Minimum Wages

The correct term should be "legislated unemployment," and that's what the minimum wage is, for all practical purposes. This is not a political column, but one of simple logic. When the law sets the 'minimum wage' that an employer must pay, quite obviously, that employer will take a second look at his staff. It has happened hundreds and thousands of times, since the concept was made into law by FDR, I believe in 1938, when the first minimum wage law was voted upon, and set at 60 cents an hour. San Francisco's liberal stoops have just made the minimum wage $9.14 per hour, and on top of that, all employees must be covered with health insurance and sick leave. This will spell doom for small businesses and make all prices go up proportionally, as well as thousands of lost jobs… just in San Francisco. Additionally, tourism will slump, because it will be far too expensive to go there, as if it isn't already.

Before the minimum wage laws were passed, there was no such thing as a self service filling station, and very few self service elevators, just to name two. When I was growing up in D.C., my Dad's drug store was located on the first floor of the Kenesaw Apartments at Mt Pleasant and Irving Sts, N.W. I loved that building, and it's still there, but no more drug store is in it. The manually operated elevators are long gone as well. I used to love to run those elevators. The "throw-over" control was located near the door, and the operator turned it one way to go up, and the other way to go down, with stop in the middle. In the middle or stop position, a magnetically tightened band clamped around the motor shaft to brake it. The skill, which I learned, was to land the car at the floor and have it level, without having to jog it up or down to make it level. Quite a skill for a 12 year old, but it was fun, as long as Mrs. McCormick, the building manager didn't catch me. She didn't like the idea of a kid running her elevators and carrying passengers in her building, when she was paying her gals top do it. Yes, paying people to operate the two elevators. I could always run the manually operated freight elevator in the back, because Mrs. McCormick never went there. I am sure they didn't make much, but they liked me and let me run the cars. No more. It cost too much.

Who benefited from the minimum wage as far as elevators are concerned? The elevator manufacturers, of course! Without doubt, endless orders for self service elevators poured into Otis, because even though they cost a lot to install, THEY SAVED LABOR, WHICH HAD BECOME TOO EXPENSIVE. Managers figured out how long it would take to pay for the self service, with lost paid operators. Many times the old cars and machinery could be adapted to self service, but usually not. A friend of mine, Wendell Allen, had a weekend job in a downtown office building operating the elevators, to give him some extra money at 65 cents an hour, and I used to go downtown to run those fast elevators which were a joy to run. (I have always loved machinery). I can't think of a single self service elevator left, other than in very small buildings with but a few tenants. All those jobs were lost. They required little skill, and paid small wages, but the point is that they gave employment to low skilled people, or extra money to those who needed it, and little welfare was tapped. Low skill people worked, rather than cashing welfare checks. There was no TV when I was growing up.

Few can remember not having to pump their own gas, but as a teen, if I tried to pump my own gas, the attendant would rush out, snatch the nozzle out of my hands, and scold me for trying to take his job. I wanted to do it myself, as I thought it was fun. All filling stations were manned by guys who pumped your gas, checked your oil, and washed your windows. They didn't make much, and had really low levels of intelligence and skill, but that was their job, they mostly took pride in it, and often got a dime tip if they did a good job. My parents used to give them a quarter, I suppose because we were middle income. There is still one state where self service gas is illegal, but try to find a non-self-service gas station in the other 49 states. Those jobs are gone, and the former job holders with low skills have no job. They are collecting welfare I am certain. The elevator operators and filling station attendants are out. Others? Sure! How about PBX operators? Don't know what they are? They were those gals who sat at a PBX, or switchboard, and plugged in your phone to the outside or to other extensions. Remember Fiber McGee and Molly, when Fiber used to make a call and talk to "Mert" the operator? I remember doing that when I was about 8 or so, before automatic dialing came in. Hundreds of thousands of operators were laid off.

Not all modernization is bad. But the PBX operators in apartment buildings were still going full blast until the minimum wage made them lose their jobs. Who benefited? The manufacturers and wire techs who installed the self service phones in apartment buildings, that's who, while the poorly skilled PBX operators took their job cuts. Cell phones now have made hotel phones obsolete. What I call "quarter car washes," (now 8 or more quarters), came about in the late 50's, and the car wash attendants lost their minimum wage jobs. As a kid, I used to watch the family Plymouth go through the car wash on Connecticut Ave, and see it washed by machinery, come out as clean as a whistle, and be hand dried by low paid workers, who also got tips.. Hand washes were also common, but no one washed their own car except as a fun thing on a summer day. "Detailing" is coming back a bit, but lots of car washers and driers lost their jobs when the quarter car washes came about. Management couldn't afford them, even at the legalized unemployment minimum wage.

The liberals will now scream about me being inhuman and cruel to not want those poor souls at McDonalds not to earn at least the proposed $7.10 per hour minimum wage, or $9.14 at the Golden Gate. I don't care what they make. If they are good, they can make $15 per hour, if their boss thinks they are worth it. Why should the law decide what a worker is paid? That is the question. There has been no raising of the minimum wage in ten years, and damned few make that little, regardless of the law. Why? Because management can't find anyone who will work at the current minimum wage, that's why. The minimum wage law is a purely political scam. The D.C. Gang's wisdom, sagacity, far-sightedness, rectitude, and capacity for common sense leadership, is purely imaginary, and minimum wage elevations are for getting re-elected…pure and simple.

Minimum wages are indeed legislated unemployment, and if employers are forced to pay $7.10 per hour, or $9.14 in the socialist kingdom, to worthless, shiftless, lazy, hangers-on, they will lose their jobs. It has always happened that way. Forced wage levels and rent controls, are always guaranteed to make apartments scarce, as well as jobs. If I am worth five bucks an hour because I am stupid, who will pay me $7.10? Stupid can't be fixed. I may be worth $5 or less to sweep the floors, mop the kitchen, or shovel snow, but if the employer is smart, he will lay me off and get a waitress to do it during slack time for a couple of extra bucks, rather than hiring at minimum wage. High school kids would love to shovel snow for a lot less than $7.10, or $9.14 per hour. They always have, and always will work for less than the current minimum wage.

Minimum wages, and wage levels of all kinds, are simply an indication of the actual debasement of the dollar. Politicians, especially during election time, love to elevate themselves in lofty platitudes about integrity, public obligations, responsibility, and all the other sanctimonious jazz that communications moguls admire to hear and publish, and especially if it is their favorite candidate. Pay no attention to them or the media, but rather think for yourself. While you are at it, protect yourself.

January 18, 2007

Don Stott has been a precious metals dealer since 1977, has written five books, hundreds of columns, and his web site is www.coloradogold.com