The minimum wage is now $25 per hour

Chart #1

Unemployment is becoming a gigantic problem that is turning out to be much bigger than anyone anticipated. As Chart #1 shows, some 30 million people have been added to the ranks of the unemployed in the past six weeks, and virtually all of them from the ranks of the private sector. That means that about 25% of private sector employees have lost their jobs! The 30 million newly-minted jobless are not hopeless, at least yet. Thanks to the generosity of Congress (it's always easy to spend other people's money, isn't it?), the average weekly unemployment check now resides in the princely neighborhood of $1000 per week, or $25 per hour. Congress has effectively raised the minimum wage to $25/hr. by boosting weekly unemployment checks by $600/wk through the end of July.

What, you say?! Consider: for any business in trouble because of the shutdown, the very best solution is to fire or lay off employees, since most, if not all, of them will be able to collect unemployment benefits which are the equivalent of $25 per hour through the end of July. The 30-million-strong army of the recently unemployed now work for the government, you see. Their job? To stay at home and watch TV all day, or whatever else suits their fancy. Do nothing, and the government will pay you $25 per hour. Not a bad job, if you can just get fired or laid off! Think of it as a paid vacation with time-and-a-half! And it's all for a good cause: to win the war against the coronavirus.

Meanwhile, employers who dare to re-open before August 1st, when Congress' $600 per week unemployment sweetener expires, will find few workers willing to work for less than $25/hour. This creates a very unfortunate headwind to any early attempt to reopen the economy.

Employees who welcome this largess will be slow to realize that the government is effectively buying their cooperation in the war against the coronavirus. Unfortunately, many of the generals (er, Governors) directing the battle have no idea what they are doing. Governor Newsom of California, for example, just fired the second salvo in his Battle of the Beaches. When his first beach closure was lifted prior to last weekend, the public thronged to the beaches to seek respite from a blistering heat wave. What he saw instead was a personal affront to his directive to shelter at home. Yesterday (Friday) he announced, in a fit of pique, the resumption of a "hard closure" of all state beaches, while adding that it needn't be permanent—if everyone could just learn to behave themselves and not have too much fun at the beach.

The above photo was taken this morning above Lost Winds beach, about ½ mile south of San Clemente pier (which is to the right). The two trucks are from the State Park rangers, and they have set up a "roadblock" for those wandering down the beach from the right. The city beach is open, but not the State Park beach. Note also the words written in the sand to the left of the trucks. This is one of the first anti-Newsom salvos to be fired at the beach. I'm told there were police in full riot gear at the pier, apparently waiting to repel anti-Newsom protestors.

Mind you, all of this is happening in a state that enjoys one of the lowest rates of coronavirus deaths per capita in the nation: 54 per million, less than 5% of New York's 1227 per million.

This is the same governor who persists in building a hundred-billion-dollar, high-speed Train to Nowhere. This is the same governor whose state has accumulated a staggering unfunded public pension
liability of more than $1 trillion. Instead of addressing the looming disaster of public pensions—which owe their size to unbelievably generous pension benefits awarded by politicians to their union supporters—Newsom is staking his reputation, or what is left of it, on stopping the public from going to the beach! Such courage in the face of public adversity! Such stupidity!

My friend H. Cademartori was inspired by these thoughts to pen yet another editorial cartoon which I am honored to feature here:

The way to win the coronavirus war is easy to see, thanks to the accumulating evidence of deaths. It seems that the overwhelming majority of those who die from covid-19 are either very old or very sick to begin with. I figured that out a few weeks ago, as readers of this blog know. Here is the latest example, from Minnesota: it turns out that 99.24% of Minnesotans who have died from covid-19 "either died in nursing homes or otherwise had significant underlying conditions," such as obesity, heart disease, diabetes, etc. (and in many cases at least two underlying co-morbidities). So why tell everyone to shelter in place? Why tell people to avoid the beach, where the sunshine kills the virus quickly, and the fresh air so disperses it that the average person never receives a lethal dose of viral particles? Staying home, or in any confined space (e.g., mass transit) is just about the worst thing you can do to avoid the virus. Why not just make sure nursing homes are isolated and those with significant health issues stay at home? The rest of the population, especially the kids (who face virtually zero risk from the virus), should be free to pursue their lives and their educations. And in the process get infected and develop antibodies, thus protecting everyone with herd immunity.

Chart #2

This is all depressing, but it seems that the stock market continues to look across the Valley of Despair in the belief that this coronavirus war shouldn't be too difficult to put behind us (Chart #2).

I prefer the collective wisdom of the stock market to Governor's Newsom's nanny-state lectures. But I sure wish he would pay attention to the real problems that face California's future.