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Ron Unz on the Minimum Wage Law
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Ron Unz fits Winston Churchill’s famous description: he is “a riddle, wrapped in a mystery, inside an enigma.” Unz has an IQ of 214. His views are for the most part conservative, even libertarian; certainly, he is an otherwise supporter of the free enterprise system. And, yet, he supports the minimum wage law.

Did this genius come up with some new twist or wrinkle that the rest of us had somehow missed? Not a bit of it. His “reasoning” is pretty much the same old tired economic balderdash offered by all other supporters of this monstrous and pernicious law:

“Once I started investigating the details it really seemed like the facts were on the other side—especially since so much of the economy has shifted from manufacturing to other industries. You can always relocate manufacturing jobs. You can’t ship McDonald’s jobs to India or Bangladesh.”

Let us try to educate this genius regarding what economics 101 has to say about a minimum wage. To start with, what determines wages in the absence of any law? Why do employers want to hire employees in the first place? Employers hire based upon a new hire’s expected productivity (actually, discounted marginal revenue product, but that is a matter for an intermediate microeconomics course). And what is this productivity? It is the amount by which having a worker on the premises will boost the company’s bottom line.

If staff person Smith increases profits by \$10 hourly, that will tend to be his wage. It cannot permanently be higher than that, or the firm will lose money on this hire, and, if it persists in the folly of hiring him, it will court bankruptcy. Nor can Smith’s wage be lastingly lower than that amount. For suppose that Smith is now being paid \$7 per hour. Some other company will benefit by offering him \$7.01, and then another \$7.02. This bidding process will tend to rise to an even \$10, assuming no transaction, sorting or information costs, which disappear in the long run.

With a minimum wage of \$12, Smith is no longer welcome on the shop floor or asking anyone if they “want fries with that?” Anyone hiring him will now lose \$2 per hour. Smith is now unemployable, Mr. Unz to the contrary notwithstanding.

But we have to be careful about this. In 1949, the minimum wage was raised from \$.40 to \$.75, almost a doubling. At that time elevators were run manually. How many operators of this machinery lost their jobs the very next day? None, not a single one. Many people who should have known better thus thought this law beneficial. But over the next few months automatic elevators replaced all humans. Automatic elevators were not competitive with manual labor at the old rate, but were at the new higher one. Indeed, as Unz says, one cannot ship a MacDonald’s job to India. But one can automate the job out of existence. This, seemingly, has never occurred to Mr. Unz.

If a minimum wage is justified, how does one determine at what level it should be implemented? No answer has ever been given to this basis question. That is, no minimum wage law is based on first principles.

If there is no justified upper bound to the minimum wage, why not require a minimum wage of one kilogram of gold per hour? It is estimated that only 250,000 metric tons, or 250,000,000 kilograms, of gold has ever been mined. At a wage of 1 kilogram of gold per hour, after two hours, USA employers would owe their workers more gold than has ever been mined in the totality of human history.

Isn’t it obvious that this is nonsense? Sure, we can all favor a minimum wage of \$1 million per hour. Then, we’d all be rich. No, make that \$1 quadrillion per hour.

But what about monopsony or oligopsony? This would indeed place an upper bound on the minimum wage; mainstream economists who believe in this fallacious doctrine tend to place it at something like \$12 – \$25 hour. However, this only applies, if it applies at all, to highly skilled jobs that have only one (monopsony) or only a few (oligopsony) potential employers: professional athletes, actors, highly specialized lawyers, doctors, nerds, etc. It is entirely irrelevant to minimum wage workers.

There is of course one other explanation for Unz’s position. He really hates unskilled workers and wants them to have miserable, unemployed lives. Then, we can all admit, he is very intelligent. Evil, but highly gifted.

Walter E. Block is Harold E. Wirth Eminent Scholar Endowed Chair and Professor of Economics at Loyola University New Orleans

Frank Tipler is a Professor of Mathematical Physics at Tulane University


This stopped being convincing to Unz, who made his fortune by designing software that allowed mortgages to be chopped up into securities, and whose IQ has clocked in at 214. “Once I started investigating the details,” he says, “it really seemed like the facts were on the other side—especially since so much of the economy has shifted from manufacturing to other industries. You can always relocate manufacturing jobs. You can’t ship McDonald’s jobs to India or Bangladesh.”


In 1949, the minimum wage was raised from 40 cents an hour to 75 cents an hour for all workers and minimum wage coverage was expanded to include workers in the air transport industry.

• Category: Economics • Tags: Minimum Wage 
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An “unreliable” report claiming that raising the minimum wage would reduce jobs
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  1. I forget whether my IQ is 21 or 14. Either way, it’s pretty close to 214, same as Ron Unz!!!

    • LOL: Adam Smith
    • Replies: @Realist
  2. Wow,…if only things were this simple.

    It appears to me that many considerations
    are missing in this intentional ambush.

    I can’t wait.I’ll set aside Thor’s day
    even bing for the 20,000 word rebuttal which
    should obliterate this viewpoint entirely.

    However,…who has time for this.

    I’d prefer Mr.Ron just chuckle and continue on
    with what I’m sure are at least 14,673.81 more
    important issues.O T but I think Russia has raised
    the nuclear alert status…again…#7, I’ve heard.

  3. Minimum wage = Butcher’s thumb on the scale.

    • Replies: @Reg Cæsar
  4. BuelahMan says:

    When jews tell me how smart they are, I laugh out loud.

    • Replies: @Ann Nonny Mouse
  5. Ron Unz says:

    Actually, I think there’s very strong evidence that monopsony effects have indeed artificially depressed wages at the lower end.

    As some might remember, during the 2014 battle over raising the minimum wage, the CBO came out with a report suggesting that the proposed \$10.10 MW would probably lead to the loss of 500,000 jobs, a conclusion that was hailed and widely cited by the anti-MW camp. A CBO analysis last year exploring a variety of different MW increases found roughly similar conclusions. But here are a few paragraphs from a column I published at the time:

    Finally, the CBO conclusions seem to totally demolish one of the central economic dogmas presented by ideological opponents of minimum wage laws.

    Rigidly doctrinaire libertarians argue that minimum wage laws serve no valid purpose since our free market in labor ensures that employers must pay all workers their true economic value, no more and no less. Thus, they say that if a worker earns \$8.50 per hour, that is the approximate value of the labor he produces and his job would disappear at any higher required wage. By contrast, economists who support a minimum wage suggest that low-wage businesses benefit from their “monopsony” position in the labor market, and regularly use that great market power to pay workers less than their true value, much like a monopolist can unreasonably bid up the price of his products.

    This obscure technical dispute is central to the theoretical basis for minimum wage laws, and I would argue that the CBO figures decisively resolves this question. According to the CBO, some 98% of those low-wage workers impacted by a 40% hike in the minimum wage would keep their jobs at a much higher rate of pay, thereby demonstrating that their economic value to their employer was vastly greater than their current rate of pay, which had been artificially reduced due to their lack of effective bargaining power. When 98% of workers are paid below their true economic value, any assumptions of a truly efficient market in labor are absurd, and the rectifying impact of a higher minimum wage becomes absolutely justified.

    Thus, on both theoretical and practical grounds, the CBO report demonstrated the exact opposite of what the contending parties in the minimum wage debate seemed to suggest. Perhaps journalists will eventually begin reporting this more correct interpretation of the stated facts.

    • Thanks: Ann Nonny Mouse
    • Replies: @Justvisiting
    , @Rosie
  6. Realist says:

    Unz has an IQ of 214.

    Says who…it is a purported IQ?

    • Replies: @Reg Cæsar
  7. Realist says:
    @Ann Nonny Mouse

    I forget whether my IQ is 21 or 14. Either way, it’s pretty close to 214, same as Ron Unz!!!


  8. According to Prof Dr Walter Block, those ‘responsible for minimum wage laws’¹ are ‘criminals’ (!) and they must be ‘punished’ (!) by Law.

    Personally, I’m against the Miminum Wage, however I’m for the Universal Basic Income.

    1. Plus ‘rent control’ and ‘protectionist tariffs’.

    • LOL: Alrenous
  9. Alrenous says: • Website

    Unz has an IQ of 214

    Holy shit, are you serious?

    Everyone needs to take my epistemic training regime stat. Yesterday.

    My IQ measures as sub-130 and I can’t help feeling Unz looks a little slow. E.g. yeah obviously the Unz comment system is the best on the internet, but there’s still a few “obvious” details out of place.

    I estimated that not being an intellectual couch potato is worth ~30 IQ, but it’s actually more like 90? Well, okay then.

    Get off your asses you lazy bums.

    • Replies: @Ann Nonny Mouse
  10. Alrenous says: • Website

    Anyway, being on-topic.

    Preliminary results.

    “Once I started investigating the details it really seemed like the facts were on the other side—especially since so much of the economy has shifted from manufacturing to other industries. You can always relocate manufacturing jobs. You can’t ship McDonald’s jobs to India or Bangladesh.”

    True and relevant.

    Employers hire based upon a new hire’s expected productivity

    False. Labour is a good like any other, and price – absent minimum wage laws – is set by supply and demand. Demand is set by how many employers want to hire, and supply is set, to oversimplify for brevity, by how crappy the job is.

    E.g. the price of a labour in the music and video market is sub-0. Folk will do that crud for free, leading to a massive oversupply of labour. Only certain very specialized niches requiring very specialized skills have any chance of rising above the minimum-wage level.

    See also: internet commentating.

    But anyway the preliminary comparison does not look promising.

    But one can automate the job out of existence.

    True and relevant, as is the preceding logic.

    However, this isn’t really a binary either-or situation here.

    You can’t raise the price of elevators. They are free.

    You can raise the price of a hamburger. There’s some flex there. You can hire cheap cruddy labour and create a super-cheap burger that practically everyone can afford, or you can hire higher-quality, more expensive labour and create a less-affordable burger of the same quality.
    You can also skimp on the ingredients, making your burger out of industrial waste and laboratory effluent instead of bread and meat. (See: McDonald’s.) Finally you can respond to Communist labour practices by getting Communist subsidies.

    But yes, (again see: McDonalds) eventually price-fixed labour overwhelms even extreme measures and you get labour replaced with kiosks.

    Not to mention the American labour market is loaded with barriers and friction. Why isn’t there a centralized job-offer marketplace? A: it must be illegal one way or another. It’s a minor miracle that jobs and labour get matched at all.

    He really hates unskilled workers and wants them to have miserable, unemployed lives. Then, we can all admit, he is very intelligent. Evil, but highly gifted.

    Now now, while this is indeed the usual reason, there is also a naivete alternative.

    The idea is that if you ban folk being poor, they will stop being poor. If it’s illegal to have lower-class behaviour – such as being paid “too little” – there will be no lower class.

    Sometimes cities like to raze their slums. If nobody lives in the slums, there will be no slum-dwellers, right?

    Normally postmodernism comes from a place of falsehood, but it’s been around for long enough for the kids not to get the joke and think these methods can seriously work.
    By “long enough” I am of course referring to Protagoras in ancient Athens.

    P.S. The fact elevators are free is a quick and dirty disproof of that whole “public good” thing. Either you can get public goods just fine without government intervention, or elevators are a waste of money.

  11. Alrenous says: • Website


    If staff person Smith increases profits by \$10 hourly, that will tend to be his wage. It cannot permanently be higher than that, or the firm will lose money on this hire

    It’s actually slightly worse than this.

    A man who is worth $10/h will not do anything that is worth less than $10/h to him. It’s not just about McD’s losing money, it’s also about labour losing money. I’m not exactly sure how they do this without sitting down and doing the accounting. Nevertheless, it’s a very reliable and consistent result.

    E.g. internet commentating is free and as a result comment quality is worth at most $0 on average.

  12. This is the strategy pushed by American tycoons. Push wages down slowly, has happens to the minimum wage since it hasn’t risen in 20 years. Then push news stories about a labor shortage and how Americans don’t want to work and insist the solution is millions more foreign workers. It goes on and on each year pushing the USA into the Third World.

    We need foreign professors to cut costs and drive down the wages of guys like this author until he quits, cause he’s lazy and don’t want to work anymore. Or just hire foreign teachers, anyone who finished four years of college anywhere. They’ll work for \$12 an hour. Imagine the savings!

  13. @Alrenous

    Get off your asses you lazy bums.

    Learn how to spell “arses”, you lazy bum.

    • Replies: @Alrenous
  14. @BuelahMan

    The inbreeders from Eastern Europe really are more intelligent than everyone else, on average. I saw somewhere an article, not by one of them, that made that clear.

    Not all Jews, not Sephardics, but the Ashen ones are not all ash.

    • Replies: @BuelahMan
  15. Nay, in response to an increase in the minimum wage, McDonalds will not go bankrupt, it will raise the price of its hamburgers. Read Galbraith’s The New Industrial State.

  16. Alrenous says: • Website
    @Ann Nonny Mouse

    So, for example, you want a Reddit karma system. You want good feedback for good commentators and bad feedback for bad commentators. Something even simpler and cheaper than agree/disagree/troll.

    Except you don’t want a Reddit karma system, because then you get Reddit. Slashdot is less bad but nowhere near good. Problem: voters are not equal. Some votes have to be worth more than others.

    Right, but, uh, which votes? Are we going to have a recursive voting system? It gets complicated stupid quickly.

    There’s an “obvious” answer: let the reader individually vet voters. Uberfact, basically. Make the UI show only upvotes and downvotes only by users approved by the user reading said vote displays. Recursion, but simple. Combined with the ignore commenter button, this provides the bare minimum of a tool to create a cohesive community.

    You can tell it’s “obvious” and not regular-obvious because apparently nobody has thought of it before. Should be obvious, but something went wrong.

    N.B. whitelist, not blacklist, which as a bonus causes the system to be self-gating. Simpleminded users won’t realize they can whitelist voters and the system will effectively be invisible to them, lowering their cognitive load.

    Keep the ignore button on [blacklist] and they won’t get too insular.

    • LOL: Ann Nonny Mouse
    • Replies: @Alrenous
  17. Franz says:

    Libertarian economics 101 is playing shuffleboard in hell with Ronnie Reagan.

    We once had tons of what are known as “courtesy service jobs” and it included a small crew to wipe your windows and check your oil as your gas tank was filled. It included floorwalkers in all big box stores, a live human at railroad crossings to keep children safe. And yes, it included elevator operators.

    Elevator operators were never skilled. It was a courtesy job that added a floor of friendliness and security to the places that had them. It had little to do with actually running the elevator.

    In the post war era ALL these jobs began to disappear. Had n0thing to do with wages. It was the radical monetization of everything — squeezing every last penny from the operation so a relative handful could be rich and everyone else would be redundant.

    What they did to elevators in ’49 the do to everything now. You really think you’re living better than people did back then? Is the world safer? Better? Worse is the fact that all the penny-pinching led to a social cesspool. They didn’t save anything anyway.

    • Replies: @Reg Cæsar
  18. dearieme says:

    Unz has an IQ of 214

    Two degrees above boiling point, eh?

  19. Commie says:

    This article is utterly braindead. I guess they will give PhDs in economics to anyone these days.

    The government currently subsidizes large corporations like WalMart to pay their employees starvation wages without benefits, as the workers get on food stamps, Medicare, etc. These companies rake in huge profits that benefit the executives. They can afford to pay their workers adequately and give them benefits.

    If the government sets the minimum wage, these corporations will have no choice but to pay these workers decently.

    The government subsidies currently used for the large corporations can be better used to subsidize small businesses who have lower profit margins. They should also be used to increase US manufacturing power which creates more productive jobs and a richer US economy.

    Automation is happening with or without a minimum wage. No matter how little it costs them to pay their workers, large corporations have the incentive to push that cost lower and lower and replace it by automation. The government needs to be on the side of American small businesses and working families, not global corporations.

    • Thanks: Ann Nonny Mouse
  20. @Ron Unz

    “some 98% of those low-wage workers impacted by a 40% hike in the minimum wage would keep their jobs at a much higher rate of pay”

    This is lol material.

    There is no way the writer of this analysis ever worked in a real minimum wage workplace, particularly in the retail environment.

    The majority of employees are dead wood–probably 20% are truly underpaid and do the heavy lifting.

  21. Alrenous says: • Website

    In other news, to be brief domain knowledge doesn’t transfer at all to other domains. Hence the need for a hack: a true scholar must choose the domain of all domains, known as epistemology. It still doesn’t transfer, but it covers everything, so it doesn’t need to.

    If you want domain-independent truth-evaluation, you must train truth-evaluation per se. Find something of unknown truth value, evaluate it, and test the evaluation. Ideally, test as harshly as possible. If it doesn’t hurt, you’re being too gentle.

    In other words, make a prediction. Epistemologist == someone who has made many, many predictions. So many that the predictions became reliably true.

  22. Rosie says:
    @Ron Unz

    Mr. Unz, a piece of me died today when I read the comments to this article:

    I get that the particular subject of the article isn’t especially sympathetic. I also get that this article was only written because liberals hate Elon Musk.

    Still, the complete and total lack of concern for young people by these obnoxious boomers who had such charmed lives chills me to the bone, as this is the heartless, vicious world I will soon have to send my children into.

    It makes me wonder exactly what these people would like me to teach my children about the real world (and what sort of people they think my children will grow up to be as a result) so they don’t grow up to be “entitled snowflakes” or whatever. Do they really want me to tell them this?–

    Look, it’s every man or woman for himself. Noone cares whether you live or die. Never buy anything you can live without because you will be tossed out like obsolete office equipment several times in your career. If you don’t have five years worth of mortgage payments saved up, you’ll probably lose your house and wind up on the sreets, because someone gave you a 30 year mortgage on a house even though we’re literally all temp workers now. Of course, you could rent a shoebox for 2K instead.

    Of course, if everyone is as tight-fisted as you, soon enough noone will have a job, but don’t worry about that. There is no room in this society for the universalizeability rule or optimism or high trust. Yours is not to question why; yours is but to do or die.

    Seriously, if I viewed the world in this way, I’d have gotten an IUD and avoided children altogether. I guess this is what a collection of individuals eventually must degenerate into. There is no sense of community, nationhood, or commonwealth whatsoever. These people disgust me.

  23. BuelahMan says:
    @Ann Nonny Mouse

    Wow. An article? Really?

    • Thanks: Bill Jones
  24. @Realist

    Unz has an IQ of 214

    Two degrees above boiling point, eh?

    That’s 101 in Centigrade. Still above average!

  25. @RoatanBill

    Minimum wage = Butcher’s thumb on the scale.

    Same with the welfare state. Milton Friedman said it was nuts to allow immigration into a welfare state. This is very true of minimum wages as well. Even if the immigrants are not taking benefits, they are forcing others to take them.

    Unless they face a high minimum wage. They alone. Force them to earn enough not just to support themselves, or even to reach the income tax threshold, but to pay the mean or median level of that tax. A fair price for the privilege of being here.

    Immigration could tax (in the other sense) the welfare system in 1900 because it wasn’t the state; i.e., it came from the pockets of donors. It is no longer 1900, and immigration fails the simplest libertarian test.

    A fair compromise would be to abolish minimum wage laws for citizens, while jacking them up to the skies for immigrants.

    • Replies: @RoatanBill
  26. @Reg Cæsar

    As you point out, in times past it was the charitable organizations that took care of the indigent. They could look at an individual and make an informed decision about if they should provide support. Today, some dirtbag walks up to a welfare office and as long as they pass known criteria, they get free money, housing, phones, food, schooling for kids, etc that the working public pays for either through taxation or the hidden tax of price inflation when gov’t just counterfeits more currency.

    The US has the largest dirtbag magnet in the world and actively advertises that any POS can claim asylum and get on the free stuff gravy train. It is the political class that is actively destroying the country with the positive intent to do so.

    As for minimum wage, I see it is a ploy to purposely raise price inflation and garner votes. It goes like this:
    1 – force employers to pay more.
    2 – force businesses to raise prices to offset the increased labor costs.
    3 – give the political class a win for appearing to be compassionate towards those too stupid to get a higher paying job.
    4 – allow market forces to take away the temporary benefit of the new higher wage as all costs rise to once again make the lowest earners scream for a higher wage. Wash, rinse, repeat.

    The temporary benefit the low end gets is rapidly nullified by rising prices. The inflationary effect is permanent. The gov’t always wants inflation to lower their repayment costs on gov’t debt. i.e. repay a 30 year old note with currently depreciating dollars.

    What the country needs is someone willing to stand up (without getting JFK’d) and state categorically that all illegals, even those previously granted amnesty and all their kids, including anchor babies will be required to leave the country on a date certain. They got to the US on their own and can leave the same way. Those discovered still in the country after that date will get 5 years of hard labor fixing US infrastructure with minimal machine input (climate change nonsense argument) and then get deported. Those coming back in get a doubling of the sentence from last time.

    Employers discovered employing illegals get their businesses confiscated with no compensation.

    Remove the Spanish language and declare English as the only official language in the US.

    Create a no mans land on the southern border complete with signage in various languages and ideograms that state passing the line will result in death. Those not heeding the warning get shot by AI capable machine guns the US military already has that function night and day and see in the dark. Those attempting landing via the water route get blown up by the Coast Guard. In short order, the flow of illegals would stop and the US population would no longer be supporting their own slow annihilation.

    By giving fair warning, the consequences are choices made with full knowledge of those consequences.

    • Replies: @Reg Cæsar
  27. @Franz

    What they did to elevators in ’49 the do to everything now.

    Let you push the buttons? And save a tip?

    In the post war era ALL these jobs began to disappear.

    The pre-war era– pre- both wars– was a lot more libertarian than today’s. Fewer and lower taxes, minimal regulation. That’s what paid for these courtesy jobs.

    …it included a small crew to wipe your windows and check your oil as your gas tank was filled.

    Oregon has fallen, but New Jersey carries on:

    Amid high gas prices, N.J. weighs lifting its self-service gas ban

    (Jerseymen here, do any of you recognize her shirt?)


  28. @RoatanBill

    Remove the Spanish language and declare English as the only official language in the US.

    No! No healthy country has any use for an “official” language. People just know what to speak.

    Officialdom is for poorly thought-out jurisdictions like South Africa (11), the Soviet Union (15 or 16), Belgium (3), or Canada (4, in the territory of ᓄᓇᕗᑦ). Swedish was always official in Finland, but only became so in Sweden just recently. Why?

    Because they made several others official, too.

    • Replies: @RoatanBill
  29. @Reg Cæsar

    I don’t care what people speak. It’s the pandering by gov’t that has to stop. No gov’t documents, pronouncements, etc should be available in any language but English. It’s the pandering to Spanish speakers that’s caused a lot of the problems.

    Every politician hits the campaign trail and either speaks Spanish to a latino audience or has a translator or representative do it for him. To gain votes, they pander to the illegals that shouldn’t be in the country to begin with. This pandering is what produces the current situation where the illegals are treated better than the native population.

    You don’t see street signs in German or French, do you? Why is that? Why is it only that Spanish speakers get to have official signage in their native language? That needs to be stopped as an additional indication that their unassimilable low IQ asses aren’t wanted in the country when they arrive via illegal means.

  30. One’s instincts should be libertarian, ones assumptions never.
    The last time I made a decision about anything based on the dogma the Block (an apt name for the man) believes is never.

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