Tag Archives: jobs

Musings on Minimum Wage

Posted on by sjcammenga
1

As a student trying to pay my way through school, I know I have been blessed to land a summer job at all, much less somewhere I am passionate about. Last year (2010), youth employment was lowest since 1949, having dropped 17.5% from the year before (2009). Interesting to note is that the minimum wage was last raised in the summer before, in 2008. Earlier in history, data from shows that at least 20,000 jobs were eliminated by the 1996 hike. This appears to be a pattern.

Minimum wage is definitely not the sole cause of the terrible unemployment numbers in the state today; the whole of Michigan has been suffering, especially after the collapse of the auto industry. The key to moving beyond failing industries is to support Michigan’s other businesses and encourage the establishment of new ones. When minimum wage is raised, the effects reach these businesses. Common summer employers, like farmers or resort owners, will readily admit to relying on the kids they employ in the summer to keep the business going. A higher minimum wage can discourage them from hiring too many employees or even be enough the shut them for good if they cannot afford the extra pay. 

Interestingly enough, Michigan is one of the few states which allow younger workers to be paid less than minimum wage. When a business is paying less, it is able to afford more workers. If less pay seems unfair, another beauty of a free market is the ability to walk away from a job if one doesn’t wish to live off its pay.

As a student, I am often willing to work cheaper. My younger brother who is looking for a job is willing to work for cheaper. I know students who have happily worked for a stipend less than minimum wage. I understand the importance of being able to support a family on a wage; this was the intent of the first wage law. However, I don’t think it would be all bad to have the freedom to choose to work for less if that is what it takes to be competitive and earn money for college.

Obama in Holland MI

Posted on by sjcammenga
1

Earlier this summer, Vice President Biden visited a battery plant in Midland. This week another visitor from the White House visited a battery plant in Michigan: President Obama himself.

Obama called it a rebound from desperate times. Apparently he feels pressured to demonstrate that his administration has made progress and this plant seems like a poster child for his plan. Not only should it create jobs for 300 full-time workers; it doubles as a step toward his desire for clean energy.

According to the Associated Press, though the Holland battery plant was built with $2.4 billion of stimulus money awarded by the government and is the ninth factory to be constructed with stimulus money, Obama declared that government programs were not the goal. Instead, he wants to unleash private sector growth.

I would suggest unleashing this growth with less regulations and taxes, making it easier for anyone in the private sector to obtain property and support a business. Just a thought.

Biden coming to Midland

Posted on by sjcammenga
Reply

My fellow residents of Midland Michigan can be prepared for a great celebration – one so big that Vice President Joe Biden will be coming to our very town. What is the occasion for this visit and the huge celebration? Obama and Biden have launched “Recovery Summer”- six weeks for them to highlight their stimulus jobs. Biden is coming here Monday for the groundbreaking of the new Dow Kokam advanced battery manufacturing facility, which was given a $161 million grant from the government. If you are interested in learning how well the government created jobs helped in the last depression, I highly recommend Great Myths of the Great Depression by Larry Reed, my personal favorite Mackinac Center pamphlet.

Pitfalls of Protectionism

Posted on by razma766
Reply

Here is a letter I recently sent to the Midland Daily News:

In his recent letter, Bill Burk sings praises to buying local (Unions commit to local, November 4). He argues that buying local saves jobs in the community, and is therefore superior to purchasing goods made outside the community.

Although I agree that buying local saves local jobs, there is nothing special about saving a job that is 1 mile away over saving a job that is 20 miles away, or 1000 miles away. Individuals who live 20 miles away or even 1000 miles away purchase goods from Dow Chemical and Dow Corning that employ people Midland. Would Midland, or the world for that matter, be better off if people outside our community shared the views of Mr. Burk? What would happen to the employees of Dow Chemical and Dow Corning if the world decided to buy local?

Additionally, which of the following actions is more benevolent? Purchasing from an inefficient producer who employs individuals enjoying an American standard of living or purchasing from an efficient producer in a developing country who employs individuals who depend on every penny of their income to sustain their own life?

Kurt Bouwhuis

GM to create jobs?

Posted on by jskorup
Reply

-Jarrett Skorup

According to AP sources, GM is planning to build an assembling plant for batteries somewhere south of Detroit.  The plant will be for battery packs for the upcoming Chevy Volt.  According to the story:

The new factory off Interstate 75 in Brownstown Township, about 15 miles south of Detroit, will take batteries made by LG Chem in South Korea and assemble them into packs that will power the new Chevrolet Volt, said one of the [sources].

The Volt will be due in showrooms sometime next year and be able to travel 40 miles after being fully charged.  There is a small engine to supply gasoline anytime after that.  And how much does this new car cost?  An alarming “$35,000-$40,000″.  Not a good sign with oil prices apparently stabilized. 

Maybe that’s why, “GM doesn’t expect to make much money on the Volt initially…”

Though 100 jobs is better than nothing, it seems clear to me that GM is merely doing this for a public relations boost and not necessarily because this will become profitable for the company.  I am predicting that our string of bailouts for General Motors is far from over.

At least South Korea will see some job growth.

Magic Works Until The Unseen Is Revealed

Posted on by razma766
Reply

barack-supermanKurt Bouwhuis, Mackinac Center Intern

I came across this text in the article cited below – “The White House estimates the $787 billion Recovery and Reinvestment Act that Democrats pushed through Congress with little Republican support will create or save 3 million to 4 million jobs by early 2011.”*  If the government can create 3 – 4 million jobs, why not create 10 million?  Or better yet, 320 million?

“The fact is, the state does not and cannot have one hand only. It has two hands, one to take and the other to give.” – Frédéric Bastiat, The State, 1848.  For every job the government creates, it must first destroy jobs someplace else.  The $787 billion “stimulus” has taken a large portion of credit out of the financial markets.  This is credit private entrepreneurs could have used to start new business, or expand operations.  It is credit consumers could have used to buy a new car or a new home.  It is credit that could have been used to create a positive savings rate for the country.

The $787 billion also takes money from current profitable businesses and consumers.  The money taxed away could have been used by businesses to employ more workers, buy new equipment, or just earn profits and stay in business (rather than closing down because of a heavy tax burden).  Consumers could have used the money to buy new televisions, books, furniture, toys, decorations, grills, clothes, etc…

A simple story may help – “If a thief goes from bank to bank, stealing all the cash he can get his hands on, and then spends it all at the local shopping mall, you wouldn’t be thorough in your thinking if all you did was survey the store owners to conclude that this guy stimulated the economy.” – Seven Principles.  The same is true with government.  If all you do is focus on the jobs created, and not look at all the jobs destroyed, you are not being thorough in your analysis.

Essentially, the taking hand of the state directs resources and capital away from productive activities where everyone purchases what they desire.  The giving hand of the state moves this capital and resources into unproductive activities, which results from political decisions with a limited number of people deciding what is best for everyone.

In short, the government is made up of real people who do not wield magical powers.  Entrepreneurs seeking profits have a greater incentive than government to create productive jobs.  Productive jobs give people what they value most – Unproductive jobs do not.  The government may be able to “create jobs” with its giving hand, but we must remember that the taking hand is destroying more jobs in the process.

*Source: http://www.reuters.com/article/marketsNews/idUSN0833333820090608
 Reffered to me by Eric Imhoff, Mackinac Center Intern

Society is not simple

Posted on by razma766
2

Here is a letter a recently submitted to the Midland Daily News

To the editor:

Dale Anger is correct with his assertion that society is not simple (“Taking Exception,” Dec. 16, 2008). He states: “I know it is easier to just mouth the simple answer, but one of the reasons we have not found answers to a lot of problems is that we keep getting these one sentence answers to problems that are much deeper.” Although there may be some truth to such a statement, I find it hard to believe that offering absolutely no solution is somehow more helpful.

Dale seemed to have a problem with allowing the market to allocate jobs, stating that there may not be enough jobs to go around. Although he did not offer a solution, I will assume he is suggesting the only alternative, which is to use government to secure jobs.

Using a quote from the beginning of his piece explains why such logic is faulty: “…government using other people’s money for the use of different people’s benefits. That is the nature of government. Anytime a government makes much of any kind of action, it is curtailing one person’s activities at the expense of others.”

Remember, the government cannot create or save jobs. The government does not produce anything of value; all it does is redistribute wealth. Unfortunately, the federal government cannot even do that correctly, as it is currently in debt for trillions of dollars. Since the government has already spent all of your money, it now has to resort to the printing press. Since the government is broke, any additional “service” the government provides will debase our currency, which is ultimately a tax on anyone holding or using dollars.

I will agree with Dale that job loss is a terrible thing in an economy. It does not make sense, however, to tax flourishing companies that are employing people in the process of creating goods that are actually demanded to subsidize companies that fail to give people what they demand. Unfortunately, no bureaucrat, politician or government wields the power to create jobs out of thin air. All the government can do is redirect them.

Believing it is possible to print our way to prosperity or create jobs out of thin air is dangerous to assume and a fallacy at best.

Kurt Bouwhuis

Granholm Going to Japan

Posted on by razma766
1

Kurt Bouwhuis, Mackinac Center Intern

“Governor Granholm leaves Monday, September 15 for a three-day jobs and investment mission in Japan. She will visit 22 companies in three different cities, highlighting all Michigan has to offer as a great place to do business.”

I thought Michigan’s business climate was so attractive that there would be no need to go searching overseas for people to invest in Michigan.  I’m glad to see that our tax dollars continue to be put to good use.