The Pin Factory Blog

47. "A national minimum wage prevents the exploitation of young workers."

Many young people make less useful employees than those with a few years experience. They may have enthusiasm and energy, but have yet to learn the habits of work, and the preferred ways of doing things. They have to be trained, and to learn, and this costs time and attention. This disadvantage is made up by the lower wages generally paid to young employees; they may not yet be worth as much as older ones, but this is compensated for because they don't cost as much.

When the state sets a minimum wage, it is legislating to have young employees paid more than the market rate. In some sectors this is not a problem, but in others employers might find it not worthwhile to employ any at the required rate. The result in the US has been that whenever Congress has raised the minimum wage, there has been an increase in youth unemployment, worst for ethnic minorities.

It's like fixing the price of anything. You can't make it worth more than it actually is, but legislators can alter the supply, in this case of jobs. The UK minimum wage recognizes this by setting a lower rate for younger employees. Low wage campaigners don't like this, but it has ameliorated the youth unemployment that a standard minimum wage would have caused. If employers have to pay young people the same rate as more useful employees, they are less likely to hire them. However, young people have an economic advantage when they cost less; it gives them a selling point when they might otherwise have none.

The great majority of top CEOs in the US started employment in a low wage job. If those jobs had been priced out of existence by high minimum wages, many of them might never have got that vital first start. Far from preventing the exploitation of young people, minimum wages can seriously damage their prospects.

Remember when Her Majesty's Revenue & Customs lost disks containing information on 20,000 people, including their bank account numbers and health details? Of course you do. Remember all the other dozens of cases where people in authority have 'lost' the data that they collect on us? Probably not.

But fortunately the Open Rights Group have been cataloguing them here.

There is, for example, the 5,123 patients' medical records that were on a laptop stolen from a Black Country hospital. Though that pales into insignificance alongside the NHS warning last month that perhaps 1.7m records have been dumped in skips, lost in the mail, left on stolen computers, pinched from doctors' lockers, or forgotten in the pub.

Also last month, a laptop was stolen from a Royal Navy officer. It contained information on 600,000 people, including their passport numbers, National Insurance and bank details.

Then last November, the Department for Work and Pensions lost yet another computer disk containing personal and fnancial details of 40,000 Housing Benefit claimants.

I don't know about you, but I just don't trust officialdom to protect the information it holds about me and other people like me. If there was one knock-down argument against the national ID database, the Open Rights Group list of failures is it.

I wonder if we'll ever get an apology from Friends of the Earth for this? Soaring food prices, the felling of forests, rising CO2 emissions: all their fault.

Another surprising emissions finding: taking the car is better than walking. 

This banning of plastic bags: do the people proposing it really understand what they're doing? 

Is this a group of charities lobbying for change? Or is it the government paying a group of charities to lobby the government for change? 

The Laffer Curve part II: the second video from Cato on the subject. 

Gun buybacks and amnesties: are any of them any more effective than this? 

And finally, which Nobel Laureate rhymes with which food?

46. "Getting everyone's DNA on file would allow us to track down criminals and protect society."

If we wanted simply to track down criminals and protect society in the most efficient way, we would watch everyone all the time, listen in on their every conversation, constantly record all their movements, and know everything about them it was possible to know. Criminal activity would be difficult, given this approach, but no doubt clever criminals would find news ways of concealing their activities.

Even though it would undoubtedly be efficient, we don't allow it because we don't want to live in that kind of society. We want a private domain in which we have space that is only for ourselves and those we choose to share it with. The state has no business in that domain.

We treat people as innocent until proven guilty. We do not start with the assumption that all people are criminals, if only we had enough information on which to convict them. Only those who transgress the law, or who give grounds for reasonable suspicion, forfeit the right to that private space and prompt the state to enter it to protect the rest of us.

Our DNA is private information. It not only tells uniquely who we are, it can be used to tell where we have been, and in some cases what we have been doing. The state has no right to such information without good grounds for suspicion. It is more information than it can be trusted with. DNA tells even more than that, however, it tells of our genetic traits, something of our abilities and potential, and the conditions and diseases to which we might be prone. There is no way we want this information in the hands of a body we put in place to serve our interests. It would give it more power than any authority can be trusted with.

It seems the likelihood is growing that the Green-House-Gas (GHG) alarmists' political lobbying may result in final overkill. One of the more serious indications of this is the defection of big business, who had previously sought new opportunities in eco-business but not expected stubborn fundamentalism.

With eco-lobbyists raising the carbon cut targets relentlessly, investment in the mitigation industry looks increasingly risky or outright futile. That’s why even some of the most committed international companies behind the scenes are looking for alternatives to mitigation. When ten of the largest US companies and four environmental groups had formed the U.S. Climate Change Partnership (USCAP) early last year it “was seen as a watershed in corporate environmentalism.” Now it seems some of these are getting disenchanted and place investments in policies that clearly undermine carbon cutting efforts:

Three high-profile USCAP members—General Electric, Caterpillar (CAT), and Alcoa (AA)—also sit on the board of the Center for Energy & Economic Development (CEED), an Alexandria (Va.) group formed in 1992 that opposes regulations on greenhouse-gas emissions. In April, 2007, CEED's board unanimously signed a position paper that, in part, described as "draconian" one federal climate bill that would require a 65% reduction in emissions by 2050.

Too much politicization, as has been the case in global warming regulation stampede, rarely pays off:

Other business groups are also stepping up opposition to global warming regulations. At the end of 2007, the U.S. Chamber of Commerce launched a television commercial that lampooned carbon reductions, depicting a family sleeping in full winter garb, a man cooking eggs over candles, and people jogging to work in business suits, while the narrator intoned: "Climate legislation being considered by Congress could make it too expensive to heat our homes, power our lives, and drive our cars."

Our latest report, Unfair Trade, got lots of media coverage over the weekend. It was in the Sunday Telegraph twice (here and here) and in the Mail-on-Sunday. ASI representatives appeared on the BBC World Service, BBC News 24, BBC One, and Radio 4's Today Programme.

There was more in the Mondays, with the report popping up in The Guardian, The Independent, The Scotsman and The Daily Telegraph. Tom Clougherty wrote a piece for The Scotsman's "Burning Issue" and respected commentator Janet Daley wrote about the report in her latest Telegraph column, titled "Forget Faritrade – only free trade can help the poor".

Correcting the statistics behind the current hysteria over the costs to the nation of drinking. Things really are not as we're being led to believe.

The BMA is not being entirely consistent either. But then there's always been some amusement in the idea of an anti-alcohol campaign being run by ex-medical students.

Caculating the benefits or not of a basic income system. More work needed but this is a start. 

Harriet Harman shows that an expensive education may take you a long way: but it won't necessarily educate you. 

An economist visits Cuba. More exploration of the place.  

Paying £1 million on a 50 p accumulator? It's a rip off! Should be £1,000,000.14 at least! 

And finally, yes, this is the Irish entry to Eurovision. Stay tuned to see if our Continental friends have a sense of humour.

Today the ASI publishes its latest report, Unfair Trade by Marc Sidwell, to mark the beginning of Fairtrade Fortnight.

Fairtrade is a nice idea, and it is great that so many consumers want to help the poor in the developing world. But it is important that we ask whether Fairtrade really helps. After all, 'Fairtrade' does not mean anyone who gives better terms to third-world farmers. It is a particular brand, which competes with other ethical schemes and charities for people's money.

There are a number of inconvenient truths about Fairtrade. Indeed, on closer inspection it may not be that fair at all. It only offers a very small number of farmers a higher fixed price for their goods. Given the way markets work, these higher prices come at the expense of many other farmers, who – unable to qualify for Fairtrade certification – are left even worse off.

More importantly, the Fairtrade scheme does not aid economic development. It sustains uncompetitive farmers on their land, holding back diversification, mechanization and moves up the value chain. In doing so it denies future generations the chance of a better life.

The fact that will surprise consumers most, however, is that only 10 percent of the premium they pay for their Fairtrade products actually gets to the producer. The rest goes to people further along the retail chain.

Fairtrade's success rests on its skilful advertising and its ability to persuade corporations, schools, towns and even nations to 'go Fairtrade'. But when you look at the evidence it is clear that for all its good intentions, Fairtrade is not the only way to make a difference, and it is not the best way either.

The Rainforest Alliance operates a similar certification scheme to Fairtrade, but without many of its drawbacks. Café Britt helps its farmers add value by processing and packaging its coffee in Costa Rica. Consumers could even buy bargain products from their local supermarkets and loan the money they save directly to farmers through a microcredit agency like kiva.org. These are just some of the options available.

You can download the whole report here as a PDF.