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Free Minds & Free Markets

The $15 Minimum Wage Is Turning Hard Workers Into Black Market Lawbreakers

An in-depth look at New York's car wash industry, and the real world consequences of politicians interfering with a complex industry they don’t understand.

On March 4, 2015, a group of union leaders, activists, and elected officials were arrested for blocking traffic during a protest in front of a Vegas Auto Spa, a small car wash in Park Slope, Brooklyn. Chanting "No contract, no peace!" and "Si se puede!," they had come in support of striking workers, who had walked out demanding a union contract after allegedly being subjected to dismal working conditions.

For David Mertz, the New York City director and a vice president at the Retail, Wholesale and Department Store Union (RWDSU), it was an inspirational moment in an ambitious six-year campaign to unionize the city's car washes industry.

"These workers were willing to stand out there during one of the coldest winters...literally in decades to fight for their rights and for basic human dignity," says Mertz, who was also arrested that day. "You have the ability to make change by coming together, and when you do that sometimes you find that you've got some friends on your side."

In the past six years, the car wash industry, which employs low-skilled, mostly immigrant workers, has also been the target of lawsuits for alleged underpayment of wages, including a handful of cases spearheaded by the New York State Attorney General's office. Working conditions in the industry were also cited as a raison d'être in the successful campaign to raise the state minimum wage to $15 per hour, which takes full effect at New York City car washes in January of 2019.

As Reason chronicled in a feature story in our July 2016 issue, the real world impact of the unionization drive, the lawsuits, and the $15 minimum wage has been mainly to push car washes to automate and to close down.

Two years later, there are more unintended consequences. The $15 minimum wage is fostering a growing black market—workers increasingly have no choice but to ply their trade out of illegal vans parked on the street, because the minimum wage has made it illegal for anyone to hire them at the market rate.

The minimum wage is also cartelizing the industry: Businesses that have chosen to automate are benefiting from the $15 wage floor because outlawing cheap labor makes it harder for new competitors to undercut them on price and service.

As a sequel to the 2016 article, this video takes an in-depth look at the real world consequences that result when politicians interfere with a complex industry they don't understand, enabled by media coverage that rarely questions the overly simplistic tale of exploited workers in need of protection.

A Failed Unionization Drive

"The car wash campaign serves as a model for what might be possible," RWDSU President Stuart Applebaum shouted from the podium during a December 2014 speech at the UNI Global Union in Cape Town, South Africa.

"The genesis of this campaign came out of a realization that you had an industry which was just a breeding ground for terrible conditions for workers," says RWDSU's Mertz. "We heard reports of workers working 60 or 70 hours a week."

The truth is that from the very beginning, nothing about the car wash campaign has gone as planned. After six years, organizers have unionized 11 businesses, or about four percent of the city's registered car washes. Two of them have since closed down, and the union withdrew at three more because of a lack of support from the workers. There are just six unionized shops remaining, or about two percent of the city's registered car washes.

And that number may continue falling.

"They just come and collect their fees, but I don't see an economic benefit from the union," says Ervin Par, a 37-year-old immigrant from Guatemala, who was speaking in Spanish. Par has been cleaning cars professionally for 10 years. He currently works at Main Street Car Wash in Queens, one of the city's six remaining unionized shops. Organizers have held two strikes at this location in the past few years, and in 2013 The New York Times covered allegations of worker mistreatment here.

Now, with the union contract expiring, Main Street could become the fourth car wash where the workers pressure RWDSU to withdraw, which would bring the total of unionized shops down to just five. "Among my colleagues, there's a majority that doesn't want the union," says Par.

Par shrugs off the idea that the workers at Main Street need union protection. "Protection from whom? If I don't like working here, I'll go find a job at a different place. There are many places to work where the pay the same. They don't pay more. They pay the same."

RWDSU's Mertz told Reason that he "doesn't have all the facts" on Main Street Car Wash "at this particular moment," adding that "we represent the workers there and we certainly hope that we'll be able to continue to do that."

The $15 Minimum Drives Automation

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  • General_Tso||

    You were saying something about 'best intentions'?

  • Angelique||

    Another neo-Luddite complaint that technology is driving away jobs, so that it needs to be fought.

  • DarrenM||

    Driving away jobs because of another artificial distortion of the market by government, not because forced automation was objectively an improvement. If it made sense to automate, the business would automate. It's not a good idea to force it since every situation is different.

  • Angelique||

    Automation is ALWAYS an improvement. It may start to lower labor costs, but then it starts bringing in other benefits.

    And my personal opinion is that workers who not make enough to earn living expenses end up in food stamps and Medicaid, which I pay for.

    And since I do NOT wash my car there, I believe that paying those workers is ripping me off

    I do NOT enjoy being ripped off. If you want my money, give me a good or a service in exchange. Complaining about "market distortion" is not it.

  • MiloMinderbinder||

    ALWAYS?

    What about Obama's Electronic Medical Records?

    Everyone seems to agree that was a rent-seeking, money-wasting fiasco.

  • Echospinner||

    Obama did not invent the new tech in medical records. EMR is not a fiasco and does not have as much to do with the government as they would like to claim.

    It is newer technology and takes time to evolve and users to adapt. Mostly it is internally driven.

    Medicine is basically information and analysis. What meds are you on, what were your last lab values, you had a CT scan two years ago how does that compare to the current one, what did the radiologist say, what did the GI doc say and results of the colonoscopy in 2015? The pathology report. (Not what you remember, what the doc wrote as consult which is not the same thing). Patients hardly ever know.

    More information and more data faster. The other thing driving it is the billing department. You know it works on coding. Diagnosis code and procedure code. With EMR that happens much faster.

  • Bubba Jones||

    The biggest problem with EMR is that docs are old and tech illiterate. The staff is worse. They are literally paper pushers.

  • BYODB||

    The biggest problem with EMR is that the functionality is dictated by law rather than the needs of any organization in particular.

  • BYODB||

    Not to mention that if you're an independent doctor, well, fuck you and join a hospital system. The ACA and it's many facets are accelerating conglomeration and monopoly.

  • Ben of Houston||

    As a programmer with several medical personnel in the family, I can tell you for certain that they are horrifically designed for the end user.

    More specifically, they are not designed for the end user. They are designed for the billing department. The design is based on the same scripting system designed for answering services and tech support. As anyone who as ever called technical support can tell you, this means they are slow, cumbersome, and make everyone involved feel like an idiot.

    Worse are the ones that are on completely wrong platforms, such as at my aunt's hospital, which made it a server-based ASP website, based on unreliable WIFI. This means a lot of data entered was lost.

  • Angelique||

    This is a problem that gets solved with time, as the old retire, and the new ones will be tech literate as they grew up with PC or Apples.

  • Sevo||

    Angelique|10.12.18 @ 11:18AM|#
    "This is a problem that gets solved with time, as the old retire, and the new ones will be tech literate as they grew up with PC or Apples."

    Yep, those forced to labor camps by the government die in time.
    Fuck off, slaver.

  • TrickyVic (old school)||

    "" EMR is not a fiasco and does not have as much to do with the government as they would like to claim.""

    If you qualify as a eligible provider under meaningful use, the government dictates a fair amount of what you do.

  • Gasman||

    It wasn't ever intended to be automation.
    The data is stored electronically, but it does not get there by magic.
    Go to a hospital or other health facility and watch what people are doing with most of their time; it is sitting in front of a terminal pecking keys and clicking the mouse.
    That is the opposite of automation. The more expensive the worker, the more time they spend as data entry clerks.

  • Echospinner||

    Yes so it pays to have data entry clerks. Docs have always had assistants. The medical assistant who takes your blood pressure, tech specialist for the ophthalmology practice I went to yesterday, through higher levels like a PA or RN.

    It is a team group and for sure there is billing and collecting of fees charged. The person entering into the record is a skilled worker as is the tech doing your ultrasound. This is not new.

    The doc does need to move in current tech. This is what you signed up to do. You can just adapt and learn. It never stops.

    The frustration is when you need to jump through hoops because this patient needs an MRI or something and the insurance company public or not will not pay. So now the patient cannot afford it, or will not fill the drug prescription they need.

  • TrickyVic (old school)||

    ""Yes so it pays to have data entry clerks."'

    A tech savvy doctor doesn't need data entry clerks. You chart the visit in the EMR as the visit occurs. Too many times I've seen doctors complain about how long it takes when they document the visit on paper, then documents it again in the EMR after the visit. More often than not, I get a funny look when I point out they create more work for themselves because they are resisting the new way.

    We have a couple of new young NPs. They don't have this problem.

  • Angelique||

    You know, your comment about data clerks could make a good argument for Canadian style healthcare. Because navigating all the insurance policies is a full time job. Someone commended that the billing department in the USA can take up a whole floor of insurance specialists, while the billing Department in a Canadian hospital takes at most three desks.

  • Sevo||

    Angelique|10.12.18 @ 11:34AM|#
    "You know, your comment about data clerks could make a good argument for Canadian style healthcare. Because navigating all the insurance policies is a full time job."

    Yes, thank you Harry Trueman and price-fixing.
    And thank our newest slaver for using that to promote more bullshit.

  • TrickyVic (old school)||

    Gasman is right. It was never intended to be automation. Although most good systems can interface a vitals device like a Welch Allen LXI, or a ECG device and the data is pushed directly into the EMR. They also can interface with Dragon Natural Speaking, but that can get expensive and it's sometimes clumsy.

  • Angelique||

    New tech is always clunky, and people need time to learn it. Just go into a retirement community and look at how many have to realy on their grandchildren t be able to send e-mails. But the kids know it.

    The first computers were incredibly clunky, took a lot of room, and needed constant air conditioning.

    Look at your laptop now.

    Compare your cell phone to the old wall phones that need cranking.

    The first technology is barely an improvement over the old fashioned method. BUT it does not stay there.

  • Sevo||

    "And my personal opinion is that workers who not make enough to earn living expenses end up in food stamps and Medicaid, which I pay for.

    And since I do NOT wash my car there, I believe that paying those workers is ripping me off"

    Goody for your opinion and beliefs.

  • Angelique||

    Seriously.. I am willing to pay for something in exchange. But if I pay so that others can wash their cars more cheaply, I am getting NOTHING out of it.

    I am not a stingy person.. I can be a soft touch at time. But there is a difference between being generous and being a chump.

  • Sevo||

    Angelique|10.12.18 @ 11:36AM|#
    "Seriously.. I am willing to pay for something in exchange. But if I pay so that others can wash their cars more cheaply, I am getting NOTHING out of it.
    I am not a stingy person.. I can be a soft touch at time. But there is a difference between being generous and being a chump."

    Which says nothing about your bullshit, slaver.
    Fuck off.

  • I'm Not Sure||

    "And my personal opinion is that workers who not make enough to earn living expenses end up in food stamps and Medicaid, which I pay for."

    Who do you suppose pays for the additional benefits these people get once they're put out of work by these stupid laws?

  • Angelique||

    Once they are out of work, I would gladly pay for them to get training for a job that turns them into taxpayers like me.

    I do not mind investing in creating future taxpayers, because I get a payoff at the end. They are no longer my concern and they get to share the burden.

    And most important, by raising the cost of labor, I lower the cost of using technology. And I am all for technological advancement - and historically low labor costs are the enemy of new technologies.

    As that Indian lady said to the washing machine salesman "Why should I buy your machine when I can get a laundress to do it for pennies?:" Yes, it might be good for her, and maybe good for the laundress, to a point. But lousy for washing machine manufacturers, and the people who work for them.

    I have no patience with neo-Luddites.

  • BYODB||

    Automation is not a benefit when it's more expensive than human labor due to government intervention. It artificially raises prices while reducing employment. Duh, McFly.

  • MatthewSlyfield||

    When has government intervention ever made automation more expensive than human labor?

    Generally, and specifically in the case of minimum wage laws (particularly "living wage" laws) government intervention makes human labor more expensive than automation.

  • BYODB||

    Yeah, that was supposed to read 'less expensive than human labor'. I'm like a Reason author, post fast with cursory editing then look like a fool.

  • vek||

    Well, it's a supply and demand issue.

    Everybody wants people to make decent money in theory. The thing is, if we keep flooding the country with no skill people as open borders people want, this is literally impossible.

    So the obvious outcome, is you have people who are willing to live in living standards native born people would consider disgusting and inhumane. So you either control the supply side, or you put in a minimum wage.

    Frankly, I think people who talk about open borders without admitting that it will destroy the entire concept of a 1st world nation existing are trippin'. It's an obvious outcome from true open borders. Having mildly too much low skilled immigration like we've had has merely somewhat suppressed wages.

    So, do you want to live in a country where even the poor are moderately well off, with less crime, no shanty towns, etc... Or do you want to live in a country where there are shanty towns, and you need to hire body guards to take your kids to school if you can afford a $50K dollar car?

    Cuz those are the options. I support limiting the supply of cheap labor, because of the political and cultural problems they also bring. Not purist libertarian, but it is practical!

  • Ben of Houston||

    In general, automation is good if it can replace labor at good quality. For example, no one washes their clothes by hand except in very rare situations. The clotheswasher is a nearly 100% solution that saves hours of time.

    For other things, automation is less useful. Do you wash your good pans, fine china, or cooking knives in the dishwasher? Of course not, they don't get everything clean, break things regularly, and encourage blunting and rusting. The dishwasher is nowhere near a 100% solution, and so we don't use it nearly as often.

    A car wash is closer to a dishwasher.

  • Agammamon||

    Even if a washing machine did a shitty job it can be worth using it to replace human labor.

    There's 'good quality' and there's 'good enough'. And sometimes its worth taking 'good enough' if its cheap enough and not important enough to you.

    Yes, I do wash my good pans, cooking knives (I don't have fine china - I'm a prol) in the dishwasher. Mine gets things clean and doesn't break anything. But your example shows how a lower-quality automation solution can still be desirable. If nothing else, there is still stuff that the dishwasher can handle adequately - and so that's less labor spent washing things the dishwasher can handle while you focus on the things it can't. That low-quality solution is still saving you labor.

  • Angelique||

    Not to mention that a dishwasher can use hotter water than your hands be comfortable with.

  • vek||

    Totally agree.

    The good enough solution is often just fine. If a few percent of people want to get their Bentley hand washed, I'm sure some places will still stay open.

    Other than the fact that this is a government imposed wage, it's essentially the same argument as "But a high quality seamstress can hand sew you new pants that will fit way better than the machine made ones!"

    Yes, they can. And people still do this on suits, or other clothing items sometimes... But for 99% of clothing, factory made is a FAR better solution. If everybody still employed seamstresses to make their clothing, the nation would be vastly poorer for it.

  • Agammamon||

    Automation is not always an improvement - hence the reason companies don't spend huge amounts of capital to automate jobs away in every sector of the economy.

    It makes sense when the capital costs equal or are lesser than labor costs over a given period of time - and that period is different for different businesses.

    Here's a personal anecdote. I ran a cleaning company (just me) and I could have spent $30,000 on a robot mop/vacuum (good enough to stand in for an employee). However, based on initial outlay and ongoing costs, the payback period (where it would start earning money for me) was too long for me to afford. In that situation, automation would have drained my bank account, likely driven me out of business, and then left me with a large debt.

  • vek||

    Totally.

    The thing is the math changes as wages change. If every company in America DID invest heavily in automation, our GDP per capita would shoot through the roof.

    There was a study done that showed farms in the northeast had automated far more than those in the west and southwest... Because they had access to cheap illegal immigrant labor. So what kind of society do you want? One with a bunch of people making low wages slaving in fields... Or far fewer people making far higher wages running some machines?

    The flood of cheap labor in this country has prevented us from becoming the better of those two options in many areas. There's a reason Japan has been automating the shit out of a ton of stuff, doing really cutting edge work. They have a shrinking population, and let in VERY FEW immigrants. This is making their economy more efficient in terms of man hours.

    At the end of the day it's a matter of balancing the two. Nobody wants people living in abject poverty, but people also don't want to have to spend capital inefficiently.

  • Blaze Miskulin||

    Automation is ALWAYS an improvement.

    So... Ikea is an improvement over my hand-crafted cedar chest? The "Hungry Man" frozen lasagna is an improvement over the lasagna I make at home with fresh ingredients? Bots are an improvement over actual conversation? BYD is an improvement over Rolls Royce?

    Automation is one option out of many, that is good for achieving some goals.

  • BigT||

    "Automation is ALWAYS an improvement."

    Think sex robots! No constant harping, no headaches, no 3-day vacations, no expensive dinners or shows, no alimony, no kids!

    Hmmmmm...

  • Angelique||

    IKEA us an improvement if you cannot afford the hand-crafted cedar chest (unless you got it a a yard sale or Goodwill). The frozen lasagna is an improvement if you come home tired, and hungry, and do not feel like chopping vegetables. And do you realize that the technology of the PC makes it possible for both of us to have a conversation, even if we are miles apart?

  • davesnothere||

    "Automation is ALWAYS an improvement."?

    "The customers prefer us," he says, "because when they come with bird droppings, or whatever, we clean it up. The machine can't do that.

    Automation is only an improvement when it works. Not for its own sake, and certainly almost never when mandated from the government.

  • Agammamon||

    Whether or not automation is 'objectively an improvement' is something that is decided by the market *as it is* - not as it would be if it weren't distorted.

    So yes, an artificial change in the market means that automation is now objectively an improvement when it wasn't before - and even though it wouldn't be absent that change.

  • Angelique||

    Since the rule of technology is that it keeps improving and refining itself (what would our grandparents have said about putting our phones in our pockets and going out with them?) you can bet that the "market distortion" does not last long.

  • Angelique||

    Since the rule of technology is that it keeps improving and refining itself (what would our grandparents have said about putting our phones in our pockets and going out with them?) you can bet that the "market distortion" does not last long.

  • Bubba Jones||

    This story puzzles me.

    They were striking over the prior wages. And now are frozen out by the new ones.

    What wage were they seeking?

  • Don't look at me!||

    Nobody really needs 26 different car washes.

  • DarrenM||

    No one really needs their car washed at all.

  • MatthewSlyfield||

    +10

  • BBerry12||

    Well maybe you don't mind "getting where you need to go" in a grubby faded rusty shitbox. Many of us feel differently. Of course I only use a car wash when it's freezing and I can't stand looking at the road salt. Even the brushless places leave scratches in the clear coat.

  • Red Tony||

    This is sad. Not because anybody was explicitly wrong; everybody thought they were doing the right thing. The consequence is that the people who were supposed to be helped got fucked. More than anything, this is why government shouldn't interfere with business and the minimum wage shouldn't exist; it leads to negative consequences that never get considered by the would-be do-gooders.

  • creech||

    "would-be do-gooders." i.e. folks who don't own cars or who have their cars detailed, not washed.

  • Angelique||

    That is, people who do NOT use the service

    And yet they have to pay for the food stamps and Medicaid for those workers use.

    You can bet that they do not enjoy being ripped off that way.

    If you have your car washed there, enjoy the low prices

    If you do not, what are you getting for your money? A lot of rethoric about the free market? That and a buck fifty will get you a cup of coffee certain joints.

  • sarcasmic||

    Is that like the Chewbacca defense or something?

  • Angelique||

    It is the "I do not enjoy being ripped off for the benefit of others"

  • Sevo||

    Angelique|10.11.18 @ 4:20PM|#
    "It is the "I do not enjoy being ripped off for the benefit of others""

    Bullshit.
    It's the "I make up shit" defense.
    Fuck off.

  • Angelique||

    Maybe you enjoy being ripped off for the sake of your principles. I do not

  • Bubba Jones||

    Illegal immigrants get Medicaid and food stamps?

  • BYODB||

    Why do you think identity theft is a quickly growing black market industry in the United States?

  • BYODB||

    And, in fairness, if their children are born here they're automatically eligible for both of those programs since wages will go unreported thus ensuring they meet the criteria.

  • Agammamon||

    Jesus fucking Christ.

    Welfare is not a subsidy to employers.

    Welfare RAISES THE RESERVE WAGE - ie, it increases the amount of money an employer must pay to get someone to get off their arse and come work. Its a subsidy to the lazy because it allows them to work less while getting enough money to stay alive.

    Oh, and now that these people aren't working *at all* - who is being subsidized under your theory? Who is still paying for that welfare?

  • Leo Kovalensky II||

    it leads to negative consequences that never get considered by the would-be do-gooders .

    They don't consider the consequences because it doesn't fit their narrow world-view, nor does it support their background premise that corporations are evil and only out to exploit their employees.

  • Longtobefree||

    They union organizers were/are explicitly wrong, because they oppose individual choice. They did not think they were doing the right thing; they thought they were going to get new members to pay more dues.
    The politicians were/are explicitly wrong, because they were just out for contributions and votes, not looking out for their constituents.
    The would-be do-gooders (your term) did not lead to unconsidered negative consequences, they got exactly what they were after. They are not do-gooders.

  • Agammamon||

    . . . everybody thought they were doing the right thing.

    Only if you consider the set of 'doing the right thing' to include 'doing something to my benefit and fuck everyone else' like the union was.

  • Echospinner||

    There is a local burger chain. They are expanding around here. They make great burgers, shakes, and fries which is key. The other thing they do which sets them apart from the others is old school curbside service instead of a drive through window. You pull into a space, a young man or woman runs out, takes your order, and brings it to you. Tips appreciated and they work hard at it. They have more workers than any other burger place and everyone is happy.

    The workers make better than $15 an hour

    I know someone who's son worked the summer at the full service car wash. He was making 15-$20 on split tips. Not easy work but better than a high school kid could get anywhere for a summer job. They keep the young workers to four hour shifts so he could have more time off for summer fun. They encourage teamwork and responsibility as the tips were split.

    Nobody can make a pencil.

  • Bubba Jones||

    The reinvented sonic?

    I hate that feature. I don't want to eat in my car.

  • Echospinner||

    I take it home. Some people do eat in the car on lunch hour whatever they want. Not a bad thing when you are working and going from one place to another.

    The KFC/ Taco Bell here never gets the order right and takes the same amount of time.

    This place is better than Sonic by far. Trust me if we went there you would really like these burgers and stuff.

    This is legendary in my rust belt place. So I am willing to drop five bucks more for and end up with a far better lunch.

  • MatthewSlyfield||

    "Nobody can make a pencil."

    Somebody can make a pencil, or there would be no pencils.

  • ace_m82||

    Oh, pencils can be made, but not by one person. Google "I, pencil".

  • Echospinner||

    Milton Friedman talked about it.

    An iPhone is a better example today since nobody knows what a pencil is.

    The guy who sweeps the floor in the factory is essential. Start there.

  • Ken Shultz||

    There are rumblings in Amazon land about the new $15 an hour minimum wage there. To mitigate for that wage hike, warehouse employees are no longer eligible for Amazon stock awards or performance bonuses, which for some workers means they'll be making less on an annual basis.

    http://finance.yahoo.com/news/.....28353.html

    Turns out there's no such thing as a free lunch.

  • Sevo||

    "To mitigate for that wage hike, warehouse employees are no longer eligible for Amazon stock awards or performance bonuses, which for some workers means they'll be making less on an annual basis."

    This showed up on some news-feed a day after the announcement; no real surprise.
    Bezos went with the PR move and is making up the money elsewhere.

  • Echospinner||

    Have you looked at Amazon stock this week.

    Better deal to pay cash to employees. Better for the workers and better for the company

    The long awaited market correction is happening.

    The bonuses were based on corporate performance not individual.

    With cash workers can make choices.

  • Juice||

    So you wouldn't take stock as payment? You're not buying the stock hoping it goes up in price. You would most likely sell it immediately, especially if it's declining.

  • Echospinner||

    I think you answered the question.

  • BYODB||

    Don't forget that the minimum wage, which is support by most Americans, is also one reason why immigration is largely illegal. It's a causal relationship, like it or not. Not to say it's the only cause, mind you, but it is one direct cause.

  • Bubba Jones||

    That seems backwards. An effective minimum wage would eliminate the competitive advantage of immigrants with low expectations.

  • BYODB||

    Sure, you'd just have to outlaw cash first right? The 'effective' bit seems to be glossed over for rather obvious reasons.

  • Agammamon||

    In the same way making drugs illegal has eliminated them from the country.

    Its just driven sub-minimum-wage work into a black market.

  • vek||

    Yup. Because people don't want to have their standard of living destroyed, which unchecked immigration would do.

    Because people are rational.

    Anybody who advocates TRUE open borders needs to understand it will destroy the standard of living of probably 80-90% of people in 1st world countries. We're only wealthy throughout the entire spectrum of income here BECAUSE we limit immigration, and the destruction of wages unlimited numbers of people pouring in would cause.

    Open borders = equalization of wages globally. Given that 6+ billion of the people in the world are impoverished and mostly uneducated... Equalization is NOT GOOD. In 1st world countries that means a massive drop in wages. Why would a rational person want that for themselves and their children?

    Since I don't want to live in a 3rd world toilet, this is why I don't think we should have low skilled immigration. It's a rational, logical, choice for sane people to make. Why would one want to slit their own throat? For some bullshit abstract "right" like international freedom of movement? Puh-leeze. Who cares? Making people stay in their own country isn't like murdering babies, hence whatever small moral sleight it causes is below registering on my "give-a-fuck" meter.

    I say this as a business owner, and one of the 10-20% that might even benefit. NOT WORTH IT. I like not having to hire armed guards to protect myself like the wealthy do in 3rd world countries.

  • MoreFreedom||

    Open borders is mostly a problem because of government welfare, not because of competition for a limited number of jobs. It seems people forget, that more people in a country, means more jobs producing and servicing everything those people consume and purchase. And they forget that when wages decline due to lots of available employees wanting those jobs, consumers benefit from lower prices.

    Which is part of the reason the establishment wants to ignore the immigration laws (silly me, I learned in grade school if you don't like the laws, change them) because that will increase tax revenues and help the government not renege so much on it's promises on the socialist Social Security and Medicare plans.

  • vek||

    Unfortunately, you are INCORRECT.

    The MIX of employment matters. The USA, Europe, Japan, etc are wealthy because we have a lot of highly educated people, that soak up the majority of the worlds high value work. Illiterate dirt farmers from the 3rd world are not capable of this on arrival. If one wants to be optimistic, it will take a couple generations for a statistically average immigrant family to become capable.

    So, if you allow in ANY type of immigrant, we will receive mostly unskilled people, since that is what the vast majority of the world is.

    This results in a nation with a higher GDP, and vastly lower GDP per capita. The excess of unskilled people will drive wages down for everything that isn't highly skilled. Probably everything from mechanics/welders/plumbers on down will be borked in terms of income. Programmers and doctors may be okay, assuming we don't get every programmer/doctor in India moving here too. I would argue keeping wages down on the high end wouldn't be a horrible thing though, for various reasons. However pushing middle-middle class jobs to being below current working poor pay rates would be a MAJOR problem for maintaining a 1st world nation.

  • vek||

    Service industry jobs DO NOT produce new value. There can only be as many of them as are supported by productive jobs, like intellectual property (tech/media/pharma), manufacturing, mining etc. We would literally have to go back to being a manufacturing based economy, and bottom out wages considerably more than they are now to become globally competitive in that again, to even find enough work to potentially put all these new unskilled people to work. Service industry couldn't do it.

    Yes, prices would go down by suppressing wages... But we would no longer be a 1st world nation. We'd be a country like Mexico, or Brazil, or China. They all have plenty of people that make good money, and they have teeming masses of poor people. I don't find this desirable. Maybe you do, but if so why don't you just move to a 3rd world toilet now, and not ruin the USA for everybody who likes living in a civilized nation?

    So, again, in reality we cannot have a 1ST WORLD country with open borders. There are not enough high value jobs in the world to do it for one, and even if there were illiterate peasants cannot do them. The only way you can maintain a 1st world country is by keeping the ratio of high skilled people to low skilled in balance.

    Open borders in the world as it currently exists cannot happen if you want to have a 1st world nation. In 100 years when more people are educated, and the gaps are smaller globally, it may be possible... But not now.

  • sarcasmic||

    Working conditions in the industry were also cited as a raison d'être in the successful campaign to raise the state minimum wage to $15 per hour
    .
    .
    .
    Businesses that have chosen can afford to automate are benefiting from the $15 wage floor because outlawing cheap labor makes it harder for new competitors to undercut them on price and service.

    Textbook example of Bootleggers and Baptists.

  • uunderstand||

    Baptists have been automated? I knew there was something wrong with services last Sunday.

  • CGN||

    Government screws EVERYTHING up, and the $15 minimum wage is just the latest example. For starters, what right do the feds have to meddle in what should be a state function? Secondly, what happens to the workers when companies start saying "to hell with the minimum wage" and start mechanizing formerly human jobs, or move them overseas? Answer, the idiots in government, of which Warren is one, will bitch about "shipping jobs overseas" when all that was needed to prevent the same would be dolts like Warren bowing the fuck out of what is none of their business.

  • sarcasmic||

    Secondly, what happens to the workers when companies start saying "to hell with the minimum wage" and start mechanizing formerly human jobs, or move them overseas?

    That's not the intention. The intention is to force businesses to employ people at a loss. After all, the purpose of running a business is to create jobs. If businesses do not subsidize workers with profits, that's because greedy businesses have bad intentions. It's not the fault of the laws that were created with good intentions.

    Don't you know anything?

  • RPGuy16||

    "The $15 minimum wage amounts to government prohibition of low-wage work."

    This truth should be promoted more and more. People tend to think of the minimum wage as a regulation on the employer but it's really a regulation imposed on the worker - they are not allowed to work unless their contribution is worth more than some arbitrary number set by government.

  • TJM||

    Yes!

  • TJM||

    Yes!

  • vek||

    This is true in many instances... What economists call tradeable employment IIRC. But for captive industries, like a local coffee shop, it can in fact often just force wages to rise, and prices to rise, without having AS BIG an impact as it might on manufacturing or some other job that can be sent elsewhere.

  • Uncle Jay||

    Politicians should take a course in rudimentary economics before passing such asinine legislation like minimum wage.
    Oh, wait.
    That would mean they would have to know how to read.
    My bad.

  • TJM||

    The hubris of progressives and snakes like that union schmuck never cease to amaze me. They need to hear what I tell my kids, you worry about yourself, and yourself only.

  • DrZ||

    Unintended consequences from compassionate legislation? Who would have thunk?

  • ||

    It just blows my mind how short-sighted and economically illiterate supporters of $15 min. wage. Even zombies who just swallow this nonsense without much critical thought.

    Lest we forget the main reason why minimum wage was created in the first place was racist at it roots.

    Ironic how lefties don't mention countries like Denmark who don't have a minimum wage whenever they point to them to pimp their socialist alchemy.

  • ||

    are

  • Rob Misek||

    Minimum wage is a corrupt concept. It implies that or could survive on it, minimum, but one can't.

    It drives people to lives of crime or welfare.

    We should have a "living wage", that people can not only survive on but enable savings for anyone willing to work full time.

    Why should we let capitalist slavers set working conditions that get them rich on the backs of the poor.

  • MSimon||

    If a $15 minimum wage is good, wouldn't a $500 minimum wage be much better?

  • vek||

    Actually we should have a $500 minimum wage! It would drive home the point of how futile a concept it all is... After about a year of MASSIVE inflation, that $500 would buy the exact same as $8-9 an hour does now, which seems to be about the market rate for minimum wages even in cheap parts of the country.

    It sure would be hilarious to watch everybody flip out thinking they're gonna be rich! Only to watch them shit a brick when they go to the store the next week and see that a loaf of bread now costs $275. LOL

  • MatthewSlyfield||

    "Living wage" is an even more corrupt concept than minimum wage.

    The truth is that minimum wages (at any level) are not just limits on the employer. The are a prohibition on low skill workers who can't make an economic contribution to the business greater than the minimum wage.

    It drives people into permanent unemployment which drives them to lives of crime or welfare.

  • blorgsnarfer||

    Yes, there are unintended consequences from raising the minimum wage. A purely libertarian approach to wages means that people without options can be exploited for wages so small that they cannot fully sustain a person - but they're better than no job at all. When you install a wage floor at higher than what the market will bear, initially you will find that marginal businesses won't be able to pay the minimum wage, which suppresses unemployment. Both situations are non-ideal, but at least with the $15 minimum wage, people who are employed can survive. And motivated businesses find that two things are true: with a living wage, you get a more reliable workforce, and eventually, you absorb the cost of the labor with a high enough price for the goods and services you sell. After all, your market now makes more money.

  • parasitwasp||

    Borgsnarfer and Rob Misek, Did you guys not read the article? The whole point, of the story, was to show good intentions were destroying people's livelihoods. What is a living wage but another name for minimum wage. Say want you want, but the end result is the exact same, shutting out unskilled workers from valuable work experience.

  • Rob Misek||

    No, one can't live on minimum wage. It is useful only for people who want a part time supplement.

    For people to live in society they should receive a living wage, as the name suggests as enough to live on with dignity, as compensation when they devote their full time lives to any employer.

    Employers should have the legal responsibility to provide full time living wage opportunities and not only part time minimum wage ones.

  • MatthewSlyfield||

    Employers have a responsibility to earn a profit to keep the business viable.

    "Living wage" is nothing more than a euphemism for a very high minimum wage.

    If a task is time consuming, but less valuable than your "living wage" or even a normal minimum wage a responsible employer faced with a minimum wage or "living wage" law will either automate to eliminate human labor from the task or simply forgo that task entirely, this leads not to more full time living wage opportunities, but fewer.

    Oh, and point of history.

    State minimum wage laws were largely originally passed for racist reasons to price blacks out of the labor market entirely. The US national minimum wage was originally enacted as part of the child labor laws.

  • vek||

    Except for facts, Rob.

    Most people that make minimum wage are young. Most aren't the sole earners in their household. Most don't have kids. I could go on.

    I wasn't exploited as a teenager when I worked for minimum wage. It isn't supposed to support a wife and 5 kids! Anybody who thinks it is is a moron.

    Also, any ADULT who doesn't move above minimum wage is a moron. Even people that work at shitty greasy spoon restaurants can get promoted over time and make a solid amount over minimum. An ex girlfriend of mines brother managed a Burger King he started working at when he was 19 or so. He makes $60 something grand a year IIRC.

    Starting pay is not supposed to be what ANYBODY makes their whole life. For those that are that big of a blow it case, weeell they're just going to have to rent a room, instead of have their own place, and not expect to be buying any BMWs. That's the breaks. Life ain't fair, and BS government laws can never make it so.

  • sparkstable||

    And as businesses raise costs of final goods and services to be able to pay for the increased wages... those wages become relatively lower until the earning potential of workers is right back to where it was before the minimum wage was imposed.

    Production of a worker MUST be more than he earns or else there literally is no wealth out of which to pay him AND keep the business going.

  • Rob Misek||

    Things will cost more, get over it.

    That is the cost of living in civilization.

    Only greedy animals do an end run around their local economy to purchase from foreign civilizations with poor living conditions.

  • MatthewSlyfield||

    You miss the point. even without "end runs around their local economy", the production of a worker must be worth more than his wages or there will be no wages at all, because there will be no job.

    Things costing more, means the worker you gave the "living wage" to by government force now has a higher cost of living which means the "living wage" is no longer a "living wage". It ends up being at best a net wash for the worker economically, the worker not one bit better off than before. At worst, you priced the worker out of the labor market and they no longer have any job at all and their wages are now $0.00

  • Rob Misek||

    All you're saying is that we're living beyond our means and as a result some people have to starve. That's how it works in all shithole countries.

    If we take some of the 500 times a living wage that the rich take from our economy and spread it out, that would help us live within our means.

    Then perhaps if we only built or purchased products designed to last 30 years we wouldn't have thousands of factories and hundreds of thousands of workers spinning away the wheels of their lives producing polluting disposable crap 24/7.

    It requires a different way of thinking based on truth, sustainability and not simply maximizing short term profit.

  • Myshkin78||

    So we should simultaneously discourage employment and job creation? That should go well. And as the scarcity of goods and services drives up prices we can just take more resources from those mean richies. That sounds like a totally sustainable utopia.

  • Qsl||

    Even if you take it as gospel that people should have a minimum living standard, minimum wage laws are the absolute worst way to do it.

    Beyond subsidizing business that are materials intensive but not labor intensive (in other words, corporate welfare), it only applies to business that must be situated locally, which means it is meaningless unless you can enforce it worldwide (nevermind trying to calculate what constitutes a living wage compare to Iowa to China to New York). People are still free to shop around outside of your local labor market, which means you've actually hurt the most vulnerable of your workers as they can't afford the rising costs of business that must be local and you've cut the legs out of their ability to compete with areas with a lower cost of living.

    Not only that, I can be assured that NONE of those automatic car washes were manufactured locally, which means you've lost twice, not only with fewer jobs to go around, but even their replacement was built outside of your minimum wage laws.

    And those people assembling those car washes are generally skilled, so you are effectively having the poor subsidize them as well.

    Is that really helping the poor?

  • MatthewSlyfield||

    "All you're saying is that we're living beyond our means"

    Paying a "living wage" (how ever you want to define that) to someone whose labor does not generate more value than your "living wage" is living beyond our means even if you try to limit compensation at the high end.

    The only thing you can accomplish with a "living wage" law is to force those at the bottom, who aren't productive enough to earn a "living wage" in a free labor market without government force, into permanent unemployment.

    Instead of increasing the wages of the people you claim you are trying to help, you will increase their cost of living while at the same time dropping their wages to zero.

  • Rob Misek||

    All you folks are repeating is that common sense doesn't work in a corrupt market based economy.

    No shit.

    Our market based economy is a fiction, created to benefit the wealthy at the expense of the poor, using recessions, depressions and the imbalance between civilizations.

    When we create a new economic model that works for everyone and we begin living within our means the old model that you're referring to for outcomes becomes irrelevant.

  • MatthewSlyfield||

    Your new economic model is a fantasy built from unicorn farts.

  • vek||

    Rob, you clearly don't even comprehend the things people are trying to explain to you. You should go read up on some economic theory bro.

    Go read some stuff by libertarian/conservative economists, and REALLY think through their points. It is always the best to listen to both sides, and form an opinion when you have all the facts. You have clearly only ever paid any attention to left wing drivel.

    I will give you one thing though: We SHOULD stop buying as much cheap disposable crap. I think this has been a useless trend, as a lot of stuff ends up costing you more in the long run than just buying quality stuff up front.

    Other that that, you just don't get it.

  • Rob Misek||

    If you think that there are only "two sides" to economics or politics you clearly don't understand their nature.

    They are fictitious, completely dreamed up and followed by some people. They do not exist in nature.

    You're a follower, I get it, someone else has the imagination and puts structure in place and you follow it. You aren't even aware that you're in a box to be able to see outside it.

    My original ideas must seem so foreign to you.

    Wake up.

  • Sevo||

    Rob Misek|10.14.18 @ 4:06PM|#
    "Wake up."

    From the fucking ignoramus.
    Here:
    Fuck off.

  • Sevo||

    Rob Misek|10.12.18 @ 12:51PM|#
    "All you folks are repeating is that common sense doesn't work in a corrupt market based economy."

    "Common sense" is neither, you fucking ignoramus.
    Fuck off, slaver.

  • vek||

    LOL

    Rob, I am a VERY non dogmatic guy by libertarian standards. And I am open to compromise on a lot of issues. I am not a follower.

    That said, your arguments simply show lack of understanding. You appear to not know, or comprehend, a vast amount of statistically KNOWN facts. In short you are economically illiterate. Don't feel bad, most people are. But you can work to change that by reading more, and pulling your head out of your ass.

    Then your "original thinking" might actually be original, instead of the same fallacious BS that you have spouted off up until now.

  • Rob Misek||

    You appear to use rhetoric without evidence.

    Like some Meetoo bitch.

  • vek||

    That's because 99% of the other people who post here aren't economically illiterate, and already understand the basics of economic theory, if not even the more advanced parts. Hence I don't have to tell them evidence they already know about. Your nonsense about taking from people who earn 500 times the average wages, and spreading that around to everybody else, shows your lack of knowledge.

    There are not enough ultra wealthy people in the USA to make a dent in anything. As evidenced by European socialist countries, you have to get down to 50%+ tax rates on people who make $50-60K a year to support high levels of economic redistribution... There just aren't enough PROPER rich people around to soak for the amount of money it takes to make a difference.

    As an example, taking every penny from Jeff Bezos, the net worth of around $150 billion he supposedly has right now, and handing it out to everybody in the USA... $500 bucks per person. ONE TIME. For the net worth he spent decades building. Start going down the Forbes list, and you can give everybody in the USA a couple hundred bucks a year. Unfortunately before long, you'd run out of people on the Forbes list, because they'd all have had their entire net worth confiscated.

    Learn facts Rob. Then we can discuss things.

  • tinwhistler||

    If a grown man chooses to work 100+ hours a week for $5 per hour, that should be his right.

  • vek||

    It should go without saying that I am unambiguously opposed to a minimum wage at any level.

    That said, the problem is that we have all these (probably mostly illegal) immigrants who have 3rd world expectations for their living standards. As a nation, we shouldn't HAVE adults that are willing to work for such garbage wages they'll have to cram 9 people into a 2 bedroom apartment in a place like NYC where rent it sky high. If there weren't, market wages would be higher, and everything would adjust accordingly. If you don't have millions of half illiterate peasants to employ, you don't need jobs that half illiterate peasants are capable of doing...

    Which is to say, most of these jobs SHOULD be automated away. The ones that remain for doing high end hand washes should be charging out the ass, and can pay well enough to get people with decent life expectations to apply.

    The entire value of a high income nation is that everybody is RELATIVELY affluent. That's what makes America a nice place to live, as opposed to a shithole like Brazil, Mexico, India. They have PLENTY of wealthy people there. The quality of life sucks though, because they also have huge shanty towns where the peasants live. You don't have to hire armed guards to take your kids to school in the USA, because kidnapping people for ransom isn't much of a thing here... Because we don't have hordes of peasants that live in shanty towns.

  • vek||

    We have this because we have really high wage industries like tech, banking, high value manufacturing, etc that make TONS of cash in the market. This is usually achieved through high levels of automation, or them being very education/knowledge based industries. This trickles through the economy to make everybodys wages very high by global standards.

    This is what MAKES a 1st world country 1st world. The open borders people refuse to admit this small fact.

    I cannot for the life of me comprehend the people who applaud as we have shipped off $15, $20, $25 an hour manufacturing jobs and deride them as "garbage jobs..." And then applaud loudly about how great useless jobs like hand car washes are super important, and we must keep such backwards jobs around, even though they can be automated without 98% of people giving a shit... Which defeats the whole purpose of living in a modernized, high wage economy!

    We shouldn't have employees in this country that are willing to work for scraps, and we wouldn't even need a minimum wage, because people born in 1st world countries have standards. The cheapest possibly labor is not the be all end all of an awesome economy... It is in fact the exact wrong direction for a NICE society to live in to go.

  • vek||

    Keep in mind I say all of this as a business owner, who directly benefits from suppressed wages. However, the fact is I value living in a 1st world society more than I value some small possible economic advantage I may gain if we allowed in another 50 million low skilled workers over a couple decades.

    The reason everybody harkens back to the 50s/60s being so great is because we'd stopped having many foreign born people with low/no expectations. Wages went up at all tiers, and we built a very nice country to live in as there wasn't much extreme poverty. As we've started pouring in tons of poor people again since 1965, we see everything falling apart, ethnic slums returning, crime problems associated with poor immigrants, etc, even as the country technically gets wealthier.

    Open borders people need to decide if they want to actually live in a 1st world country, or a 3rd world country. There is no possible outcome for open borders other than equalizing out incomes the world over. Any incremental steps in between of mass movement of low skilled labor creates varying degrees of this effect, like what we have now.

  • Rob Misek||

    Becoming a shithole nation only requires policies that put the interests of the wealthy above the interests of the poor.

    Have you driven through Detroit lately? It didn't get that way from accepting Muslim refugees that were bombed out of their own nations by the US and it's allies.

  • vek||

    Uhhh, Detroit got that way because they over regulated and taxed all the businesses out of the area... Not because monocle wearing billionaires were greedy. Note, there are a shit ton of car manufacturing jobs in the southern US now, that probably all would have been up there had they not been so anti business.

    As far as the working poor go though, Muslim immigrants aren't enough of the population to make much of a dent... But the 10-20 million illegal Hispanics has cratered wages in all the exact jobs our native born poor and lower middle class work in. I worked construction for awhile about 10 years ago, painted. Wages hadn't changed in that industry for nearly 20 years because of all the downward pressure from illegal immigrants.

    So if you really care about the poor, stop importing people who are content to live 10 people to a small apartment, and work for horrendously low wages. There's supply and demand in the labor market... We have too much on the supply side for unskilled work. Then there are all the political/cultural problems with low skill immigrants. Hence I'd rather cut things back on the supply side.

  • Rob Misek||

    Actually they moved the manufacturing to Mexico, where the standard of living and wages are accordingly low.

    Only regulation will keep jobs where the standard of living is high. Mexico and China eat your lunch and own you.

    It's time we dispose of our antiquated ideas of economy and politics and create something new from the best elements from wherever they originate without childishly rejecting good things simply because of their origins.

    Are you from the south?

  • Sevo||

    Rob Misek|10.14.18 @ 10:36AM|#
    "Actually they moved the manufacturing to Mexico, where the standard of living and wages are accordingly low."
    Bullshit, liar

    "Only regulation will keep jobs where the standard of living is high. Mexico and China eat your lunch and own you."
    Bullshit claims; no evidence, liar.

    "It's time we dispose of our antiquated ideas of economy and politics and create something new from the best elements from wherever they originate without childishly rejecting good things simply because of their origins."
    Fuck off, slaver

    "Are you from the south?"
    Do you have a brain cell, you fucking ignoramus?

  • vek||

    Many jobs DID move to Mexico. Many also moved to the Southern US.

    I am not from there. I am a west coast boy through and through. My family settled the wild west, we even have a town named after us in California. That's where I grew up the first half of my life, and have been in Washington state the 2nd half.

    As one of my breaking with libertarian positions principles, I actually believe we should have reciprocal trade agreements. If a nation wants to slap tariffs on us, we should slap them on them. This would fix some of the problem with shipping jobs overseas.

    I do not, however, believe we should have a massive set of draconian nonsense that tries to force every product in the world to be made in the USA. There is a difference. I understand and accept that there are tradeoffs in trade situations. Thing is MUCH of the time they are AWESOME for Americans... Not 100% of the time (as some libertarians think), but I think with only a minor tweaking, mainly getting other nations to lower their barriers, we could be doing pretty damn good.

  • Rob Misek||

    We agree that changes need to be made to the economic model. We disagree on the magnitude and details.

    I solve all problems the same way by reducing them to their most basic unambiguous state and then simply stepping forward to the objective.

    Our economic model is so old and corrupt it's completely irrelevant in today's modern, informed and technological world. We need to start over.

    Maybe we can leave recessions, depressions and global colonialism and oppression out of the objective of the next economic model.

  • Rob Misek||

    What is the unambiguous purpose of an economic model?

    To coordinate trade between individuals in a civilization and between civilizations.

    As such, an unambiguous economy is only a good thing. Recessions, depressions and many other elements of ours are destructive, unnecessary and inefficient wastes of time and energy.

  • vek||

    Yes, tweaks need to be made.

    But rebuilding everything from scratch? Nope. History has shown that free market economies create the most wealth overall for people. Every incremental step away from a true free market reduces this wealth creation in incremental amounts.

    I think there may be a literal handful of exception to this, such as one sided trade agreements. But not very many. And we need to maintain the market as free as possible to maximize wealth creation.

    Fact is that even the poor in the USA are wealthier than almost anybody else on planet earth. Our poor live in bigger houses, drive nicer cars, have more material possessions, have better access to food, etc than even people in Europe in the same part of their income distribution. These are are statistically known facts.

    So while we need a few tweaks, MOST of those are removing restrictions from the market, not trying to create a "better" redistribution system.

  • Rob Misek||

    A complete redesign is required to eliminate the destructive elements of the economy and recognize our progress towards human rights.

    Having recessions and depressions in an economy is like having faulty brakes on your 30 year old car. It isn't worth fixing.

    The objective of an economy is NOT to maximize wealth today at the expense of sustainability for the future.

    Greedy myopic narcissism doesn't define a good civilization.

  • Sevo||

    Rob Misek|10.13.18 @ 4:54AM|#
    "Becoming a shithole nation only requires policies that put the interests of the wealthy above the interests of the poor."

    Becoming an ignoramus requires nothing more than brain-dead bullshit like our fucking ignoramus here.
    Fuck off, slaver.

  • Rob Misek||

    That's a lot of effort to say very little.

    What's your point?

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