Gongol.com Archives: February 2013
Brian Gongol

February 13, 2013

Business and Finance Who are America's minimum-wage workers?
In yesterday's State of the Union address, the President proposed raising the minimum wage to $9.00 an hour. It's a no-lose political gamble for him: He can talk endlessly about how it will help working families, and parade examples of those low-wage families out in front of the cameras. It makes it look like his administration is "doing something" to help the poor. ■ While there is no doubt that there are families living on the minimum wage, the reality is that 50% of minimum-wage workers are under age 24. One in five minimum-wage workers is, literally, a teenager. Of the people working for minimum wage (or less), 51.3% work in leisure and hospitality (including restaurants), and about 17% are working in retail. ■ In other words, raising the minimum wage will largely affect the prospects of young people working in restaurants and retail. While a wage increase for adults in those jobs would undoubtedly make their lives somewhat better-off, a wage hike would also have the hidden consequences of making a night out at the restaurant more expensive for everyone else. It would also tend to shrink the opportunity set of low-wage, first-time jobs for young people in high school and college (or at least, for those of college age). That means higher youth unemployment, and if you want to see how that works out, ask France, where rigid employment laws keep huge numbers of young people from entering the labor market -- so they riot instead. ■ So even though it's an easy political move for the President, the consequences aren't necessarily quite so easy as "Raise the minimum wage, and working-class families will do better". If you really want to help working-class families, raise the Earned Income Tax Credit and increase the opportunities for job training and non-traditional routes to post-secondary education. But raising the minimum wage? Well, it looks nice, but it steals opportunities from the next generation by stealth. ■ Young people who can't get low-wage, low-skill jobs early in life don't develop a track record from which to get better jobs later. Nobody starts out as CEO of a Fortune 500 company; virtually everyone starts at the bottom. But if the "bottom" evaporates because good intentions (and easy politics) are allowed to ride roughshod over sensible long-term economics, then fewer people get a chance to start "at the bottom". Instead, the risk becoming part of a class of permanently unemployed non-workers. This concern is no small matter: It's a pressing worry already in Britain, and the dangers should be obvious: It's much, much better for young people to have legitimate opportunities to gain work experience, even when that work is low-skilled and for low pay, than to have no entry-level opportunities. ■ The President wrote in 1985 (when he was still a community organizer) about the frustrations of trying to help people get started finding jobs. It is as though he doesn't see the continuum between opportunities for young people and the success those people enjoy later after getting some skills and experience under their belts. And that, regrettably, is a lesson that doesn't translate well into a winning sound bite...but it's the right approach to lasting success.

Computers and the Internet Five technology myths that need to go away

Aviation News Why has it taken until 2013 to start addressing the legal consequences of drone aircraft?
The law is at least five years behind where it should be. Unmanned aircraft have been a huge development for the US Air Force, and it's an indictment of our lawmakers that they've ignored the consequences for civilians for so long. And on a related note, Raytheon can mine your digital presence (including photos and social-media connections) to form predictions about where you are and where you're likely to be found.

Computers and the Internet The ICN is up for sale
Iowa's statewide, state-owned fiber-optic network is on the market

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