By Ed Ring
Back in the late 1970’s something happened to the Santa Clara Valley. Increasingly it became referred to as the Silicon Valley, because the emerging silicon based semiconductor industry found its first home in plants nestled along the southern shores of the San Francisco Bay. Boasting what are among the finest universities in the United States – Stanford and Cal Berkeley – and the best weather in the world, high technology companies began choosing the San Francisco Bay Area in the 1940’s and never looked back. Where once there were endless orchards of Prune, Apricot and Cherry trees, a sprawling ecosystem of high tech companies and venture capital firms now attracts talent from everywhere on earth. The Silicon Valley became, and remains, the epicenter of the most dramatic technological advances in history.
For the first 25 years or so, certainly through the end of the 20th century, the mantra in the Silicon Valley was “better, faster, cheaper.” Entrepreneurs were creating entire new industries, as digital technology enabled “mini-computers” to replace mainframes, and “work-stations” to replace mini’s, which were in-turn replaced by PCs and laptops, which are themselves being replaced for many applications by smart phones. But as we move to the “internet of things,” and as the Silicon Valley ecosystem matures from a jungle of creative destruction to a forest where a handful of gigantic firms wield unprecedented economic power, the “better, faster, cheaper” mantra is fading away.
I was recently going through the checkout line and I overheard the cashier talking to the bagger. “Man, if I could just get paid for doing nothin’. That’d be sweet.”
I looked right at the cashier who was all of 18 or so and I said that I disagreed. A really sweet job was one which provided a living while one did meaningful and enriching work. Doing nothing is boring.
Both the cashier and the bagger agreed that meaningful work was better than doing nothing. Then we talked about cars.
Unfortunately it will likely not increase full-time workers either.
The enemies of progress (real progress) always lash out when bested. They fear the market. They fear the free flow of prices and the competition it brings.
Things change. Buggy whip companies go bust. So do cab companies. Sorry, my suggestion is that you learn how to do a better job than the Uber drivers.
Most of us over the age of 35 have seen massive changes to our livelihoods. I certainly have. This is the nature of the economy. Thankfully a changing economy is also an economy which is full of new opportunities.
As we’ve argued many times before, arbitrarily raising the minimum wage, particularly to a level which is far above the real wage rate is an idiotic move. It creates unemployment for low wage earners, and in many cases for the people who formerly employed low wage earners. A “living wage” sounds nice. It sells to economically unsophisticated people. But a job doesn’t suddenly become “worth” more just because the government declares that it is. One can not revoke gravity. Likewise one can not revoke supply and demand.
Magic is not real, no matter what the politicians say.
This is an old article, but given the current debate it is worthy of a post.
By Ed Ring, executive director, California Policy Center
Emperor Palpatine: There is a great disturbance in the Force.
Darth Vader: I have felt it.
Emperor Palpatine: We have a new enemy, the young Rebel…
Darth Vader: How is that possible?
Emperor Palpatine: Search your feelings, Lord Vader. You know it to be true. He could destroy us. The Force is strong with him.
– Quote (edited for brevity) from Star Wars Episode V: The Empire Strikes Back, 1980
There are indeed great disturbances in the force. There are indeed challenges to the imperial monopoly that, for nearly 40 years, has eroded the quality and escalated the costs for California’s system of public K-12 education. And the imperial stormtroopers who enforce their educational edicts on California’s state legislature, its thousands of public school boards, and by extension, millions of parents and children, are all part of an evil empire called the California Teachers Association, or CTA. In plain English, the teachers union.
This is a significant development. One would think that the teachers unions, dominated largely by a female teacher rank and file, would be in the bag for Hillary. That the teachers (arguably the most important constituency for any Democrat running for president) would be a done deal.
They must be loving this at Clinton headquarters.
I have come to the conclusion that a large part of the voting population just wants ponies. Or maybe unicorns. There is a real live contingent which believes that such things can be simply conjured out of the air or perhaps that the government can force “rich people” to pay for them. Ponies for everyone courtesy of the Kochs.
Now most reasonable and rational people don’t believe that ponies or unicorns can be conjured into existence in the literal sense. However some people are absolutely convinced that a minimum wage which is far above the real wage of workers – a pony – is entirely possible without massive disruption. Simply force those greedy entrepreneurs – you know the ones who provide the goods and services people want – to pay their workers more. So what if many of these businesses operate on very thin margins and will be forced to close because they can‘t afford to pay nonsensical wages? So what? We will have conjured a pony into existence. $15.00/hour for $7.00/hour work. Magic.
But, but, but…that’s not magic. That’s “social justice.” We’re making the system work for “the people.”
No, it’s magic pony economics. And you’re just making things worse for the people you think you’re fighting for.
The minimum wage debate is a bizarre one. Anyone who understands the simple concept of supply and demand can see why arbitrarily raising the minimum wage above the real wage rate for unskilled workers is a boneheaded idea. Raise the cost of labor and jobs will diminish, margins will be cut, tax bases will be reduced.
But a $15/hour wage sounds good to people who seriously DON’T understand supply and demand. It’s just those greedy employers who are holding back. We need to squeeze more from those terrible business owners. You know the ones who sign the pay checks, take on the risk, and pay all the taxes. Those bastards.
It was not that long ago that Detroit was one of America’s and the world’s great cities. A center of industry and commerce which rose up out of the American Midwest as testament to innovation and ingenuity.
By Ed Ring, executive director, California Policy Center
“If you say there is an elephant in the room, you mean that there is an obvious problem or difficult situation that people do not want to talk about.”
– Cambridge Dictionaries Online
If you study California’s legislature, it doesn’t take long to learn there’s an elephant in both chambers, bigger and badder than every other beast. And considering the immense size of that elephant, and the power it wields, it doesn’t get talked about much.
The unions don’t like it. Many libertarians and free market types don’t like it. But Obama and the Chamber of Commerce are keen. Something smells here.
Something else to keep in mind. Just because something is called free trade doesn’t mean it actually is free trade. My bet, and the author alludes to this, is that the agreement will be full of crony nooks and crannies. Nooks and crannies some would prefer the public not learn about.
Until it’s too late.
Seriously Democrats is Hillary Clinton really going to be your nominee? So she’s taken millions of dollars from the head of an oil company which has strong connections to the Colombian military, which also just happened to “round up” the striking workers of Pacific Rubiales, the company in question.
I mean, I get that she is a woman, and that she has name recognition, and that she has long been the presumed nominee. But guys, I may not agree with you on most things but this is an integrity thing. At least don’t throw in with someone who many of my friends on the “Left” would probably call a union busting, fossil fuels promoting, political profiteer if she wasn’t named Hillary Clinton. At least stand for something lefties – other than cronyism.