Ben debunks the fallacy of minimum wage, and its impact on American workers.
This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
Ben Shapiro here and you're about to listen to the audio, only version of debunked, my new series, where dismantling debunk common left Psmith each episode in fifteen minutes or less. If you like what you but a daily word. I come slash, subscribe, use, promo code debunked for twenty percent off and become a member today. It's the only way to get the full experience shows a document. We feel with amazing visuals help guide for a plethora of stats studies. In fact, you can bear the entire foresees in right now on the daily, where but a daily wired outcome, Slash Subscribe, use, promo code debunk for twenty percent off we'll get it in just one second, first, simple truth right now, if you have anybody would depends on your income. You need a life insurance, your responsible person. That means, God forbid, something had happened here. Your family needs to be taken. Care of policy. Genius makes it easier to compare quotes from over it in top insurers. All in one place, why compare well? First, you can save fifty percent or more
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Good pride money been opened in hand all the cash over the workers. They will all be better. There's only one problem. The minimum wage does not accomplish what it seeks to accomplish. Here's the deal. Here's how wages are set is reliant actively unto factors. Factor number one is the practical willing to pay for a product. He can charge a bunch of money for labour if the product is going to be sold for much lower price. What say you're selling a hamburger for about it, because you five bucks make ever you're gonna lose money, so what people are willing to pay for a product is one of the factors in determining the price of labour. The other factor in determining the price of labour is the market for labour. So, for example, if there, five people on planet earth who can cook a hamburger you're not going to be able to pay them five dollars an hour, it's when be very, very expensive, because again high demand, low, supplying supply and demand, or the name of the game when it comes to setting wages and setting prices an essentially all wages. They price for labour. So, for example, ask about where they paid an enormous amount of money.
not because of these social value they create, but because there is enormous demand for excellent basketball players, and there are not very many of them. By contrast, genders by an enormous social value, are not paid very much money, the reason being the number of people who are capable of doing a janitor job very high, so high supply and the amount of demand sort of in the middle. So here's the deal minimum wage jobs are typically the kinds of jobs that are middling demand, but extremely high supply. Lots of people are qualified to do those jobs, and that means that employ we are not going to pay an enormous amount of money for those particular job. In reality, the number of people are working in pure minimum wage shops like seven. Twenty five in our jobs is actually exorbitant low. According to the Bureau of Labour statistics in twenty seventeen,
Eighty million people who are working hourly wage jobs only about five hundred forty two thousand working at the federal minimum wage of seven twenty five, an hour and other one point. Three million are actually working for below that amount of money, which means a grand total in terms of people were being paid narrowly wage. Only about two point: three percent of all people being paid narrowly wage were either making minimum wage or below. That's because again, market for labour is typically above the minimum wage. people who are going to be working in hourly wage are going to be working for more than minimum wage. What exactly are these minimum wage workers, while their typically A single mom aged thirty, five with three kids, a quarter of minimum wage workers are under the age of twenty five, and in fact, eight percent while teenagers are working for minimum wage. What does this mean?
that minimum wage jobs very often are the first jobs that people take. Many many people started minimum wage shops and and work their way up the food chain. This means the minimum wage jobs are particularly attractive for both employers and employees. For people who don't have tremendous levels of skill actually about two thirds of people in minimum wage jobs are going to be earning more than minimum wage within one year of beginning that minimum wage shop, So what happens when you artificially boost the price of labour? What happens when you raise the minimum wage while ago of things happened. The first thing is you push a bunch of people out of the market, Thomas always fond of saying the minimum wage is never what the government says. The minimum wage is the minimum wage, a zero. I was working age related what an I do get year and after a servile looking, found a job with the point is the KEDO is living where I lived there whoever they are now, he has a hell of a lot harder
I'm fine? I job, because there are so many good people who try to do good for him and priced him right out of them. Jump, that there is a job that is currently being paid a dollars an hour now, before governments, as it's gonna fifteen dollars an hour. The people who are competing for fifteen Learn our job, we're typically people who are going to be college educated, their people who have more work exe, is because of fifteen dollar, and our job was not the lowest level of job that you could obtain now, a fifteen dollar and our job is the lowest level that you can obtain. And that means that if you are an employer, you're gonna be in for a college graduate flip burgers as opposed to a high school graduate. All the people of those high school degrees? Those people are kicked out of labour markets in favour of people with a college degree that employers are now looking for to fill a fifteen dollars an hour job, because again, the value of the job has not. Actually change is just that now you have opened up their job to new pool of labour So what is the minimum wage actually do it create artificial disparities in the labour market? In fact, according
so in nineteen, forty eight be black. Unemployment rate for teenagers was ten percent since the event of higher and higher minimum wages. Black unemployment rate has never been lower than twenty percent and has often been higher than fifty percent, because, again to people being pushed out of the labour markets are the people who most need the jobs that you go back to say that these have been forty four nice. If you find at that time, the unemployment rate among block teenagers was a fraction of what it is today, and this wasn't less rate has in there is today, although is different, was at that time, the minimum wage law was a decade old. It was a decade of inflation and had been changed so for all practical purposes didn't exist. This is not actually a partisan point of view. I can do
your budget office recently evaluated Joe Biden Plan for fifteen dollar federal minimum wage. What they found is that, over the course of the next few years, it would improve the salaries for some nine hundred thousand people, but one point: four million people out of work, the reason being that when you artificially boost the price of labour people, don't just magically come up with money; instead, they fire a bunch of people or the automated bunch of those jobs. So a bunch of jobs are lost, the people retain their jobs and make the higher minimum wage everybody else again. They may Thomas Souls minimum wage of zero dollars. President remains firmly committed to raising the minimum wage to fifteen dollars. That's why you put it in his first legislative proposal, and he doesn't. He believes in any American who is working on a full time. Job trying to make ends meet should not be at the poverty level
In twenty fifteen, Seattle raised its minimum wage for about nine hundred and fifty an hour to about one thousand and fifty an hour, and then, a year later, they raised it again about thirteen bucks an hour. Here's the thing that second boost in pay actually boosted the wages by about three percent, but what it also to reduce the number of hours worked by about nine percent for a net loss of income. Then there is the problem of a federal minimum. Wage may have noticed in New York. Does not look a lot like Mississippi? Neither does California. This is one of the problems. The price of labour in these places is very, very different, so, for example, of fifteen dollar minimum wage in LOS Angeles, is not going to pay for a studio apartment. However, a fifteen dollars, wage in Mississippi is actually higher than the median wage right now, the median wage, like the guy in the middle, the median wage. Mississippi. Right now is fourteen dollars and twenty two cents an hour. Now, the guy working in Mississippi for fifteen bucks an hour can probably afford a small house,
creating a federal minimum wage that applies equally across all the states, is completely idiotic, actually put out of work more people in the state where the pay is already the lowest. The businesses hurt the worst by an increase in minimum wage are not big. Businesses are, in fact small businesses. Small business is already have a tough time competing with big business. There are unable to abrogate their costs. They have fewer sales. Their margins profit are generally smaller. That means that small businesses pay the price when minimum wage gets increased in fact business is usually tend to pay more than minimum wage. There is reason that Nepal, in February twenty twenty and economic boom time found the eight percent of small businesses said they would have to lay off workers if there was a massive increase in the minimum wage fourteen percent, so they would have to cut worker hours and twenty two percent said there would be a loss of profit margin which, in the end, would lead to our legal or to employees getting laid off raising minimum wages in a time of high unemployment? Is the dumbest idea ever? It is one thing to raise minimum wages when you are talking about it,
where did of labour for desirable jobs, but when you are talking about a surplus of labour then, raising the minimum wage only means that you are creating a greater disparity between what business is, ought to be paying in a free market and what businesses are now being forced to pay. That means more people being put out of work at a time when you actually more people employed and then there's one big cost me haven't even talk about, and that is the cost of automation. If you're a truck The worry about the possibility that your blog going to decide your labour is too expensive and then put some sort of machinery in the truck drives the truck instead of you. This. This has already happened, a grocery stores all around the nation when you artificially boost the price of labor at a certain point, the business figures- you know what I want to deal with this union. I wanted to go with this labour rights. A machine escapade machine, anything the machine doesn't winning, which in fact machine doesn't earn away. They have decided that the burdens of labour are simply not worth the cost of labour. Now right now, because low wage jobs are still
more than implementing that technology. People so have jobs. But at a certain point, when you artificially raise the price of labour, the machinery becomes cheaper than the job dappling. Your lungs you work is replaced entirely across a wide swaths of the american economy. The bottom line is this: when you have officials setting an artificial standard, The price of labor across industry across states without regard to how businesses are actually run? You end up with more people out of work. You are hours work and, in the end, learning the minimum wage. Already If you and joined the audio only version of drunk, you will love the video version, and this episode is just the tip of the iceberg at the entire foresees an available right now the daily wire seriously, the show books, fantastic, it's got a documentary feel there's some great visuals plus in get my show notes with links in
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Transcript generated on 2021-05-16.