Wednesday, December 18, 2013

Minimum Wage

I have had many discussions with big-government types and regressives about minimum wage laws and I anticipate another round of argument coming with the recent changes to the minimum wage in Seattle-Tacoma, Washington.  Overnight, the minimum wage was jacked up by over 60%.

First of all, anyone who wants to learn about the economic facts about the concept of minimum wage should read Thomas Sowell.  Start with a recent article, "Minimum Wage Madness."

Here's the point I want to make and it is about what Thomas Sowell hammers away at, over and over:  consequences.  The consequence of increasing the price of labour is that those doing the hiring will hire fewer people... owners will hold the line on their labour expenses in order to protect their bottom line.  What big government types will say is that minimum wage laws have no adverse effect on employment.  Without trying to prove that statement is false by citing studies and using statistics, let's look at SeaTac.  The minimum wage went from around $9.19/hr to $15/hr or a 63% increase in that price of labour.  Now, what reasonable person could possibly believe that much of an increase would have no effect on employment?  I think that the ballot vote showed that there are a significant amount of people who won't answer that question honestly.  However, if the cost of your favourite steak were to increase overnight by 60%, virtually everyone's shopping list would change and adapt to that reality.  Substitution.

If you think about it logically (honestly), you would realize that every single business in operation in SeaTac will now look for cost savings.  And, yes, that will involve lowering headcount and raising prices.  It will not involve business owners just agreeing 'to make less money.'  Because owners are a large group of people who aren't protected by any minimum wage law.  For a lot of them, if you take their net profit and divide by all of their hours of work, it will come out below minimum wage.  And for owners it often comes to the point where they are better off financially to sell their assets and put the money in the bank, rather than put in 12 - 14 hour days.  And what minimum wage laws do is push more and more owners into confronting that decision.

Here is a picture to contemplate:

How long has it been since you saw a grocery store with all of the checkouts running?  I don't think I have ever seen it.  What I see in that picture is the owner increasing the number of self checkout aisles and decreasing the number of checkouts that require a person.

And how about Amazon Prime Air?  This is real, despite it feeling just like an April Fools joke.  I'm no economist, so I don't know the exact principle involved, but I see owners eliminating an increasingly expensive input into their business (labour) by investing in robotics and automation.  It's technology destroying jobs.  I don't see that as a good thing or a bad thing, but rather just a thing that people will have to deal with.  It's similar to the introduction of the automobile or the computer.  We shouldn't rage against these things, like so many Luddites.  We should acknowledge that they are happening and react to them in a logical and intelligent way.

Here is what the full-service video rental store became:

It is rare that you find a gas station that pays people to fill your car.  You go to giant gas stations with 20 pumps and one person accepting payment (or not).  It won't be long before that last position is eliminated as well.  So you will go to the giant gas station and there will be no employees.


But as usual, in walks the government, 'here to help,' and ends up speeding up the process of technology destroying jobs.  The question is are the government types really ignorant of these consequences, are they truly 'unintended?'  Or is it intentional?

Wednesday, May 25, 2011

Clock still running...

On the number of years the Liberal Party has wiped their arse with their party constitution and refused to elect their leader.
The party's national executive is expected to rubber stamp the selection of Rae as caretaker until a full-time leader is chosen. A decision on that will be made next month, but the party doesn't want a leadership race to start until as late as February 2013.
Rubber stamp, anoint, what's the diff?  In 2013 it will be over 7 YEARS since the last leader was elected by the Liberals.

As I keep saying:  The Liberal Party of Canada has ceased to exist as a real political party.  The Green Party now has more credibility and more reliable adherence to party principles than the LPC.

Saturday, March 26, 2011

The gap between intent and result

Premier Brad Wall and his government released their budget this week and it is widely acknowledged that it will be by far the best provincial budget in the country.  I would go further to say that with Brad Wall as Premier, SK that this will be a long term trend.

However, Dwain Lingenfelter was quick to point out that 'not everyone was happy' or 'not everyone was helped' by this budget.  The main topic that he is flogging these days is rent control.  Apparently everyone in SK is no longer able to afford housing in the province and we need the government to step in and "control" things.  Well, I hate to break this to Mr. Lingenfelter, but there are a lot of people paying upwards of $400k to $500k for new homes in Regina and Saskatoon these days so there are alot people who can afford housing.  He's basically right in his diagnosis, but totally wrong in the conclusion he draws.  He's correct in that I am one of the people who can't afford housing in Regina.  Or rather, refuses to afford housing in Regina.  I refuse to pay 5-6x my gross salary to someone for a shoddily built home in a crime infested city that gets 6-8 months of winter weather per year.  And I maintain that anyone who does or did, is an idiot.  But I'm not about to go whining to the government to help me pay for housing.

To understand better, let's take Dwain at his word and try to imagine what he would do if we the people of Saskatchewan were suddenly and collectively stricken with advanced mental illness and made him Premier:

The first thing he would do is implement rent control.  Dwain's example that he provided was Winnipeg and BC where he speculated (lied) that rent increases are limited to 1% per year.  So he would limit rent increases to between 1-2% he said.  He didn't mention inflation or any other factors that would be taken into account.  I find that really doubtful.  I doubt that if Dwain in complete control of government, he would do nothing.  I think that he would move to immediately start torturing the rental market with rebates and legislated rent decreases and other really destructive, NDP style, bludgeoning of that area of the economy.  And by the way, Dwain is out to lunch about the limits to rent increases in BC.  Rent increase in BC is a complicated matter.  It's so complicated, they have an entire branch of government assigned to deal with it.  If you read, which Dwain didn't do (and neither did his lackeys), you would see that landlords are allowed to increase rent by the rate of inflation plus 2%.  It is interesting to note that in BC the government (a) thought inflation was 0.3% in 2010 and (b) uses inflation rates from 2009/2010 to set rent prices in 2011.  Now all that pertains to a "residential tenancy" and not a "manufactured home park."  For a manufactured home park... please stay with me here and trust that I am not going to belabour this point too much more, the landlord can raise interest rates by 2%, plus the rate of inflation, plus "a proportional amount".  Now, a proportional amount is defined in a 7 page pdf worksheet that only the owner of a manufactured home park would understand.  So all I know is that those rents could be increased more than 2.3%.  Also, a landlord can do pretty much whatever they want anyway, if (a) tenants don't participate in the insanely complex process to file a complaint or (b) the landlord does following the insanely complex process to file for approval of the increase.  And by the way, any disputes between landlord and tenants will end with an "officer" of the tenancy branch visiting whichever side didn't fill out their insanely complex application correctly.

But you get my point.  If the new government in BC wanted to exit the rent control business, they would probably have to fire 10,000 public employees.  Just the thought of my government creating a large new bureaucracy and getting into the business of setting prices for rent, to borrow a phrase from mayor Pat, makes me sick to my stomach.

So we have proven that Dwain fibbed a bit about BC, so what about MB?  Well, it turns out he wasn't being truthful when he said 1%.  Maybe Dwain just truncated the decimal places off to simplify things.  In reality, the latest edict from the Rental Tenancy Branch in MB is that landlords can increase their rent by 1.5% in 2011 (note, this increase amount, like in BC, is figured with data from 2009/2010).

Oh, hold on a second, you didn't think that was it did you?  Exemptions people!  Landlords can increase rent by as much as they want if they have an exemption!  One such exemption is if the rental suite rents for more than $1120.  Get that?  If your rent is set high enough, you get exemption from rent control!  It doesn't seem logical to me, but I am not as good as Dwain Lingenfelter at suspending reality for long enough to convince myself of these things.  If your building is a part of a "rehabilitation scheme."  I can imagine how many "rehabilitation schemes" suddenly sprang up when that exemption was put into place.  And how many cases of rare scotch flowed into the province!  Newer buildings are also exempt (so the owners have 15 years or so to ensure that their rents are all above the exemption threshold to avoid the rent control.

So what is the point, the real point, behind rent control?  Control.  That's it.  People like Dwain Lingenfelter are not happy unless there is a government bureaucracy involved in every aspect of your life.  I know for a fact that Mr. Lingenfelter doesn't care about the effectiveness of rent control.   The reason I know is because he would neither put in place the metrics to measure its effectiveness nor scrap rent control when it was proven to be a complete failure.

This is what Thomas Sowell refers to when he talks of the vast gap between the intent of public policy and the actual result.  If it were proven beyond a shadow of a doubt that rent control was ineffective and that a newly implemented rent control scheme had failed, Dwain Lingenfelter would still do it.  I'm going to go one step further than Mr. Sowell and say that liberals today don't care about the actual results of their policies and also don't care about the perceived intent.  Their only concern is with government intervention and control.  That is their goal.

I could go into the myriad of reasons why rent control doesn't work, but you can't get a better explanation than what is written here by Thomas Sowell.  It has to do with the fundamental economic principle of prices.  Prices are the primary source of information for a free market.  Taking away price from a market and expecting it to operate properly is akin to removing the gasoline from a car and expecting it to run.  But people like Dwain Lingenfelter insist on taking control over prices (removing them as a signal from a marketplace).

I have some advice for people in Saskatchewan who feel that the government needs to save them from the high cost of housing.  If you are having trouble finding an apartment you can afford, get a roommate.  Instantly, you cut your cost of housing in half.  And if you are popping out children AND can't afford housing, then you need to think hard on some advice my Grandmother gave me when she was alive:  'If you find yourself standing in a hole up to your neck, stop digging.'

Monday, February 14, 2011

US debt to exceed GDP in 2011

Take a look at this article and judge for yourself.

A few of the more salient points:

1.  2011 deficit is going to be around $1.65 trillion.
So the 2010 deficit was $1.4 trillion and the 2011 deficit estimate is $1.65 trillion.  Can anyone spot the problem here?  The deficit is increasing.

2.  The initial estimates for the 2011 deficit were $1.4 trillion and if you take that number and subtract it from the revised estimate, you have $245 billion.  This means that the estimation errors made by people trying to pin down Obama's actual deficit figure will be are larger than the entire deficit in 2007.

3.  Obama is proposing to cut $1.1 trillion from the deficit over 10 years.  This amount of money is beyond miniscule.  Consider that it is decreasing the deficit by $100 billion per year.  That amount is about 2.9% of the current amount of government spending.  Not exactly cinching up the belt another notch.  And notice that they aren't talking in concrete terms.  Nothing is said about eliminating the deficit unless you consider this piece of self contradicting crap from one of Obama's mathematically challenged, fellow Democrat:

White House budget Director Jacob “Jack” Lew said the goal was to get to a point where the debt is at least stabilized by the middle of the decade.

“The government will no longer be adding to our debts, and as a share of the economy, we’re going to stabilize the deficit,” he told reporters. “We’ll, in short, be paying for what we spend every year. The goal, to put it simply, is for the deficit to be in the range of 3 percent of our economy by the middle of the decade.”
Lew-ser.

Well, actually, a deficit of 3% of the US economy is still massive.  And yes, any deficit number will definitely be adding to the debt.  How about this:  How about we start changing the dialogue a bit here and begin talking about actual surpluses.  How about a surplus of 3%.  In terms of economic health, wouldn't that be a little, well, healthier?

Sometimes you have to watch what these guys are saying because they tend to mentally wander off into their little dreamscape that they have constantly running in their brain.  Lew-ser was probably deep in thought about a time in the not so distant future when $400B - $500B USD is such a small sum of money it's insignificant.  We will all be living, carbon neutral, in our very own shanty town shack, outside the mine where we work.  A mine owned by a Chinese conglomerate.  And it will cost $1B USD to buy bread down at the bread line.

4.  The US debt will exceed the size of its economy in 2011.

It's over for the US and it can be solely attributed to Barack Obama.

Thursday, February 3, 2011

Saving Mula

So a big part of my life is my concern for and my value for money.  So I guess you could say, I am a bit of a miser.  I really don't see it that way in that the word "miser" has a negative connotation and being careful with one's money is never a bad thing.

I also do some pretty generous things with my money such as travelling and the purchase of large ticket items if I need.  I would say that I think about the value of money a lot and I don't let other people separate me from my money very easily.  I watch it flow in and out of my hands and I count it religiously.  Not literally of course... well, literally actually.

One such example of saving money has to do with a situation which was bothering me a lot, my coffee habit:
  • I drink a lot of coffee.  A lot.  I am pretty sure it is borderline dangerous for me, but I try to keep it under 10 cups a day.
  • It costs me a lot of money.
  • I am addicted to Tim Hortons coffee
So in terms of the number of cups that I drink per day.  I drink one cup in the morning, when I get to work, coffee break, after lunch, and most of the time one in the afternoon.  I sometimes have a coffee after dinner at night.  So I think that amounts to between 5 and 7 per day.  I am sure that this is a lot to some people, but I have been drinking this much for years now.  I once encountered a trainer who taught me a Cisco course and he told me that he drank upwards of 25 cups of coffee per day.  So I should survive.

So while at work, I spend $1.53 per cup (Timmy's) and that means I spend about $6 or so per day.  This amounts to $120 per month!!

In addition to having to pay for the coffee, I also have to go to Tim Horton's in the mall here and that means I have to walk.  It usually takes between 12 and 15 minutes per trip.  Annoying.

So now I have a coffee maker at my desk.  I buy k-cups for $0.50 each.  So in one fell swoop, I have cut my coffee spending to 1/3.  And I save about $80 per month, which is more than I pay for Internet and TV.  I did have to pay for the coffee maker, but in terms of an investment, it is going to pay off in about 1.5 months.

Wednesday, February 2, 2011

The most frightening words uttered during this whole "Egypt" thing...

Walid Abdel-Muttaleb, 38. “Now it’s up to the intellectuals and politicians to come together and provide us with alternatives.”
(Emphasis mine)  I would rather entrust a committee of 10 orangutans, a rubber mallet, and 3 randomly placed bells labelled 1, 2, and 3 in their cage.

I want this situation in Egypt to turn out right, but I have very little hope.  I suspect that the military leaders are the real power and they will simply install another dictator.

UPDATE:  I read this today and it states very plainly the situation in Egypt:
A population that was convinced just two months ago that sharks in the Red Sea were implanted by the Israeli Intelligence Services is hardly at a stage of creating a liberal democracy in Egypt.
In reality, these things are rarely done in a bloodless manner and go through multiple iterations before it gets done right.  This would be anathema to the Egyptians, but they should look to the history of the United States and the development of their constitution as a model.  And it is true that they need "intellectuals" (preferably those who don't refer to themselves as such) that will guide them through the process of creating a new constitution.  What they don't need are ex-army officers dressed up like politicians.

However, if all else fails, Egyptians should implement this protocol:
Every single time the Internet and/or telephone service is shutdown by the government or the army, a million people should gather in Tahrir Square. They should then make their way to the seat of government and dismantle it brick by brick.

h/t Kate

Tuesday, February 1, 2011

X10 Website Sucks

Wait!  Don't go to their website!

Actually, I think X10 technology is pretty useful, however, I have a big problem with their website.  It seems to me that it is obviously designed to confuse and distract people instead of clearly showing what is for sale and the costs.

So I did an "online chat" with someone one name Nathan who attempted to help me through their site and after, they let me fill out a survey.  I am pretty proud of my response to the question whether or not I would buy from the x10 website:
My experience with the online chat representative was just fine.  He was courteous and actually helped me quite a bit.  The reason I won't buy a product from the X10 website is due to the fact that the items are available for a fraction of the cost on ebay.  For example, the outdoor motion sensor that I was asking about is $4-6 on ebay, but $30 on the x10 website.
My problem is with the X10 website itself.  This is the worst POS (piece of shit) website in the world.   If that were my child, I would hit it over the head with a shovel and bury them out behind the barn.  Anyone who has anything to do with the design of that website should be ashamed of themselves.  In fact, if I had anything to do with that website, I would go into the datacentre with a barrel of napalm, kick it over and then light a match.  No, scratch that.  I would do the napalm thing, but then shoot myself in the head making sure to take the precaution that the muzzle flash would be guaranteed to ignite the napalm so that no other person in the world could be harmed by looking at that horrifying website.