Gibbons stumps for unions--again
Inside Liberty Watch Today - March 27, 2006

Jim Gibbons again made a play for the union vote during a luncheon last Tuesday where all five gubernatorial candidates answered questions from moderator Jon Ralston.

It's old news that the union representing correctional guards has endorsed Gibbons because the congressman favors unionizing all state workers, and that Gibbons' wife Dawn cast a vote in favor of that very thing a couple of legislative sessions ago.

Now Gibbons is championing the unions' favorite cause-raising the minimum wage. The uninformed might ask: why would unions care about raising the minimum wage, union members make much more than the minimum?

Substitution is a fact of life in economics. Low-skill, low-wage workers are substitutes for high-skill, high-wage workers. Labor competes against labor, not against management. And since low-skill workers compete against high-skill workers, minimum wage laws work against the lower-skilled, lower-paid worker in favor of the higher-paid workers.

Economist Walter Williams in his book, The State Against Blacks explains that if a fence can be erected by either using one skilled worker costing $38 per day, or three unskilled workers costing $13 each per day, a firm will use the skilled worker because the cost is less ($38 versus $39). Williams points out that skilled workers soon realize that if minimum wage laws are enacted to say $20 per day (for this example), then the skilled worker can then demand up to $60 per day without losing his job. "Thus the effect of the minimum wage is to price the high skilled worker's competition out of the market," Williams summarizes.

Thus the unions that represent highly-skilled workers are the major supporters of minimum wage laws and candidate Gibbons is all for reducing labor competition for his union boss buddies.

Murray Rothbard wrote in Making Economic Sense, "When we see that the most ardent advocates of the minimum wage law have been the AFL-CIO, and that the concrete effect of the minimum wage laws has been to cripple the low-wage competition of the marginal workers as against higher-wage workers with union seniority, the true motivation of the agitation for the minimum wage becomes apparent."

Of course Gibbons mumbled something during the luncheon about minimum wage workers being able to buy houses or some other such nonsense, but the idea that increasing the minimum wage helps low-wage workers is just plain felony stupid. The fact is, when government sets the price of anything above the market price, the demand for that good or service necessarily falls.

Tragically, the worst outcome of minimum wage laws is the deprivation of first-time job opportunities to young workers. When minimum wage laws are set above low-skilled workers' marginal productivity, employment is restricted. Thus teenagers are priced out of the labor market and lose their first and most critical chance to accumulate the human capital that would make them valuable to future employers.

"It is unfortunate and ironic that we encourage and subsidize expenditure on formal education while blocking the opportunity for individuals to 'buy' on-the-job training," writes economist Martin Feldstein.

Minimum wage laws have been displacing low-skilled and low-wage workers since the National Recovery Act (NRA) established minimum wages in 1933 for 515 classes of labor. Sadly, it's likely that the great mass of unwashed voters in Nevada will raise the minimum wage in Nevada a dollar above the federal minimum come election day, further knocking out the first rungs of the job ladder to success that is so important to young and low-skilled workers.

Democrats used to be the only politicians that would curry favor with the unions. But, these days it's hard to tell the difference between R's and D's. Las Vegas Sun reporter J. Patrick Coolican's reporting of the candidate luncheon is instructive: "The candidate who stood out was Sen. Bob Beers, R-Las Vegas, though not necessarily for his charm. His far-right politics distinguished him from a field of Republicans and Democrats all hoping to seem moderate. The result was a forum that at times featured two parties - the Beers party and the-everybody-else party."

Coolican's analysis is right on: there is essentially no difference between Gibbons, Gibson, Titus, or Hunt. Mr. Gibbons is giving Republican voters plenty of clues as to his ideology. If they send him to Carson City, they will only have themselves to blame.

Doug French, Liberty Watch Columnist


Beers unveiled first campaign ad
Beers first ad calls Jim Gibbons out on his opposition to the Tax and Spending Control (TASC) initiative. Just click on the link to view the commercial, if you like the commercial, please forward this message to each of you're friends. George Harris, Editor 

Link: Bob Beers first campaign ad