screen resolution of 800x600 or greater is recommended
profile pic   ChuBlogga!
Offended? Intrigued? Contact my manager.

    Here begins your journey into the mind of everybody's favorite asian, and I don't mean Jet Li.
What follows is the somewhat inane, mostly irrelevant, and self-important ramblings of a man on the brink of madness.
Welcome... to the Chu.

Thursday, November 16, 2006
 Post-Election thoughts    [L]

It pretty much all went down as I had expected, albeit with not as much of a fight as I had hoped.

Locally, Bob Taft screwed Ohio. You can lay the loss of the Governorship, Attorney General, Secretary of State, Treasurer, etc. at his feet. He and his administration, along with the Ohio GOP, are responsible for the poisoned attitude the people of Ohio have towards Republicans. Now we get Tax Strickland for Governor, with his Lt. Governor Lee "Gun Control" Fisher (NRA rating: F-).

Issue 2, the minimum wage increase, passed, as apparently Ohioans are ignorant of basic economics. Higher minimum wage = higher prices. The national percentage of people making minimum wage is small, about 5%, but it affects much more than that - many US workers' (non-minimum) wages are tied to the minimum wage, specifically union workers. So you can expect the cost of anything manufactured in Ohio to go up, and manufacturing jobs leaving the state. And mark my words, jobs will leave the state over this. Companies will have to either make up the difference from their profit margin, or they'll have to raise the cost of their product. Either action will lead to reduced profits, and jobs lost.

And of the 5% making minimum wage, the vast majority of those will be high-school or college kids working their first job. Do people believe they should be making more money for unskilled labor, for crap jobs like that? Ostensibly, the bill was for helping that single mother working 4 minimum wage jobs so her kids can eat. In reality, we know while situations like that exist, they are few and far between. The bill was completely unnecessary and overreaching. I'm not enthused about the government taking even more of my hard-earned money and giving it to someone who doesn't deserve it.

Of those 5% jobs, many of them are in the service industry or manual labor - in other words, foundational to other businesses. Other sectors depend on the work done by minimum wage workers. When the minimum wage rises, the cost of their services rise, and therefore the other sectors are forced to adjust their prices upwards. Call it trickle-up inflation.

Morgan Spurlock (the creator of super-size-me) tried to make a documentary based on 30 days of minimum wage living in Columbus. And he couldn't do it without cheating! He had to look long and hard for a job that only paid minimum wage, passing up many others. The cold hard fact is, that if you're only making minimum wage, it's only because you're doing work that pays minimum wage. If people would get off their fat, lazy, asses, they can earn more money.

Another big fat downside to Issue 2 is that now tip-based employees' (such as restaurant servers) base pay must be at least half of the new minimum wage ($3.425). A friend I know who works as a server makes $2-something in base pay - so now all restaurant employers must pay their employees another few dollars or so in base pay. Guess who's pocket that is coming out of? Not the restaurant's, but ours! Look for immediate price increases on new menus at your favorite restaurant.

UPDATE 12/11/06
I now have some actual numbers:
Vote may raise eating-out cost
It won't be long before visitors to Ohio restaurants see higher prices after voters approved Tuesday a constitutional amendment to increase the state's minimum wage, one restaurant chain executive said Wednesday.

Starting next year, the minimum wage for servers, who rely on tips for most of their pay, will increase to $3.43 per hour from $2.13 per hour. Craig Maier, president and chief executive officer of Frisch's Restaurants Inc., said the measure would cost his company about $3 million a year and will mean increased prices early in 2007.

"The guest will have to pay it," Maier said.
h/t Blah Blah Blog

There are other onerous parts of the Issue that I won't go into here, such as the 3 years' records compliance portion, the employee narcing portion, its enshrinement in the state constitution; mere rabbit droppings on top of a huge steaming pile of dung.

I think I've made the argument that the cost of goods and services will rise with the minimum wage increase. And that is why the final part of Issue 2 is so ruinous. The minimum wage is now tied to the Consumer Price Index. The Consumer Price Index is tied to the cost of goods and services. The minimum wage is re-evaluated every September 30th, and adjusted upwards based on the CPI. Follow me?

Minimum wage goes up -> CPI goes up -> minimum wage goes up -> CPI goes up -> minimum wage goes up -> CPI goes up -> etc.

Way to go Ohio, you picked yourself a doozy of a law.

Issue 3, Learn & Earn, failed. I won't go into comprehensive detail - obviously the measure was shady enough that most Ohioans didn't trust it, and rightfully so.

Issue 4 & 5, partial / full smoking ban. Well, looks like Ohioans don't like smoke at all. Even though it's invading the rights of private property owners, I find myself somewhat ambivalent about it - while I don't like any restrictions on liberty, the fact that we the people voted for it satisfies my penchant for self-determination. If the government had implemented it on their own power instead of putting it up for a referendum, then i'd be all against it. But i'll go with the will of the people on this one.

I'm not upset at all about Mike DeWine losing his seat, other than the fact that it gives the Democrats control of the Senate as well as the House. I'll bet he and the rest of the Republican party are regretting their complete cave-in (Gang of 14) over judicial nominees. We had our chance to get a conservative (or at the very least a originalist) majority for the supreme court - and now with the high probability that another judge will step down in the next 2 years, we will not get another chance for a few decades. As the bumper sticker says, Don't blame me, I voted for Pierce (Bill Pierce in the primary).

No, the Republican loss at the national level does not rouse me in the slightest. Sure, I'd much prefer them over the Democrats, and I voted that way, however, I (and I suspect most Republican voters) held my nose while doing so. The Republican National Party has lost touch with it's base - you know, conservatives.

I'm at a loss for how inept the RNC is - how politically tone-deaf they are. It's as if they have lost the ability to communicate and understand the needs and wants of their constituents. Case in point? The illegal immigration amnesty bill put forth by the Senate. The House at least got it right on illegal immigration (or should I say, more right rather than perfect), but they are more dependent on (and therefore more in tune with) the base. In the Senate, 19 (out of 51) Republican senators broke rank and voted for the amnesty bill, despite overwhelming sentinment by their constituents against it.

Need more examples of their tone-deafness? Harriet Miers. Speaker Dennis Hastert (R-MI) defending "Cold Hard Cash" Rep. William Jefferson (D-LA) (and all legislators) from being investigated by the FBI. Nominating wishy-washy Mel Martinez (R-FL) for RNC chairman, instead of a firebrand like Michael Steele. Trent Lott as minority whip. Republican leadership, meet Insanity.

Actions like these and more serve to discourage the base. We are no longer voting for our leaders, but against the opposition. Democrats understand all too well the lack of enthusiasm that sentiment brings.

And if the GOP is tone-deaf, then the DNC are too tuned-in. They are so tuned-in, all they hear are the high-pitched shrieks of the far-left liberal wackjob minority, instead of their more plentiful and moderate base. Truly, it is rambling of idiots, full of sound and fury, but signifying nothing. One need only look at Lieberman's defeat of Lamont, or Pelosi's big mis-step in trying to get Murtha as majority leader. The house democrats, especially the new ones, are much more moderate than their leadership - and they rejected Murtha and his far-left views.

This is the best way to sum it up: "The Republicans lost and the Democrats won for the same reason -- they distanced themselves from their base." -- Dave S. from Tim Blair's comment section (h/t RWN)

It will be an interesting (nay, horrifying, since I must live through it) experience during the next two years, seeing how the Democrats spend their fortunes. If they cater the far-left, they risk alienating their base and enragenizing (enraging and energizing) the conservatives. If they cater to the center, then they risk having the far-left turn on them, which is especially damaging because they're the ones with the biggest megaphones and deepest pockets.

But, I take heart in the hope that Republicans, as a national party, use this opportunity to analyze just why they lost and try to reconnect with their base, get back on track (however, this isn't an effective long-term strategy, otherwise the Democrats would be the best party ever). Their recent "changes" in leadership proves me wrong for now - but I hope that we can pull a Harriet Miers on them and get them to consider a new direction instead of new leaders in the same failure.

At the least, people will look back 2 years from now and wonder if the Republican weren't so bad after all. At the best, the Republicans will start to turn conservative again, renewing hope and enthusiasm.

UPDATE 11/22/06
Ian comments, I rebut

Good editorial. Your insight is spot on. My hope is that what has happened will be the best thing in the world because it gives the nation 2 years to see what it is like to live under liberal agendas. However, it won't surprise me one bit if the Reps don't take the hint. Honestly, I think they'll be so caught up in the "we must win..." mentality that they'll do just about anything except look at the cold hard facts that seperate them from their conservative would-be supporters.

DeWine is probably a good person to consult right now if I were a Karl Rove. So how does it feel now DeWine?

By Blogger Joel, at 11/17/2006 07:29:00 AM      

"An estimated 14.9 million workers (11% of the workforce) would receive an increase in their hourly wage rate if the minimum wage were raised from $5.15 to $7.25 by 2008. Of these workers, 6.6 million workers (5% of the workforce) currently earn less than $7.25 and would be directly affected by an increase. The additional 8.3 million workers (6% of the workforce) earning slightly above the minimum would also be likely to benefit from an increase due to 'spillover effects'."

" * A 1998 EPI study failed to find any systematic, significant job loss associated with the 1996-97 minimum wage increase. In fact, following the most recent increase in the minimum wage in 1996-97, the low-wage labor market performed better than it had in decades (e.g., lower unemployment rates, increased average hourly wages, increased family income, decreased poverty rates).
* Studies of the 1990-91 federal minimum wage increase, as well as studies by David Card and Alan Krueger of several state minimum wage increases, also found no measurable negative impact on employment.
* New economic models that look specifically at low-wage labor markets help explain why there is little evidence of job loss associated with minimum wage increases. These models recognize that employers may be able to absorb some of the costs of a wage increase through higher productivity, lower recruiting and training costs, decreased absenteeism, and increased worker morale.
* A recent Fiscal Policy Institute (FPI) study of state minimum wages found no evidence of negative employment effects on small businesses."


- - - -

"More than 650 economists, including five winners of the Nobel Prize for Economics [...] [said] that a phased-in increase in the federal minimum wage to $7.25 'falls well within the range of options where the benefits to the labor market, workers, and the overall economy would be positive.' [...] 'the weight of the evidence suggests that modest increases in the minimum wage have had very little or no effect on employment.' " (>>)

- - - -

I'm more than willing to pay a few dollars more when I go to restaurants so that people who weren't lucky enough to have the kinds of opportunities we did can make enough to live on.

By Blogger Ian, at 11/17/2006 10:47:00 AM      

Stop believing in voodoo Clintonomics, Ian:

Minimum Wage: Yet Another Republican Retreat
by Larry Elder (April 16, 1999)

A recovering drug and alcohol abuser, living in the streets, recently told me the following story. One day, in desperate need of money, he went to the owner of a convenience store. The street guy pointed to the dirty, bottle-strewn parking lot and offered to sweep and clean the parking lot for $4 an hour. He said the owner looked nervous before turning down the offer.

My homeless friend countered with $3, and still, the man said, "No." So my friend went to another mom-and-pop store. "May I clean your lot for $3 an hour?" he asked. Again, "no." He went to four other convenience stores, each with a filthy parking lot. Each time, the owner said, "No."

Several owners said they could not legally hire him for less than the California hourly minimum wage of $5.75 an hour. The owners told my friend they "couldn't afford to take a chance," some no doubt assuming that he was an undercover cop out to bust them.
[Reasons] Why not [for a minimum wage bill]?
Nobel laureate economist Milton Friedman said, "We regard the minimum wage as one of the most, if not the most, anti-black laws on the statute books." Friedman and the overwhelming majority of economists say that minimum-wage laws hurt the very people that proponents seek to help -- minorities, teenagers and female heads of families.

Or how about the 1987 New York Times editorial, "The Right Minimum Wage: $0.00"? The editorial in the liberal paper urged the abolition of the minimum wage, arguing, "An increase in the minimum wage ... would increase employers' incentive to evade the law, expanding the underground economy. More important, it would increase unemployment: Raise the legal minimum price of labor above the productivity of the least skilled workers, and fewer will be hired."

How about the unemployment rate for black teens, age 16 to 19, which now stands at 30.1 percent? Before minimum-wage laws, the black and white teenage employment rates were about the same. After minimum-wage laws, however, black teens experienced greater unemployment than white teens.

Or how about when Congress raised the minimum wage from $4.25 an hour to $4.75 an hour? From third quarter 1996 to first quarter 1997 (when the rate kicked in), teenagers, blacks and women heading families all experienced greater unemployment. And this during a period of over-all job growth! Allen Reynolds, director of economic research at the Hudson Institute, writes, "Such a sudden rise in the national unemployment rate would be front-page news. But when only teens, blacks and single moms are affected, it apparently does not attract much attention or sympathy." [Chu- unless it's a Republican presidency]

For over 30 years, my dad ran a cafe near downtown Los Angeles. Whenever Congress hiked the minimum wage, I watched my parents sit at the kitchen table with pen and pad and make decisions. The goal of hiring a new dishwasher? Not now. Raises for the waitresses? Postponed. Prices? Must raise them, even though this always triggered several weeks of business falloff.

Studies show that most people hired at the minimum wage get increases within a matter of months. Many fast food executives started out flipping burgers. And the image of a guy with a family of four working a minimum-wage job? It is just that -- an image. Most minimum-wage earners are teens and secondary household wage earners.

Minimum Wage Causes Maximum Pain
Sixty years ago on June 25, 1938, President Franklin Roosevelt signed into law America’s first minimum wage: 25 cents an hour, rising to 40 cents an hour over the next seven years, which is equivalent to almost $5.00 in 1998 dollars. Today, many increases later, Senator Ted Kennedy of Massachusetts is pushing for yet another hike in the minimum wage. Now is a good time to reexamine the origins of this important law and its impact on the job market.

Once the original bill was passed, many economists and politicians predicted that more workers would be thrown out of work and that the Great Depression—already in its ninth year—would get worse. That’s exactly what happened and during the fall elections, Roosevelt lost an astonishing 80 House seats to the Republicans.
Roosevelt’s political muscle eventually prevailed and the national law was passed, but Mapes’s prediction has proven to be prophetic. Over the years, steady hikes in the minimum wage have priced out of the market the most vulnerable workers, including blacks, teenagers, and women with limited skills. Also vulnerable have been workers with developing skills whose labor is not yet worth what the law says they must be paid.
Data from President Clinton’s own labor department show that at least 20,000 jobs were eliminated by the 1996 hike. The Employment Policies Institute calculates that the real job loss was closer to 128,000.

Pay hazard - raising the minimum wage
``MANY well-meaning people favor legal minimum wage rates in the mistaken belief that they help the poor,'' Nobel laureate Milton Friedman has observed. ``It has always been a mystery to me why a youngster is better off unemployed at $4.75 an hour than employed at $4.25.''
There is a nearly perfect correlation between minimum-wage hikes and both teenage and non-white unemployment (see chart). Poverty rates rise dramatically just after the minimum wage rises. And now there is fresh evidence that raising the minimum wage has also helped trigger recessions. This link has been brought to light by Richard Vedder and Lowell Gallaway, two economists at Ohio University. In a study for the National Center for Policy Analysis, Vedder and Gallaway document a connection between the 1974 - 75 and 1990 - 91 recessions and increases in the minimum wage. They say a good case can also be made that the 1979 - 80 economic downturn and the recession that began in 1981 were linked to minimum-wage increases. It is more difficult to isolate causes in those instances, because of the high inflation rate and other economic factors that could have played a part. But in the 1990 - 91 and 1974 - 75 recessions, minimum-wage increases appear to have been the straw that broke the camel's back.

And Ian, please, the EPI? They're about as non-partisan and objective as Dan Rather.

By Blogger Chu, at 11/22/2006 10:50:00 AM      

Yes, because the National Review and "Capitalism Magazine" are bastions of objectivity...

By Blogger Ian, at 11/24/2006 03:08:00 PM      

2 out of the 3 articles I referenced quote the New York Times as a source... not exactly a bastion of conservative thought.

All you quote are a handful of economists, to which I counter with Milton Friedman; and the EPI - and when a simple scan of their mission statement reveals such phrases as "fair economy", "the interests of low- and middle-income workers", "wage inequality rising", and "a willingness to challenge conventional thinking", it succinctly tells me all I need to know about their bias.

By Blogger Chu, at 11/26/2006 05:47:00 AM      

Both of them refer to the same NYT piece, which is almost 20 years old.

Yeah, I reference an opinion by 5 Nobel laureates (along with 650 other economists) and you countered with 1 Nobel laureate who is a proponent of laissez-faire capitalism. I'm not quite sure how that tips the scales...

By Blogger Ian, at 11/27/2006 11:46:00 AM      

A theory 20 years old in our economy is not so old as to be irrelevant. Many still revere Adam Smith's "Wealth of Nations" even though it's over 200 years old.

Milton Friedman is considered "to have been one of the two most influential economists of the 20th century, and regarded as the intellectual impetus behind the fall of Communism in Eastern Europe at the close of the Cold War."

He's no slouch in the economics department, regardless of what your opinion of laissez-faire capitalism.

At a ceremony celebrating Friedman's achievements, Alan Greenspan said "There are many Nobel Prize winners in economics, but few have achieved the mythical status of Milton Friedman."

There's also the joke that Economics is the only field in which two people can get a Nobel prize for saying exactly opposite things.

I also tend to have a lack of respect for the Nobel organization as a whole since they gave Yassar Arafat the Nobel Peace prize.

So, having read and analyzed (just a small bit of) Friedman's work, his words ring true to me, and i'll take his opinion over that of many other economists.

By Blogger Chu, at 11/27/2006 01:39:00 PM      

^^^ speak up ^^^