Raymond Richman - Jesse Richman - Howard Richman
Richmans' Trade and Taxes Blog
How the Minimum Wage Contributed to the Ferguson Riots
The legal federal minimum wage prevents employers from hiring anyone, with few exceptions, who would work for less. Michael Brown, the young black teenager killed in Ferguson, was one of the millions of black teenagers and other unskilled blacks who are unemployed as a result of the minimum wage of $7.25 per hour which costs prospective employers $16,150 per year including social security tax and Medicare insurance plus some thousands more for Obamacare. As a result, most black teenagers are unable to get the first foot on the ladder to a living wage and the ability to raise a family. And many older unskilled workers, including single mothers, who are without a job find themselves alienated and part of a vast underclass with attendant unsocial and criminal behavior.
That the minimum wage reduces the demand for unskilled workers cannot be denied. The vast majority of economists acknowledge that the legal minimum wage prevents the employment of many unskilled workers but they are afraid to publicly denounce the minimum wage which enjoys so much support from powerful political groups, like the labor unions. Unions do not want competition from non-union employers.
We even hear calls for a “living wage” as though every worker is the sole support of a family. The average household consists of 2.54 persons down from 3.33 in 1960. That statistic includes seniors and families whose children are grown-up. Twenty-eight percent of women age 35 to 44 have three kids or more. During the 1950s, women had four children on the average. That date is significant because the minimum wage began to have its effect about then. Still, the typical family with a teenager in it has one or two parents. If either parent works, a teenager earning $5 and hour adds $10,000 to the family income. His employment could be the difference between the family’s living in poverty or not....
Keystone XL Pipeline
Steve Yetiv and I published an op-ed recently in Canada's national newspaper the Globe and Mail on the Keystone XL pipeline.
"The Republican victory in the midterm elections has shaken up politics in the United States. It may even lead to a decision on the controversial Keystone XL pipeline, which would move oil from Alberta’s tar sands and North Dakota’s Bakken oil fields to refineries on the U.S. Gulf Coast.
"Will it clear the way for construction of the last phase of the pipeline? The chances have risen, but passage is still not assured. It will likely depend on a deal between the Republican-dominated Congress and Democratic President Barack Obama."
The entire piece can be read at: http://www.theglobeandmail.com/globe-debate/the-president-and-the-pipeline/article21558766/
Cloture Rule May be Key Senate Vote -- We were published in today's American Thinker
To read the rest, go to:
Government Interference in the Economy Has Been an Unmitigated Disaster
Few Americans know the economic harm that government mismanagement of the economy has caused. The Community Investment Act—still in force—was the principal cause of the housing bubble that led to the Great Recession, whose effects we are still experiencing. And government intervention in the economy continues to cause untold economic misery. For example, the minimum wage law has denied employment to millions of unskilled workers with dreadful consequences to them and to our society. The Corporate Income Tax was enacted to appease anti-business sentiment. Its proponents unknowingly created a tax that violates all the criteria of a good tax. Americans widely support free trade notwithstanding the fact that some of our trading partners entertain policies that steal American jobs and whole industries. Americans are unaware that the federal government (and some state governments) have given away billions in subsidies and tax credits and conducted a war on fossil fuels in the name of preventing global warming. It has become a world-wide disaster. Scientists are in disagreement as to how much of the global warming is caused by the burning of fossil fuels. Scientists are unanimous in acknowledging that the billions spent to date have had no effect whatsoever on climate change. Moreover, the dynamic oil and natural gas industry has been the major contributor to employment growth during the past six years and is reducing our chronic trade deficits which have cost Americans millions of jobs. Americans are willing to provide low-rental housing for the poor but are unaware that while rentals are low, the cost per unit was astronomical. And Americans should know that many other government policies have slowed America’s rate of economic growth, among them excessive and costly unnecessary government regulations which have raised costs to the consumer and produced little of no benefit. Let us look at a few of these policies....
Journal of Economic Literature:
Atlantic Economic Journal: