I love these predictably selective refrains from Oregon’s various political cabals, right and left alike, extolling “our voter-approved” laws when it’s something they favor.

They’re usually the same people who tend to exhibit utter disdain for direct democracy when they don’t like an outcome - like, say, with Measure 37 last year, which garnered a hell of a lot more support than the 2002 M25 minimum wage initiative, which squeaked by with 51 percent.

(I wonder if Mr. Nesbitt ever considers that “the voters just didn’t understand” the economic ramifications and consequences of forcing employers to pay more money to their least qualified employees - or in the case of waiters and waitresses, to people who're often already making more in tips alone than the poor wretches in the kitchen who actually prepare the food take home in their entire paychecks.)

It’s no secret of course that the righties do everything they can to undermine individual freedom and expressions of the people, too, like crying to the feds to try and stop assisted suicide or drug war reform initiatives.

The whole phenomena reveals the authoritarian tendencies of Oregon’s major political players, and shows how ineffective and two dimensional politics in the state would be without the initiative system as a rudimentary check on an otherwise corrupt system. Too bad we don’t have it for the nation as a whole.

Some of us aren't taking this minimum wage issue sitting down. Our local Sen. Whitsett was confronted in advance of this issue with a letter to the editor of our local paper stating it was poor practice to lower the wages of the people that just voted for you! Incredibly, Sen. Whitsett wrote back a letter to the Editor published 1/28/05 in which he claimed, "I have not introduced, co-sponsored or supported legislation that will reduce the Oregon Minimum wage." On February 7th we learned he was a co-sponsor of Senate Bills 451, 452, and 455 that will lower the minimum wage for waitresses (451), students (452), and everyone (455).

So, our local Democratic Central Committee followed up with another letter to the editor in which this lie to the people was revealed.

We have to hold their feet to the fire. If you can write to Blue Oregon, you can certainly write to the Oregonian or your local paper. Legislation is online at www.leg.state.or.us The Oregonian accepts emailed letters to the Editor.

Get out there and do something. Writing to Blue Oregon is nice and all, but really it is preaching to the choir!

Are you guys really defending the lack of a "tip credit" provision in Oregon's high minimum wage on the basis of "waitresses work hard"?

So do a lot of other people.

I had a couple jobs in the restaraunt and bar industry and I had the chance to see the effect of minimum wage increases on a small operation. Decent cooks were in higher demand than servers yet often made less (and you couldn't force servers to tip cooks because that was against the law too).

The cost structure usually resulted in management doing a couple of things: hiring fewer servers or bussers, using inferior products (processed cheese on the nachos and HRD in the wells)and/or raising prices.

End product was that quality of food and/or services suffers while prices rise.

I suppose that the consumer is just collateral damage in the battle for "economic justice" (or whatever you're calling it these days).

In other words:

Get used to spending more to receive less when you dine, because waitresses have a difficult job.

It simply amazes me how the republicans get away with all out war on the working class yet it is some of those same working class people that continue to vote to put that party in positions of power.

That anyone would support, defend or rationalize why it is that a working class person -often a single Mom trying to put food on the table for her kids- should subsidize a business owner with her/his hard earned tips (which we customers voluntarily give out of our own pocket to that person) reveals a contempt for the working class.

Frankly, those that support tip credits disgust me.

I say, thank God for great working class leaders like Tim Nesbitt. He is, in my opinion, one of the most outstanding leaders on working class issues alive in the United States today.

I consider myself enriched that I count Tim Nesbitt as one of my friends.

Randy,

Republicans get away with war on the working class because people are largely too lazy or stupid to find out how their vote is really impacting them. Sand but true. The GOP has also done a tremendous job in the PR department of convincing the working class that "tax cuts" and the like benefit them when in reality they hurt them...the old bait and switch.

The R's and their lapdogs in the thinktanks and media are effective in diffusing the class consciousness that would allow most people to understand why they should support a living wage for waiters [as well as janitors, farmworkers and others]. Instead, people see others income as coming from their own pockets, effectively adopting the world-view of the ownership class.

I think changing this paradigm is one of the big challenges for progressives.

Randy,

So the ability for a server and a restaurant owner to freely negotiate terms of employment is "subsidiz[ing] a business owner" in your book?

Well allow me to express some of my "disgust".

You butcher the meaning of "subsidize", heap an emotion-laden image of single mothers juxtaposed with evil business owners on a faulty premise, then demonize minimum wage critics as showing "contempt for the working class."

I have news for you Randy. The attempts to lump people into working class/proletariat and pit them against greedy aristocrats are not as persuasive as they used to be.

The minimum wage initiative just squeaked by in '02.

The "us vs them" concept evaporates as more folks attempt to move their way up the ladder and start their own businesses and find their path clogged with regulatory obstacles and illogical mandates.

It is sad (but telling) that you are generally considered the most "business friendly" Commissioner on the Council.

I'm with Todd. Nobody should be bleating about protecting the sanctity of the (narrowly) voter-approved minimum wage unless they first renounce any and all attempts to weaken M37.

Kari Chisholm: Todd, are you suggesting that if the service staff at restaurants made less money, then the kitchen staff would make more? It's different everywhere, of course, but at most restaurants, the wait staff 'tip out' the hostess, the busboys, the kitchen, etc.

You’re right, unless a "minimum tip-out” law has been enacted in Oregon that I’m not aware of, the transfer of money from servers to other staff is voluntary, and the waiter makes the final call as to who gets what, and how much - at least that’s the way it’s been at the restaurants where I’ve worked. Maybe a statutory change is warranted. I bet I can find some dishwashers and line cooks who’d vote for it if given the chance.

As far as a restaurant manager being able to pay individual staff a better share of their worth in the absence of the state minimum wage mandate...well, if she's got more money in her budget (money the government isn't telling her exactly how to spend), then yes, I am suggesting she might throw a little extra in the direction of employees she thinks deserve it (and a little less to those she judges do not, it is alas also true).

Or, it might mean she hires more employees - although I'm fully aware that unions and their fellow travellers reject the notion that there's any conceivable correlation or connection between a sky high minimum wage and a sky high rate of unemployment, both of which we have here in Oregon at present.

Hum. So, as server's wages rise, the quality of the food goes down...

Over the last 20 years I've been a happy and increasingly well-fed Portland restaurant-hopper. As minimum wages have risen, so has the quality and variety and sheer quantity of Portland restaurants, and the food they serve. Why, I can remember a time when one could count the number of really great eateries in this town on one hand. Now -- I've given up on the notion that I will be able to try them all, even just once.

Once we were a pale also-ran to SF or LA or NYC eating-out opps. These days we're a hopping, exciting restaurant scene. Much of that is thanks to a wave of local restaurateurs focused on high quality, local, and oft organic ingredients. From the neighborhood sandwich-and-fresh-roasted coffee cafe, to the most expensive once-a-year special treat place, the food here in Portland is fresher, wilder, more adventuresome and just plain better with every year, and every cost of living increase, that passes...

Every ingredient I can think of is now offered in more variety, and of higher quality than it was when server's wages were lower. Fresh-made local cheeses? Fingerling potatoes? Fresh, tender greens? Beef so tender and mouth-watering flavorful I shouldn't think about it for too long or I'll be tempted to leave my desk and work? Wine and beer to match?

PanchoPdx - you gotta get out more :-)

For the record, Todd Birch, detesting nationalist socialism as he does, is not now, nor has he ever been, a Republican. (More than anything he leans toward "Marxism": He'd never belong to a club that'd have him as a member.)

I think unemployment is far too complex an issue to draw a direct correlation to minimum wage levels.

If there are reforms that would provide more tip-sharing with other staff, then I'd welcome the discussion. But our nation's largest employment sector after the government is the restaurant industry. I would imagine that's mirrored here in Portland. It is sustained growth, albeit with high turnover, but not a market in danger of going under from employment costs. So I don't see a very compelling case on exempting restaurant employees from minimum wage laws.

In fact, as more Americans look to the service sector for jobs--one of the largest growth sectors I think--their ability to provide living wages will be an increasingly important issue.

Tom -- can a waiter plan to one day open their own restaurant?

There should be greater flexibility to flipflop from owner to laborer and laborer to owner. Which is a belief that there is no predefined life long class to which anyone belongs. The class is one of agreement on a common set of rules of the game.

The owner of a start up usually starve themselves, and their own family, and give up health insurance while they live out their dream of running their own business. In this context, mandated wages and health insurance coverage impose a barrier to entry into the market. If policy makers make some trade off or concession on behalf of entrenched existing businesses then the market gets stale. Such a stale climate works to the benefit of franchise outfits over mom and pops.

A tip that goes exclusively to staff works to the benefit of the owner. It makes staff attend to the needs of the customer and thus results in more repeat business. I would rather this remain a qualitative assessment. If the owner wants to place a tip jar with “owner tips” taped onto the empty jug, in lieu of focusing on getting repeat business, then they are in the wrong business. Customers go out for service not prices. If price were the issue they would stay home.

I oppose bad service restaurants, thus I oppose the fly-by-night and non-customer-oriented restaurant owners.

Ron,

I've got nothing against a waiter opening arestaurant. It would be nice if he remembered his roots and didn't proceed to f-over his employees the way he was f'd-over earlier.

I am self-empolyed, but I realize my common interests with peple who work for a wage. But I'm a realist. I expect most restaurant owners to be exploitive a-holes, and my expectations seem verified by the restaurant association activities.

Most people who eat in restaurants are wage earners. they are the folks I believe should feel solidarity with waiters.

Anne,

I probably get out more often than you think. FWIW, I've probably dined in about half of the restaurants in the latest WW top 100 list.

You've concluded that the Portland's historically good restaurant scene is due to a generally high minimum wage over the last decade, while I believe it has prospered in spite of it and is now reaching a tipping point (no pun intended).

We can continue to trade anecdotal observations, I suppose. Eventually it will all come out in the wash (unless the unions find a way to blame M5 or M37 for it).

Some years ago, I worked in a restaurant during a minimum wage hike and I saw negative results on service, prices and food quality during the adjustment. I was only there for six months, so maybe the effects were only temporary there, but I learned a little bit about the challenges involved in running a restaurant.

I learned that restaurant owners often work very hard at significant financial risk. If their bottom line suffers for too long they'll get out or take their show somewhere else. They aren't running charities.

As Ron alluded earlier, it's the Olive Gardens and Applebees that benefit most from the barriers to entry.

The increasing minimum wage is only one factor driving the increased costs of dining and the failure of some (otherwise great) restaurants. Lots of other things (price of ingredients, customers' disposable income, shifting trends, cost of leasing space, ability to retain good cooks/managers, etc) also factor in.

I'm not suggesting that increasing the minimum wage is the death knell for certain restaurants (although it's usually a factor), but that the current increase (2nd highest in the country) couldn't have come at a worse time (with staggering unemployment) for the restaurant industry. Customers have less disposble income while the price of dining out goes up.

Is it just me, or has anybody else noticed that happy hour prices seem higher (and offerings less generous) lately?

Hasn't anyone else felt mildly disappointed in the last year after dropping $150 on a dinner for two?

Less bang for my buck, means that I'm more likely to dine in next year.

Things might seem different in your circle Anne, but I doubt that I'm the only one who senses this.

Pancho, how much did the incresesed minimum wage add to your $150 tab? Not much. How then can it be blamed for your disappointment.

I eat in restaurants quite a bit. I think service is generally good. I don't want to feel like I am exploiting my waitress so I can have a low effort meal. Has anyone here lived on minimum wage recently, especially with out accessing government aid programs? It's damn tough. How can you expect cheerful service from someone struggling to feed and shelter herself [let alone any dependents]?

Of course, I imagine some masters expected their slaves to smile as they worked.

Tom,

I don't know, perhaps 5-10% of the total tab. A higher minimum wage increases the costs of all sorts of things beyond paying servers, bussers and valets (not to mention inflating the base calculation of a presumed 20% tip for decent service).

It's funny you bring up the master/slave metaphor. The insitution of slavery (supported by Democrats back in the day) required the force of government to restrict the natural freedom of individuals bargain for the value of their services in the marketplace. Modern democrats still see no problem with corrupting market decisions that could be left to free individuals.

Nobody is forced to be a server, you don't have to work in a restaurant if you don't want to, but restaurant owners have no choice whatsoever about paying the minimum wage.

As you sneer at selfish restauranteurs, you might want to reflect on just who is curtainling the freedoms of whom nowadays.

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Kari,

Shouldn't a person's wage accurately reflect the value of their work?

If so, what gives you the keen insight to determine a person's minimum value in the marketplace better than the marketplace itself?

PS - I hope you aren't suggesting that minimum wage policies are responsible for making the US the richest country in the world?

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Pat,

In the same spirit, I'll leave you with a quote pertinent to progressive philosophies (with respect to minimum wage policies, at least):

"Exitus acta probat"

(translated)

The ends justify the means.

Imagine if a grocery checkout clerk can be characterized as a service employee just like a waiter. How long before the owner sets up a tip jar on the counter and says “have pity on the clerk” for they have a lower minimum wage than their peers [blah and blah]. . ?

The issue is not waitresses and waiters it is all workers that have face to face contact with customers. Suppose Portland's good tipping attitude spread to the bank clerk, anyone with face to face contact. The economist in me recognizes that if you reward behavior, here enabling lower wages under particular circumstances, then the employers will adapt to it. In order to prove their point they could demand that waiters reveal their tips to the boss just to prove the point; even if it is to turn over a cut to the boss. Try tipping a gas pumper at Albertson's - - - it is against the company rules . . . would Albertson's pay less wages while abandoning the prohibition on accepting tips?

The principal of distinguishing between minimum wage earners based on tipping opportunity is more important than the minor COLA adjustment in this particular instance. It could extend all the way toward charging the worker a stage fee even if the worker is “assigned” a bad shift and gets only 15 bucks for 6 to 8 hours of demeaning work.

Having said that, the owners themselves are no less vulnerable to the whims of customers than are the tippable employees; unless one can come up with a gimmick like state mandated car insurance among a small group of oligopolists etc. The second car discount ended with the mandate for car-specific insurance, . . wonder why?

Kari needs to go run a business someday, perhaps a flower shop, and then contemplate the wisdom of believing that the customer owes a duty to buy from her. A minimum wage, if applied uniformily and treats all businesses alike, keeps the employers battling with one another on a level playing field. The swiss cheese style of application among different businesses is no longer a public policy question but is designed to give one employer, or group of employers, an advantage over another via the political process.

The courts, by the way, authorize swiss cheese by allowing the legislature to make class distinctions in the economic context as long as the government can dream up any conceivable rational explanation at time of any court action to challenge the distinctions drawn. The distinction here is the tips. I would expand the inquiry to all tipping opportunities, that is face to face contact with customers, regardless of whether or not tips are exchanged.

Do we want our bar owners barking at their staff to reveal all their tips just so the owners can then appease the labor division that the workers did indeed receive tips? I bet the tax man is licking his chops on this one, for sure . . . his army of tax collectors would get a boost at the expense of the wages of the poor waitresses.

I'm happy to see such a lively debate on whether we should have a reduced wage for tipped workers.

Some clarity on the question of whether the increase of the minimum wage hurt unemployment: There is absolutely no evidence of that at all. None. Zip. Nada. I'm not kidding.

In fact, an October 2004 study in Oregon Labor Trends published by the Employment Department has tracked job growth in all employment sectors since June 2003 - right after Measure 25 passed. According to the study, low-wage jobs in Oregon are growing faster than other wage levels. In fact, low-wage jobs grew by 3% while the other sectors grew by only 2%.

All a reduced wage for tipped workers does is put money in the pocket of the restaurant owner. There is no evidence that in the states that have tip credit, the back of the house workers make more money. If there was, the Restaurant Association would be waving the reports in our faces.

Here's the reality: People that have worked in other states with a tip credit report that not only do the owners keep the extra money, individual tip earnings are reduced because wait staff can be hired at bargain prices - encouraging restaurants to overstaff.

The reduced wage also pretends that every single minute a tipped employee is earning tips. Anyone who has worked in a restaurant knows how much side work there is and that there is slow time. That’s time when tipped workers would be getting ripped off if Oregon had a tip credit.

To argue that it cuts into the profits of business owners misses the point entirely. As a society and a state we set minimum standards. For example, we have a 40-hour work week and we don't let children work in sweat shops.

And in Oregon we believe that that no one who works full time should work in poverty. That's what the voters decided and special interests like the Oregon Restaurant Association shouldn't be trying to mess with it.

I used flower shop as an illustration of a small business where the owner is likely to be the worker too, with even a zero or negative salary. If I had a greenhouse full of flowers, rather than tomatoes, would that imply anything about gender, or gender preferences? I do not subscribe to any theories that correlate artistic talent and some gender this or that. Lest I would have to find the artistic use of the English language is somehow indicative of something else in all writing today and in ancient times.

If someone were to take offense I would rather it be to my implication, in my last sentence in the preceding post, that a waitress might be free to escape the reach of the tax man on their unreported tips. Is that a loophole in the enforcement of our regressive tax law that needs closing?

Kari – if you are both an owner and employee, and understand first hand the concept of consumer sovereignty, how then can you phrase wages as something that one deserves or does not deserve? Let me flip it over again . . does a homeowner “deserve” to have the taxpayer preserve the value of their home by interfering in the marketplace with interest rate tweaks and such; effectively making homes too expensive for the poor? M5 includes a provision prohibiting the decrease in the tax appraised value of homes, for purposes of taxation. This distorts the tax man's view of a freewheeling home market that might go down half the time rather than always going up. Artificial markets create disequilibriums.

If anything, the waitress does “deserve” not to have to suffer the consequences of political favoritism given to asset holders in maintaining a perpetual bubble, not through affordable housing programs via rent assistance but by removal of the price supports on property they cannot now afford due to the favoritism. The forces that keep home prices high do not stem from capitalism but rather from political chicanery, on behalf of mortgage lenders.

If Russel wants to enter the fray . . I suggest reading some Veblen to see some economic descriptions that have historical parallels.

The Lochner era lives on, but through other devices today, not withstanding the illusions of wealth by some. How would you describe a situation where a poor person's SS payment can be used as an offset against their lod student loan balance that they never made enough money to cover? They are a government slave if you ask me. Have they freely negotiated away their right to relief via bankruptcy merely because they did not borrow as an incorporated entity rather than as an individual? The lender can accomplish their guarantee via the government intervention that they could never accomplish directly today through free negotiation.

So Kari,

Exactly which law required Henry Ford to offer his employees better wages?

I did waited a lot of tables in New Jersey, where we had a very low base rate. The argument was that one made one's money on tips. And so it was. It would have been nice to get more money. How could it not be? But I made more money waiting tables than I would have at many other jobs, and the hours made sense.

I guess it amounted to a living wage, since I didn't die.

But I have to say, I did have other options, so I don't see how it wasn't a free negotiation with my employer. I could have left at any time. The automatic villification of employer I see here strikes me as a kind of moral hysteria.

Nor do I understand how one arbitrarily assigns value to any given occupation outside what the market demands. No doubt a robust economy can tolerate some amount of that falsification of value, but it's bound to cause mischief.

I'd love to hear some elaboration on how the Ford example proves the economic correctness of the minimum wage. Surely Ford's attitude toward pricing the commodity is at least as important. And if Ford and other manufacturers paid workers artificially high wages, it would ultimately cost them in a free market, and probably very quickly.

Wow. Get a life for a few days and this place explodes...

Many an interesting comment, though I found PanchoPdx's snarky presumption as to my presumed abundant wealth really the funniest.

Actually, people who shop with coupons CAN be foodies, too! (Well, I can't take the credit here, my hubby Frank is the coupon master. They bow down to him at Safeway. He should go into consulting on this... In the meantime we feed an army of teenage boys at all hours of the day and night thanks to his smart shopping. Hey -- you know anyone else who's actually gotten cash back for buying a gallon of milk? :-))

As for the rest of it, there is no free market. That's an ideological construct, closer to "virgin birth" than anything else.

Anne,

How would you describe the difference between an economy in which prices are determined by the government and prices determined predominantly by market forces? Perhaps you could further enlighten us as to the hilarious folly of believing in something like a free market.

Another question: where does value come from? What makes a thing valuable? (Smart ass preemption: that's one question phrased two ways.)

Anthony -- define "predominantly". Define "value" :-)

"Predominantly" means mostly, Anne. "Value" means the worth of something.

Show us there's something more than flippant bluffing behind your remarks.

Was it a "free" market that led to a stock market crash in 1929? Or was that the minimum wage that did that? Is it me, or is it government regulation that attempts to protect us from such catstrophic failures of the market?

It seems that what we're arguing about is how much the government ought to participate in the market.

"Nor do I understand how one arbitrarily assigns value to any given occupation outside what the market demands. No doubt a robust economy can tolerate some amount of that falsification of value, but it's bound to cause mischief."

I think arbitrarily isn't quite the word you're describing. Take that word out and the argument makes a bit more sense. I think when you ask what the market demands, you ought to define what you mean a bit more specifically.

I think plenty people in the market would love to have more discretionary money in the hands of consumers. And employers, if driven by their own market interests, would like to pay you as little as they can to make a profit they see as acceptable. What's missing is the human element that employers aren't always focused on the bottom line. And employees aren't always free to pick up and leave.

Many are arguing that the cost of doing business for restaurant employers--and I suppose for other small employers--is too much to bear with a minimum wage in place. Yet, for all the volatility of the restaurant business nationally, and the fact that restaurants have a range of choices in responding to local employment conditions, and the fact they are growing locally at a rate faster than the national average doesn't offer a compelling reason to exempt them or anyone from minimum wage laws.

The argument comes down to what level of regulation the government should have on the market. And for me, the market is more than capital flowing, it sustains us. I believe that it should do so taking into account that we are human, not pieces of money, and that a relative level of dignity and stability are integral to our (and its) success.

Jesse, the author of The Great Crash – the book – has also written about his experience trying to set price controls during WWII. The cause of crashes is not mandated minimum wages but comes from excess debt; which today is exacerbated by ever more creative derivatives upon debt. A bit of runaway wage inflation would be just what the doctor would order to restore a more natural equilibrium between debt and the ability to pay on the debt. It is a part of the remedy, not the cause.

The proposed legislation to selectively lower the minimum wage does not prohibit the payment of greater than the minimum wage. What it does offer is safety in numbers for the Oregon Restaurant Association members.

Imagine if Kari built a site that listed the offending employers availing themselves of the lower wages and thus the proper target of a boycott and protests. Should I think that a boycott and perhaps even a strike, because it might harm the workers at a particular restaurant, be an invalid weapon? Of course not.

Why not isolate any member of the Association that is using its statewide influence, and the cover of numbers and policy blah blah, and then STIKE and BOYCOTT them preemptively, immediately. There are quite a wide range of rules about when and whom may lawfully strike and boycott. The effort to isolate folks that get tips opens a rather large door of opportunity for a labor protest and BOYCOTT. So, the question is, what business is owned or partially owned by the President of the ORA. It seems a good a target as any, don't you think? Why wait until the law passes? There is no need whatsoever to wait, because the ORA has opened the labor negotiations already. Imagine if the ORA President tried to get a court order, or change the law, to make a statewide boycott or strike unlawful, because it is too selective. (You could, or should, be able to hear the judge laughing already.) Demand double the standard minimum wage for the employees.

[This is not about the OEA/lottery dispute or the OEA's effort to get more tax dollars, is it? From the tips of waitresses? Would the OEA support the strike/boycott even if it would hurt their source of revenue from the waitresses tips? Could the waitresses compete with the OEA for a larger cut of the lottery revenue from establishments hosting the state's lottery games via a statewide strike? That does seem to be the preferred bargaining unit today; statewide class distinctions.]

Suggested targets anyone? Is today as good a day as any to figuratively poke someone in the eye?

Anne,

Didn't mean to suggest that you are wealthy...not that it's a bad thing.

Just pointing out the obvious, we travel in different circles with different perspectives.

Jesse,

I'm not taking issue with government regulation per se. There are areas of common concern where there exist no incentives to get important work done. That's when it makes sense for government to step in and regulate.

Of course I also agree that employees should always be treated not merely as means to an end but as ends in themselves.

In the case of employement, both sides have incentives and disincentives.

What I mean by "arbitrarily" is assigning worth based on what you fancy something should be worth. Perhaps what I said was inexact. What I mean is however non-arbitrary (i.e., conditioned by set criteria) your procedure may be for assigning value, it is still disconnected from the actual value of a thing -- including labor for a given task -- which is driven by demand.

One can regulate markets in various ways, but it seems that one must always keep real value in sight. I'm no student of economics, but I can't understand how departing from that real value can fail to have proportionate costs.

For example, suppose the demand for a certain task were to decline. Those skilled at that task would have likely have a chance to continue earning something longer if wages for the task weren't artificially inflated. Certainly the worker skilled in that task would have a threshold beneath which it would no longer be gainful for him to work at that task, but it may be that his threshold is considerably lower than the artificially inflated wage. In other words, both he and his employer might agree that it was worthwhile to continue the relationship below the artificially set wage, but that option is taken away.

Ok Anthony. I'd argue that the free market exists, predominantly, at garage sales or swap meets. But even there you have distortion resulting from such things as the price of gas (the way most people get to garage sales is by car).

Can we agree the market for gas is not "predominantly" a free market?

I agree our desires and appetites do move the market in some areas, (the explosion of good restaurants serving high-quality local foodstuffs is an example) but not all such market movements are "predominantly" free. Ref the Pharmaceutical industry and their little purple pills...

My point was that all markets are manipulated and regulated to some extent. One chooses what one will tolerate/support based on one's value system. The Reagan Republican likes the notion that "a rising tide lifts all boats." That's 'cause they're pretty sure they've gated off all the beaches and the tide, and the boats, belong only to them...

When you start talking about using tax structures or regulatory means to lift the row-boats of poorer folks, well, all of a sudden the line changes. Now there is no tide, or the tide flows backward, or the tide's going to eat the world...

So yes. Value. I value a regulatory structure that reflects/supports/promotes my desire for a society where no one who works hard and productively should go hungry or without access to health care. Nor should their children.

I realize that's not what you meant by "value". So, the waitress - ok. I'd submit that we pay her based on how we value her services, that's why we passed the minimum wage law. It is the mechanism and expression of this society's cumulative efforts to place "value" on less-well paid work and less economically powerful citizens. I'd submit that the waitress is paid closer to how society values her work, than is the average ad agency account executive. And that in fact she provides society with higher "value-added" returns than many a higher-paid person does.

And, I haven't even gotten to childcare workers or the folks taking care of our poor elderly in nursing homes. I submit they provide our society more "value" than many a higher-paid executive running his corporation into the ground and collecting big bonuses as a reward... The fact we choose to pay them less is not about value, or some non-existent free market, but about power and deeply-rooted societal roles.

Anne,

You wrote: "The fact we choose to pay them less is not about value, or some non-existent free market, but about power and deeply-rooted societal roles."

Do you really believe this? If so, I guess my question would be what would a market look like if it weren't "manipulated and regulated to some extent"?

Your concern for your fellow man is admirable, but how much you honor any given honest occupation has nothing to do with its monetary value, i.e., what anyone is willing to exchange for it.

The average ad exec, for example, has the potential to influence a business' course significantly. Successful ad agencies, moreover, are in short supply compared to unskilled workers. It doesn't take a lot of skill to wait tables, so lots of people are available for that kind of work, as compared to civil engineering, management consulting or surgery.

In some sense a child care worker is more valuable than the best athlete in the world, because childcare is necessary and entertainment is dispensable. But the star athelete has vastly more monetary value as measured by supply and demand.

Also, one might fairly say that a dishwasher is more valuable than a CEO who runs a company into the ground. But of course no one hires that (presumably highly qualified) CEO expecting he'll destroy the company. But in a free economy there is risk, and the buyer must beware. On the other hand, the value of a dishwasher is monetarily insignificant compared to the value of a successful CEO.

Maybe it would be helpful to think of someone in an obsolete occupation. Say a person had expertise in the rendering of whale oil. In the not too distant past that was worth something, since society depended on whale oil for lighting and other purposes. But when petroleum use became widespread the demand for such expertise quickly declined. Compensation dropped accordingly until no one was willing to hire anybody for the job. This of course had nothing to do with how whale oil renderers were held in esteem as persons, but how much demand there was for the skill and how many people there were who could provide it.

I value the right to bargain, the right of employees to bargain collectively so as to balance out the imbalance of the bargaining parties. The ORA seeks to exacerbate imbalance through collective action, by the employers, in the legislature.

Anthony, would it be OK to strike and boycott “Cafe Today” in perpetuity, demanding that the staff get double the standard minimum wage, even if it ultimately drives it's owner out of business?

The recent replacement to the vacant seat in the legislature owns “Cafe Today” that has a retail outlet in the basement of the Capital Building. Could I wear a “Double Pay at Cafe Today” tee-shirt in the basement or would I have to prance back and forth out on the “public” sidewalk out front, way beyond the front steps? Where would you draw the line, based on the value you place on the tools of economic coercion so as to derive a value of the labor in question?

I'm not sure what your point is, Ron.

What exactly do you mean by "the value [I] place on the tools of economic coercion"?

My interest here has been recognizing what value is and what the consequences might be of failing to appreciate it.

People are free to advocate whatever economic positions they like. Consumers can refuse to buy something if they want.

Frank wrote:

"There is an over-abundance of potential 'star athletes.' What sets their price tag is not 'supply and demand' economics but rather how much surplus value the chosen few can create for their owners. Or do you really think the number of guys who can excel at basketball so limited?"

I just take this as another example of inapprehension of a basic concept of economy or parsimony, without which it's impossible to reason about monetary economics. The supply of basketball players is finite and consists of people at all different levels. Whatever "surplus value" any star might have is heavily influenced by both individual and team performance. All the teams strive to have the best players. It's not as if there's just some mass of "potenial star athletes"; the longer competition occurs, the more the level is driven up. The top rung will contain the best players. I'm don't happen to be a big fan of basketball, but every other sport I've ever been interested in displayed a constant striving to acquire and keep the best starting team. The top is the top, and there is always some smaller cohort of standouts. The same is true of other fields of endeavor that have economic significance, from salespeople to surgeons.

There is no correct or incorrect value. Period. There is however a process for parties to reach agreement.

A new sofa at a garage sale can go for 1 buck; and an old one for a thousand bucks. The value remains subjective to the parties making the bargain.

An objective economist could gather and tabulate data from a bunch of transactions and then surmise that there is sort of a generally recognized value for [whatever], but it does not work the other way around except in politics.

You could be totally right that the tips make a waitress rich and others could be equally right that waitresses are ridiculously underpaid, inclusive of the tips. Both are subjective. Arguing about the subjective worth or value of a person is, however, wholly unnecessary and irrelevant for resolution of the matter.

The process of reaching an agreement can be skewed to favor one party or another party. The happy and boring meeting place where everyone should come to agreement is on a balanced process. All too often our politicians like to replace process with a declaration of a winner, and thus do away with process entirely. The minimum wage is nothing more than an arbitrary number that is neither right nor wrong, it just is, and for a time it seems to settle down any disagreements. The employers get the benefit of labor harmony.

If the state law did not provide for a minimum wage it might alternatively allow for the creation of a statewide bargaining unit of all waitresses and waiters (or all workers that could potentially get 30 dollars in tips per month), rather than only comprised of workers for one particular employer. Can every single person who gets tips call for a general strike, statewide, and seek protection via labor laws from being fired for such collective action? That is the appropriate parallel to the collective bargaining position by the ORA in the legislature.

A vigorous labor advocate would be trying to cram an amendment into the bill to protect workers from being fired for participation in statewide collective action by all persons subject to the wage reduction such that they could have an opportunity to bargain, as a group, for a better deal than just the minimum wage. The ORA is collectively bargaining, in a one sided bargaining table, but it is in the wrong arena for setting that value.

It is generally unlawful to interfere with someone's business, that is to engage in economic coercion, unless it is for a lawful purpose. Refusal to show up for work, so as to participate in a general strike, would leave many strikers without a job the following day; particularly any organizers. If the ORA had to choose between recognizing a statewide bargaining unit, inclusive of employee protections for strike activity, versus the measly gains they hope to get from selectively culling out waitresses for special treatment they would prefer to abandon their proposal and pretend it never happened.

The value of being able to fire someone for unlawful statewide general strike activity is rather high for employers. Can you or I place a fixed number on that value? Nope. It is certainly higher than the savings the members of the ORA hope to gain through wage reduction for waitresses.

If the ORA wants a statewide bargaining unit I say that is just fine, so long as that also means full protections for waitress strikers in a statewide action. I would take that bargain in a heart beat. I would take that over the minimum wage too for a comparable statewide bargaining unit.

The non-public-employee union representatives are perhaps too busy playing kissy-face with the NEA and OEA so as to protect their capitalist investments from the risk of loss that they cannot see straight.

Come on Tim and tell me that Ted will support labor and veto the waitress bill. Are you just putting up a mock fight for a good little show? What bargain did you make?

Frank: "MONETARY economics? Sorry, I inapprended this to be about PLANETARY economics. My mistake..."

My apologies, Frank. You're clearly cogitating about a different realm.

Anthony – the charts in “price theory” economics courses do not have a place to input a legislatively determined, and thus arbitrary, determination of value. To include arbitrary data points from the legislature would convert economic analysis into a self reinforcing, and false, measure of value. Neither the CPI nor the present minimum wage in Oregon has anything to do with the value of waitresses.

I hope I had not gotten too wordy for you, or Frank, and will start back with the basics.

From an economists view, but explained in terms that a talk show listener might understand. It is called feedback. Please turn off your radio when calling! The same goes for using the standard minimum wage as a reference point for adjusting, legislatively, the minimum wages for waitresses; or the CPI for anything. All I hear is noise and it has all the likelihood of generating a discernible and meaningful pattern as does SETI.

The static is just too high for this economist to have any useful data points for analysis of value.

(I hope Anne gets a chuckle out of this one.)

Anthony, if you want a description of what a perfect free market would look like, I suggest any old econ 101 text.

I love the dismal science, (I got my undergrad in it) and am happy to argue it -- but, something a little fresher, please?

Yes of course I believe that our wage structure is more strongly influenced by power and ancient societal roles than any other single factor. That's why woman earn less than men, even within the same occupations. It's why African-Americans earn less, achieve less, spend more time behind bars. It's why the schools in "poor" areas are in such abysmal shape compared to their more economically powerful cross-town peers.

It’s why “objective economists” can predict, using statistical models that have proved themselves over time, a baby’s likely future based on the economic status of his or her parent(s).

For goodness sake, take off your rose-colored glasses for a minute. You asked about the high paid execs, Frank' point was well taken, but I'd add there is also the guy who is hired because his daddy knows the owner, because he went to Harvard with him (sonny boy gets in on a "legacy" pass, because he wouldn't qualify on his own merits...) It doesn't matter if he bankrupts the company, Daddy's friends will step up with another job for him.

Then there are those who get moved up because they get invited huntin' or fishin' with the right person, or someone just finds them charming. There is a high percentage of dross to gold in upper management. Much higher than in waitressing. It's easier to hide your incompetence in one field, than in the other...

The funniest indictment of that, imo, was the fate of the managers profiled in one of those gawd-awful self-help management books, I can't remember which one it was, someone help me here -- was it "habits of successful managers"? It was one of the first blockbusters of this kind and created quite a stir in its day. Management workshops by the score (I remember going to a few, urp.).

An inquiring journalist went back 10 years later to see how the great examples had progressed, most of them had run their companies into the ground within just a few years of being profiled for the book...

Ron, you wrote>> An objective economist could gather and tabulate data from a bunch of transactions and then surmise that there is sort of a generally recognized value for [whatever], but it does not work the other way around except in politics.<<<<

"an objective economist" -- hee hee. What, vs the "other kind?"

But to the larger issue, economics is a member of the esteemed social sciences. And there is a reason for that. Much as folks would like to pretend otherwise, it is not a hard science undergirded by counting cell replications in a petri dish.

It's the study of how, in a world of infinete wants, we distribute finite resources. There's no way, in the real world, that doesn't take you head-over-heals straight into politics.

Take your couch example. Your "objective" economist does a study on the price of used couches. He finds the prices vary widely, and without regard to the item's place on his quality-matrix -- based on where and when they are sold, who sold it, and who bought it. He can then tell that the item is "valued" somewhere between $0 -- "just take it away please, the garage sale is over" -- and $475.00 -- "so nice of you to stop by our lovely antique shop, don't you just love this sofa? Look at the patina on that gorgeous old crushed velvet, think of the history... sigh.."

From this study he can draw some pretty specific lessons -- he can, for instance, tell you that in demographic area A folks don't earn enough to pay anything for a couch, and that he finds a statistical correlation to the continueing failures of most businesses in the area as well as the decline in municipal services, school functioning, and the increase in infant mortality rates, teen pregnancy’s, drug use, gang activity, etc. In demographic Area B folks earn much more, they buy used couches at antique stores, their schools have all the latest technologies and their kids go to college. Polititians, social agencies and grad students looking for projects will, or won't, take it from there.

Anne -- The other kind is "normative" . . . or considering what ought to be (with a clean slate) rather than what is. (from Comparative Economic Systems . . )

My most loved set of undergrad classes dealt with Economics of Developing Countries. It is filled with reading and study that is heavily weighted toward qualitative analysis over numbers. My perspective was certainly not that of a rich person trying to justify an economic system but toward critiquing things as they are, or were, in the midst of civil wars over the debates on the economic matters in question.

I thought I had taken your garage sale issue (using the couch as a proxy) to restate and agree with your belief that the free market really does not exist. It is all politics.

When I question PERS it is precisely because I look upon anyone that seeks to immunize themselves from the risk of loss on their private investments as common thieves. I don't care whether it is Intel or a person who's investment capital was derived from their prior salary as a teacher or software programmer, it makes no difference. Public employee pensions systems, being tied to stocks (Oregon was the first), have distorted the description of what a union is today and it was done by political design to disarm them as a force that works genuinely on behalf of all labor. And it has worked beautifully. The guy at the AG's office opposing me in late 2003 on the state PERS bonds expressed puzzlement at my argument that the state's taxing power was being used to prop up stocks. He did not get it then, he probably still does not get, nor does our state treasurer get it, perhaps they never will (idiots).

I do not accept the premise that White Anglo-Saxon Immigrants, whether they be in Argentina, Chile or Oregon USA are immune from being the subjects of wealth extraction by forces outside our geographic territory (with some benefits skimmed off for a few locals). Please do not let internal and local race politics interfere with the bigger picture.

The Republicans are saying, look, most of the rest of the states have already bashed waitresses, we should too. That is not economics, that is poppy cock.

My point on a statewide bargaining unit faces the obstacle of national rules enforced by the NLRB. The Republicans know that they can count on the aid of national interests to halt any collective action on behalf of labor. It strikes me as absurd that the state Republicans can use collective action in the state legislature that is only precariously available at the state level via minimum wages. The resort to minimum wages, at the state level, is a lesser valued thing than would be a right to have a statewide general strike, without the specter of the federal folks effectively halting it by letting employers fire away at will.

Ted could easily announce an intention to veto the waitress bashing bill. This should be a no brainer, i.e., if Ted actually even acknowledges labor's right to fair play. My lengthy posts here are perhaps reflective of my hunt for the answer as to why Ted has not ended the waitress bashing bill already. Have you got an explanation?

I might be a tad bit more radical, radical left (in my critique), than the good folks here might be able to stomach. Debt on houses and so-called Economic Development projects look all too much like a World Bank sponsored big-dam project for my Economic Development taste. They drown out local business and replace it with debt that is paid for by taxes, and interest payments, on the rich and poor locals alike. The good folks at ECONorthwest are like the hokey pokey locals justifying extraction by cranking out rationalizations for local politicians who do not have the slightest clue what economic development means.

Frank -- Consumer sovereignty, where the consumer chooses, is elementary to liberty and economic analysis and is the direct opposite to an economic system that dictates the selection that is available and rations resources via party loyalty.

The dollar drop is supposed to trigger the J curve stuff, you know, lower dollar lower price and increased quantity of sales resulting in greater revenue . . . (but like with the Chinese 150 years ago we might not have anything that they want to buy. )

I still want to know why Ted has not yet announced a threat of a veto on the waitress bashing bill.

Ron writes>>>I still want to know why Ted has not yet announced a threat of a veto on the waitress bashing bill.<<<

Why, you mean, has he been such a lack-luster disappointment in office????

Re the couch thing, I did misunderstand your example, Ron. I thought your were saying econ has nothing to do with politics.

re the j-curve - as both Frank and Ron pointed out we've got to have something to sell that folks want to buy -- maybe we can sell ourselves as darn good third-world piece workers? When, after all, was the last time you bought new furniture you didn't have to put together, yourself?

Anyway, I wouldn't hang my hat on that theory working out just the way I'd like it to, though some who have must be getting more and more nervous as it doesn't happen. That 'ol balance of payments thingy? Wasn't it supposed to be getting better, back last year, or the year before that? And, who wants to place a bet on whether/when the foreign holders of our debt will blink?

In the meantime our dollars buy less and we have fewer economic choices and less economic clout. Tough nut for an American. Particularly those of us who like to be able to travel in other countries...

Though it's interesting to see how China's place in the whole scheme is changing. Perhaps here a historian's perspective might shed more light on the future than an economist's.

Now I'll bow out of the conversation, as I think I'm contributing to the dreaded thread drift. And it's too nice to be inside anyway.

We could always sell the belief in the goodness of building asset bubbles on credit. The Chinese do like the idea. But can we give up our claim to it?

We could reopen the debates about bubbles; and read some Veblen.