 So I'm gonna start with a video, right? Of a rational national, well, really irrational national. Irrational national talking about the minimum wage. And he calls it, this is the title of the video, Democrats Introduce Embarrassing Minimum Wage Bill. Why is it embarrassing? We'll find out. Ah, wrong button, there we go. Unmuted. I've introduced an inadequate and frankly embarrassing minimum wage. I agree. Inadequate and embarrassing. Yeah. Now, in this video, I'm going to break down what is in this bill, what has been passed already, what Joe Biden has done, and also where the minimum wage would be if it were tied to productivity. But before I get to all that, let me first start with what Joe Biden has done. So this is an executive order that he pushed a few days ago, signing an executive order to pass a $15 minimum wage for federal workers. Now this is to our news rights here. Justin House and Senate Democrats introduced legislation to raise the federal minimum wage from $725 to $15 by 2020. Doubling the minimum wage. Now there are a couple things here. Let me start with how Democrats already are coming to the table with the compromise. I wrote this on Twitter. This is essentially my notes here on this piece, so I'll just read this out. But I say here, putting aside how inadequate this is, if Democrats actually wanted to pass this, they wouldn't come to the table with the compromise. They'd come with $15 an hour by the summer and have Republicans water it down to $15 an hour by 2025. So note, the problem is that the bill introduces the minimum wage over a few years. And they want it out. And of course, if you're going to get it, why not negotiate with the Republicans? Because the Republicans are going to give in, right? Probably. So the Republicans are off of the 2025. And that way Democrats can look good, right? Because they try to fight for. So he's giving them a little bit of political recommendations on how to get a higher and better minimum wage noted. No equivocation about the fact that raising the minimum wage is a good, important, crucial thing to do. And of course, $15 is just the beginning. That should be coming to the table with 20 bucks an hour. So this is just how you negotiate. And I always wonder, why 20? How do we get to 20? Like, what's the calculation behind 20 and not 1950 or 2750? I mean, if raising the minimum wage is cost less, if raising the minimum wage doesn't hurt anybody, it only helps the people who use the minimum wage and are not earning much high minimum wage, then why, why not raise it to 50 or 100 or 500? All right, let's, let's keep going. I keep pressing the one button. I apologize. Come to the table with a watered down bill. Now part of the issue here is that this is the exact same bill that was passed in 2019 through the democratically controlled house. The Senate, of course, did not take it out, but they are simply reintroducing the same bill that was passed in the house two years ago to try and get it through with the now democratically controlled Senate with Kamala Harris being the tie breaking vote. Now the other issue, of course, is that they need 60 votes unless they pass it through budget reconciliation, which is something they will try and do if they don't get those 60 votes. This gets back to the issue. Of course, Democrats are not going to get discussion, negotiate and negotiate down to whatever your position is. Yeah, yeah. But to come to the table with this very conservative compromise already, notice $15 an hour is conservative and $15 an hour by 2025, four years, conservative, conservative. I mean, it's doubling the minimum wage. And by the way, if the minimum wage was, I wrote this down somewhere, let me just find this. The minimum wage had been adjusted from its highest rate ever in terms of to the PCE, which is the consumer expenditure deflator. So it's the most recognized inflation deflator that you want to use. The 725 today would be 920. 920. By the way, one of the tricks that economists play on all of us when they throw numbers at you, oh, wages haven't gone up or down or sideways or whatever, inflation adjusted, is the measure they use to adjust inflation. There are a lot of different measures you can use. And they'll give you different results because they're different measures. And of course, each side uses the measures that will give them the best outcome. Now the PCE is most economist accepted as the best measure, the most accurate measure. But no inflation measure is accurate. No inflation measure is good because every one of our inflations is different in terms of prices because your basket of goods is different than my basket of goods. So if your basket of goods have gone up in price faster than mine, you have more inflation. Price inflation I do. For example, if you consume primarily education and healthcare, prices have gone through the roof for you. If you primarily consume computers and food, prices have gone down dramatically. So inflation is a very tricky number. And it's one that economists use often to lie to you, to deceive you. So beware, whenever quoting inflation adjusted numbers, what inflation? What deflator are you using? What if I use the different deflator? How much does it change? But according to the PCE, 920 should be the minimum wage today, right, 920. And they want to raise it not to 920 from 725, they want to double it to $15 an hour. They want to completely utter free lunch. They've invented a free lunch. All right, let's listen to, it's inadequate, yeah, yeah, yeah, yeah, we know it's inadequate. Let's go. I want to get into some of his other arguments. Let's see what he's, what is he arguing here? Now this isn't the only issue with this bill. As if you look through it here, after the first four years, so once it raises to $15 an hour, it is then tied to the median hourly wage increase. So instead of tying it to inflation or tying it to productivity, which I would prefer, I'm going to show you later how much you would be making right now if it were tied to productivity, they're tying it to median hourly wage. So now why is this an issue? Well, looking at EPI.org here, again, I'll link to all this below the video. You can read through all the state of yourself. They write here, the 95th percentile continues to pull away from middle and low wage workers, cumulative change in real hourly wages of workers by a wage percentile, 1979 to 2019. Now notice here, first, all this is inflation adjusted and we don't know what the deflator is, but put that aside. Notice also that here he's separating out the 10th, 15th, and 95th percentiles. This is going to be important when we get to productivity. And he's showing here that real wages, again, what real means, what real means depends on what you use as the inflation adjusted. Real wages of low income workers have basically remained flat. They've grown 3.3 percent. The higher wage workers, it goes up by 63 percent. So people who earned a lot at the top 95th percentile in 1980 earned 63 percent more today. And the people in the 95th percentile, remember, it's not the same jobs. The people who are in the 95th percentile in 1980 are not the same people. Not the same jobs as the people in the jobs that today. But this is what economists do. They aggregate everything up, they mush it all together, and then they give you statistics as if it's meaningful. Now what is true though is it's likely that a lot of the jobs at the lower 10th percent of income are the same as they were 40 years ago. And it is likely that the kind of job that earned you a minimum wage or just above a minimum wage, that is the bottom 10 percent in 1980, is about the same kind of job as today. What kind of job would that be? I don't know, a fast food restaurant worker, a textile worker, the kind of manual labor that is relatively simple that does not require a lot of training, does not require a lot of skill, does not require any education. That kind of job is the bottom 10 percent. So why do wages go up over time? Why would you expect wages to be higher in the future than they are today? Well, because your productivity goes up in the future. How does productivity go up? Well, because you either get better skilled, you get better educated, or you have better machines, better robots, better computers, better equipment to work. So capital is being invested to make you more productive. So the way your productivity goes up is either through education, acquiring skills, training, all of these things, or capital investment. Now notice that where have we seen a lot of improvements that would lead to growth in productivity? We've seen that in the higher end jobs, jobs that relate to manufacturing, jobs that relate to services, but high-end services like programming. In fast food chains, flipping burgers, you haven't gotten more productive. So why should you get paid more? Let me say that again. You haven't gotten more productive. Do people today flip more burgers than they did 40 years ago? Does the cashier, the person at the cash register, collect more money, handle more people in line than he or she could 40 years ago? Probably not. I mean, maybe at the margin, wages have gone up 3.3% according to this, which I don't really trust, but let's assume these numbers are true. Whereas in any higher-skill job, your productivity because of technology has gone up significantly since 1980, and therefore your wages have gone up significantly since 1980. And again, this is not your wages. This is average wages of the top 95, which could be completely different people today, completely different jobs. What has happened over the last 40 years is we have dramatically automatized. We have dramatically increased the use of computers where in some jobs, those jobs are getting much more rewarded because their productivity has gone up. And McDonald's, it hasn't. But so linking it to the median is giving the minimum wage employees that increases based on the productivity of somebody else. The productivity of the median worker, which is significantly higher than the minimum wage worker. The fact is the minimum wage workers, how many people work in year 2, 3, 4, 5, 6 for a minimum wage? Almost zero, almost nobody. Minimum wage is something you pay somebody when they first start, when their productivity is the minimum wage. Less than a minimum wage, right? Sorry, just slightly more than the minimum wage. That's why you pay them the minimum wage. But as they get trained on the job, their productivity rises and their wages rise. But there's always a group of people, teenagers, ex-cons, ex-drug addicts, just people hot up, people who got through a lousy, horrific educational system. They don't know anything. They're not productive. They're always a group of people that enters at the minimum wage. And their minimum wage should only increase if their, not productivity, if their productivity has gone up. So I mean, the way they present it, the way they report statistics and the way they imply the statistics have meaning to what they're talking about, is just ignorant of economics in such a fundamental way. It really is quite shocking. All right, so if you look at this graph, the top increase here is from the 95th percentile. This right here is the median. So now at 15.1%, this is the median wage increase, the 50th percentile. Now, explaining this further, to put this growth and inequality in perspective, consider that the 10th percentile wage grew from 9.75 to 10.07 an hour. Over this 40-year period, wages for this group increased only 32 cents in real inflation-adjusted terms. How are they adjusting? The median wage grew... I bet you they're using the inflation adjuster that will give them the best outcome, not the one that most reflects actual inflation. It looks like I'm going to get, I'm barely going to get through any voodoo economics today, just because I've got so much to say, it turns out. All right. From 16.79 to 19.33, an increase of only $2.54. At the top, the 95th percentile wage grew from 41.15 to 67.14, an increase of 25.99 an hour. Why is that? This is the major difference here. You have a, over, by tying the increase after four years to the median wage, over the last 40 years, you've only seen an increase here of $2.54 in the median wage. Yeah. Now, tying it to productivity, as I'm going to show you, would make a hell of a lot more sense. Here's productivity, guys. Now, this... Wait, wait, wait. Now, remember, I did a whole show on this graph. I did a whole show on this graph. This graph is a manufactured lie. It is an unmitigated lie. If you don't remember my discussion about this graph, and I had a number of different points why this is complete distortion, go back and watch that show. Just put your own book, Productivity, and maybe Action Jackson can release that video again as an adjunct to this video. But this shows hourly competition flattening out and productivity going through the roof. This is complete and utter distortion. Now, I want to go back. Wait, I want to go back to, where's the graph? I want to say, I want to say, I want to go back to this graph a second, because I forgot to say something about this graph. One of the things that this graph does not recognize is what has grown since 1980 that is not captured on this graph that affects the compensation of workers. And this drives me nuts because, again, this is so dishonest of these people that I purposefully using these people. These leftists who don't know any economics have no conception of what it means to think economically, have no understanding of how economics works, and who pretend to throw graphs and numbers and pretend that they're conveying information all for some fantasy, some illusion that they live under, that basically there's a free lunch, and all driven really by the hatred of this group, the group at the top, right? What is missing from the graph? Well, it's quite a bit missing, but one of the important things that are missing are benefits. Benefits. Benefits have become a bigger and bigger and bigger and bigger part of compensation every decade. Health insurance, all the other coverages, all the other stuff that employers are required to provide to you. That whole laundry list, if you're an employer that you know that you have to provide your employees, but healthcare is certainly a big one. Now, as a percentage, as that is massive, all these are acquired by law. As a percentage, this is huge for low-income employees because the benefits might be 25% of their wages. They might be more than 25% of their wages. So as benefits increase, yes, employers have less and less money to give them cash in salary. So what you see is, you see that salary only go up 3.3%, but if you included benefits, their wages would be going up far, far higher, significantly higher as to start catching up to the median and to the high income people. And if you look at the high income people's increase, they have benefits there as well. But their benefits are much smaller percentage of their compensation. So if you add benefit to their compensation, yes, it will increase the amount of their wages, but not by much. Whereas for the low income, it would be huge. So if you wanted to fix this graph, just include benefits in it. That would be one way to fix it. The deflator is another way to fix it, but there are other ways and so on. Somebody's asking what the solution is? The solution is to have a zero minimum wage, but I'll get to that. I have a lot more sense. Again, this is a completely false graph. The hourly compensation, they use a different deflate on that than on productivity. So they're using two different deflators to maximize the difference. That's one thing. In hourly compensation, they're not including benefits. That's another thing. Who's hourly compensation are they using? Hourly compensation of whom? Is this the top people? Is this the bottom people? Is this the average? Is this the median? What is it? Is it of a particular worker as he goes through his life cycle? I mean, they are so dishonest. And the reason they have to be dishonest is a reason they have to be dishonest. The reason they have to be dishonest is because their ideas are so detached from reality. The solutions are so illogical from an economic perspective that they have to invent data. They have to lie through the teeth about the data in order to try to convince anybody because there's no logic. There's no economics. There's no reason behind what they're proposing. Now, he wants to link increases in the minimum wage to increases in productivity. You see right here. Now, what's the problem with that? Because wages should be linked to productivity. And I'm going to shift away from this because it pisses me off. What's the problem with that? The problem with it is wages are supposed to be linked to productivity. Your wages are supposed to be linked to your productivity. His wages are supposed to be linked to his productivity. When your productivity goes up, your wages should go up. And if they don't, you should change jobs. His wages should go up when his productivity goes up. But if my productivity goes up and your productivity doesn't go up, why should your wage go up? So if Rational National wants to link a specific individual's wage to that individual's increase in productivity, that's exactly how the market works. That's what happens in a proper marketplace, in a free market. But he wants to link unproductive people, people, minimal wage people, people who have never had a job before, people just entering the job market. He wants to link their wages to my productivity, to my productivity. Not to that person's productivity, but to mine. How does that make sense? Why should the fact that Stephanie has got a brand new computer and therefore can produce at a far, far higher rate than she used to and therefore is earning a lot more money than she used to? What does that have to do with a low wage, with a minimum wage employee? Why is his wage linked to Stephanie's productivity? His wage should be linked to his productivity. That's the other fallacy that is very prevalent in economics. And that is the aggregation fallacy or the collectivist fallacy. Economics is fundamentally about you and me. It's about individuals. How we produce, how we get compensated, how we consume the incentives we have, why we switch jobs, who becomes entrepreneurs, what entrepreneurs do. It's about individual action in a marketplace. That's what economics should study. But what economists today like to do is they like to aggregate all these individuals and just have numbers, the bottom quartile, the top quartile, the median, the average, who cares? What matters is your wage. What matters is your productivity. What matters is that firm's profitability, that firm's profit, whether you're consuming their product or their product. This is not, economics is not rocket science. It's not easy, particularly when you get into the real deep end. But this is just what rational, national, and what so many of the leftist economists do is just a con job. And this is Paul Krugman and this is Robert Reich and this is the whole slew of them, the whole slew of them. What we need today, what I call the new intellectual would be any man or woman who is willing to think. Meaning any man or woman who knows that man's life must be guided by reason, by the intellect, not by feelings, wishes, wins, or mystic revelations. Any man or woman who values his life and who does not want to give in to today's cult of despair, cynicism, and impotence, and does not intend to give up the world to the dark ages and to the role of the collectivist brought. All right. 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