Was Bill O’Reilly Wrong on Minimum Wage?
I usually find myself in agreement with most of Bill’s nightly memos. He does a masterful job of taking on the difficult issues facing our society. However, when he delves into the world of economics, he sometimes doesn’t grasp the secular themes at the heart of the problem.
In a recent show he talked about the economy, referring to fast food workers who are protesting for higher wages. He is mistaken about the root causes behind the inability of workers to move up to higher paying jobs.
While I agree with Bill that raising the minimum wage isn’t the answer, it’s important to fully understand changes in the world economy and its effects here at home. Many workers today have little desire to push themselves or move outside their comfort zone. However, there are even more going the extra mile at work while continuing their education who receive little or no reward for their efforts. The world has changed and today’s employed often don’t have the same opportunities their parent’s did.
Decades ago, the U.S. dominated the world’s economic arena both in education and opportunity. Today, that is no longer true. China and other countries became the manufacturing centers of the world offering an educated and productive workforce, ready to take over jobs once enjoyed by millions of Americans. Willing to work for less, they’ve attracted industries from every corner of the globe.
The end result is a double edged sword. As consumers we reap the benefits of cheaper goods but the effects on our job market are obvious.
Big muscle jobs go to where big muscle jobs are cheap and that simply isn’t here. Water always seeks its own level. Until the cost of manufacturing a good on one side of the planet is the same as the other side, the flow of capital and jobs will be out of balance.
For the last decade, the standard of living for many Americans has declined and that problem has actually accelerated over the last few years. How many of you reading this enjoy a life style that even approaches where you were 10 years ago? If you do, you are in the minority.
Part of the problem is the two bubble economies we’ve witnessed since 1999. The internet bubble and the housing bust both destroyed wealth at all levels of our society. However, the real damage to our standard of living is the simple fact that we now live in a global society.
The United States may still enjoy the highest standard of living but global competition has forever changed the work dynamic and has dulled our competitive edge.
I suspect that over the next decade, the standard of living of our competitors will rise and the standard of living for many Americans will continue to fall until both are in balance. Adopting a woe is me attitude is never the answer.
Over time, workers in other countries will demand higher wages. The increased pressure on margins will force these companies to raise prices and the U.S. will appear relatively more competitive.
The concept of the 9-5 job is all but a memory and the family of today, with two working spouses is the norm. There is much we can do to improve our education including new online options that dramatically reduce cost. We will live longer than our parents and should probably expect to work longer as well. We need to stop living in the past, looking to government to buy us back the lifestyle of yesterday.