Who the Minimum Wage Hurts

Young People Minimum Wage UK

There's some things that just don't work, but everybody loves them. I've posted before about the NHS, and other such almost religiously-supported institutions and ideas. Those who support them are – to my mind at least – kind-hearted, decent and good people. But good intentions don't make for good policy.

A case in point on this day – budget day: The UK is set to increase its minimum wage. Minimum wage laws hurt those who cannot provide a service as valuable as the minimum-wage. If, due to your circumstances, education, ability, etc. can only provide £5 an hour of value, at say, a resurant or warehouse, then you can't get a job if an employer is forced to pay you a minimum of £6.50 an hour.

The last Labour government were very proud about dispelling the naysayers of the minimum wage: “They said it would cost jobs”, they gleefully retort, “but unemployment went down in the first decade of the minimum wage!”

Yes, unemployment went down. Quite easy to do, if you're into making a massive government, centered around a client-state, where you create a lot of 'fake' government-jobs. But the growth in private-sector jobs at the same time was practically anaemic.

Those who said that the minimum wage costs jobs weren't talking about any old jobs though. We were specifically talking about those sort of jobs that younger, poorer, underskilled people typically take.

So how have, say, younger people done under the minimum wage? Well, you can see the graph above and see for yourself. Before the minimum wage, younger people were finding more and more (real) jobs, and opportunities to get on the ladder, often of their chosen career-path. But it turned almost 180 degrees after that.

I believe that the forthcoming increase in the minimum wage will, sadly, continue this tragic trend.

 

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The NHS: Britain’s State Religion

Stethoscope“The NHS is Britain’s national religion” stated then Prime Ministerial hopeful David Cameron before the last election. The phrase was meant to show he understood how preciously we hold the NHS to our collective heart, and that he wasn’t going to “tamper” with it too much.

He’s right that we hold it dear, and he’s right that we in the UK treat it as a religion, but he’s way off if he thinks this is a good thing.

A religion is a belief that operates on faith – without any evidence. Indeed, often the absence of evidence is a requirement. Even if there is evidence to the contrary, it merely serves to boost the congregations faith and proclaim their beliefs in a louder more vocal way.

The overwhelming evidence is that Britain, with it’s nation health service, has one of the worst healthcare outcomes in the western world. Everyone (almost) can provide some anecdotal story about how their Aunty Mabel received great treatment and that the nurses were very kind, but it’s just that – an anecdote. The fact is, even lucky old Aunty Mabel would have better treatment if she’d have been treated in Singapore, or Germany, or many other countries.

I have big problems with the healthcare system in the US. But those problems are the SAME as the ones facing Britain. The narrative in the UK is you either have our post-war NHS system, or you have an “evil” “private” system like the US. But what about the other systems, many of which, unlike both the UK and US models, are fairly free-market solutions?

The thing is though, pretty much all the ills with the American system are to do with the fact that it’s not a free-market system when compared to say, the cellphone market, or the grocery business. If the grocery industry was run like the US healthcare system, millions and millions of Americans would go to bed hungry every night. And more than a million every year would starve to death. But luckily, the comparatively free market grocery “system” in America means that the problems with diet over there are down to over-consumption (type 2 diabetes, heart decease and obesity), not starvation. I appreciate there are hungry people in the US, but I think we’re all smart enough to understand the problem in context. Tens of millions in the US will not go hungry tonight.

The US government contributes about 75 cents of every dollar spent on healthcare. There are anti free-market rules about not buying coverage in a different state to the one you live in, and if you do buy insurance, (or what they laughably call insurance but is really a system to pay for everything in advance, not just to insure yourself against unforeseen problems) you’re forced to pay for coverage for things irrelevant to you. But all that is for another post.

Basically healthcare the the UK and the US is faced with the same problem: the distance between the customer and the seller. If the majority of us had to directly buy your own health services and goods, the prices would fall and the quality would rise, at levels we can’t imagine now. That’s what happens in every other comparatively “free market” capital-intensive, zero marginal cost business/service. The problem in both systems, is the state stands in between consumer and service.

But you can’t make that argument in the UK. Because our Aunty Mabel said those nurses were so nice to her. Even when she went in for a chesty cough and contracted the norovirus on the ward. They were lovely. And the only alternative is the evil private American system where people die on the street because they can’t afford healthcare, right?

Amen.

The Help To Buy “Time Bomb”

The classic definition of madness is doing the same thing over and over and expecting a different result each time.

British Prime Minister David Cameron seems very chuffed that his new Help To Buy Scheme is seeing such a large number of applicants right away. But I wonder if this isn’t another financial ticking time-bomb that’s set to go off, in a similar (if not smaller) manner that the last housing-related bubble went off?

Why is there this obsession with making people “home-owners”, foresaking decent economics in the process, even when those decent economics can steer you clear of a financial meltdown?

Buy all means, build more homes if there’s a market for them. That might curb prices and make a mortgage more economically viable. But when the government uses the banking/lending system as another tool for social engineering, you get, well, you know, what happened last time.

Some interesting views on this in the Backbencher, which is always well-worth a read.

Syria, Chemicals and War

Several days ago, I posted this on Twitter:

I know, it’s a flippant, loose, possibly ignorant response to what was (then) our possible response to the chemical weapons deployment in Syria. That’s what you get for only having 140 characters to play with on Twitter.

But I stand by it. And I’m pleased that our Prime Minister took the issue of war/a clinical strike to the legislature, and that they voted against it. The media were hyperventilating over how this result weakened David Cameron, but I think it’s one of the strongest, most mature things he’s done since walking into No. 10.

And now that Obama has followed suit – citing the vote in Westminster specifically – I think Cameron will come out all the stronger.

I’m still deeply concerned that the war drum beats on in D.C. though. And it seems like the majority of the legislative branch will vote for war. There’s even worrying talk that Britain’s parliament may vote again once we get word that Assad was responsible for the chemical weapons attack.

The civil war in Syria is horrific. I mourn the loss of innocent people there, I really do. if someone wants to set up some refugee camps and needs monetary support, then tell me where to sign up. If you want to advocate clearing the trade embargoes and restrictions in Syria and anywhere else in the world, then I’ll stand by that – the only real way to guarantee security and peace in the long term. (I’ll show you a Penn & Teller clip tomorrow that perfectly explains why this works).

But we’re talking about picking winners and losers in a intricate and difficult war with too many complexities even for the Syrians themselves to understand. It’s not a war with “good” side (i.e. “the rebels”) and a “bad” side (i.e. Assad).

Yes, Assad is a monster. Maybe he or his supporters deployed those chemicals that John Kerry claims killed 1,400+ people. But the only other significant time chemical weapons were used in Syria, a UN inspection found it was rebel forces who had deployed them.

And “the rebels” are not one group. It’d be great if they were like the plucky American minutemen, fighting for freedom and independence, simply pursuing a classical liberal democratic republic. But they’re not. There isn’t two sides to this war – there’s at least seven at the last count. At least two groups of rebel forces are directly linked to Al-Qaeda. So we’re going to fight Al-Qaeda in Afghanistan, and back them up in Syria?

I’d love to see Assad removed from power – but replaced with what? The two million or-so Christians living in Syria are protected by the Assad regime. What happens to then once he’s gone and replaced with – possibly – something even worse?

Maybe it won’t be that bad. Maybe whoever from the rebel forces rises to the top will be much better than what they replace. But in a situation so complex, and with Iran, China, Russia and more involved and looking on with interest, surely the most dangerous thing for British and American political leaders to have now is certainty?

The NHS – Britain’s State Religion

I’ve only just stumbled upon “The Backbencher“, a UK-based libertarian-leaning online blog/magazine. How did it take me so long to find it?!

I think I’m going to find lots of remarkable, thoughtful and engaging content there – I highly recommend that you have a sift through and find some gems of your own.

For starters, here’s a great article on the NHS not being the “envy of the world” as so many of it’s obedient congregation call it. I couldn’t have summarised my views any better if I tried.

Hello Backbencher – very pleased to meet you!

Andy Jones TV Season 5 Episode 8

A viewer emails: “re the current economic situation, doesn’t it stand that if austerity (i.e. cuts) work and investment (i.e. growth) doesn’t, then why is America’s economy doing better than your country’s and Europe?”

Andy Jones TV Season 5 Episode 7

A viewer emails: “So you guys [in the UK] are getting that royal charter soon. Does that mean England won’t have a free press any more?”