By: Mark Thornton
It has been often said that our future rests with the next generation. If that is true, then it is a scary prospect.
The millennial generation (ages 18-34) increasingly sees itself, politically, as socialist. I personally know a couple of young men who declare themselves Marxists! Although that is frightening enough, remember the context in which it occurs:
- The United States already faces several daunting economic problem such as the national debt, the unfunded future liabilities (related to entitlement programs such as Social Security and Medicare), as well as the obvious potential for hyperinflation. You can set aside things like the possibility of nuclear war and killer robots. The economic problems are real and likely to happen and can only be avoided or dealt by returning America to a free market economy—not socialism.
- Moving our government and society towards socialism will only make matters worse. Worse yet, if socialists gain control—and some would likely argue that they already have—they are unlikely to relinquish power peacefully.
You would think that events in socialist Venezuela would knock some sense into these young people, but a new survey from GenForward shows increasing support for socialism. The report looks at how the millennial population thinks about politics and offers us a look at how the next generation thinks. Support for socialism is strongest among African-Americans and capitalism is supported by a small majority of white Americans. Among Asians and Latinos there is marginally more support for socialism. Given the support for the Bernie Sanders campaign this result is not surprising.
When asked questions about whether strong government or the free market is the key to solving social problems, respondents believed that government is the answer by two to one. The majority felt the government was doing a good job with the economy, especially those that identified as Republican.
How this can be is a mystery. The federal government deficit has averaged more than a $1 trillion over the last decade. Guess who will have to pay this bill? Every $1 trillion of increased government debt puts an approximate burden of $15,000 on every millennial. High government support among Republicans is probably just a reflection of the fact that their party is in power.
The millennial generation wants higher minimum wage laws, equal pay for equal pay, free tuition and for the government to pay off their student loans which indicates their Economic IQ is close to zero. I understand them not knowing that subsidies to higher education make a college degree even less attainable, but advocating a higher minimum wage is just stupid under all conditions.
Their gut feelings come from a variety of sources. Their education has brainwashed them about where our standard of living comes from. Lifestyle, for many of them, makes them feel guilty for the poor and downtrodden. Envy of the rich and famous also plays a role. They have been “successful” and “above average” all their lives. Why can’t they be rich and famous too?
I think a really big factor is that, under these conditions, they should feel betrayed and left out. Their generation, taken as a whole, is the first to take a step back economically since the Great Depression. Their real ire should be directed towards the Baby Boomers — their parents and grandparents. They are the generation which allowed the government debt and entitlement programs to grow into the deadly monster that they have become. Moreover, the Boomers are the generation that has benefited from all that waste and they are the generation that will hand over these problems to the millennial generation.
I have always felt uneasy with the idea of defaulting on the national debt and Social Security, because I believe strongly in carrying out your obligations. However, I also know that there are very strong ethical and economic cases that can be made for defaulting.
According to one website, I myself come from the Generation Jones—which I had never previously heard of. Generation Jones comprises the late Baby Boomers born from 1954 to 1965.
However, this Jones Generation is also the generation that did much of the work while receiving shrinking benefits from things like Social Security. Meanwhile, it will only see greater attacks on its income and wealth, both in terms of rhetoric and in law. Therefore, I am now “jonesing” for default, which is slang for wanting — if not craving — for defaults.
This was originally posted on Mises.org.
“advocating a higher minimum wage is just stupid under all conditions.”
Extensive research refutes the claim that increasing the minimum wage causes increased unemployment and business closures. (See list below.)
The buying power of the minimum wage reached its peak in 1968 at $10.97, adjusting for inflation in 2015 dollars. The unemployment rate went from 3.8% in 1967 to 3.6% in 1968 to 3.5% in 1969. The next time the unemployment rate came close to those levels was after the minimum wage raises of 1996 and 1997. Business Week observed in 2001, “Many economists have backed away from the argument that minimum wage [laws] lead to fewer jobs.”
Numerous states raised their minimum wages higher than the federal level during the 1997-2007 period the federal minimum wage remained stuck at $5.15. Research by the Fiscal Policy Institute and others showed that states that raised their minimum wages above the federal level experienced better employment and small business trends than states that did not.
A series of rigorous studies by the Institute for Research on Labor and Employment at the University of California, Berkeley, significantly advanced the research on minimum wage employment effects. Minimum Wage Effects Across State Borders compared all neighboring counties in the U.S. located on different sides of a state border with different minimum wage levels between 1990 and 2006 and found no adverse employment effects from higher minimum wages.
The Institute for Research on Labor and Employment’s Spacial Heterogeneity and Minimum Wages: Employment Estimates for Teens Using Cross-State Commuting Zones found “no discernable disemployment effect, even when minimum wage increases lead to relatively large wage changes.” Do Minimum Wages Really Reduce Teen Employment? analyzed the 1990-2009 period (an earlier version analyzed 1990-2007). Carefully controlling for more factors than previous minimum wage studies, the researchers found the answer is no.
In a 2013 report, Why Does the Minimum Wage Have No Discernible Effect on Employment?, the Center for Economic and Policy Research spotlighted two recent meta-studies analyzing the extensive research conducted since the early 1990s; they conclude that “the minimum wage has little or no discernible effect on the employment prospects of low-wage workers. The most likely reason for this outcome is that the cost shock of the minimum wage is small relative to most firms’ overall costs and only modest relative to the wages paid to low-wage workers.” The Center report explores varied means of adjustment by employers such as increased worker productivity and diminished wage gap between lower and higher paid employees, noting, “But, probably the most important channel of adjustment is through reductions in labor turnover, which yield significant cost savings to employers.”
More recent studies on states and cities with higher minimum wages by the Institute for Research on Labor and Employment, Center for Economic and Policy Research, Integrity Florida and others cited below continue to show that actual minimum wage increases have not caused job loss.
In the 2015 report, Minimum Wage Policy and the Resulting Effect on Employment, the research institute Integrity Florida observes, “Economists cite several reasons why increases in the minimum wage, which raise employers’ cost, generally do not cost jobs. Increased pay adds money to workers’ pocketbooks and allows them to buy more goods and services, creating higher demand, which in turn requires hiring more workers. The higher wage may make it easier to attract applicants and results in less turnover of workers, lowering costs of employers.” They report, “Our examination of employment statistics in states found no evidence of employment loss in states that have increased the minimum wage and more evidence that suggests employment increases faster when there is an increase in the minimum wage.”
1Adjusted for inflation, the federal minimum wage peaked in 1968 at $8.68 (in 2016 dollars). Since it was last raised in 2009, to the current $7.25 per hour, the federal minimum has lost about 9.6% of its purchasing power to inflation. Back in 2015, The Economist estimated that, given how rich the U.S. is and the pattern among other advanced economies in the Organization for Economic Cooperation and Development, “one would expect America … to pay a minimum wage around $12 an hour.”
2Less than half (45%) of the 2.6 million hourly workers who were at or below the federal minimum in 2015 were ages 16 to 24. An additional 23.3% are ages 25 to 34, according to the Bureau of Labor Statistics; both shares have stayed more or less constant over the past decade. That 2.6 million represents less than 2% of all wage and salary workers. (See more about the demographics of minimum-wage workers.)
3Twenty-nine states, plus the District of Columbia and nearly two dozen cities and counties, have set their own higher minimums. State hourly minimums range from $7.50 in New Mexico to $11.50 in D.C., according to the U.S. Department of Labor’s Wage and Hour Division. Together, these states include about 61% of the nation’s working-age (16 and over) population, according to our analysis of U.S. Census Bureau data. Among the cities that have enacted even higher local minimums are San Francisco ($15 by 2018), Seattle ($15 by 2021), Chicago ($13 by 2019) and San Diego ($11.50 by 2017), according to the National Employment Law Project. And in 12 states, the minimum wage rises automatically each year based on a cost-of-living formula.
4About 20.6 million people (or 30% of all hourly, non-self-employed workers 18 and older) are “near-minimum-wage” workers. We analyzed public-use microdata from the Current Population Survey (the same monthly survey that underpins the BLS’s wage and employment reports), and came up with that estimate of the total number of “near-minimum” U.S. workers – those who make more than the minimum wage in their state but less than $10.10 an hour, and therefore also would benefit if the federal minimum is raised to that amount. The near-minimum-wage workers are young (just under half are 30 or younger), mostly white (76%), and more likely to be female (54%) than male (46%). A majority (56%) have no more than a high-school education.
5The restaurant/food service industry is the single biggest employer of near-minimum-wage workers. Our analysis also found that 3.75 million people making near-minimum wages (about 18% of the total) worked in that industry. Among near-minimum workers aged 30 and younger, about 2.5 million (or nearly a quarter of all near-minimum workers in that age bracket) work in restaurants or other food-service industries. But because many of those workers presumably are tipped, their actual gross pay may be above $10.10 an hour. (Federal law, as well as wage laws in many states, allows tipped employees to be paid less as long as “tip credits” bring their pay up to at least the applicable minimum.)
Now is the time to raise the minimum wage. Andrew have you not received a pay raise since 2009? Many Low income workers have not, why not them?