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Posts For: December 1, 2013

Other People’s Money: The Minimum Wage

Steve Coll has a comment in this week’s New Yorker calling for a higher federal minimum wage. He points out that it’s awfully hard for a family of four to live on the current minimum wage, which would produce a family income of about $15,000 a year. That is certainly true, but Mr. Coll leaves out a few things. A family of four with an annual income of $15,000 would be eligible for food stamps amounting to $7,584 and an earned income tax credit of $5,372. That raises the family income to $27,911, which is quite an improvement. The family would also be eligible for Medicaid, school lunch and breakfast programs, perhaps housing assistance and other forms of help. He also leaves out the fact that very, very few people earning the minimum wage are the sole breadwinners of a family of four. Most are entry-level employees, often teenagers, with no developed skills.  Most people who take a job at the minimum wage are earning above that level within a year, having learned marketable skills.

To be polite, Mr. Coll is being tendentious. To be less polite he is being grossly intellectually dishonest.

The minimum wage is a favorite liberal hobbyhorse, heavily promoted by labor unions. It is typical progressivism: a liberal politician (or journalist) says, in effect, “See that man over there? He needs help.” Then he points to an employer and says, “You, help him.” Finally, he points to himself and, addressing the man needing help, says, “Don’t forget where the help came from.”

But is the minimum wage a good idea?

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Steve Coll has a comment in this week’s New Yorker calling for a higher federal minimum wage. He points out that it’s awfully hard for a family of four to live on the current minimum wage, which would produce a family income of about $15,000 a year. That is certainly true, but Mr. Coll leaves out a few things. A family of four with an annual income of $15,000 would be eligible for food stamps amounting to $7,584 and an earned income tax credit of $5,372. That raises the family income to $27,911, which is quite an improvement. The family would also be eligible for Medicaid, school lunch and breakfast programs, perhaps housing assistance and other forms of help. He also leaves out the fact that very, very few people earning the minimum wage are the sole breadwinners of a family of four. Most are entry-level employees, often teenagers, with no developed skills.  Most people who take a job at the minimum wage are earning above that level within a year, having learned marketable skills.

To be polite, Mr. Coll is being tendentious. To be less polite he is being grossly intellectually dishonest.

The minimum wage is a favorite liberal hobbyhorse, heavily promoted by labor unions. It is typical progressivism: a liberal politician (or journalist) says, in effect, “See that man over there? He needs help.” Then he points to an employer and says, “You, help him.” Finally, he points to himself and, addressing the man needing help, says, “Don’t forget where the help came from.”

But is the minimum wage a good idea?

Labor unions love it for a very simple reason, even though few unionized workers earn the minimum wage: labor contracts are often predicated on the minimum wage, with the bottom tier of workers earning 1.5 or 2 or 3 times the minimum wage. So if the minimum wage goes up, so do the wages of all the workers covered by such a contract. Labor leaders may shed crocodile tears for the poor and downtrodden, but what they care about—because that’s what they’re paid to care about—are their often well-paid workers.

Steve Coll points out that a higher minimum wage polls well, even among Republicans. But this sort of polling is junk polling, good only for producing rhetorical ammunition for the chattering classes, not judging real public opinion. The overwhelming majority of people don’t think deeply about matters of public policy, so asking the right question will always produce the desired answer. Even if the poll is honest it will elicit, at best, an algorithmic response not a considered judgment.

But marshaling the opinions of the self-interested and the ill informed is not much of a test for public policy. Does the minimum wage make economic sense? The answer is no. It’s price fixing (fixing the minimum price of labor) and price fixing is always economically pernicious. Set the price too low, and instant scarcity results, such as affordable housing in cities with rent controls. Set it too high and instant glut happens, such as with, well, the minimum wage. In economics, a transaction is, by definition, “an exchange of commodities between two parties, to the economic benefit of both parties.” If an employer has to pay $8 an hour in wages, he must get $8 an hour in work from the employee or he won’t hire him. Could that be a reason teenage unemployment right now is 22.7 percent and unemployment among black teenagers is 36 percent?

Is there a better solution for the few people who are working full-time, trying to support a family, on the minimum wage? Yes, and it’s been in place for the last forty years, the earned income tax credit mentioned above. It is a refundable tax credit for people earning less than a “living wage.” (A refundable tax credit is one that is paid to the tax filer even if his tax liability is zero.) If the wages produced by a free market are not sufficient to produce a living wage, the EITC supplements those wages until, as skill levels improve and wages thus increase, the wages paid produce a living wage. It incentivizes the unskilled to develop the skills needed to make a living on their own without distorting the free market and producing untoward results, such as horrendous teenage unemployment.

Of course, from the politician’s viewpoint, the EITC would have to come out of tax revenue, requiring either skimping on other types of spending, raising taxes or worsening the deficit. Any of those choices might imperil the politician’s reelection. Or, of course, the politician could find ways to operate the government more efficiently, freeing up the needed revenue.

But that last option would take hard political work. It’s a lot easier to be generous with someone else’s money, secure in the certainty that liberal journalists will carry the necessary water.

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Even in Academia, Boycotting Israel Is a Hard Sell

The weekend before Thanksgiving the American Studies Association, at its annual meeting, considered an academic boycott of Israel. As of Thanksgiving, the ASA’s National Council had not taken action, though the proposed resolution had wide support at the meeting. I have written on ASA and the Boycott Israel resolution here and here. But it’s worth focusing on just one false yet revealing claim.

Supporters of the resolution say that the ASA meeting should be considered “historic,” whether the resolution passes or not. It is very “controversial to talk about Palestinian solidarity activism, in most American settings, especially an academic one” (my emphasis). So the mere fact that ASA members were “talking about things like Israel’s various apartheid systems” was an event of national, if not world-historic, significance. At last, the ASA has shown that it is possible “to speak and to hear others speak publicly about an issue that has for so long been the third rail not only of US politics, but of academic discourse.”

Because anti-Israel activists so regularly trot out this storyline, that criticisms of Israel and especially calls for a boycott have been stifled in academia, let’s put it to rest. While I don’t expect leading boycott propagandists to stop making the claim, perhaps others will be reluctant to repeat it when they learn that it is demonstrably false.

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The weekend before Thanksgiving the American Studies Association, at its annual meeting, considered an academic boycott of Israel. As of Thanksgiving, the ASA’s National Council had not taken action, though the proposed resolution had wide support at the meeting. I have written on ASA and the Boycott Israel resolution here and here. But it’s worth focusing on just one false yet revealing claim.

Supporters of the resolution say that the ASA meeting should be considered “historic,” whether the resolution passes or not. It is very “controversial to talk about Palestinian solidarity activism, in most American settings, especially an academic one” (my emphasis). So the mere fact that ASA members were “talking about things like Israel’s various apartheid systems” was an event of national, if not world-historic, significance. At last, the ASA has shown that it is possible “to speak and to hear others speak publicly about an issue that has for so long been the third rail not only of US politics, but of academic discourse.”

Because anti-Israel activists so regularly trot out this storyline, that criticisms of Israel and especially calls for a boycott have been stifled in academia, let’s put it to rest. While I don’t expect leading boycott propagandists to stop making the claim, perhaps others will be reluctant to repeat it when they learn that it is demonstrably false.

It is demonstrably false because Israel’s critics and boycott proponents are mainstays of the academic lecture circuit. Almost three years before the “historic” ASA meeting, Max Blumenthal was invited to debate BDS (Boycott, Divestment, Sanctions) at Princeton. More than two years before the “historic” meeting, Omar Bhargouti, a founder of the Palestinian Campaign for the Academic and Cultural Boycott of Israel (PACBI), spoke at NYU, Columbia, Princeton, Rutgers, Brandeis, Harvard, and Brown. And remember the controversy over a BDS event at Brooklyn College back in February? Students have since been graced with Ben White on “Israel: Apartheid, not Democracy,” and Josh Ruebner, national advocacy director of the U.S. Campaign to End the Israeli Occupation, who observed that “the Israel lobby sets the agenda in Washington” and argued in favor of a boycott.

In short, when Israel’s critics complain about being suppressed on college campuses they complain into microphones provided by America’s most prestigious colleges.

Although I am aware of no recent polls that ask faculty members what they think of Israel, a 2012 survey by UCLA’s Higher Education Research Institute indicates that more faculty members put themselves on the “far left” than put themselves in the far right and conservative categories combined. Overall 62.6 percent of respondents called themselves far left or liberal, while 11.9 percent called themselves conservative or far right. Sympathy for the Palestinian side in the dispute between Israel and the Palestinians runs much higher among liberals than among conservatives, and academics are much more liberal than the general population. In this context, the assertion that “Palestinian solidarity activism” is more controversial in an academic setting than elsewhere, or that the Palestinian cause cannot get a hearing, is delusional. Is there any academic who thinks that it would be more controversial to offer a BDS resolution at a faculty meeting than it would be to offer a resolution expressing support for Israel?

Still, the constant complaints of boycott supporters that they are being suppressed are revealing. Why do proponents of a boycott feel compelled to put forward such a transparently false assertion? Perhaps they are reaching for an explanation for why academic organizations have been reluctant to take up the “Boycott Israel” call. If the American Studies Association adopts the resolution, it will be just the second notable U.S. academic organization to do so, the other being the Association for Asian American Studies. By claiming that there are powerful forces working to silence them, boycott opponents can divert attention from the extent to which joining their movement entails opposing academic freedom, adopting odious comparisons of Zionism and Nazism, and plumping for a one-state solution that would put an end to the Jewish state. Thankfully, even in academia, that position remains a hard sell.

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Anti-Semitism Becomes Respectable in D.C.

Anti-Zionism, as Jonathan noted, is acquiring “an undeserved veneer of respectability in Barack Obama’s Washington”: The latest anti-Zionist screed to hit the bookstores will receive a prominent platform at an event organized by the New America Foundation, a prestigious Washington think tank headed by a former senior Obama administration official. But frankly, I don’t see why anyone should be surprised. After all, anti-Zionism is merely an offshoot of a much older evil, anti-Semitism. And since the original has become perfectly respectable in Barack Obama’s Washington over the last month, why be surprised that the offshoot is as well?

Exhibit A occurred at the Geneva talks with Iran earlier this month, when an unnamed senior U.S. official refused to condemn the latest rant by Iran’s supreme leader, Ali Khamenei. Though many commentators found this silence disturbing mainly because Khamenei termed Israel a “rabid dog,” I was even more disturbed by the American representative’s tolerance of the part of the diatribe aimed at France, in which Khamenei used one of the oldest anti-Semitic tropes in the book.

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Anti-Zionism, as Jonathan noted, is acquiring “an undeserved veneer of respectability in Barack Obama’s Washington”: The latest anti-Zionist screed to hit the bookstores will receive a prominent platform at an event organized by the New America Foundation, a prestigious Washington think tank headed by a former senior Obama administration official. But frankly, I don’t see why anyone should be surprised. After all, anti-Zionism is merely an offshoot of a much older evil, anti-Semitism. And since the original has become perfectly respectable in Barack Obama’s Washington over the last month, why be surprised that the offshoot is as well?

Exhibit A occurred at the Geneva talks with Iran earlier this month, when an unnamed senior U.S. official refused to condemn the latest rant by Iran’s supreme leader, Ali Khamenei. Though many commentators found this silence disturbing mainly because Khamenei termed Israel a “rabid dog,” I was even more disturbed by the American representative’s tolerance of the part of the diatribe aimed at France, in which Khamenei used one of the oldest anti-Semitic tropes in the book.

Since France had singlehandedly thwarted what it termed a “sucker’s deal” in the previous round of talks with Iran, forcing its negotiating partners to make some significant (though still insufficient) improvements, it was understandably in Khamenei’s bad graces. But rather than admit that France could possibly have had its own concerns about Tehran, he accused it of simply “kneeling before the Israeli regime.” Paris was furious and condemned the remarks, but neither the senior U.S. official nor a spokesman for EU foreign-policy czar Catherine Ashton would do the same. The best America’s official representative could do was mutter that yes, such rhetoric is “uncomfortable,” but Americans also “say difficult things about Iran and Iranians” (is it any wonder he or she was too embarrassed to be named?).

The claim that Jews control the world–or in this case, France’s foreign policy–is classic anti-Semitism; this alone makes it worthy of condemnation. But the official’s silence was particularly outrageous because the target of this slur was America’s negotiating partner in the talks: France’s representative was on the same side of the table as the U.S. official and Ashton, with Khamenei’s representatives on the opposite side. If American officials aren’t willing to condemn anti-Semitic slurs hurled at their own negotiating partner by their mutual opponent while the talks are taking place, when would they be willing to do so?

Answer: Never, as proven by Exhibit B–the administration’s silence in the face of an anti-Semitic slur against some even closer allies that same week. I’m referring, of course, to New York Times columnist Thomas Friedman’s outrageous assertion that lawmakers are siding with Israel against Obama on Iran not “from any careful consideration of the facts,” but “from a growing tendency by many American lawmakers to do whatever the Israel lobby asks them to do in order to garner Jewish votes and campaign donations.”

Not only is this another classic example of the anti-Semitic “Jews control the world” trope, but many of the lawmakers whom Friedman accused of blindly obeying Jewish dictates rather than thinking for themselves are President Obama’s fellow Democrats, who have loyally shepherded his domestic agenda through Congress. Yet even so, the administration couldn’t be bothered to utter a word in their defense.

When an administration doesn’t see fit to condemn anti-Semitic slurs even against its closest allies–its negotiating partner abroad and congressional Democrats at home–you know anti-Semitism has attained the height of respectability. My only question is when all the American Jews who voted for this administration are going to wake up and start objecting.

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