California Governor Jerry Brown launched a Political Earthquake proposing a series of minimum wage hikes every year between now and 2022 when the minimum wage hits $15.
The Huffington post reports “The new law will boost paychecks for millions of California workers. More than 40% of California workers earn less than $15 dollars an hour. ”
The very next line, written by Peter Dreier, professor of politics at Occidental College is economic nonsense: “By putting more money in people’s pockets, the pay increase will improve the economy by increasing consumer spending in businesses throughout the state.”
Inquiring minds just may be interest in seeing a chart of California minimum wages hikes over time, all the way back to 1912. I just happen to have that chart.
California Wage Hike History
Data for the above chart is from the California Department of Industrial Relations, History of California Wage Hikes.
Data points through 2022 reflect the new wage hikes.
The idea for this post comes from reader “Rand” who emailed the links and a Google Docs chart. I re-entered the data into Excel.
As for Peter Dreier’s ridiculous comment, the only things thing this hike is guaranteed to do are as follows
- Make the US more uncompetitive
- Increase the use of robots
- Drive up prices
- Crucify those on fixed incomes
- Hammer cities with increased costs of doing routine maintenance
Where does it stop? Please look at my chart and tell me. Then tell me why we should not expect another round of outsourcing and increased use of robots.
Mike “Mish” Shedlock
Reality is of no significance to Progressives. Possible why the term “Progtards” is coming of age.
I like the term “Regressive Left” that’s been gaining traction.
Seems too me California consumers are losers as well as entry level workers.
By 2020 $15/hour will be the same as $9 whatever now. No living wage now nor then. Just thank God that you and I are not debt slaves making non-living wages, especially as a working single mom, with kids. Let them eat cake! Greedy corporate capitalism is the BEST way (corporatocracy): See John Perkins, The New Confessions of an Economic Hit Man. And take it to international levels, screwing countries and making them debt slaves too. And if a problem, just “off” them as USA did to:
Arbenz of Guatemala or Mossadegh of Iran or Allende of Chile or Jaime Roldos of Ecuador or Omar Torrijos of Panama and now, in progress of Rafael Correra of Ecuador.or see NYTimes yesterday of vultures and Argentina (op-ed). The wealthy MUST get their pound of flesh!!
Oh well, thanks be to whomever, for the good old USA!!!!! Number 1 superpower and IT WILL STAY THAT WAY, thanks to Hit Men and Jackals.
Kenneth, I think you are perhaps too angry to commuicate well.
Yes, the economic hitmen are a reality. No, I do not support it. No, I have no say in what goes on. As for what will be, who knows.
I do not automatically agree with you or Mish on what nine or fifteen dollars will do to California. See my post below.
Agree. It is a bit disingenuous to try to make a point using nominal value.
“By 2020 $15/hour will be the same as $9 whatever now. No living wage now nor then. Just thank God that you and I are not debt slaves making non-living wages, especially as a working single mom, with kids. Let them eat cake!”
The true minimum wage is ZERO. Unemployed at $15 an hour is ZERO. Unemployed at $35 an hour is ZERO.
Anything that is manipulated, manipulates back. Or as Newton would have said, for each action, there is an equal and opposite reaction.
Mandate $15 an hour, there will be equal and opposite reaction. Simply, nothing occurs in a vacuum.
Walmart raised their wage and closed over 100 stores as a result and cut higher paying jobs at their headquarters.
The FED has mandated ZIRP since 2009. That has not happened in a vacuum. QE has not happened in a vacuum. Stock buybacks have not happened in a vacuum. The ACA has not happened in a vacuum.
Every manipulation distorts, resulting in an inverse distortion.
Government guaranteed student loans were supposed to make college affordable. It did the opposite. Colleges reacted to the cash cow and jacked up student costs. $15 an hour will be like $9, because of the follow on reaction, because $15 doesn’t happen in a vacuum.
Take away the student loans and the cost of college will drop.
Regarding the fallout, “…the only things this hike is guaranteed to do are as follows…” I surprised that “homelessness” wasn’t included.
You really should use logarithmic charts for number series which increase on a percentage basis. Anything that grows x% per year will have a chart that looks exactly like that.
You might want to see a normalized % change every year, but for others the change in value from a given date is better represented by the above. I find log charts deceptive, but sure to someone who is measuring variation in itself will find use for them.
Gave it a try and came up with a rate of 4.09% with an adj-r2 of =0.9889 if you inlcude only data after 1940.
Oh, all you rightwingnutjobs, is it time to clutch the pearls and look for your fainting couches? Where is your evidence for your prognostications from previous minimum wage hikes? You say that you can’t find any? You say the same hackneyed rightwing things you always say and your predictions never come true. Go see Mr. Laffer, he might have some new insight for you.
“Oh, all you rightwingnutjobs, is it time to clutch the pearls and look for your fainting couches? Where is your evidence for your prognostications from previous minimum wage hikes? You say that you can’t find any?”
You might take a look at what has happened in Seattle since they raised their minimum wage. The evidence is there, you just don’t want to look for it. Walmart raised their wage and closed down over 100 stores. They also cut jobs at their headquarters. How many jobs did it cost for Walmart to raise their wage?
The laws of math and economics are not nut job. Unlike you, math has no feelings. 1+1 always = 2, whether anyone likes it or not.
Ron J; You are spending too much time reading the Seattle rightwing propaganda from the AEI which has been refuted by Barry Ritholtz on the Big Picture on the Finviz site. Do some research and broaden your horizons. Are you telling me Walmart shut stores because of pitiful raise for employees or because of a lack of demand created by the fact that nobody has any money in the middle class to buy their Chinese stuff?
“Are you telling me Walmart shut stores because of pitiful raise for employees or because of a lack of demand created by the fact that nobody has any money in the middle class to buy their Chinese stuff?”
The closings happened AFTER Walmart raised their wage level. People didn’t have money to buy stuff at Walmart well before the company raised wages. Store closings are related to the increased cost of raising wages.
Walmart canceled a planned store in Washington D.C. after D.C. raised their minimum wage above the wage rate Walmart had raised theirs to.
Mish, I wonder if you’re actually correct. Surely in a state like Illinois you would be. However, Illinois is already on the verge of Detroiting. So any shakeup could indeed do everything you say.
But what about California? The state is a tourist destination, and this will surely reduce tourism, but I’m not sure that tourism isn’t a negative-sum game anyways. Meanwhile, if this law LOCALLY drives down the wealth gap, couldn’t it indeed benefit California? Or let me put it in terms of the second law of thermo: the second law says that you cannot globally reduce entropy. However, the very reduction of entropy locally is what powers heat engines, entropy engines, and the development of all life.
Therefore, instead of making a sweeping generalization, I think it would make sense to stop and say, “what will this do microscopically? Will it drive California’s billionaires to extract more wealth from the rest of the country? Will it possibly even save Calpers by forcing the economy to keep up with solvency requirements of the pension funds?”
I think the basis for all micro study is the agreement between two parties who look at the world around them, calculate their position and try to forge an honest agreement by bargaining each other’s position into an exchange. That would not be three parties with the Fed., or four with the concern for a few billionaires, or five with the local authority wage mandate, or six with…. etc.
All of the latter are incidental, they confuse or open avenues, but they do not simplify the calculation in reality. Where they seem to simplify I think you will find that they actually have unwanted results on the whole process, ones that are often channelled and return to the scene where they can never be sourced.
But as long as the sensation is of security, of obtaining a bargain, of imagining someone else is paying because someone else deserves to, it is all o.k.?
If $15 is good , isn’t $20 better? Why not $25 etc. etc. I haven’t heard a progressives explain why they stop at $15. I’ll tell you the answer nobody else so far will. The “establishment” politicians of both sides know we will never be able to pay down our debts. Not even balance our budget. They know the only way out is to inflate our way out.
Buy Silver, Buy Gold. Buy hard assets that you can touch. If you are sure you have a steady income/won’t be laid off, go into debt and buy more hard assets. All rich people got rich using OPM. “Other people’s money”. Do it. The only question is when and now is as good a time as any.
This kind of chart is worthless if the value of dollar is not compared to previous times. 15 dollars 1971 was worth 89.14 those days (1 was 5.94). Annual Inflation 1971-2016: 4.04%. Total Inflation: 494.28%
Purchasing power, not numeral amount, defines whether or not people are doing well. And in a state like California with constant rising rents and costs, they are not.
There seems to be a black spot in Mish’s thinking when raising salaries is mentioned. Expecting the economy to grow forever and people having money to spend, it would only seem natural to me see salaries rise. However, our economical model seems to be doomed so perhaps we will move back to hunting and gathering instead.
I think Mish does not like gov. mandated salaries. Though I think you are right when it comes to measuring real dollars instead of nominal to understand the effect of purchasing power or price inflation… maybe I could sum it up this way :
Gov. mandates min. wages be a certain level through 2022, what is the value of the dollar through those dates to adjust it to in real terms?
So, based on that logic the minimum wage in California should be $9.65. I am betting most actually get paid more than that – if not, they are probably in a job that is not worth it.
I am not saying, what the actual sum should be but if we look everything that government does according to statistics related to costs etc. than we can forget minimum for social security and other benefits as well and move directly to begging on the streets on the mercy of others.
I see minimum wage as a good way to guarantee that people are paid enough to survive. What the level is, I am not qualified to say but am sure there are people able to give answers to that equation.
If we all would be on the mercy of the employers without no rights to choose, I wonder would that really be the utopia many seem to have in their minds?
Turns out that CA minimum wage has roughly tracked CPI inflation since 1971. However, this new trajectory rises at 7% per year. Sure hope we don’t see that kind of inflation again!
There is an army of corporate compensation consultants that establishes a minimum wage for corporate executives. Even though shareholders often can vote on the pay packages for key personnel I have never seen a pay increase voted down. This is even in spite of the bloated pay subtracting from profit that should go to the shareholders. The system is corrupt at the top so it must be balanced by corruption at the bottom now.. Rarely do I see pay matching value to the organization in any case.
I just had to repeat it “Rarely do I see pay matching value”
In 1960 Minimum wage was $1.00 and would be around $8.21 if you computed the average CPI growth published from then until today. If you doubled the CPI over the term which covers the period the government really started to lie to us, it would be over $16. No matter how you calculate it should have been indexed at lease for inflation, these knee jerk reactions might be eliminated. What everybody is forgetting about and never talks about is the underground economy. These idiots will make it grow even more and much faster! Until they can read our minds which is coming. In addition, when you are letting out car thieves because you have no room in jail, nobody is scared anymore. Final point is you cannot get blood out of a turnip, which is what Chicago and Illinois is finding out and is going down the tubes. People are voting with their feet and starting to leave in droves. It took decades for Detroit, years for Chicago, and it will be months for California!
I know of a company that has invented a very cost effective solar air conditioning system that was going into production in CA. They will still stay for now and make their small unit but they plan on moving within the next two years, when their larger and more mainstream products come on line, it will not be in CA! How do I know, I am a partner in this business? By the way our average wages we were going to pay was much higher than minimum.
One other problem is the current employees making between $15 to $20 an hour how do you keep; them happy. Nobody has talked about this either.
CA did a very stupid thing!
Oh, Look! Minimum wage is growing to the sky!
Oh, really? No, O’Reilly.
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US wages are out of proportion to productivity of labor. US Labor unions got spoiled by the post WWII monopoly on production. Two billion souls gladly work for $2/hour and our wage slaves are not better than their wage slaves.
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When does US employment end? Google ‘layoff’. When you get one million hits the end is nigh. Recovery begins with the end of EBT cards, and no minimum wage, low tax, industrial zones.
I have not seen any mention about what this giant increase in labor cost will do the CA agricultural industry. With the drought and excessive regulations many farmers were barely able to stay in business before this. Liberals think this problem is overblown, but in fact I recently bulldozed 1600 avocado trees because there was no way to make a profit, and the regulations were a huge pain in the butt.
You had better get used to more expensive food, with more imported from other countries with hardly any environmental oversight (Central & South America).
This gives CA employers greater reason to hire more illegals and pay substandard wages. And why not? The CA state government has promoted illegal labor by refusing to demand that the state labor laws get enforced, by consistently refusing to consider a mandated employer E-Verify system and by giving illegals CA driver’s licenses. In his last run for governor during the broadcasted debate with his challenger, Kashkari – Brown said that illegals needed drivers licenses to make it easier to get to work in the morning. So Brown made it very clear that he endorses illegals to violated state labor laws.
It’s very clear to me what’s happening here. More jobs for illegal foreigners. The CA government is forcing the small employers into a corner. Hire illegals or go out of business.
The $15 is just the first number” — with FICA and worker comp., the total from the small business owner will be between $17 and $18 per hour. Many of these businesses operate on smaller margins — the unions and the socialists could care less about their survival and the fact that kids will not have a local deli or business around to get an entry level job, that might teach them skills and work ethics.
Cue gigging economy……
One important factor that is completely forgotten from the equation is that how much the taxes take from these enormous hourly wages? I bet they are higher than in 1970’s or 1950’s and no end is sight to the greed of government…
Someone here was suggesting that we should use more ILLEGALS to get work done cheaper. This is as the name suggest, illegal practice. If you are not happy with laws and taxes, use your vote and voice to make a change. Don’t condone immoral and illegal ways.
Read the comment again. Nobody was suggesting that employers should use more illegals to get work done cheaper. It was simply opined that would be the natural outcome of raising the minimum wage to $15/hour. Businesses will do whatever is required to survive. This is especially true since the government (especially in California) has promoted and encouraged the hiring of illegal labor by refusing to enforce the federal or state labor laws or implementaing easy and practical ways to discourage employers from hiring illegals like an E-Verify system.
So read the comments carefully before you respond so that you don’t misinterpret or construe them to mean something other than they were meant to mean.
Don’t misinterpret.
I am referring to this kind of news:
http://www.zerohedge.com/news/2016-03-30/attention-president-obama-one-third-us-households-can-no-longer-afford-food-rent-and
However, according to a striking new Pew study while household spending has returned to pre-recession levels (the average household spent $36,800 in 2014) incomes have not.
Specifically, while the median income had fallen by 13% from 2004 levels over the next decade, expenditures had increased by nearly 14%. But nobody was more impacted than the one-third of households which the study defines as “low-income.” Pew finds that while all households had less slack in their budgets in 2014 than in 2004, lower-income households went into the red by over $2,300.
In other words, approximately one third of American households were no longer able to cover the core necessities – food, housing and transportation – with average income.
Subsidized inflation is a one way street, deflation being ‘disallowed’ prices don’t descend to match demand (ability to pay) . The difference is you think management can equalize the imbalance, whereas I say it causes and takes advantage of it.
It is strange that Obama wants to raise the minimum wage at the Federal Level but this has never happened if you look at the wage rates. Currently the federal wage rate still sits at $7.50 per hour still for a laborer. Do not believe me go pull the federal wage rate for a laborer at the davis-bacon site. Stupid states are raising them without the fed’s mandates. So much for this administrations helping the poor!
You can raise the wage rate to whatever you like and it ill not solve the problem as the increase in wages will be passed on to the consumer in the way of price hikes. This is already happening in the Seattle area and it is also killing small business. Personally speaking we expect more qualifications now then before.
Those on government handouts will cut back working so they do not lose their handouts. Happens to me all the time at the bakery as we pay more then the minimum wage with the exception of new employees on probation. I had to finally post a memo about this problem and if they did not want to work the schedule we could no longer use them it was getting so bad.
Old,
Our 25 person manufacturing enterprise in Riverside county will very likely never hire anyone under 30 years of age. plus we’ll shrink to only do the absolute highest margin oruders. The low productivity guys will end up being laid off . Best Case, looking at laying off 15-18 and keeping 10-7 people. Maybe even just keeping 5 and laying off 20.
My enterprise is similar to hundreds of thousands in California. The math is simple – one can not pay a worker more than he produces.
Where is your proof on Seattle?
The new law guarantees $15/hr but it can’t guarantee you a job. Everything that can be outsourced will be outsourced and everything than can be robotized/automated will be automated. In addition many companies will relocate out of California dimming job prospects in the state.
Those low wage employers that can’t leave, like municipalities, restaurants, taxi companies, construction, etc will be forced to automate, cut hours and raise prices. That translates to higher consumer prices and higher taxes.
In the end people and businesses will move out of California for economic reasons. Detroit and Chicago are prime examples of such failed policies.
So, how many widgets will your robots buy at Walmart?
“So, how many widgets will your robots buy at Walmart?”
How many widgets will those unemployed at $15 an hour, buy at Walmart?
I think really California is just keeping up with the drop in the value of the dollar. The graph looks like hyperinflation by 2025 to me.
Gradually raising the minimum wage to $15 per hour will accomplish little when it comes to affordability for those on the lower rung of the wage scale. Everything else will go up in cost accordingly including housing, food, transportation and health care. The clamoring for a $20 minimum wage will begin shortly after implementation of the current proposed raise. This is inflationary to say the least and unfair to the majority of workers of the state and those prudent seniors who live on fixed incomes.
Following the trend line up, the minimum wage will be $200 per hour within 16.3 years. I can’t wait.
I would like to see this same chart with average US CEO compensation over the same time period and the same chart with average Hedge Fund Manager compensation (not to mention their “carried interest” tax rate)
Some people seem to get all upset when discussing minimum wages even though a 40 hour minimum wage job today can barely support one individual and yet seem to think that the upper echelon is fairly compensated.
If this is true ( http://www.epi.org/publication/ceo-pay-has-grown-90-times-faster-than-typical-worker-pay-since-1978/ ) then I would have to say “who cares, we’re all screwed anyway”.
Blame the Fed – not the CEOs
I enjoy your site daily and have depended on it to increase my understanding of various global economic policies, but this is one area where we are not in agreement.
To tell you the truth, Mish, I blame both.
The Fed for multiple obvious reasons and CEOs and their Boards of Directors that actually believe they are worth more than 300 to 400 times more than the average employee. When I see people like Lord Browne and Tony Hayward of BP walk out with a couple of million in compensation and 10’s of millions in pensions when the drilling engineers and geo experts are making in the neighborhood of $100K (I know a couple) and secretaries are making $30K to $40K, or worse, people like Lloyd Blankfein and Jamie Dimon making upwards of $20 million through promoting outright fraud, while those below are making far less, it’s awfully easy to believe they are not worth their 900% + increase in salaries in the same time frame as your charts above.
Are the janitors and bank tellers worth so little? If minimum wages are that high, maybe the above could start cleaning their own bathrooms for a change, they sure are paid enough.
By the way, sorry about the double post… I’m not sure what happened there.
I would like to see this same chart filled in with average US CEO compensation over the same time period, or better yet, average hedge fund manager compensation, including their “carried interest” tax rate.
Considering that $15.00 is just barely a living wage today for one person and considering this won’t even come into effect until 2022, 6 years from now, I guess all the minimum wage worker can hope for is some serious deflation.
A lot of people seem to get upset that a minimum wage law even exists in the first place, but when you consider that a) today’s minimum wage doesn’t even get you to close to the accepted poverty line, and b) if there were no minimum wage many corps would drop wages even further in order to improve “productivity”, it seems to me that we have to have some offset to the rampant corporate greed we are all well aware of, particularly that of the Wall St Financial Class.
With that said, I do not consider small owner-operated businesses greedy and obviously this hurts small businesses. I have no idea how to fix it without coming up with even more, and dreaded, complicated rules and regulations as to who must pay minimum wages, but if this article has any truth to it ( http://www.epi.org/publication/ceo-pay-has-grown-90-times-faster-than-typical-worker-pay-since-1978/ ) then I would have to say “Who cares, we’re all screwed anyway. Welcome to the third world.”
Maybe people are stupid and have to learn ( said sort of sarcastically) . While they keep accepting what is offered at the ‘nice price’ that is arranged for them, they will be getting the hard end of the bargain. Considering maybe three quarters of the population are legally committed to that price being ‘correct’ looks like everything else will have to fit. An economy where prices are set will either be communism ( progressive Marxism) or state capitalism, but probably an indecipherable mixture of the two.
Rich or poor, well I don’t think those with money hoard it, it gets put to use most always and in theory makes its way through to the average worker. Average people have in total a very large base of money to trade with also. I guess they are stuck in an overvalued system to which they owe more than they are able to earn. So you can make the value of money descend ( subsidize or finance) so people get paid more but which buys the same and keeps creditors paid, or you can let prices set themselves so that they suit demand.
The first becomes inevitably a trap, and the second is an initially chaotic adjustment that threatens current status as the whole structure is flattened. Take your pick, but we obviously don’t learn and nor are we able to support continuous unbalance forever by improvising supports – in theory yes but real life is different ( as communist and fascist states have demonstrated by their demise throughout history).
And yes, communism is pyramidal also, just as an antithesis to a natural hierarchy will have to bear its mirror image so as to bring about a level field about the polarized axis of power, which may be called a dictate or dictatorsip.
Thank you for pointing out that this would be bad news for fixed income retirees. Economists and bankers often ignore what inflation and does to their elders.
“The End” of the dollar menu at the fast food restaurants is upon us.
Someone queue up the Doors song!
Ongoing economic disparity is the problem. Before joining the Eurozone Germany had no problem paying everyone properly while remaining competitive globally. Raising the minimum wage is not “economic idiocy” . A bottom up approach almost always yields better results.
Mish, you missed an item for your “guarantees” list: MORE joblessness due to folk moving to Cal looking to cash in on higher minimum.
“California Wage Hike History”
That chart looks like a near perfect parabolic arc.
Looked at the Fed’s balance sheet lately?
The Federal Reserve balance sheet is only around $4.4 trillion to support an $18 trillion a year US economy and has only expanded by around $3.6 trillion over the past 10 years, unlike China whose economy is half the size of the US economy and where the PBOC expanded their balance sheet by around $30 trillion through the wild printing of money and creation of credit. The Federal Reserve is among the most financially conservative central banks in the world and the US is by far the largest single country economy in the world.
When you price the CA minimum wage in real money, its gone down quite a bit, even when the new law takes full affect. From .0416oz/hr in 1971 to 0.0117oz/hr in 2022.
I like your way of thinking. It’s the half life of the dollar that holds the key to understanding how this all works.
When you price the California minimum wage in real money it is an EXORBITANT INCREASE to the employers in California, many of whom will fire employees and cut back or close their businesses as it is unaffordable to most employers in the State of California. Where do you think money comes from anyway to pay employees?
The $15/hour wage may disqualify the worker for certain public assistance programs that he or she previously qualified for. And with welfare costs continuing to escalate this is probably a ploy by government to stop the bleeding by putting the monkey on the backs of small businesses. But it will backfire since many small businesses currently obeying the labor laws will hire illegal labor at a substandard wage to stay competitive and to keep their costs down. And since the government fails to enforce laws against hiring illegal labor the problem will mushroom. You will have a larger number of citizens who are unemployed who will be forced to go on the dole. At the same time the illegal labor will still get free medical care and education for both themselves and their children. The CA state legislature just approved a law that gives children (ages 0-18) free Medi-Cal known as MediCaid to the rest of you.
All of this is intentionally orchestrated for a reason. To bring down the working class and impoverish more formerly working class US citizens.
If wages don’t rise to keep up with devaluation, by law or otherwise, entitlement programs will need to take their place. So, either way, the piper gets paid.
That said, I see inflation eventually rising into the double digits again, like in the late 70’s because devaluation is the only political way to prolong this debt overhang. Actuaries, public and private, will get their 7-9% + average “returns” again. Of course, tax revenues will also rise, resulting in .gov expansion along the same 7-9% annuals.
Just as Obamacare was designed to fail, resulting in a .gov administered single payer system, in the end, so are entitlement programs designed to fail, resulting in a .gov controlled centrally planned economic system.
At first, it will be a voluntary exchange of Liberty for economic security. Then, when it is found to be even more oppressive, and folks understand what happened, it will become mandatory,,,ala the origins if the USSR, in a revolutionary sense. Or, who knows, maybe it goes the way of The Reign of Terror, French style. Guillotines are kind of low tech, and can be constructed cheaply.
Any way you look at it, calling 911 isn’t going to be a panacea. Normalcy bias won’t offer much future either. Only those who can think on their feet will hold an advantage.
Oh, I forgot,,,”It” can’t happen here. Never mind “It” is already in progress, as ends of empires are always processes, not events.
We are headed for much further DEFLATION, not inflation.
Where is the money supposed to come from to payer vastly higher minimum wages to anyone?
Undiscovered wage rates decreed by profoundly stupid politicians will have an economic result similar to injecting oneself with transmittable cancers.
if 40% of California’s Workforce currently earns less than $15/hour that equals about 7 million workers. As a California small business owner ( manufacturing ) I can guesstimate that between 2-4 million of those jobs will now vanish.
It’s going to be grim for those 2-4 million who end up unemployable. A tragedy for too many families.
Hey Vooch, let’s see your math, I hate guestimates!
“Hey Vooch, let’s see your math, I hate guestimates!”
How about a chart showing the increase in bartender and restaurant jobs and the decrease in the number of manufacturing jobs in the U.S.
Nothing occurs in a vacuum, Tom.
Some may note that this graphic hockey stick launches around the close of the GOLD window. Massive fiat creation delivered directly to the favored few in order for these elites to have Ron Paul’s oft stated “first use of money.” They buy everything at today’s price with the effect of immediately diluting the value of the Dollars you hold. Their spending of newly conjured fiat steals a fraction of the value your Dollars day after day. You no longer get interest as they have bifurcated money. There is a war on non-FED money. On yours and mine there is no interest. The free money they get from the FED, they charge you for big time. Really amazing. Money from A no value. Money from them big interest. Hard for Joe Blow to wrap his arms or brain around as Mr. Keynes said.
Some interesting tax implications in this article from today.
http://www.wsj.com/articles/the-consequences-of-californias-15-wage-1459784200
Wish Mish and others would direct the blame where it really belongs: low interest rates and wall street.
People advocating higher minimum wage are simply coming at the problem in a simple minded way: people are too poor, so let’s give them more money. However, that is only TREATING THE SYMPTOM not treating the disease.
The disease is ZIRP and wall street. These things are literally destroying the American economy, but it seems like nobody is able to name the real enemy. Fingers just get pointed around between the “left” and the “right.”
And it funny just how hostage Wall Street has us. Yellen so much as hints at a rate hike and Wall Street begins to howl and suddenly rate hikes are off the table. The longer this goes on, the higher the likelyhood that mother of all economic crashes is coming.
The fact a “Professor of Politics” is touting the new utopia to come from the price fixing of labor should tell us all we need to know. As if people needed yet another reason to leave CA…