sovereignty
I’m really surprised to find myself disagreeing with Marshall Auerback about minimum wage
Rodger Malcolm Mitchell

15 comments:

David said...

The problem is that so-called progressive politicians can wrap their minds around raising minimum wage, but they can't wrap their minds around a deficit financed investment in human resources. Bernie Sanders, Sherrod Brown, Al Franken, etc., all really think the deficit is a big problem. Maybe Marshall Auerback is just trying to give a boost to something that might do some good, which at least some politicians are willing to countenance.

Dan Kervick said...

Rodger says:

Every “investment in financial products” transfers dollars from one person to another. The dollars keep moving, from one bank account to the next, and during this process, some are spent.

But it makes a difference which bank accounts those dollars are in. Those closer to the bottom of the income scale have a much higher propensity to spend than those closer to the top.

Dan Kervick said...

The problems with minimum wage can be addressed by a job guarantee, which basically establishes a minimum wage for the entire society.

Letsgetitdone said...

@David, not just Marshal, but Jamie is also playing politics. I don't accept Rodger's critique of a higher minimum wage, but I think that his narrow proposition that his program is better than the alternative of raising the minimum wage is correct. But, he ignores the point raising the minimum wage is more practical politically than his more comprehensive alternative.

beowulf said...

I agree with Dan and Joe. Minimum wage laws are like hummingbird wings. In theory they shouldn't work at all, in the real world they work pretty well.

Australia's minimum wage was just bumped to A$15.96 an hour, US$16.8.hr at today's exchange rate. Unemployment rate is 5.2%.

Think about that, their U3 rate is three points lower AND their minimum wage is more than double ours. Either the Coriolis effect makes neoclassical economics work backwards in the Southern hemisphere, or mainstream economists are a bunch of astrologers who think they're Carl Sagan.

$16.84/hr is high enough that a full time worker making that here would be means-tested out of food stamps, section 8 and other income security programs.
So what's going on is Australia puts the cost of a living wage for the working poor on their employers instead of taxpayers, enabling govt spending to be focused on other needs-- like universal Medicare and a Social Security system so broad it would impress even Rodger Mitchell.
http://en.wikipedia.org/wiki/Social_Security_%28Australia%29

Leverage said...

"Maybe Marshall Auerback is just trying to give a boost to something that might do some good, which at least some politicians are willing to countenance."

At this point in time is better to not play the status quo, and let the situation unravel.

Worst is better (in the long run). Too bad people will suffer, but idiots in power are forcing us to this situation.

Maybe this is also playing politics, but the problem is there is no escape as long as some mantras and people still dominate the circumstances.

Letsgetitdone said...

@beo, brilliant comment. Mind if I post it at Correntwire and other places?

Two more things to note. Aussie Medicare for All includes dental, something which Bill Mitchell is very proud of. And 2) look at this piece on where Australia and the US stand on median wealth per adult according to Credit Suisse estimates: http://www.correntewire.com/were_no_24_were_no_24

Oh, btw, I started a $60 T coin petition here: http://signon.org/sign/end-austerity-mint-the

beowulf said...

"@beo, brilliant comment. Mind if I post it at Correntwire and other places?"

NO Problem, re-post away (just fix my typo where I flubbed $16.84/hr the first time). :o)

beowulf said...

One other thing, this John Stossel post last month may be the most mendacious thing I've read all year.

"Statists say that Australia is proof that minimum wage laws help workers. They point to Australia's 5.1% unemployment rate... But statists ignore the details.
Most people who earn minimum wage are young, unskilled workers. How are they doing in Australia?
In June, Australia's unemployment rate for workers age 15 to 19 was 16.5%."
http://www.foxbusiness.com/on-air/stossel/blog/2012/07/13/australian-minimum-wage-myth

That's digging pretty deep for an unemployment stat. Curious that Stossel neglected to mention the comparable US stat (for workers 16 to 19). In June, their unemployment rate was...26.6%.
http://www.bls.gov/news.release/empsit.t01.htm

That Coriolis effect is CRAZY.

beowulf said...

OK, this is really the last one...
According the Heritage Foundation/WSJ "2011 Index of Economic Freedom", Australia's "government spending as a percentage of gross domestic product (GDP)" is less than that of the United States; 34.3% vs 38.9%.
http://en.wikipedia.org/wiki/Government_spending#International_government_spending_as_a_percentage_of_GDP

Stop and think about that... universal Medicare (with dental!), a jumbo size Social Security system, a defense policy of jumping into the same wars we do (including Vietnam and Iraq) and Australia still spends less on government than we do. At risk of sounding hyperbolic, I"d say that Coriolis effect is strong enough to move hurricanes (and cyclones). :o)

David said...

One other thing, this John Stossel post last month may be the most mendacious thing I've read all year.

I always knew John Stossel was ignorant, mean and mendacious, but what's all this "statist" crap? Is he playing the Libertarian now? Does he support Ron Paul? Is he then anti-war? I imagine it would be difficult getting serious face time on the TV if one was "anti-statist" in that sense.

David said...
This comment has been removed by the author.
Matt Franko said...

David,

"but what's all this "statist" crap? Is he playing the Libertarian now?"

They are all eventually revealing that is what drives them ALL... they seek not to be subject to anything...

Stossel is a Limbaugh wanna-be, and "free market"- lover:

http://mikenormaneconomics.blogspot.com/2011/11/how-job-guaranty-led-to-thanksgiving.html

All we need to see now is that he is also a gold-lover and stick a fork in him.... he's done.

rsp

Matt Franko said...

Wouldn't you know it right on cue:

http://townhall.com/columnists/johnstossel/2012/04/04/creators_oped/page/full/

Matt Franko said...

It's a package deal with these people.