Tuesday, September 9, 2014

The State of Economic Understanding in the Country

Ike Brannon writes:

While waiting in line at my local grocery store in Washington, D.C., the other night, I eavesdropped on two thirty-something store employees discussing the $15 minimum wage that recently took effect in Seattle.

“It’s a start, but it ain’t enough,” averred the first man.

“Not in this neighborhood it isn’t,” agreed the second. “That’s barely, what, $30,000 a year?”

“Two people earning that much can’t raise kids on that money,” lamented the first.

“Two people? What about all the single parents — they’ve got no chance at all.”

“How much does it take to get by in this neighborhood?”

“With kids? At least $75,000, and that’s without a car.”

“Gotta have a car to work, realistically.”

“So that’s $80,000 a year. What’s that work out to for an hourly wage?”

“Divide by 50 weeks and then by 40 hours… so that’s $40 an hour.”

“Sounds about right.”

To understand the true impact of minimum wage laws see: Murray Rothbard On the Only Way to Truthfully Regard the Minimum Wage: Compulsory Unemployment


  1. It's not even $30,000. Probably $20,000 after all the taxes, mandates, etc.

    $30,000 with no taxes would be a heck of a standard of living hike for many people, as it would actually be more like $36,000 without the employer withholding most people don't even seem to know exists.

    Good luck keeping your effective tax rate below about 50% when the state's total spending has been sitting at about 50% of GDP for years. Plenty of people aren't working, so you're "lucky" if it's that "low."

    What drives me insane about the minimum wage "debate" is that it did not start until after the payroll tax was raised in 2013, and that itself increased the minimum wage!

    But does anyone even so much as suggest putting the paltry reduction back? Of course not. Cue Mises on one intervention leading to another and another and another...

  2. Our Progressive/Democrat government is pro union, is supported by union contributions.
    Unions want higher minimum wages,
    (1) They bargain using minimums as a comparison
    (2) Minimums remove competition
    The government wants higher minimum wages.

    Henry Hazlitt   [edited]:
    11/2008 at EasyOpinions
    === ===
    Economics is haunted by more fallacies than any other subject. The difficulties of the subject are great enough. And they are multiplied a thousandfold by the special pleadings of selfish interests.
      A group may benefit greatly from certain policies. It will hire the best buyable minds to argue plausibly and persistently for them. It will either convince the public or so befuddle the argument that clear thinking becomes next to impossible.
    === ===

  3. So, when he says "thirty-something", I assume he is referring to IQ...possibly combined IQ, at that.

  4. Heh, also note they divided by 50 weeks and not 52 so they get a free two weeks.