I don't like motorcycles, I don't like outfits that proudly use the word "confederate," and I'm not sure you are allowed to use the word "bitchin'" anymore--but this is a bitchin'-looking motorcycle. ... 2:42 A.M
"We Are Hiring at $9.50 per hour"--sign in the window at the In-N-Out burger restaurant in Westwood, CA. That has to be more than they were paying a year ago. ... I'm not saying you can raise a family on that (it works out to a bit less than $20,000/year). I'm saying tight labor markets--produced by growth and maybe a boost in immigration enforcement--eventually raise wages at the bottom, and we are starting to see that. Burger chain jobs set the de facto minimum wage, no? ... Update/Correction: Several---actually more than several--alert readers have emailed to note that In-N-Out famously pays more than other burger chains, so it does not, in fact, set the de facto minimum wage. On the other hand, the $9.50 wage appears to have been instituted last fall, so it represents an increase.** Plus, they apparently feel the need to advertise for new workers, which suggests that even the $9.50 wage may soon not be enough.
More: Kevin Drum sneers that the fancy-looking chart of unspecified provenance on his blog
is, perhaps, more reliable data than a single sign in a burger joint in an upscale Los Angeles neighborhood, no?
Well, no. They're both data! Large indexes are obviously more comprehensive than cheap casual observation--though some, like the hourly wage data from BLS, are notoriously skewed. But large indexes are not timely. Assuming Drum's data (which seem to have come from the WSJ, which in turn cites only "Labor Department") came from this BLS survey, the most recent numbers are from the last quarter of 2006. Help wanted signs that appear in small business windows can tell you what's happening now. (I got my first clue that the brutal Reagan recession was over--this was 1983, when the papers were filled with dismal stats--when I was campaigning (for a Democrat) on a subway platform in New York, and ran into a contractor who said, "You think the economy is bad? My business has never been better.")
I'm not denying income inequality is rising--I wrote a book based on the reality that income inequality is rising--or that Bush-era prosperity, in particular, hasn't been as widely shared as prosperity in other eras. My suggestion is only that if you keep the economy going and stop new immigrant entrants from flooding in at the bottom, entry-level wages will eventually rise and people will start complaining (as they did in the late 1990s) about the "U-shaped" economy in which the rich and the poor were gaining faster than the middle.*** I also think that's a much better bet, when it comes to boosting low-end wages, than "card check" legislation.
**On January 1 of this year, the California minimum wage increased to $7.50, which could also have affected the chain's decision. ...
***--If growth is really going on at the bottom but not the middle, it won't show up in Drum's "median" statistic, of course. (There will still be the same number of low-earners making under the median wage. They'll just be richer low-earners,) You'd want to look at something like the median wage in the bottom quartile (which seems to do only a little better than the median in this handy chart generator). ...1:42 A.M. link
Saturday, March 31, 2007
1. Lowry says "only one writer" on NR is currently supporting McCain, Ramesh Ponnuru. That's who I was talking about! It's Ponnuru who took it upon himself to explicate and defend NR's McCain editorial at length. I suspected the editorial in fact reflected his views. Was I wrong?