As you may know I am interested in covering Charles Koch and Koch Industries. I did a historical net worth of the Koch brothers from 1984-2013 here. If you would like to read all my Koch entries go here. So in
this recent
Wichita Eagle interview (as
of right now in writing this post the Koch interview is number one on the most
read stories for the Wichita Eagle). Charles Koch talks about how he wants to
spread the ideas of freedom and liberty to everyone (even the poor
people). The Charles Koch Foundation will spend $200,000 on media ads to
promote education on economic freedom. If there is ever a time in history to
explain to people free markets and economic freedom now is the time. Koch says
that “we want to do a better job of raising up the disadvantaged and the
poorest in our country, rather than saying ‘Oh, we’re just fine now”. Charles
Koch also talks about how licensing laws hurt poor people because often times
they have limited access to capital. Koch points to driving a taxicab (which requires
expensive medallions which can be tens of thousands of dollars if not
hundreds of thousands). In addition to regulations that keep people out of
certain industries the minimum wage also prevents people at the bottom from
getting job since the minimum wage requires business owners to pay labor higher
prices. The minimum wage prevents people from getting their first job which
hinders not only getting a future job but doesn’t teach young people the skills
they need for the “real world”.
The YouTube
ad video explains that
Americans earning just $34,000 are in the top 1% of income worldwide. If you do
any historical analysis on this amount it put Americans making this amount in
the top .1% from not only a worldwide perspective but a historical perspective
as well. What would John D. Rockefeller pad for an iPhone? This
ThinkProgress article points
out that Charles Koch is already in the 1% and many Americans are not.
ThinkProgress confuses income and net worth. The article mentions the
$34,000 which represents income (yearly) and then goes on to say that “Meanwhile,
Charles and Davis Koch are the ones comfortable in the 1% with a net worth of
about 1 million times that figure”. Net worth and annual income are two
completely different numbers. My income could be $10,000 and my net worth can
be $1 million. Net worth represents years of saved income and invested income
while income represents what a person earns in one year.
ThinkProgress then goes on to argue that Charles Koch is wrong in wanting to get rid of the minimum wage since apparently raising the minimum wage to $9 per hour would add $48 billion in economic growth. Studies like these never take into account incentives. Yes, if I took everyone making minimum wage and used a "multipler" it by a higher wage and then factored in a Keynesian multiplier I would arrive at $48 billion, however in the real world firms and small businesses would simply fire workers, reduce hours worked by hourly employees, and or find ways around the minimum wage (which isn’t taken into account). Why stop at $9 per hour. $20, $30, or even $50/hour sound pretty good yet I don’t hear anyone arguing for that as the minimum wage. The problem is people are paid for their value not what we think someone ought to be paid. Productive people are paid more. If someone can only produce $5 of value per hour why do we mandate a business should be forced to pay them $7 per hour. Why don’t we force producers of milk to sell their products at $2/gallon?
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