The Wall Street Journal runs an editorial today criticizing Mitt Romney for his support for increasing the minimum wage and indexing it to inflation.
Few policies are as destructive as the minimum wage at keeping the young and least skilled out of the job market. By setting an arbitrary wage floor, politicians make it impossible for businesses to hire people for many entry-level positions. The jobs simply disappear.
In 2007 the Pelosi Congress passed a minimum-wage increase in three stages that coincided with the recession. The jobless rate for teenagers has since exploded to 23.1% from under 15%, and for minorities to 15.8% from close to 9%. For black teenagers, the jobless rate is still an incredible 39.6%.
This is a devious one.
The Journal’s not so brazen as to say that the jump in unemployment for these groups was entirely due to the minimum-wage increase (signed by President Bush, it should be noted). There was that whole financial crisis thing after all. So it says it “coincided with the recession.” And thus it gets to imply both that the minimum wage increase caused a good chunk of the unemployment and that it helped cause the recession—without quite saying that.
Hey, they’re good at what they do.
(h/t Bill Grueskin)
— Reuters looks at the skeptical case on Facebook’s stock. But it makes an apples to oranges comparison between how the market values Facebook’s and Microsoft’s earnings streams:
“We had some clients call and once we step them through the numbers, they sober up,” he said. “The valuation is 100 times earnings in a stock market that is trading at 12.”
“At the end of the day, if you have a small amount of money that you are in a position to lose a chunk of it and you want to speculate on Facebook, go ahead,” he added. “But don’t use money that you really need to save to do it. I would put it in Microsoft, which is dirt cheap right now.”
To be sure, most technology analysts would argue that Facebook’s growth potential far exceeds that of Microsoft Corp, whose stock has largely traded between $20 and $30 in the past decade.
That Microsoft’s stock price has traded between $20 and $30 doesn’t tell us much of anything, particularly about its valuation. If its earnings went down during that time but its stock stayed the same, say, then its multiple would actually go up. It would be better to tell us the range of its price-to-earnings ratio. Reuters gets around to telling us that Microsoft’s P/E is 11, but it’s down at the bottom of the story.
— This is three weeks old, but worth a read.
The Village Voice tired of obnoxious power lists in New York, ran a cover story on the “100 Most Powerless New Yorkers.”
There are some frivolous ones here, like Howard Stern and Tina Brown, thrown into keep people reading, but most are pretty good. Here are a few:
10. Food-delivery people
Not only is a food-delivery person (typically a Chinese or Hispanic immigrant) usually murdered every year, but also far more are killed in bicycle accidents. Moving through the city while carrying large sums of cash, they are easy targets for theft and assault. Because many are undocumented, their assailants think they’re too powerless to go to the authorities…
14. Mary Lee Ward, an 82-year-old being evicted in Bed-Stuy
“Ms. Ward,” as she’s affectionately known in Bed-Stuy, received a predatory loan in 1996 of $10,000. Despite never receiving the money (and the broker losing his license and his firm being shut down by the state for predatory practices), Ward’s loan was considered delinquent, was bundled and repackaged multiple times, and resulted in her home being sold at auction last year. She has only evaded being kicked out because of Organizing for Occupation’s eviction blockades around her house, which started in August. Almost as powerless is Shameem Chowdury, who bought Ward’s house at auction in 2008. Because Wells Fargo, who sold the home to him, couldn’t provide the actual deed, he might not legally be the owner of the house he paid hundreds of thousands of dollars for…
Despite Mayor Bloomberg’s “Young Men’s Initiative,” few men (and they’re mostly men) who spend time on Rikers Island will ever get jobs, especially with such high unemployment. Three-quarters of all ex-cons will go back to jail.
Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at firstname.lastname@example.org. Follow him on Twitter at @ryanchittum.
Tags: Facebook, minimum wage, Reuters, The Wall Street Journal Editorial Page, Village Voice