Free Republic

Amateur writers on economics are always asking for “just” prices and “just” wages. These nebulous conceptions of economic justice come down to us from medieval times. The classical economists worked out instead, a different concept—the concept of functional prices and functional wages. Functional prices are those that encourage the largest volume of production and the largest volume of sales. Functional wages are those that tend to bring about the highest volume of employment and the largest real payrolls. The concept of functional wages has been taken over, in a perverted form, by the Marxists and their unconscious disciples, the purchasing-power...

In spite of the overwhelming evidence that labor productivity is the fundamental determinant of wages, the conclusion is usually forgotten or derided by labor union leaders and by that large group of economic writers who seek a reputation as “liberals” by parroting them. But this conclusion does not rest on the assumption, as they suppose, that employers are uniformly kind and generous men eager to do what is right. It rests on the very different assumption that the individual employer is eager to increase his own profits to the maximum. If people are willing to work for less than they...

The U.S. rate of unemployment has been rising since March 2007, when it stood at 4.4 percent. In 2007 it rose slowly, then in 2008 and 2009 much more quickly. In August 2009 it reached 9.7 percent. The increase in unemployment represents for most people the most troubling aspect of the current recession. However, during the past year, so much attention has been focused on the financial debacle in its various dimensions, and on the Fed’s and the Treasury’s efforts to deal with it, that the growing unemployment - now amounting to approximately 15 million persons - has become almost...

On May 12, 2009, the trustees for the Social Security system released their annual report, "The 2009 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds." Following release of this report, many media outlets were quick to report (or should I say regurgitate) the findings sited in the trustee's executive summary -- notably that Social Security payroll tax collections would begin to exceed benefits paid in 2016, a year shorter than had been forecasted in 2008. Although the news media were correct to convey this fact, such simplistic accounts...

The DoD Appropriations Act 2010 passed the house last week without including the Connie Mack amendment that would have removed the Davis-Bacon Act from H.R.3326. We need to get our spending under control. Contact your Senator and let them know that this outdated Act is hurting our recovery efforts. For more info about the DBA and to contact your Senator see Link.

he Bureau of Labor Statistics released new numbers today on employment and wages by county. The data are from the last quarter of 2008. Of the 335 larger counties surveyed, New York had the highest weekly wages, with an average of $1,856. That’s twice the national average of $918 a week. (Of course, the cost of living in New York is much higher than the rest of the country.) New York wages, like those in many counties, were trending downward. Compared to the same period the year before, wages fell 0.6 percent in the fourth quarter of 2008. The average...

The deflation vs. inflation debate seems to be settling down, with everyone agreeing that we're seeing both at the same time. The split is: Things we want to see going down are going up (oil, food) and things we want to see going up are going down (houses, wages). In his latest piece, David Rosenberg talks wage deflation: A survey conducted by YouGov for the Economist magazine found that 5% of respondents had taken a furlough this year and 15% had accepted a pay cut (see The Recession and Pay: The Quiet Americans on page 33 of this week’s edition)....

Sacramento -- There is more pain ahead for elderly, disabled and poor Californians. Schwarzenegger has proposed reducing caregiver pay under the In Home Support Services program -- used by 446,000 Californians with disabilities -- from a maximum of $10.10 per hour (including benefits) to $8.60. That will make it tougher to find help. "I expect suicides, premature deaths, a horrible disruption of the social fabric. . . . We're headed toward market-based social Darwinism where only the fittest will survive."

The Obama Administration, known for never letting a crisis go to waste, used the popular outrage over the $165 million in executive retention bonuses paid out by AIG, as the perfect segue to introduce the idea of imposing a maximum wage in the United States. Citing the “Arrogance, Incompetence and Greed” that purportedly represents the ethos of AIG and other Wall St. firms, Mr. Obama has had little trouble inciting incendiary hatred toward executives among America’s larger corporations. I find it curious that Mr. Obama is so “outraged and angry” over the bonuses, when they were grandfathered into the much...

An email from the IowaGOP: Democrats who control the Iowa House of Representatives have scheduled debate for later this morning on the so-called “prevailing wage” bill that will create state mandated wages and benefits for those working on public construction projects and raise property taxes (House File 333).HF 333 would require contractors and subcontractors who work on public improvements to pay wages and fringe benefits that have been established by collective bargaining agreements. Even those supporting the legislation acknowledge it will result in higher construction costs for public projects and that it WILL raise property taxes. Labor union lobbyists have...

Barack Obama, not content with merely being president, has enhanced his resume with the additional title of “Salary Czar.” His new duties include telling corporate executives how much money they can make. Next thing you know, he’ll have the White House tailor add golden epaulets on his suits and start wearing one of those military hats with a big gold eagle in front. This is a slippery slope, President Obama. Once you start adding titles, it won’t be long before you end up like Idi Amin. His full title was “His Excellency President for Life, Field Marshal Al Hadji Doctor...

I missed Clintonite moldy oldie-turned-Obama economic adviser Robert Reich’s testimony a few weeks ago on how the government should spend federal stimulus money. The Berkeley professor engaged in academic fantasy land talk about getting all the cash out to workers as quickly as possible — a pipe dream debunked by the CBO report I mentioned in my column yesterday. Even more noteworthy, however, were the comments Reich made about which workers deserve the stimulus bucks most. Reich’s proposal exposes the lie that the Obama administration is actually interested in revitalizing basic infrastructure for the good of the economy. No, what...

Thank You Brian for reminding our Representatives that our first priority is to get our economy on track and that isn’t done by eliminating statutes of limitations and eliminating caps on punitive damages besides the act being “UNFAIR”.

GRANTS PASS, Or. -- Even though the raises are in the budget, a group of Grants Pass city employees says higher salaries would be unseemly. Members of the Grants Pass Employee Association have told city officials they'll forgo 2.5 percent cost of living adjustments due with the new year. Association leaders say the members looked at the overall economy and the layoffs among major local employers and decided they didn't want their friends and neighbors to see them as grabbing money. The decision is expected to save the city at least $87,000. Assistant City Manager Laurel Samson said nearly 100...

Newly released data show that federal employee wages and benefits continue a rapid ascent above and beyond private sector pay levels. The data was released last week by the Bureau of Economic Analysis. (See tables 6.2, 6.3, 6.5, and 6.6).The new data show that the 1.8 million federal civilian workers earned an average wage of $77,143 in 2007, which is 61 percent higher than the $48,035 average in the U.S. private sector. That 61 percent pay advantage has increased from a 34 percent advantage in 2000.Looking at total compensation (wages plus benefits), federal workers earned an average $116,450 in 2007, which is more than...

Men with egalitarian attitudes about the role of women in society earn significantly less on average than men who hold more traditional views about women's place in the world, according to a study being reported today. It is the first time social scientists have produced evidence that large numbers of men might be victims of gender-related income disparities. The study raises the provocative possibility that a substantial part of the widely discussed gap in income between men and women who do the same work is really a gap between men with a traditional outlook and everyone else. The differences found...

Unemployment Deconstructed by: Emily Miller, September 09, 2008 The unemployment rate spiked at 6.1 percent last week, the Labor Department reported, the highest since September 2003. Nevertheless, a recent study released by the Heritage Foundation concludes that job quality is improving in the US. “America is not becoming a nation of low-wage fast-food workers,” said James Sherk, Bradley Fellow in Labor Policy at the Heritage Center for Data Analysis and author of the report. “Job opportunities are expanding with the typical job paying more than it did a generation ago.” The report indicated opportunities for jobs are “expanding” alongside an...

Monthly salaries in Sweden averaged 25,800 kronor ($3920) last year, an increase of 800 kronor compared with the previous year. Women’s salaries amounted to 84 percent of men’s salaries on average, unchanged from the year before, according to new figures from Statistics Sweden. In 2007, public sector workers earned an average of 23,900 kronor per month, a 500 kronor improvement from 2006 salary levels. Meanwhile, private sector salaries improved by twice as much, landing up 1,000 kronor to 26,700 kronor per month on average.

Our economic system — the market economy or capitalism — is a system of consumers' supremacy. The customer is sovereign; he is, says a popular slogan, "always right." Businessmen are under the necessity of turning out what the consumers ask for and they must sell their wares at prices which the consumers can afford and are prepared to pay. A business operation is a manifest failure if the proceeds from the sales do not reimburse the businessman for all he has expended in producing the article. Thus the consumers in buying at a definite price determine also the height of...

Chances are they probably aren't working. And who can you thank for that ... the government. Researchers at Northeaster University estimate that summer 2008 will be "the worst in post-World War II history" for teen summer employment. Only about one third of American teenagers will have a summer job and the rates are even lower for low-income and minority teens. So why is this? One of the main reasons is because of government mandated wage increases. Economic researchers show, yet again, that increasing the minimum wage destroys jobs for low-skilled workers and does nothing to fight "poverty." For every 10%...

The leftwingnuts at Center for American Progress said: "The minimum wage increase will not harm our economy." "The minimum wage increase will not cause price inflation. In Arizona, for example, the total cost of the wage increases is equal to 0.08 percent of total sales. The average business can fully cover the cost of the minimum wage by increasing revenue by less than 0.1 percent." "The minimum wage increase will not destroy job growth. Between 1997 and 2003, small business employment increased by 9.4 percent in higher minimum wage states, compared to 6.6 percent in states at the federal level."

Unions Blast Government Effort to Stop Hiring of Illegal Aliens By Susan Jones CNSNews.com Senior Editor March 27, 2008 (CNSNews.com) - The Department of Homeland Security has re-issued a rule that labor unions and some business groups oppose. The "no-match" rule is intended to stop employers from hiring illegal aliens, but critics say it will have unintended consequences. The rule re-issued last week is the same one blocked by a federal district court in San Francisco last October. The Homeland Security Department (DHS) said the newly issued "supplemental" rule addresses all three concerns raised by the court on Oct. 10,...

Newstip 2-22-08 Obama, Savior of the Middle Class? Barrack Obama is running ads saying he will work for the middle class. One way he’ll do this is to raise the minimum wage. Wait a second, how does this help the middle class? By definition, the middle class is already making more than the minimum wage. Do they get a raise when the minium wage goes up? Nope. They get a decrease. Think about it. Companies forced to artificially raise their bottom rates have to pay for it by cutting money somewhere else: Job cuts, increase prices of the goods they...

CAMBRIDGE, Mass. — Mexican President Felipe Calderon on Monday decried anti-immigrant perceptions in the United States and argued that Mexican immigrants complement American workers. On his first trip to the U.S. as Mexico's president, Calderon said he is working to combat anti-Americanism in Mexico and to improve job prospects there to reduce migration. He said he hopes that Americans resist anti-Mexican sentiments. "The worst thing that happened in this country is this anti-Mexican or anti-immigrant perception of people. We need to contain this," Calderon said after a speech at Harvard's John F. Kennedy School of Government. "I need to change...

Will Hillary Clinton as president tap into workers' wages to achieve her goal of health insurance for all Americans? The possibility exists as the candidate was pressed on the matter during a television interview today. Speaking on ABC's "This Week" program, the Democratic senator from New York said she might be willing to have wages garnisheed if people refuse to buy health insurance. "I think universal health care is a core Democratic value and a moral principle, and I'm absolutely gonna do everything I can to achieve that," Clinton said. "I think there are a number of mechanisms" possible, including...

Will Hillary Clinton as president tap into workers' wages to achieve her goal of health insurance for all Americans? The possibility exists as the candidate was pressed on the matter during a television interview today. Speaking on ABC's "This Week" program, the Democratic senator from New York said she might be willing to have wages garnisheed if people refuse to buy health insurance.

BEIJING, Jan. 12 (Xinhua) -- More than 40 percent of employees in China were unsatisfied with their salaries in 2007 amid rising costs of living, said a latest online survey. Covering more than 8,000 people of various professions nationwide, the survey was conducted earlier this month by www.zhaopin.com, one of China's leading job-hunting websites. When the respondents were asked to rate their degrees of satisfaction on salary, 21.5 percent ticked 70-100 points representing "very satisfied and satisfied," 36.4 percent chose 60-70 points indicating "an average degree," with the remaining 42.1 percent opting for 60 points below to express their strong...

Former Federal Reserve Chairman Alan Greenspan is warning of a sea change coming to the global economy. Greenspan says the glory days of low-cost imports from China are coming to an end, sending a wave of inflation to the U.S., reports Bloomberg. After a speech in London yesterday, Greenspan answered an audience member's question about whether China's rapid economic growth will translate into rising prices. Greenspan cited an index of import prices from China to the U.S. that revealed prices are already beginning to trend higher (see chart). The index "finally turned higher in the spring," said Greenspan. "It's saying...

Americans earned a smaller average income in 2005 than in 2000, the fifth consecutive year that they had to make ends meet with less money than at the peak of the last economic expansion, new government data shows. While incomes have been on the rise since 2002, the average income in 2005 was $55,238, still nearly 1 percent less than the $55,714 in 2000, after adjusting for inflation, analysis of new tax statistics show. The combined income of all Americans in 2005 was slightly larger than it was in 2000, but because more people were dividing up the national income...

" McDonald's in Sidney, Mont., said he tried advertising in the local newspaper and even offered up to $10 an hour to compete with higher-paying oil field jobs. Yet the only calls were from other business owners upset they would have to raise wages, too. Of course, Francis' current employees also wanted a pay hike." " "The only economic development we used to get was the creation of more economic development offices." "And workers have benefited. Utah workers saw a 5.4 percent average wage increase in 2006,Knold said. "

Young women in New York, Dallas, Minneapolis, Chicago, Boston and a few other of the nation's largest cities who work full time have forged ahead of men in wages, according to an analysis of 2005 census data.-Snip-The study by Queens College demographer Andrew A. Beveridge shows that all women from ages 21 to 30 living in New York City and working full time made 117 percent of men's wages, or a median wage of $35,653, and even more in Dallas, 120 percent.-Snip-Also, many of those women are not marrying right after college, leaving them freer to focus on building careers,...

he day the first minimum wage increase in 10 years was enacted, Democrats and Big Labor made it clear they would ask for another hike soon. On Tuesday, a 70 cent increase to the federal minimum wage went into effect. The minimum wage increase, passed by the Democrat-controlled Congress in May, will increase 70 cents twice more over the next two years, until it reaches $7.25 in 2009. To celebrate, labor activists held a rally on Capitol Hill to thank congressional Democrats for delivering the pay raise—and demanded more. “Even when we get to $7.25, it’s not enough. We have...

After a grudging admission of the actual numbers and an "it's good but not great" quote from an unimpressed economist, here is the incriminating passage:Wage gains for most Americans last month were slow, and are most likely still trailing inflation. Compared with June 2006, average hourly earnings for workers in nonmanagement jobs increased 3.9 percent, to $17.38, less than the 4 percent advance in May.

If you have any doubts government-mandated minimum-wage laws kill jobs for the poor rather than lift them out of poverty, just take a look at what is happening right now in American Samoa. The latest minimum-wage law passed by Congress calls specifically for hikes in the U.S. territory – 50 cents a year annually until the continental rate of $7.25 is reached. This Washington-knows-best, one-size-fits-all approach is killing jobs in Samoa already – just days after it was signed into law by President Bush last Friday. StarKist had planned to expand its tuna production next month by hiring some 200-300...

Share this with All your Friends... And SHOW this to your children and grandchildren !!!! THE YEAR 1907 This will boggle your mind, I know it did mine! The year is 1907. One hundred years ago. What a difference a century makes! Here are some of the U.S. Statistics for the Year 1907: ************************************ The average life expectancy in the U.S. Was 47 years old. Only 14 percent of the homes in the U.S. Had a bathtub . Only 8 percent of the homes had a telephone. A three-minute call from Denver to New York City Cost eleven dollars. There...

The master plan, it seems, is to move perhaps 40 million high-skill American jobs to other countries. U.S. workers have not been consulted. Princeton economist Alan Blinder predicts that these choice jobs could be lost in a mere decade or two. We speak of computer programming, bookkeeping, graphic design and other careers once thought firmly planted in American soil. For perspective, 40 million is more than twice the total number of people now employed in manufacturing. Blinder was taken aback when, sitting in at the business summit in Davos, Switzerland, he heard U.S. executives talk enthusiastically about all the professional...

Businesses took on 180,000 more workers in March, only slightly short of the 200,000 per month average during the last two months. The unemployment rate fell by 0.1 percentage point to 4.4%, equaling its level of last October. Joblessness hasn't been lower since May 2001, just before the last recession. Wages also continued their recent upward march. Average hourly earnings of production workers advanced six cents to $17.22, and have risen 4% over the past year. Average weekly earnings rose even faster -- 4.4% during the year. Investors, facing the combination of a tighter jobs market and potentially inflationary wage...

THE NEW York Times recently reported that the earnings gap is now the widest since 1928, with the richest 1 percent of Americans having captured most of the economy's 2005 growth, and the bottom 90 percent getting nothing. Between 1979 and 2005, according to MIT professor Thomas Kochan, productivity of American manufacturing rose by about 70 percent, but the real wages of production workers remained flat. This economic pummeling of ordinary Americans has many causes, including deregulation of industries that once paid decent wages, the weakening of tacit social compacts in which bosses were ashamed to pay themselves hundreds of...

Evelyn Coke sat in her wood-frame home in Corona, Queens, a hobbled figure, not realizing that this is supposed to be her moment in the spotlight. For 20 years, she had cared for clients in their homes, bathing them, cooking for them, helping them dress and take their medications. But now, suffering from kidney failure, she is too ill to work. [...] The stakes in her case are considerable, not least because home care attendant is one of the nation’s fastest growing occupations. There are expected to be nearly two million aides by 2014, as the elderly population grows and...

SUPPOSE SOMEONE offered to import 350 foreign workers to New Bedford to work for less than the minimum wage. Since the unemployment rate is over 8 percent, we would expect public outrage. The city needs jobs, not more unskilled laborers. So it is no surprise that citizens seeking jobs started lining up at the Michael Bianco plant after Immigration and Customs Enforcement uncovered 350 illegal immigrants. [...] Contrary to popular belief, illegal immigration is not a victimless crime. The victims may not have a voice, but they are low-paid, low-skilled American workers. Many are historically disadvantaged groups such as minorities...

American businesses are largely unprepared for a seismic workforce change that will get underway in the coming decade, as tens of millions of baby boomers retire and far fewer new employees arrive to take their place. That's the conclusion of a study being released today by Boston College's Center on Aging & Work. The report, which surveyed 578 companies and other organizations, finds that only 12 percent have planned in-depth and more than a quarter have failed to plan at all for the changing demographics projected to create a worker shortage. [...] Drawing on its employer survey, it finds that...

WASHINGTON -- Former Federal Reserve chairman Alan Greenspan said allowing more skilled immigrants to work in the United States would help keep the income gap from widening. Inequality of incomes is the "critical area where capitalist systems are most vulnerable," Greenspan said yesterday in Washington at a conference on maintaining the competitiveness of US capital markets convened by Treasury Secretary Henry Paulson. "You cannot have a system that we have unless the people who participate in it believe it is just." Allowing more skilled workers into the country would bring down the salaries of top earners in the United States,...

In time-honored tradition, recent political-economic discourse has revolved around some form of the “Two America’s,” the “Middle Class Squeeze,” or the “Rich vs. Poor.” This political minefield of “wealth creation versus redistribution” is no place for a business economist. But if there really is a huge swath of Americans experiencing falling incomes and living standards, this would signal some serious ramifications for the economy and for investors. For example, if incomes were falling, credit problems would likely proliferate, government tax revenues might be weak, interest rates could fall, and the economy would be at greater risk of recession than the...

Who, on average, is better paid—public school teachers or architects? How about teachers or economists? You might be surprised to learn that public school teachers are better paid than these and many other professionals. According to the Bureau of Labor Statistics, public school teachers earned $34.06 per hour in 2005, 36% more than the hourly wage of the average white-collar worker and 11% more than the average professional specialty or technical worker

The US economy last year recorded its lowest rate of labour productivity growth in more than a decade, with growth in output per hour worked falling behind the EU and Japan. The fall casts further doubt on the ability of the Federal Reserve to cut interest rates as the US economy slows. Research to be published on Tuesday by the Conference Board, the international business organisation, shows that US labour productivity in the whole economy grew by 1.4 per cent in 2006 as slower economic growth was combined with a rapid rise in employment. [...] The US slowdown in whole...

In the first hundred hours of the just-started session of Congress, the new leadership promises to raise the minimum wage. The Democrats won't be opposed by many Republicans. Raising the minimum wage is definitely popular. Voters in six states approved higher minimums last Election Day. State politicians in both parties are practically drooling with eagerness to "help" lower-income workers. We all want the poor to make more money. So if government can raise wages by decree, why are the popular proposals so stingy? Let's really do something for the poor. Let's raise the minimum wage to $20 an hour. Even...

[...] When Mr. Bailey discovered that Mario was in the country illegally, he wanted to help him. So Mr. Bailey, [...]went to a lawyer to see if he could help Mario get a visa. That's when the president of Bailey Family Builders ran into a little-understood roadblock to legal immigration for the millions of Mexicans and others who perform manual-labor jobs in the U.S.: Only 5,000 work visas are available every year for unskilled laborers. "We don't have a system that recognizes the realities of the U.S. economy," said Mr. Bailey, president of the Home Builders Association of Dallas-Fort Worth....

U.S. companies are about to wrap up their fourth consecutive year of spectacular profit growth, filling corporate coffers with cash and keeping the bull market alive on Wall Street. Total earnings of the blue-chip Standard & Poor's 500 companies have risen at double-digit percentage rates for 18 consecutive quarters, an unprecedented streak. But to many rank-and-file workers, the booming bottom line may only serve as a reminder of what has been missing from their own paychecks. Wages of average workers have just begun to improve in recent months after badly lagging behind inflation for most of this decade. Amid the...

Robert Rubin, the former Treasury secretary and Citigroup executive, meets Wednesday with the House Democratic Caucus to begin educating its new members on the politically correct way to think about the economy. "Fiscal responsibility" is his standard theme and no doubt some freshmen will want to hear his views on trade and globalization and other large concerns. A political friend asked me: If you were in the room, what would you ask? So I gave him a list of challenging questions. These might or might not get passed along to House members. It seems unlikely, in any case, that freshly-elected...

Qatar 'to pay Palestinian wages' Palestinian civil servants have protested over unpaid wages Qatar has agreed to pay the salaries of 40,000 Palestinian education workers for several months, Palestinian Prime Minister Ismail Haniya has said. Mr Haniya said the amount would total more than $22m (£11.1m) a month. The Hamas-led Palestinian government has been struggling to pay its workforce since March when Western donors suspended direct aid. They want Hamas to renounce violence and to recognise Israel. Hamas has rejected the demands. The US and the European Union regard Hamas as a terrorist organisation. FOREIGN AID * April 2006 -...