Minimum Wage Increase: Helping or Hurting American Jobs?

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On the first day of this year, while many college students were nursing their hangovers, little did they know that the minimum wage increase came into effect, and would have such a grand influence on their futures. In Florida, the minimum wage went up to $7.93/hour this past January, and the Obama administration is already talking about raising the federal minimum wage up to $10/hour. Good news right? WRONG. In John Stossel’s latest special on the topic, he asserts that although politicians have good intentions in raising the minimum wage, it would take a toll on unskilled workers, further delay teenagers from entering the job market, and slow down job growth.

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Politicians in favor of the bill like Keith Ellison, featured in the video, believe, “employers will pay the least they can, even if they could pay more, because they can get away with it,” and considering employers are always trying to reduce costs, this seems like a logical argument for raising the minimum wage; to make sure the poor are not take advantage of ! However, competition in the job market is notably prevalent, specifically in the private sector, and that is what keeps wages fair in America. The newscast reports, “the average hourly wage in America is $16.57,” more than double the minimum wage, which suggests that people get paid based on how much their skills can produce, not based on the minimum wage regulations alone.

Minimum wage regulations hurt unskilled workers and inexperienced teenagers who are trying to make their way into the job market. Forbes magazine notes, “A recent study by Jonathan Meer and Jeremy West, economists at Texas A&M University, found that ‘the most prominent employment effect of minimum wage laws is a decline in the hiring of new employees,'” (Forbes). In other words, because employers now have to pay their current employees more, they do not have extra money to expand their businesses and hire new employees at such high wages.

The article also reports that the minimum wage, “violates the principle of freedom by limiting the range of choices open to workers, preventing them from accepting jobs at less than the legal minimum…it also prohibits employers from hiring those workers, even if both parties would be better off,” (Forbes). A high minimum wage makes it illegal for teenagers to work low paying jobs for work experience. Conversely, for $10 an hour, employers cannot afford to hire unexperienced workers, so by default, teenagers would suffer the most from such an increase. In order to gain work experience legally, teens wishing to enter the job market would have to provide free labor, instead of getting a lower wage, that would be fair and beneficial for both parties.

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Despite all of the research against the wage increase, Stossel reports that “two-thirds of Americans support a 10$ minimum wage,” (Youtube). On that same note, Forbes argues that, “The belief that increasing the minimum wage is socially beneficial is a delusion,” and while I agree it is a delusion, it is hard to argue that 2 million people are “delusional” (Forbes). However, I will argue that most of America is probably not familiar with fundamental macroeconomic concepts, and to someone who cannot see the secondary effects of such a policy, raising the minimum wage seems like a great way to counter poverty and unfair wages in the United States.

My suggestion? Get informed America ! Read between the lines, and learn to see through political schemes, and attempts to pull at your heart strings.

And always remember the wise words of accomplished Economist James Gwartney, ” GOOD INTENTIONS DO NOT GUARANTEE DESIRABLE OUTCOMES.”

 

Sources:

photo #1- http://hr.blr.com/HR-news/Compensation/Minimum-Wage/State-minimum-wage-increases-for-2014#

video- https://www.youtube.com/watch?v=Z0xVojIYA-o

Forbes article & SD graph- http://www.forbes.com/sites/jamesdorn/2013/05/07/the-minimum-wage-delusion-and-the-death-of-common-sense/

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The Chinese ARE Winning: Let’s Catch Up America

It is no secret that China has evolved immensely throughout the past 20 years, but is it possible they have surpassed the United States? YES, and by a lot. The news report clip below expands on how, “Chinese students left American teens in the dust,” in Reading, Math, and Science (Youtube).

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The video notes that, “On average, Chinese students attend 41 more days of school every year,” which amounts to, “30% more instruction.” per year (Youtube). The video describes China as a nation that is striving to be a nation of skilled workers, and as the Senior Advisor for Education in Asia blatantly put it, “Nobody wants to be the shoe manufacturer of the world, everybody wants to be in the scientific and technical sector,” (Youtube).

More time in classes and the desire for a better life, however, is not the only reason Chinese students perform better than American students. The Asia Pacific Journal Education attributes the success of Chinese students to religious, cultural, and political factors.

An article released by the journal reveals that in China, children are “expected to comply with the requirements of adults without question,” and they observed that, “the respect for authority also extends to relationships between teachers in schools,” (APJE). This culturally engrained notion of unquestioned respect for authority allows teachers to worry less about disciplining children, which allows them focus solely on academic instruction. The journal article also states, the functional nature of socialist education is to achieve economic ends (APJE). They hold their youth to a higher standard because of the collectivist thought that they must eventually serve a purpose in their growing economy, as opposed to the US educational system that focuses much more on the individual. The article concludes that, “Many of his [Confucius’s] precepts, including respect for authority, patriarchy, worshipping traditions and collectivist rather than individual values, are still reflected in the structure of schools and the wider society,” and they attribute these as the reasons why Chinese students excel over American students: because they respect the classroom, are held to higher expectations, and have greater incentives to be competitive academically.

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Do I believe that US schools currently lack those characteristics? YES. Do I think we should completely revolutionize our education system completely and adopt China’s educational structure, and collectivist principles? Not at all. An educational framework like that simply would not work within the context of our society, and being able to freely challenge authority respectfully is one of the cornerstones of higher learning because it has been proven to cultivate critical thought. The journal touches upon this fact when it says that although, ” regard respect for elders is a consistent virtue of the Chinese nation, complete submission is unfavourable to the spirit of democracy,” (AJPE).

Despite the fact we cannot implement China’s educational policies, can the United States catch up?

OF COURSE. It is just going to take a “Sputnik moment,” as the video calls it, where the US must prioritize Education, and allocate necessary funds into our school systems. The Stanford University study described in the video revealed that,“If American students were able to raise their performance on this international test by just about 5%, it would translate into 41 trillion dollars in the U.S economy of the next 20 years,” that is enough to pay our 17 trillion dollar debt, two and a half times over. So, you decide America, do you want to pay now, and reap a great return later? Or are we going to continue to settle for 30th best?

 

Sources:

Asia Pacific Journal of Education (APJE)- http://www.tandfonline.com/doi/pdf/10.1080/02188791.2000.10600183

video-https://www.youtube.com/watch?v=y90UkcCifVo

image- http://www.globalpost.com/dispatch/news/regions/asia-pacific/china/120717/economy-college-education-youth-unemployment

 

Sweatshops: Foreign Exploitation or Creating Occupations?

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As Americans who have grown up in a first world country, the idea of working in a factory performing tedious work for long hours and receiving little pay is unpalatable, and many classify this as a form slavery. The U.S Department of Labor classifies said factories as sweatshops, which are defined as “factories that violate two or more labor laws,” (DoSomething). However, for poor people in developing nations, sweat shops are often their best option, and without these factory jobs available, they would be worse off.

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As the video illustrated, “sweatshops are what allowed people in now thriving places like South Korea, Taiwan, and Hong Kong to pull themselves out of poverty.” After working at so called “sweatshops,” many of the employees made enough money to go off and start their own businesses, an achievement that would have been impossible to reach in an area with such little opportunity. Furthermore, these factories provide cheap labor for US companies, lower prices for American consumers, but most importantly, they provide jobs for people in developing nations, and give these destitute people a chance to better their standard of living. It is because of these benefits that the Kenyan representative in the video stated “they [college students] have no idea what they re talking about,” when she heard news of students protesting and boycotting businesses that made their clothes in sweatshops. Although the college students being interviewed claim their “goal is to raise the wages across the board,” she believes the protests will force corporations to move those factories.

In an article written in the Library of Economics and Liberty, Professor Benjamin Powell describes that, “All too often the fact that we have better alternatives leads first world activists to conclude that there must be better alternatives for third world workers too,” (EconLib). This phenomenon explains why so many protestors are against sweatshops, and they do so with good intentions, but unfortunately, their actions have caused unintended negative results.

The video tells of how “American complaints about child labor persuaded factories in Bangladesh to stop hiring adolescents. The results, according to Unicef, were that many of the young girls turned to prostitution instead.” No matter how bad American protestors claim sweatshop conditions are, a life in the sex industry is much worse. What American idealists fail to realize is that in developing nations, sweatshops are often one of the best options people have to earn a living, and protesting will only take those options away from those who need them most. So the moral of the story? Think before you protest, and be prepared to be held accountable for the consequences of your actions.

 

Sources:

https://www.dosomething.org/facts/11-facts-about-sweatshops

http://philebersole.wordpress.com/2012/03/13/the-debate-over-asian-sweatshops/

http://www.econlib.org/library/Columns/y2008/Powellsweatshops.html

Foreign Aid: Feeding the Poor or Enabling Cleptocrats?

 

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It is incredible how many Americans remain under the impression that it is “our duty” to provide foreign aid to underdeveloped nations. Yes, this idea makes us feel like the superhero country, out to rid the world of poverty, but unfortunately, there is a grand discrepancy between what people think aid is, and what it really is.

What Americans think about government aid:

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Truman Library

So many people in this country believe that the US sends mostly medicine and food to our neighbors who need it most. They think aid is this handy dandy care package of goodies that falls directly in the hands of those struck by poverty.

The truth about government aid:

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As illustrated in the picture above, the foreign aid that the United States sends to poor countries does not reach the people it needs to go to at all. How foreign aid works is the US sends aid, typically in the form of money, to countries, and their government is in charge of distributing the aid among its people.

In a utopian society where greed does not exist among men, foreign aid programs would indeed help developing nations. Unfortunately, we do not live in such a world. The United States gives out around 50 billion dollars a year in foreign aid, and most of it goes to Israel, Afghanistan, Pakistan, Iraq, and Egypt. Despite the billions received in aid, these countries have not improved economically, politically or socially, (some have gotten worse) so where is this money going? because it sure is not going to those who need it.

According to an article written by the Huffington Post, “The U.S. Agency for International Development (USAID) states that its function is to provide ‘economic, development and humanitarian assistance around the world in support of the foreign policy goals of the United States.'” By placing money in the hands of avaricious foreign rulers, the United States is only making these governments richer, and in turn, more powerful. This foreign aid, is being used by rulers in other countries to buy tanks, ammunition, and bigger houses for themselves, it has not made its way to the poor in the past, and it will not do so in the future.

In the video clip below, Economists Chris Coyne and John Stossel, further discuss the secondary effects of foreign aid, and how they “harm the very people they intend to help.” Coyne discusses what results when, “you inject millions if not billions of dollars of foreign aid in to an already corrupt, dysfunctional society.” That being said, it is crucial to note that these governments are poor for many reasons, but it typically boils down to greed, corruption, and mismanagement of resources. Thus what foreign aid is inherently doing is giving these countries more resources to mismanage, and is doing nothing to improve the conditions of the impoverished populations of said countries. So long as the United States continues to waste billions of tax dollars fattening the pockets of foreign rulers, the situations in those countries will only get worse.

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Alright so foreign aid is obviously not the answer, so what is? How can we make a difference in the lives of poor people suffering in developing nations? Two things: direct aid and policy changes. Charities and mission trips that travel to these countries and provide people with food, medicine, and clothes not only help these people by providing immediate care, but it gives them a sense of hope. Unfortunately, direct aid alone cannot change the world, and many argue it causes people to become dependent on the aid, and in turn reducing any incentive they have to improve their situations. However, if the governments of these countries began to value property rights and allowed economic freedom to flourish, disease and poverty would become less prevalent in their society. Since we cannot change the policies of those nations, we can do our part by donating our time and money to charities that provide direct aid to the suffering peoples of said countries, and we can also create awareness of the secondary effects that arise from foreign aid as a result of corruption and greed.

Sources:

http://www.trumanlibrary.org/photographs/displayimage.php?pointer=52047

http://www.huffingtonpost.com/2012/08/30/us-foreign-aid-by-country_n_1837824.html

America is not the Greatest Country in the World Anymore: Accept It and Do Something About It

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The Land of the free, and the home of the brave has lost its edge over the last 100 years, but television shows, movies , and print media continue to portray our nation as the greatest in the world. So many people in our country are under the impression that America is, and always will be at the top of the country food chain, and there is nothing anyone can do to bring us down. While those thoughts often come out of a great sense of pride we feel for our country, we should not let that pride blind us from the fact that our nation is rapidly declining in more ways than one. Some may read this, and think I hate America, but in fact I love it, and that is I why I care so much as to write about what is wrong with it, and why it is so important we address these issues.

What Makes a Country the Best anyways? Literacy rates? Average income level? Military size? Whether it is any one of these, or a combination of the three, it may come to a surprise to many Americans that we do not hold the best records in these categories. In fact, we do not rank first in the world in any of them:

Literacy avg. income military

 

However, we do have the largest obese adult population, the biggest national debt in the world, and we are ironically the leading contributor of foreign aid in the world.

obesity national debt foreign aid

 

Again, I exhibit this as a fellow American who deems it necessary to bring about pertinent, current issues that face our nation. Television and media persistently portray America as this ideal country that possesses the freedoms and opportunities that no other country has, and this is why so many Americans do not accept the fact that we are no longer the best. America must realize its faults, and work to improve them, because as of right now, its hubris is causing its downfall.

 

Sources:

-graphs were obtained from http://www.indexmundi.com/

-other America photo was from http://interculturalmeanderings.wordpress.com/2011/07/18/why-americans-view-the-world-as-geography-cartoons-depict/