From Vox: Trump won. But so did marijuana legalization, gun control, and minimum wage increases.

An odd result since these are all liberal proposals.

- Click here for the story.

By all accounts, the biggest races on Election Day were a total disaster for Democrats. Donald Trump won. Republicans kept Congress, holding back a Democratic attempt to retake the Senate. And down the ballot, the results weren’t much better for the party: Democrats overall lost governors’ races, although the results were more mixed in state legislatures.

But not all is doom and gloom. While Democrats lost big, liberals won some of the big initiatives that were on statewide ballots. It wasn’t a total sweep — several states, for example, affirmed the death penalty — but there were gains on some issues, including marijuana legalization, minimum wage, and gun control.

The full results paint a much more mixed picture than the top-ballot results suggest: The Democratic Party got clobbered, but some of the major policies Democrats support also won big.

The left and right might converge over increasing the minimum wage

Most stories about ideology in the United States point out where the differences lie, but there are areas where the far right and the far left converge.

A Washington Post writer covers a recent conference where conservatives joined liberals in arguing that in increase in the minimum wage would benefit the economy. Whether this gains traction in Congress is unclear. One of the arguments made is that higher wages leads to less demand for social services. The government may well be subsidizing businesses, allowing them to pay low wages with these programs.

One conservative even argued that increased wages might be good for the Republican Party's competitiveness. The wealthier people are, the more likely they are to pay income taxes, and the more likely they are to adopt fiscally conservative positions, which might make them consider voting Republican.

- Click here for the article.

Democrats have made the argument that an increase is morally right and that the only thing standing in the way is corporate greed. That may be so, but it hasn’t won them enough Republican support to get the increase through Congress. But what if Democrats were to make a free-market argument that a higher minimum wage would shrink the federal government and reduce the welfare state?

That’s the argument Ron Unz made to Nader’s gathering. Unz, a wealthy businessman known for his 1994 Republican primary challenge to California Gov. Pete Wilson and his fight against bilingual education, has serious conservative credentials, most recently as publisher of the American Conservative magazine. But now he’s leading a ballot measure in California to raise the minimum wage to $12 an hour.

“The government spends over $250 billion a year in social welfare programs aimed at the working poor,” he said, addressing the group via Skype. “If we simply made the working poor much less poor by raising their wages to a much more reasonable level, a lot of that money would be saved, probably in the range of $40 to $50 billion a year.” The $250 billion spent on welfare for the working poor, Unz said, amounts to a “massive subsidy for businesses” that are paying less than a living wage and “forcing taxpayers to make up the difference.”

But what about the Congressional Budget Office study this year predicting that increasing the minimum wage to $10.10 would cost 500,000 workers their jobs? Actually, Unz argued, the study found that 98 percent of minimum-wage workers would benefit from a wage increase, while only 2 percent would lose their jobs. Further, he said, the higher minimum wage would mean a reduction in Mitt Romney’s “47 percent” — those who, Romney said, won’t consider voting Republican because they don’t pay income taxes — as these new taxpayers become “open to a traditional Republican conservative economic message.”

On the minimum wage, the right to unionize, and Walmart

I stumbled across a fruitful blog post that touched on the relationship between minimum wages - along with the wages of low income workers in general - and the ability of workers to collect their strength under the heading of a union.

Perhaps the problems faced by low income workers are better served by allowing them to unionize than to simply increase the minimum wage. Something for M3's to consider as you put your papers together.

I'll post a few separate items based on the links in the story above.

From the Fiscal Times: Why Raising the Minimum Wage Is a Fantasy

A sobering read - something to consider for your paper, and maybe your career:

In a recent “60 Minutes” piece, Amazon founder Jeff Bezos proudly displayed his company’s next delivery vehicles: drones. It’s only a matter of time, according to Bezos, before Amazon’s faux-pelicans will be dropping packages at your door (and hopefully not on your head), speeding up deliveries and bringing instant gratification one step closer. No one thought to ask the obvious – what happens to all those redundant delivery folks?

The constant replacement of humans by machines presents policy makers with a looming crisis — not enough jobs to go around. It also destroys the easy confidence with which many on the left argue for higher minimum wages. Incomes aren’t stuck because employers are hard-hearted so-and-sos, which is the recurring accusation of those who, like Paul Krugman, have never actually had to compete in the real world. Wages are stuck because so many individuals can be replaced by competitors overseas who earn far less or by machines, which earn nothing.. . . . The retail industry is just one in which workers are at risk. It’s hard to find many jobs that are not threatened by automation, by Internet expansion or by overseas competition. That includes people working in the fast food industry — where union organizers are currently pushing for a big jump in minimum pay. They should not assume that burger joints won’t eventually automate. Last year, Momentum Machines in San Francisco previewed an apparatus that created 360 burgers an hour. Noting that the fast food industry spends $9 billion a year on wages, the company predicted a lively reception for its space- and cost-saving machine.

Companies and workers successfully competing against all these forces must rely on the right combination of productivity and price. Purposefully jeopardizing workers’ livelihoods by driving wage costs higher is risky and in the end unproductive. Add to the mix uber-low interest rates, which tilts investment towards capital and away from labor, and those urging a higher minimum wage are not on the side of workers.

Four posts from the Dish on the minimum wage

Andrew Sullivan has a series of blog posts - with input form his readers - on various aspects associated with the minimum wage.

These might be worth a look.

Click here, and here, and here, and here.

From the Fiscal Times: Why the Income Gap is Widening

The gap has become more pronounced since the housing crash of 2008.

Here's a look at why - which might help determine whether raising the minimum wage might be an effective way to address this problem.

This growing inequality is being exacerbated by policy failures – more specifically, by decreasingly progressive tax, transfer, regulatory, and full-employment policies in recent decades.

Financial deregulation has contributed to the rising share of national income going to investment income and compensation of financial professionals — with the latter being a significant driver of rising income share of the top 1 percent, as analyzed in a recent paper by Larry Mishel and Josh Bivens of the Economic Policy Institute.

There is also compelling evidence that reductions in top marginal tax have exacerbated the growth in market-based income inequality. Essentially, a lower top tax rate makes efforts by executives to demand greater compensation more rewarding. Successful such efforts will come out of workers’ paychecks, not shareholders’ portfolios.

Political inaction, or “political drift,” on the minimum wage — allowing the real minimum wage to be eroded by inflation — or unionization policy is certainly part of the story. Globalization and international trade have exerted downward domestic wage pressure while increasing returns to wealth, with pressures on inequality growth stemming both from irreversible market forces and certain trade policy choices.

Inequality would have risen sharply absent these influences of budget policy. But while market-based income inequality, as measured by the “Gini” index, rose 23 percent between 1979 and 2007, post-tax, post-transfer inequality rose 33 percent.

This means that roughly a third of the rise in post-tax, post-transfer inequality is attributable to erosions in the redistributive nature of tax and budget policy.

There are limits to how much redistributive policies can temper inequality (though we are far from those limits), but tax and budget policy should have been serving as a tempering influence rather than exacerbating market-based inequality growth.

Beyond these better-understood forces and policy levers, the disparate nature of the recovery from the Great Recession is both fueling inequality and is squarely in the hands of U.S. policymakers.

From the Atlantic Cities: Minimum Wage Was Once Enough To Keep a Family of 3 Out of Poverty

From Emily Badger:

Amid protests across the country over retail and service jobs that pay little better than the minimum wage, it's easy to forget that this income benchmark once meant something slightly different. In the past, a minimum-wage job was actually one that could keep a single parent out of poverty.

Since the 1980s, the federal minimum wage has kept pace with neither inflation, nor the rise of the average worker's paycheck. That means that while a federal minimum wage in 1968 could have lifted a family of three above the poverty line, now it can't even do that for a parent with one child, working full-time, 40 hours a week and 52 weeks a year (yes, this calculation assumes that the parent takes no time off).

The history of increases in the minimum wage

Here are two ways to look at it.:

1 - Graphically



2 - As a table, but you have to click here to see it.

Note that the value of the wage has fallen since the late 1960s. We will try to figure out why.

Fair Labor Standards Act of 1938

The minimum wage was established - along with a variety of other rules related to labor - in the Fair Labor Standards Act, a piece of New Deal legislation passed in 1938.

The proposal . . . adopted an eight-hour day and a forty-hour workweek and allowed workers to earn wage for an extra four hours of overtime as well. According to the act, workers must be paid minimum wage and overtime pay must be one-and-a-half times regular pay. Children under eighteen cannot do certain dangerous jobs, and children under the age of sixteen cannot work during school hours.

If I'm not mistaken, the bill was responsible for creating what we now know as a weekend.