3 Things 3-23-26

 Thing One

A Minimum Wage Metaphor

Imagine for a moment that you are in need of a new pair of running shoes. You know of a strip mall that has two shoe stores, so you get in your car and make the short drive. The first store, Uncle Sam's Sports, is closer to where you parked, so you start there. When you walk in, you're greeted by the manager who asks if he can help you. You politely tell him that you're looking for a pair of running shoes, but you also indicate that you'd like to browse on your own. After ten minutes or so of looking at display models, you zero in on a shoe that isn't quite what you were looking for from a functional standpoint but is aesthetically pleasing. Then you flip the display model over and discover the pair is priced at $60 more than you expected. So you replace the shoe and proceed toward the exit, intending to visit Freedom Footwear, which is two storefronts down. As you pass by the register, the manager asks if you've found everything okay. You tell him you found a pair you liked, but since the price was more than you wanted to pay, you were going to Freedom to see what they had to offer.

At that point, the store manager tells you that you are not allowed to do that and insists that you retrieve the shoes you liked, bring them to the register, and complete your purchase. When you try explaining again that the price is more than you want to pay, the clerk informs you that, by law, you must make the purchase. He goes on to explain that he has overhead to cover (it turns out he's the owner too). He says to you, "There are employees to be paid, the rent is due, and I have to pay myself a salary too. That's why we worked so hard with our city council to get a law passed that forces people who come into our stores to buy our products at council-approved prices." He goes on to tell you about the three kids he has to feed and the fourth on the way and explains to you that it's your duty to help him with these things.

You tell him that while you certainly appreciate his situation, having one of your own, you don't believe you have any obligation to support him. You say to him, "I'm just here to buy a pair of shoes, and I'm perfectly fine with your store deriving a benefit from our exchange, but please understand that is not my primary objective. In fact, it is not among the very short list of objectives I have in this regard. I know you have a store to run, but I have my own budget to manage, and purchasing these shoes from you at this price is inconsistent with my budgetary objectives."

You bid him good day and leave the store, not realizing or caring that there are surveillance cameras everywhere. A few days later, you receive a letter from the city government regarding your shoe shopping incident. It seems you have broken the law, and the city has levied a fine in the exact amount of the purchase price, which will start accruing interest in 30 days. You've barely had time to recover from the shock when you notice protesters on the sidewalk in front of your house. It's the store manager and some of the workers, all holding signs that read, "Uncle Sam Wants You to Buy His Shoes."

Sounds silly, right? You can't be forced to buy something at a price you don't agree to, right? But that's exactly what minimum wage laws do. They force businesses to buy labor at prices they might not otherwise pay. There is no difference, in other words, between the shoe shopper and the labor shopper.

Of course, those who favor legal minimum wage mandates argue that the wage thresholds are necessary to lift people out of poverty and pay them living wages. And while that sentiment is noble, it is misguided, and it places a responsibility on the businesses in question that is well beyond what they've signed up for.

The business owner doesn't open a store to help people raise families and escape poverty. He does it so he can make a living. If others are able to make a living and raise families, that is a secondary benefit. If those same others need to make a living and raise families off their wages and they can't convince the business owner to make the necessary adjustments, they should sell their services to a business willing to pay them what they desire, if they can. In the end, if the business owner is unable to attract labor at the wages he is offering, he will have to raise his wage levels or go out of business.

That's how it works. But someone forgot to tell that to the city council members in Los Angeles. They recently voted to raise the minimum wage to $16.90 in general and $30 for hotel and airport workers. On top of that, the minimum wage will be indexed to inflation, which means as prices rise, the minimum wage will rise automatically.

The problems inherent in that approach are obvious. Automatic, inflation-based wage increases will exacerbate price increases across the board. The higher prices will, in turn, lead to more inflation-based wage increases as part of a never-ending wage/price spiral.

But University of Washington Professor Martha Klawitter saw the inflation indexing arrangement as an obvious solution rather than a problem, as she said, "This is a way to allow the minimum wage to respond directly to the economy, to adapt to the current conditions automatically without requiring the political process to intervene." Mrs. Klawitter seems a bit confused about what market forces are and how they differ from government-mandated wage hikes.

She might want to get barbecue shop owner Todd Schwartz to help her bone up on real-world economics, as he explained it very succinctly with the following: "Wages don't come from me; they come from the customer. What is the most you are willing to pay for a barbecue sandwich?"

Thing Two  

Education: The Problem And The Solution 

Here are a few statistics on educational achievement (the lack thereof, actually) that may not surprise you, but are nonetheless discouraging:

• About 80–83% of African Americans graduate from high school, compared to roughly 89–91% of white and Asian students.

• Nationally, African American male students in grades K–12 are about 2 to 3 times more likely to be suspended than white students.

• On average, African American twelfth-grade students continue to perform academically several grade levels behind white students in reading and math.

• The twelfth-grade reading scores of African American males remain significantly lower than those for nearly every other racial and ethnic group.

• Only about 17–20% of African American eighth graders score at or above the proficient level in reading. These results reveal that millions of young people struggle to understand or evaluate text, provide relevant details, or support inferences about what they read.

Now add to those education statistics a few about unemployment:

• The unemployment rate for White Americans is typically around 3–4%, while the unemployment rate for African Americans is about 6–8%.

• Overall, workers from ages 16 to 19 have an unemployment rate of roughly 10–12%.

• White workers in the same age cohort have an unemployment rate of about 8–10%.

• Blacks in that cohort have an unemployment rate often in the 20–30% range.

And finally, add to those numbers this bit of information about who occupies the nation's prisons and jails:

Of the roughly 1.8 to 2 million people incarcerated in U.S. prisons and jails, a disproportionate number are people of color, individuals with mental health or substance abuse issues, people with low levels of educational attainment, and those with a history of unemployment or underemployment.

The numbers above are appalling and should be cause for national (not race-based) outrage and action—like the kind that seems to occur every time a young Black male is shot and killed by a police officer. Those incidents, which are statistically quite rare, by the way, often spawn weeks-long protests, bring out the who's who of race relations, and give birth to slogans meant to capture the essence of the unrest.

Oh, and on police killings, I have another data point. Estimates suggest that, out of a population of 330 million, there are roughly 1,000 to 1,200 fatal police shootings per year in the United States—regardless of race. The twelve hundred shooting deaths are a tragedy for sure, justifiable or not. But when you consider the fact that there are over 50 million kids attending public primary and secondary schools, in conjunction with the education statistics cited earlier, a shift in priorities might seem in order.

To be clear, let me say that I’m not at all minimizing the significance of anyone being killed by anyone else, police officer or not, but if the same kind of sustained outrage were directed toward getting better educational outcomes, there might be a whole lot less outrage at police shootings because there might be fewer of them.

Again, there’s rage over dead young men at the hands of police officers, but where’s the rage over the figurative walking dead that bad schools are pumping out in the form of the poorly educated? In large numbers, these poorly educated will either drop out, remain stuck on the lower economic rungs of society, end up in jail, or die prematurely at the hands of police or members of their own communities.

Wouldn't it be refreshing to see politicians get unified and get after the big problems that are currently being perpetuated by defenders of the status quo within the educational system, namely inflexible school boards and teachers’ unions?

Things will keep changing for the worse until we force policymakers to alter their course. The sooner we decide to do so, the better, because improving education isn’t just an issue—it’s the foundation for all our societal issues.

Thing Three

Just A Thought  

"A bad system will beat a good person every time." - W. Edwards Demming