Governor of Oregon signs ‘Economic Death Warrant’ for Her State

Without consulting any economists or reviewing the past performance of government interference from the manipulation of wages against labor and productivity, Oregon’s governor Kate Brown on March 2nd 2016 signed a potential economic death warrant for her state.

She picked up her black and gold stylus, with the hammer and sickle engraved in the nib, and signed legislation that will raise the minimum wage to nearly $15 an hour over a six year incremental three tiered system.

Now this has never been tried before anywhere in the United States. Probably for good reason. Even the emerging capitalist nation of the Russian Federation has stayed clear of this type of folly.

The Governor said today the new law “Is a path forward – so working families can catch up, and businesses have time to plan for the increase.”

ERR, no. This is a massive Socialist Marxist mindset economic mistake. Small business owners will stop hiring and families will be left even further behind.

Besides; one DOES not raise a family in a minimum wage job. This is entry level work of none skilled labor. A stepping stone to better things.

When governments artificially raise wages and eliminate competition they suffer massive economic problems.

Increasing the minimum wage this high in Oregon, is way above the threshold for small business owners to sustain employees and this action by the Governor will cut off and eventually block many roads to greater prosperity for many poor families, kids working their way through college and the like.

Kate Brown oregon governor

Governor Kate Brown

This action by Governor Kate Brown the born again Marxist in Oregon will delay if not eliminate the entry of other workers, including youth, into non skilled paid work by needlessly increasing the cost of unskilled labor. Totally un American and Marxist in nature.

Employers; especially small business owners will not be able to afford to hire as many unskilled workers, and will respond by cutting back services or replacing workers with machinery or computers.

The expert matter subjects in this field of study refer to this as the “elasticity” of demand for labor to describe the ratio of jobs gained or lost when wages change.

Increasing wages on low skilled entry level jobs such as those that help college kids get through their growing years in college on Ramon noodle dinners will now be making the kids just heat the water. No job. No more Ramon noodles…..

Economic experts estimate this “elasticity” will vary, but the average estimate is that for a 10 percent increase in the minimum wage, employment crashes by 5 percent.

If the minimum wage is increased from $9.00 to $15.00 per hour, as is now the case in Oregon the demand for unskilled labor could drop by as much as 35 percent in jobs that earn the said current minimum wage.

The outcome of this is the loss of hundreds if not thousands of jobs making it more difficult for small business owners to hire.

It will close down many non skilled entry level workers access to a job and it will put up a road block to people who want escape poverty.

My friend started working at McDonalds making $3.15 an hour flipping burgers. With the knowledge he acquired and as a capitalist risk taker he went on to now 35 years later to own seven McDonald franchises in Baton Rouge. His net worth today exceeds $12 million dollars.

His hard work and his risk taking paid off. The fact he made minimum wage when he first started out did not stop him from achieving financial success. There was no interfering with and artificially manipulating the cost of labor when he was sticking the fryer in the hot oil.

Mom and pop stores will soon stop hiring in Oregon and instead will perhaps just use family members to run the front counter. Large franchise like Wal-Mart and fast food chains will install self check out stations and machines to take burger orders.

This action by the Governor of Oregon will destroy jobs and perhaps force some companies to move across state lines.

Increasing the minimum wage will eliminate entry-level jobs for unskilled workers, more people will become a burden upon the state funded welfare rolls thus reducing productivity, and thus reducing the available job market and making it more difficult for those who want to work to find jobs.

There is no such thing as a dead end job.

Low-wage entry level jobs provide the poor with an escape route from poverty. Now in Oregon the new law means to make an honest living is now much harder and more folks will be unable to get hired will be living off the dole..

Entry level positions will either be eliminated, moved out of state of replaced with technology.

This action by the Governor has done nothing but to bash the working poor over the head with a hammer and has made an escape route from poverty more difficult for them to follow.

RELATED ARTICLES:

An Economist’s 10 Objections to the Minimum Wage by Mark J. Perry

The Minimum Wage Fairy Tale by Donald J. Boudreaux

Low-Skilled Workers Flee the Minimum Wage: How State Lawmakers Exile the Needy by Corey Iacono

The Minimum Wage Hurt the Young and Low-Skilled almost as Much as the Recession by Preston Cooper

EDITORS NOTE: What are the specific objections of economists to the minimum wage and why do they generally favor market wages instead? Here are ten reasons in favor of market wages over a government-mandated minimum wage:

  1. Proposed minimum wages are almost always arbitrary and never based on sound economic analysis. Why $10.10 an hour and not $9.10? Why $15 an hour and not $16 an hour?
  1. A uniform federal minimum wage may be sub-optimal for many states, and uniform state minimum wages may be sub-optimal for many cities. A one-size-fits-all approach to the minimum wage is really a “one-size-fits-none.”
  1. Minimum wage laws require costly taxpayer-funded monitoring and enforcement mechanisms, whereas market wages don’t.
  1. Minimum wage laws discriminate against unskilled workers in favor of skilled workers, and the greatest amount of discrimination takes place against minority groups, like blacks.
  1. Adjustments to total compensation following minimum wage laws will disadvantage workers in the form of reduced hours, reduced fringe benefits, and reduced on-the-job training.
  1. Many unskilled workers will be unable to find work and will be denied valuable on-the-job training and the opportunity to acquire experience and skills.
  1. Minimum wage laws prevent mutually advantageous, voluntary labor agreements between employers and employees from taking place.
  1. To the extent that higher minimum wages result in lower firm profits and higher retail prices, that’s a form of legal plunder by workers from employers and consumers that is objectionable.
  1. Market-determined wages are efficient, whereas government-mandated wages create distortions in the labor markets that prevent labor markets from clearing.
  1. Like all government price controls, minimum wage laws are distortionary. If you trust government officials and politicians to legislate and enforce a minimum wage for unskilled workers, you should logically trust those same bureaucrats to set all prices, wages and interest rates in the economy. Realistically, if you agree that those economy-wide price controls would be undesirable, then you should also agree that the minimum wage law is also undesirable.
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