Posted by Charity on April 21st, 2006

What do Burlington, Vermont and Charlottesville, Virginia have in common?

Both the University of Vermont and the University of Virginia had a tent city on the green full of students “fighting” for a livable wage for university employees. Both schools ordered the tents to be removed. Both groups of students, though well-meaning, seem to lack an elementary understanding of economics.

There is an interesting article, Campaigning to lose jobs, written by a U. Va. visiting Economics Professor in The Cavalier Daily, explaining how instituting a livable wage could actually hurt the lowest skilled workers and proposing a better way for students who care to offer their assistance to these workers.

I saw this post about it on another blog and thought, wow – it really is a small world after all.

22 Responses to “Campaigning to lose jobs”

  1. Wow, great article. Although I can’t imagine a UVM professor ever writing a similar article.

  2. I thought the same thing.

  3. I would bet that, although the wage issue is an economic one, you won’t find anyone in the tent city with a major that requires math.

  4. Apparently the author, Edwin T. Burton is a professor at the Univeristy of Virginia, which is a public school.

    Burton approached his thesis in a very simplified way. The principle that a minimum wage prices some workers out of employment with a given entity more is true if other factors in the equation are held constant. It isn’t necessarily true if they are not.

    For example: If the top earner in an organization makes $100 per hour and the bottom earner makes $9 per hour, but performs an essential function like trash removal, a mandated minimum of $10 per hour for the trash guy doesn’t mean the trash won’t get picked up. It just means the top guy might have to settle for $99 per hour so the bottom guy can get $10.

    My point is, things are not as simple as some of you like to imagine.

    “If $10.72 has no effect on employment, then why stop there? Why not settle on a minimum of$25 per hour or even$100 per hour? Why not?”- Burton

    Isn’t that obviously an over-simplification? As a professor, this guy knows darn well there are nominal price floors that are not effective in practice, that there are labor price threshholds above which quality sacrifices have to be made and below which only profit suffers.

    I know some will say higher profit attracts better talent at the top, but then I’d have to pull a Charlie Sheen and ask “how many yachts can you water-ski behind?”

    And could I not simply make the converse argument? If any mandated minimum wage is a burden, then why not drop the price floor for labor to zero? It worked in the 18th and 19th centuries right? Look how many Africans were employed on plantations when the labor price was nothing.

    Now don’t get me wrong. I’m not necessarily endorsing this notion of a “livable wage” because it seems to me the minimum wage exists for the same stated purpose. I think the “livable wage” crowd would be better served playing their sport in the stadium we’ve already built.

    Besides what the hell does “livable” mean anyway? Even the slaves “lived.”

  5. “why not drop the price floor for labor to zero? It worked in the 18th and 19th centuries right? Look how many Africans were employed on plantations when the labor price was nothing.”

    You were being sarcastic with this, right? If so, what’s your point?

  6. What Burton is saying is not that essential functions like trash removal will be eliminated, but that they will be reduced. In other words, if they had three trash collectors at $9/hour and they had to raise the pay to $12/hour, they would only employ two trash collectors, who would need to be able to do more work. So, some guy who only moves in two speeds – slow and stop – would be let go in favor of someone more on the ball. Even within such menial tasks as trash removal, you have a range of competence. The point is that those low down on the competence scale would be SOL if everyone was forced to pay higher wages.

    Have you ever been to a store and had a totally slow or stupid (or a sad combination of both) clerk? Yeah, that guy would be out of a job if the store was forced to pay more.

  7. “What Burton is saying is not that essential functions like trash removal will be eliminated, but that they will be reduced”

    Some things can’t be reduced any further. What if you’re on your last trash guy?

    Another good thought-provoking post you got here. Nice job.

    BTW looks like Osier might run away with the crackpot polling…
    Only 9 more votes to go before I call a fake winner!

  8. “If any mandated minimum wage is a burden, then why not drop the price floor for labor to zero?”

    You mean do away with the minimum wage? You do realize that that is what libertarians and most conservatives want, right?

    It sounded like you were saying that as a ridiculous extreme that no one would agree with, but many people think that’s what we should do.

  9. The minimum wage is just one of many govenment labor regulations.

    Others include but are not limited to the Family and Medical Leave Act, fire exits, harrasment policies, and a whole bunch of health and safety standards that are job specific like limiting the number of hours in a row truck drivers can be on the road. There are child labor laws. There are FAA guidlines for pilots. Teachers, Doctors and others have to be liscensed. What about anti-trust laws? You cool with monopolies?

    Besides the minimum wage, what other regulations would conservatives do away with? All of them? Some of them? Why or why not?

  10. Yeah, I like Monopoly.

    This isn’t really my area of expertise, but I’ll give you my take on it. There are a lot of regulations that are useless. Some of the things you mentioned are for public safety – limiting the number of hours in a row a truck driver can be on the road, guidelines for pilots. And child labor laws protect children from parents or others who might exploit them. But, adults should have the option of setting their own work conditions. I don’t see why we need the government to dictate everything.

    Some regulations are out-of-date anyway, like overtime. All you have to do is salary an employee and you don’t have to pay overtime.

    And don’t even get me started on sexual harassment laws.

  11. The real retarded-ness of the livable wage protestors (in the case of UVM) is that they don’t seem to realize the excellent health coverage that UVM employees receive. ANd then there’s the free tuition for employees and their family members. That’s a heck of a lot better than other minimum wage jobs in the area.

    If people want to protest, it seems to me that their efforts would be better directed at the situation of many poor immigrant/refugee families who don’t know english and can’t get over 7.75 per hour and have no health care and no car and no education and no skills and live in slummy apartments, sharing like, three rooms with seven people.

    To be pathetically honest, I’d be pretty psyched to work at UVM and have all those benefits – and I could even deal with the 9.00 an hour or whatever (it’s more than I get for babysitting).

  12. I was watching speeches made by members of SLAP at Waterman on Channel 17. One girl said the wages paid by UVM were a “human rights violation.” Now that’s rediculous.

    Sure, these kids are idiots and they don’t know what the hell they’re talking about, but at least they’re learning to organize and make speeches. Maybe they can use those skills for good someday when they get a clue. For now I bet a lot of them are protesting mainly to get laid. The university won’t be swayed by their current campaign.

    By the way, I assume it’s an acronym for something, but I have to say “SLAP” is a pretty stupid name. Who’s afraid of a slap? Oooooh! Please don’t “SLAP” me!
    I’m soooo scared!

    They should have called themselves STAB- Student Troublemakers Arguing Bullshit.

  13. I can’t believe 48 hours have passed with no response to my last comment but the sound of crickets!

    Didn’t you hear me? I said the protesters were idiots! I said their organization had a dumb name!!

    …Nothing? How about Anonymous1? No? Bob the Optimizer? No? Bueller….?

    Huh.

    (cricket sounds)

  14. Haik, I thought your post was a riot. I don’t know if you noticed, but the Optimizer has not been online all weekend, or today either.

    It’s been deadsville around here.

    What does SLAP stand for anyway? Student Losers Always Protesting?

  15. “Didn’t you hear me? I said the protesters were idiots! I said their organization had a dumb name!!”

    Wow, How badly do you need attention? You don’t even really believe in anything do you? Are these the same “idiots” whose rights to vote and interfere in local elections you champion? Typical of your underdeveloped logic and inconsistant character. Keep up the good work. I love watching you make a fool of yourself, “comment deleted.”

  16. Ahhh. There it is. Thanks ‘anon1.’

  17. “Typical of your underdeveloped logic and inconsistant character.”

    Nice try, but like most high school graduates I know how to spell “inconsistent.” You should really seek help, or at least keep this nonsense on your own blog.

  18. Yay! Where have you been?

  19. Haik, you might want to try joining AA- “anonymous anonymous”

  20. Just another way to justify screw working people, brought you by someone earning a living wage.

  21. What are you talking about and who are you talking to, rowvee?

  22. banking job search
    July 18th, 2006 at 7:47 pm

    Hey Fellow, you have a top-notch blog here!
    If you have a moment, please have a look at my banking job search site.
    Good luck!