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The Minimum Wage Forces Low-Skill Workers to Compete with Higher-Skill Workers – Article by George Reisman

The Minimum Wage Forces Low-Skill Workers to Compete with Higher-Skill Workers – Article by George Reisman

The New Renaissance Hat
George Reisman
January 4, 2014
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The efforts underway by the Service Employees International Union, and its political and media allies, to raise the minimum wage from $7.25 to $15 per hour would, if successful, cause major unemployment among low-skilled workers, who are the supposed beneficiaries of those efforts.

The reason is not only the fact that higher wages serve to raise costs of production and thus prices, which in turn serves to reduce physical sales volume and thus the number of workers needed. There is also another equally, if not more important reason in this case, and it is a reason which is only very inadequately described by reference to the substitution of machinery or automation for the direct labor of workers when wages are increased.

This is the fact that a low wage constitutes a competitive advantage for less-skilled workers that serves to protect them from competition from more-skilled workers. In other words, a wage of $7.25 per hour for fast-food workers serves to protect those workers from competition from workers able to earn $8 to $15 per hour in other lines of work. The workers able to earn these higher wage rates are not interested in seeking employment at the lower wage rates of the fast-food workers.

But if the wage of the fast-food workers, and all other workers presently earning less than $15 per hour, is raised to $15 per hour, then these more capable workers can now earn as much as fast-food workers as they can in any of the occupations in which they had been working up to now.

Moreover, the widespread rise in wage rates to $15 per hour will cause unemployment in all of the occupations affected. The unemployed clerks, telemarketers, factory workers, and whoever, who otherwise would have earned between $8 and $15 per hour, will have no reason not to apply for work in fast food, which will now pay as much as any other occupation that is open to them. And since those workers are more capable, it is overwhelmingly likely that to the extent that they do seek employment as fast-food workers, they will be preferred over the low-skilled workers who presently work in fast-food establishments. Thus, the rise in the wage of the fast-food workers will serve as an invitation to the competition of large numbers of workers who do not presently think of working as fast-food workers and who, being better qualified, will almost certainly take away their jobs.

Between less employment overall in the least-skilled lines of work such as fast food, and the incentive created for vastly increased competition for employment in those lines coming from more qualified workers, the effect could well be to close those lines altogether to the employment of workers at the low end of skill and ability. That, of course, would deprive these people of the opportunity to acquire skills and abilities from work experience that otherwise would have enabled them to become capable of performing more demanding jobs later on.

What the demand for a $15 an hour minimum wage represents is a case of low-skilled workers being led to reach for a high-wage “bird in the bush,” so to speak. Unfortunately, at the high wage, there are both fewer birds in the bush than are presently in hand and most or all of them will fly away into the hands of others, who possess greater skills and abilities, if the attempt is made to reach for them.

This must ultimately be the result even if somehow the present fast-food workers and the like could be enabled to keep their jobs for a time. Even so, practically every time that it became a question of hiring someone new, the new employees would almost certainly be drawn from the ranks of workers of greater skill and ability than those who had customarily been employed in these jobs. Thus, even if not immediately, in time there would simply be no more room in the economic system for workers at or near the bottom of the skills ladder.

No one can question the desirability of being able to earn $15 an hour rather than $7.25 an hour. Still more desirable would be the ability to earn $50 an hour instead of $15 an hour. However, it is necessary to know considerably more than this about economics before attempting to enact sweeping changes in economic policy, changes to be achieved by attempting to organize a mass movement that is based on nothing but a desire for economic improvement and no real knowledge whatever of how actually to achieve it.

George Reisman, Ph.D., is Pepperdine University Professor Emeritus of Economics and the author of Capitalism: A Treatise on Economics (Ottawa, Illinois: Jameson Books, 1996; Kindle Edition, 2012). See his Amazon.com author’s central page for additional titles by him. His website is www.capitalism.net and his blog is www.georgereismansblog.blogspot.com. Follow him on Twitter.

This article was published on Mises.org and may be freely distributed, subject to a Creative Commons Attribution United States License, which requires that credit be given to the author.

The Hubris of Neo-Luddism – Article by Franco Cortese

The Hubris of Neo-Luddism – Article by Franco Cortese

The New Renaissance Hat
Franco Cortese
June 19, 2013
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One of the most common anti-Transhumanist tropes one finds recurring throughout Transhumanist rhetoric is our supposedly rampant hubris. Hubris is an ancient Greek concept meaning excess of pride that carries connotations of reckless vanity and heedless self-absorbment, often to the point of carelessly endangering the welfare of others in the process. It paints us in a selfish and dangerous light, as though we were striving for the technological betterment of ourselves alone and the improvement of the human condition solely as it pertains to ourselves, so as to be enhanced relative to the majority of humanity.
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In no way is this correct or even salient. I, and the majority of Transhumanists, Techno-Progressives, and emerging-tech enthusiasts – I would claim – work toward promoting beneficial outcomes and deliberating the repercussions and most desirable embodiments of radically transformative technologies for the betterment of all mankind first and foremost, and only secondarily for ourselves, if at all.
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The ired irony of this situation is that the very group that most often hails the charge of Hubris against the Transhumanist community is, according to the logic of hubris, more hubristic than those they rail their charge against. Bio-Luddites, and more generally Neo-Luddites, can be clearly seen to be more self-absorbed and recklessly selfish than the Transhumanists they are so quick to raise qualms against.

The logic of this conclusion is simple: Transhumanists seek merely to better determine the controlling circumstances and determining conditions of our own selves, whereas Neo-Luddites seek to determine such circumstances and conditions (even if using a negative definition, i.e., the absence of something) not only for everyone besides themselves alive at the moment, but even for the unquantable multitudes of minds and lives still fetal in the future.

We do not seek to radically transform Humanity against humans’ will; indeed, this is so off the mark as to be antithetical to the true Transhumanist impetus – for we seek to liberate human wills, not leash or lash them. We seek to offer all humans alive the possibility of transforming themselves more effectively according to their own subjective projected objectives; of actualizing and realizing themselves; ultimately of determining themselves for themselves. We seek to offer every member of Humanity the choice to better choose and the option for more optimal options: the self not as final subject but as project-at-last.

Neo-Luddites, on the other hand, wish to deny the whole of humanity that choice. They actively seek the determent, relinquishment, or prohibition of technological self-transformation, and believe in the heat of their idiot-certainty that they have either the intelligence or the right to force their own preference upon everyone else, present and future. Such lumbering, oafish paternalism patronizes the very essence of Man, whose only right is to write his own and whose only will is to will his own – or at least to vow that he will will his own one fateful yet fate-free day.

We seek solely to choose ourselves, and to give everyone alive and yet-to-live the same opportunity: of choice. Neo-Luddites seek not only to choose for themselves but to force this choice upon everyone else as well.

If any of the original Luddites were alive today, perhaps they would loom large to denounce the contemporary caricature of their own movement and rail their tightly spooled rage against the modern Neo-Luddites that use Ludd’s name in so reckless a threadbare fashion. At the heart of it, they were trying to free their working-class fellowship. There would not have been any predominant connotations of extending the distinguishing features of the Luddite revolt into the entire future, no hint of the possibility that they would set a precedent which would effectively forestall or encumber the continuing advancement of technology at the cost of the continuing betterment of humanity.

Who were they to intimate that continuing technological and methodological growth and progress would continually liberate humanity in fits and bounds of expanding freedom to open up the parameters of their possible actions – would free choice from chance and make the general conditions of being continually better and better? If this sentiment were predominant during 1811-1817, perhaps they would have lain their hammers down. They were seeking the liberation of their people, after all; if they knew that their own actions might spawn a future movement seeking to dampen and deter the continual technological liberation of Mankind, perhaps they would have remarked that such future Neo-Luddites missed their point completely.

Perhaps the salient heart of their efforts was not the relinquishment of technology but rather the liberation of their fellow man. Perhaps they would have remarked that while in this particular case technological relinquishment coincided with the liberation of their fellow man, this shouldn’t be heralded as a hard rule. Perhaps the they would have been ashamed of the way in which their name was to be used as the nametag and figurehead for the contemporary fight against liberty and Man’s autonomy. Perhaps Ludd is spinning like a loom in his grave right now.

Does the original Luddites’ enthusiasm for choice and the liberation of their fellow man supersede his revolt against technology? I think it does. The historical continuum of which Transhumanism is but the contemporary leading-tip encompasses not only the technological betterment of self and society, but the non-technological betterment as well. Historical Utopian ventures and visions are valid antecedents of the Transhumanist impetus, just as Techno-Utopian historical antecedents are. While the emphasis on technology predominant in Transhumanist rhetoric isn’t exactly misplaced (simply because technology is our best means of affecting and changing self and society, whorl and world, and thus our best means of improving it according to subjective projected objectives as well), it isn’t a necessary precondition, and its predominance does not preclude the inclusion of non-technological attempts to improve the human condition as well.

The dichotomy between knowledge and device, between technology and methodology, doesn’t have a stable ontological ground in the first place. What is technology but embodied methodology, and methodology but internalized technology? Language is just as unnatural as quantum computers in geological scales of time. To make technology a necessary prerequisite is to miss the end for the means and the mark for a lark. The point is that we are trying to consciously improve the state of self, society, and world; technology has simply superseded methodology as the most optimal means of accomplishing that, and now constitutes our best means of effecting our affectation.

The original Luddite movement was less against advancing technology and more about the particular repercussions that specific advancements in technology (i.e., semi-automated looms) had on their lives and circumstances. To claim that Neo-Luddism has any real continuity of impetus with the original Luddite movement that occurred throughout 1811-1817 may actually be antithetical to the real motivation underlying the original Luddite movement – namely the liberation of the working class. Indeed, Neo-Luddism itself, as a movement, may be antithetical to the real impetus of the initial Luddite movement both for the fact that Neo-Luddites are trying to impose their ideological beliefs upon others (i.e., prohibition is necessarily exclusive, whereas availability of the option to use a given technology is non-exclusive and forces a decision on no one) and because they are trying to prohibit the best mediator of Man’s ever-increasing self-liberation – namely technological growth.

Support for these claims can be found in the secondary literature. For instance, in Luddites and Luddism Kevin Binfield sees the Luddite movement as an expression of worker-class discontent during the Napoleonic Wars than having rather than as an expression of antipathy toward technology in general or toward advancing technology as general trend (Binfield, 2004).

And in terms of base-premises, it is not as though Luddites are categorically against technology in general; rather they are simply against either a specific technology, a specific embodiment of a general class of technology, or a specific degree of technological sophistication. After all, most every Luddite alive wears clothes, takes antibiotics, and uses telephones. Legendary Ludd himself still wanted the return of his manual looms, a technology, when he struck his first blow. I know many Transhumanists and Technoprogressives who still label themselves as such despite being wary of the increasing trend of automation.

This was the Luddites’ own concern: that automation would displace manual work in their industry and thereby severely limit their possible choices and freedoms, such as having enough discretionary income to purchase necessities. If their government were handing out guaranteed basic income garnered from taxes to corporations based on the degree with which they replace previously manual labor with automated labor, I’m sure they would have happily lain their hammers down and laughed all the way home. Even the Amish only prohibit specific levels of technological sophistication, rather than all of technology in general.

In other words no one is against technology in general, only particular technological embodiments, particular classes of technology, or particular gradations of technological sophistication. If you’d like to contest me on this, try communicating your rebuttal without using the advanced technology of cerebral semiotics (i.e., language).

References

Binfield, K. (2004). Luddites and Luddism. Baltimore and London: The Johns Hopkins University Press.

Franco Cortese is an editor for Transhumanity.net, as well as one of its most frequent contributors.  He has also published articles and essays on Immortal Life and The Rational Argumentator. He contributed 4 essays and 7 debate responses to the digital anthology Human Destiny is to Eliminate Death: Essays, Rants and Arguments About Immortality.

Franco is an Advisor for Lifeboat Foundation (on its Futurists Board and its Life Extension Board) and contributes regularly to its blog.

Automation, Jobs, and Human Prosperity – Video by G. Stolyarov II

Automation, Jobs, and Human Prosperity – Video by G. Stolyarov II

Contrary to popular belief, automation does not lead to the loss of jobs. Automation is humankind’s best friend in terms of raising standards of living and freeing up human efforts to be devoted to truly creative and innovative tasks. Furthermore, Mr. Stolyarov argues that jobs are not in themselves a desirable goal; higher prosperity is – and higher prosperity allows humans to enjoy greater leisure while producing more than their ancestors could with more primitive tools.

Remember to LIKE, FAVORITE, and SHARE this video in order to spread rational discourse on this issue.