Minimum Wage Law Hikes Passed Across the Country This Year

(via WSJ)

How Hotels Are Responding to Minimum Wage Hikes: Keyless Cellphone Check-ins

Starwood Preferred Guest, the loyalty program from Starwood Hotels & Resorts Worldwide, Inc. (has announced  SPG Keyless. It is the hospitality industry's first mobile, keyless entry system allowing guests to use their smartphone as a key.

It will be rolled out to  Aloft, Element and W Hotels around the globe,  all Starwood properties.

SPG Keyless is making its official debut in 10 hotels in markets including Beijing, Hong Kong, New York, Los Angeles and Doha.

SPG Keyless enables guests to bypass the front desk (where available), go directly to their room and unlock their stay with a simple tap of their smartphone.

Lowe's Answer to Minimum Wage Hikes: Robot Sales Assistants

This is What the Oil Boom is Doing to Wages in North Dakota

The oil boom in North Dakota is the result of the discovery of the Bakken formation in the state that followed the discovery of Parshall Oil Field in 2006. New technology, including methods of extracting oil from shale and fracking have contributed to the boom.

The boom in means that Walmart must compete aggressively for employees, in the region.

The below pic shows what WalMart has to pay for various jobs in Williston, North Dakota.

Note well: All these wages are far above the current minimum wage. When market conditions warrant wages above the minimum wage, there is nothing that businesses, including large corporations like WalMart, can do about it other than pay the prevailing market wages, if the want to employ the workers. No unions needed, no government regulations required.

North Dakota oil production:

(ht Jeff Jacoby)

Socialist Hypocrisy

The Freedom Socialist Party (owner of the website domain name Socialism.com) routinely advocates that employers be forced to pay workers a minimum wage of either $15 an hour or $20 an hour. Yet when it comes to hiring a “graphic designer / web content manager” for its Seattle office, the organization is only willing to pay $13 an hour, see advertisement above and Craigslist listing here.

(via Mark Perry)

Getting in the Middle of an MMT Debate

As I have said before, I am going to pick my spots debating MMTers. There really is too much MMT stuff out there with moving parts to address most of the dance. However, when a comment is made that seems to need to be corrected because of its numerous fallacies that could mislead many, I will jump in, and such a comment has occurred.

MMTers Pavlina R. Tcherneva and John Carney of CNBC are having a debate over the call by most MMTers for a Jobs Guarantee program. Carney is against such a program, which is good to see. However, he yields much too much to those in favor of JG.

He writes:

Since I've been one of the critics of the Job Guarantee, there are a few points I'd like to make in response to this.

1. I agree that (a) unemployment is a social evil, (b) it is a serious macroeconomic problem of capitalist economies, and (c) the private sector cannot deliver a long term solution. Our point of disagreement is not on whether the world is beset by evils but whether or not a state-created program--more specifically, the Job Guarantee--can eradicate the evils.

First, I don't see unemployment as a "social evil".

I personally do not believe I have anything to do with the current unemployment situation and I am certain most others are not responsible for the unemployment. Long-term unemployment is the result of two factors: minimum wage laws and unemployment "insurance" payments.

If minimum wage laws are above the marginal revenue product of a potential wage earner that person will not be employed. This is simple basic economics. An entrepreneur will not hire someone if the cost is greater than the revenue. Pretty simple stuff. Make the minimum wage (cost to an employer) high enough and you will have massive unemployment. Second, if a person is offered payment for not working, some may opt for this option. I see no other factor that can cause unemployment (outside of some very short-tern unemployment when a person searches for a new job)

There is no "social evil" in unemployment, just as there would be no social evil if the government passed a law that bananas could not be sold for less than $500 each. The resulting rotting of bananas is not because of some social evil but because of a very specific action taken by government, having nothing to do with most in society. Society suddenly didn't hate bananas. Government regulations distorted a market exchange.

Second, unemployment is not, as Carney states, a "serious macroeconomic problem of capitalist economies". We see clusters of unemployment in economies at times when a central bank exists and manipulates the money supply, which results in the boom-bust business cycle. But this has nothing to do with "capitalist economies" and everything to do with central banks. During the bust phase, sizable unemployment occurs because the economy is going through a readjustment phase following the distortions caused by central bank money manipulation during the boom phase. But even this unemployment would clear up fairly quickly, if allowed to do so. The unemployment tends to linger only as a result of the minimum wage laws and unemployment "insurance" payments which hinder the readjustment process from taking place.

In other words, such unemployment has nothing with capitalist economics, and everything to do with government interventions in a capitalist economy.

Finally, it is not the case that the "private sector cannot deliver a long term solution", but that through the government interventions of minimum wage laws and unemployment insurance payments, the private sector is limited from hiring individuals at the wages the market will allow.

In other words, free the markets will result in the unemployment "problem" disappearing, and we won't have to get so pensive over "social evils" that are in reality problems created by evil doings of government leaders.

So Much for 2012 Pastry, Gelato and Salami Workers in San Francisco

The People's Republic of San Francisco has boosted the minimum wage in the city to $10.00 per hour.

This is on top of a 1.5% city payroll tax and the requirement that employers provide nine paid sick days and provide health care. This brings the total cost to over $12.00 per hour.

The confused San Francisco Living Wage Coalition is hailing the new higher minimum wage as though it will help minimum wage workers, when it will in fact result in some minimum wage workers being laid off.

Wages, like all prices, are set by supply and demand. When you raise the price of a product above the market clearing price, the quantity demanded declines. Raising the minimum wage will, if it is above the market wage (and it appears it is in SF), will result in some workers being laid off at the margin.

Indeed, that appears to be exactly what will occur in SF.

SFC reports:

"I hate it," Daniel Scherotter said of the city's highest-in-the-country minimum wage.

He's the chef and owner of Palio D'Asti, an Italian restaurant in the Financial District, and a previous president of the Golden Gate Restaurant Association...

He said he recently cut his kitchen staff by eight workers and no longer makes pastries, gelato or salami in-house, thereby directing his money outside the city for those products.

And it won't boost the standard of living for others in the city, either. Scherotter explains:

"If you want to know why so many chefs are getting into the food truck, taqueria, quick-service game, that's why," he said. "Of course we all love tacos, but the fact is if you're operating on the 19th century model with full-service, that's got problems."...

"Who the hell would hire a teenager for $12 an hour?" he asked.

And there you have it, a perfect example of do-gooder laws hurting everyone. The higher minimum wage will hurt those just attempting to enter the wage force, making many unemployable. Leaving them to do nothing but roam the streets. The business owner isn't happy because he has to waste time finding ways around the onerous wage laws. And the consumer sees his standard of living drop, since fewer will attempt to enter the labor intensive restaurant business.

In other words, a trifecta of trouble, because of  basic economic ignorance in the land of heavy fog.

Interventionist Policies and Youth Employment Don't Mix

50% of workers under 25 are unemployed in Spain and Greece. It's a combination of high minimum wage laws, the nanny state and regulations keeping youth from getting jobs---a truly sad situation.