WHY THE MINIMUM WAGE ISSUE IS SO IMPORTANT TO AMERICA
With the Democrat takeover of both houses of Congress, once again we find ourselves debating the minimum wage issue. Since three states passed a minimum wage raise in the same election, it is perhaps inevitable that there will be a new federal minimum wage standard. The raising of the minimum certainly has curb appeal, but what will happen when its motor begins to rev?
Will the raise's impact be limited to the not-so-obvious "good" it will do for those whose pay goes up, or will there be CONSEQUENCES to others? Does the economy just ABSORB the mandate, without any macro-economical repercussions?
To explore the first question, we must go back to the beginning, back to the orignial contract between employer and employee. Did the employee who TOOK the job at $5.25 an hour, DO SO WILLINGLY? Since we are in a country of laws, one would have to conclude that the answer to this question is definitively affirmative. Next question: WHY would someone want to work for the lowest wage allowable by current law? Perhaps some have to, because the value of their labor is not WORTH, to the employer in question, at least, more than $5.25 per hour. Perhaps this employee sees value in taking the job that over time, he or she believes will result in higher pay. Perhaps the employer has a history of ENHANCING the value of the employee's labor, over time, through TRAINING.
So now we have the first reason some people might want to enter into a contract for low pay: they perceive that their concession for low pay in the present will pay off in the future because they see additional value in the job by virtue of the training they will receive, and the skill they will subsequently acquire. These employees hope to move up the pay scale, and they inevitably do.
The training-in-exchange for pay issue is seldom discussed by politicos who favor a minimum wage hike, but there is evidence that they KNOW the issue is there. Nearly every federal minimum wage hike has been accompanied by government sponsored job training programs; training programs necessitated by the elimination of the employer's willingness to train the employee, by virtue of higher lower-end labor costs. The presence of government training programs in minimum wage legislation is the very illustration of fiscal lunacy, and this phenomenon should tell each and every voter that something is inherently wrong here. Government gets larger, with a shiny new bureacracy, and the economy-- inevitably, incontrovertibly-- gets the shaft.
Who pays for the increase in minimum wage, and the bureacracy to administer the training program? Since the public sector produces no wealth, the answer is that the private sector pays for both, through higher prices on goods and services, and higher taxes.
A second reason people take minimum wage jobs is that for many, MONEY ISN'T THE PRINCIPAL REASON they want to work in the first place. There are very few people who hold minimum wage jobs, and statistically almost NONE of them will have their pay remain static. For those whose pay does remain static, we can conclude that they are not there for the money. Many seniors and college students fit this description, as we all know.
The first thing we have to understand then, before we begin to tinker with this freely agreed-upon contract, is that the employee obviously SEES VALUE IN HIS OR HER POSITION, BEYOND THE PAY, and has willingly made a concession.
The first casualty of a $1.60 per hour raise in the minimum, then, may possibly be the employee who was WILLING to work for less. The employer, in this newly government- imposed dynamic, will be FORCED to rethink the original VALUE he or she would receive from the contract with the employee. He now has many choices to deal with the new dynamic. First, he can decide just to be nice and ABSORB the increase by accepting lower profits. Likely? Secondly, the employer could decide to INCREASE THE PRICE of his product or service. I suppose that's possible, but then who's paying for the increase? And thirdly, the employer could decide to REPLACE the employee with SOMEONE ALREADY TRAINED, whose value of labor is WORTH the new minimum hourly wage. A fourth possibility is TO REPLACE the employee with technology that eliminates the need for the employee's presence. Notice that only two of the four possibilities end up with said employee being retained, and the other two choices require the employer to a make a decision known to be quite contrary to good business sense.
Demographically, the cohort that suffers the most from minimum wage increases is composed of young, inexperienced people just entering the workforce. I have children, so trying not to be disparaging, let me say that my experience tells me that the typical young person just entering the work-force exhibits some or all of the following traits:
1-An inability to put their job ahead of their social life, usually due to not being married.
2-A lack of empathy for the employer's need for them to show up, on time, dressed for work.
3-First jobs for them generally end up representing a time when they learn some of life's lessons the hard way.
All experienced employers have these things in mind when they are called upon to hire a young person for their first job. The only mitigating factor is the fact that their labor can be had for a price that is commensurate with their skill level and experience; i.e. minimum wage. This being the employer's only consolation, who believes it is wise to artificially eliminate it by raising the minimum? We should oppose minimum wage increases for this reason alone. Where are the liberal mantras including the words "for the children" when we need them?
Thus we can see that an increase in the minimum wage can possibly harm precisely those who it was designed to help by eliminating their jobs, and the only alternative outcome IF THEY DO RETAIN THEIR JOBS, is increased prices on goods and services for consumers. The minimum wage hike will therefore deliver a net overall benefit to our citizens of......from somewhere between zero toward substantially negative territory.
Just to reenforce the reasoning above, let's suppose for a minute that the minimum wage is increased by law to $20 per hour. Since about three-fourths of the country makes less than that on average, almost everyone will get a raise. How wonderful that would be! No? Why not?
Is it possible that the price of everything might go up? Isn't it probable that a lot of people would be replaced by technology? Would the marvelous service component that capitalism has afforded Americans for two centruries become a bit, well, hampered? Wouldn't those industries that depended most on low-cost labor to deliver a low-priced product or service be the first to succumb? Or would those who could turn to OUTSOURCING to other countries to survive. Who would that harm?
Since the GOVERNMENT gets ALL its funding from the private sector, eventually even our government would suffer.
Who then, should be AGAINST a minimum wage hike? Well, ANYONE WHO WORKS IN THE PRIVATE SECTOR, or ANYONE WHO IS A CONSUMER OF GOODS AND SERVICES, should be against it. Why do we vote FOR it then?
I believe we vote for minimum wage hikes for two reasons. One, it makes us feel better to think we are doing something for poor poeople. The fact that as many as 9 out of 10 minimum wage earners are in households that are above the poverty level seems to have been willfully ignored. We seem to be saying, I'm a good person, so don't try to paint me otherwise with facts. The second reason we favor hikes in the minimum has to do with history. We don't seem to notice the repercussions of previous hikes do we? Why not? Answer in the next paragraph.
I am a business owner. I have ninety employees, and I am operating in one of the lowest cost-of-living areas in the country. I have NOT ONE employee currently working for less than the highest PROPOSED minimum wage let alone the current one. Is it because I'm just a nice guy? No. It is because the competition for labor and technology have combined to raise ANY able-bodied carbon unit's labor value above the minimum. If you can just SHOW UP, consistently on time, you are worth the current minimum wage. If you can SHOW UP, DRESSED TO PLAY, you will be too valuable to allow a competitor to hire you away. If you can SHOW UP, DRESSED TO PLAY, and display a willingness to accept the training we provide to enhance your value to us, then we can begin discussing the pension plan today. If you can in addition to showing up on time in proper attire, smile while you work, and stay away from personal phone calls, you will definitely be considered for management.
I would venture to say that, with unemployment approaching 4% in this country, that what I describe here is pretty much the case in most business environments, in most areas of the land.
So why OPPOSE a minimum wage hike?
I consider the capitalist economic system that we enjoy to be two things: it is first and foremost THE PROVERBIAL GOOSE THAT LAYED THE GOLDEN EGG. The second thing I know about capitalism is that its benefits SEEM to flow from our labor, instead of our system, and this MISCONCEPTION puts capitalism in perpetual danger of being willingly discarded. Capitalism has been, is, and will therefore ALWAYS BE VERY FRAGILE.
Another reason to oppose federal minimum wage hikes is that it is NOT A FEDERAL ISSUE. I am perfectly happy to see STATES pass minimum wage hikes. If the right to legislate wages remains the dominion of STATES, then the consequences will be noticed over a short period of time, and will be obvious to all. Businesses will react by relocating or outsourcing for cheap labor, those that can, and that will be enough to awaken voters.
Question for those who favor minimum wage hikes: IF IT IS WITHIN THE POWER OF STATES TO PASS THESE INCREASES, HOW IS IT ALSO WITHIN THE PURVIEW OF THE FEDERAL GOVERNMENT? Doesn't our constitution ENUMERATE these powers?
Almost all of the repercussions of a minimum wage hike described above will happen. The problem is that they will happen so imperceptibly for most of us, we won't even notice. The principal problem then, with a minimum wage hike is not the harm it will do to the economy or those of us who participate in it. The principal harms will be done to our freedom to enter into unencumbered contracts with each other, to our CONSTITUTIONAL form of government, and TO OUR FAITH IN CAPITALISM.
A minimum wage hike represents the first drip in the drip, drip, drip that is our trek toward KILLING THE GOOSE. And it always has been. It seems so innocuous, and, historically speaking, proves to be so.....to the economy. Soon we will begin bashing our employers, entrepreneurs, and investors through tax policy(I know, I know). That's the second drip, isn't it? The third drip is when we begin to see more value in turning over our lives to government than we see in retaining our right to provide for ourselves.
Drip, drip, drip. The slope is getting more slippery with each drop.
We are all willing to sacrifice a little property for that which we perceive to be of help to others, but should we be willing to sacrifice our freedom, our method of economic organization, and our revered Constitutional government in the process?
Will the raise's impact be limited to the not-so-obvious "good" it will do for those whose pay goes up, or will there be CONSEQUENCES to others? Does the economy just ABSORB the mandate, without any macro-economical repercussions?
To explore the first question, we must go back to the beginning, back to the orignial contract between employer and employee. Did the employee who TOOK the job at $5.25 an hour, DO SO WILLINGLY? Since we are in a country of laws, one would have to conclude that the answer to this question is definitively affirmative. Next question: WHY would someone want to work for the lowest wage allowable by current law? Perhaps some have to, because the value of their labor is not WORTH, to the employer in question, at least, more than $5.25 per hour. Perhaps this employee sees value in taking the job that over time, he or she believes will result in higher pay. Perhaps the employer has a history of ENHANCING the value of the employee's labor, over time, through TRAINING.
So now we have the first reason some people might want to enter into a contract for low pay: they perceive that their concession for low pay in the present will pay off in the future because they see additional value in the job by virtue of the training they will receive, and the skill they will subsequently acquire. These employees hope to move up the pay scale, and they inevitably do.
The training-in-exchange for pay issue is seldom discussed by politicos who favor a minimum wage hike, but there is evidence that they KNOW the issue is there. Nearly every federal minimum wage hike has been accompanied by government sponsored job training programs; training programs necessitated by the elimination of the employer's willingness to train the employee, by virtue of higher lower-end labor costs. The presence of government training programs in minimum wage legislation is the very illustration of fiscal lunacy, and this phenomenon should tell each and every voter that something is inherently wrong here. Government gets larger, with a shiny new bureacracy, and the economy-- inevitably, incontrovertibly-- gets the shaft.
Who pays for the increase in minimum wage, and the bureacracy to administer the training program? Since the public sector produces no wealth, the answer is that the private sector pays for both, through higher prices on goods and services, and higher taxes.
A second reason people take minimum wage jobs is that for many, MONEY ISN'T THE PRINCIPAL REASON they want to work in the first place. There are very few people who hold minimum wage jobs, and statistically almost NONE of them will have their pay remain static. For those whose pay does remain static, we can conclude that they are not there for the money. Many seniors and college students fit this description, as we all know.
The first thing we have to understand then, before we begin to tinker with this freely agreed-upon contract, is that the employee obviously SEES VALUE IN HIS OR HER POSITION, BEYOND THE PAY, and has willingly made a concession.
The first casualty of a $1.60 per hour raise in the minimum, then, may possibly be the employee who was WILLING to work for less. The employer, in this newly government- imposed dynamic, will be FORCED to rethink the original VALUE he or she would receive from the contract with the employee. He now has many choices to deal with the new dynamic. First, he can decide just to be nice and ABSORB the increase by accepting lower profits. Likely? Secondly, the employer could decide to INCREASE THE PRICE of his product or service. I suppose that's possible, but then who's paying for the increase? And thirdly, the employer could decide to REPLACE the employee with SOMEONE ALREADY TRAINED, whose value of labor is WORTH the new minimum hourly wage. A fourth possibility is TO REPLACE the employee with technology that eliminates the need for the employee's presence. Notice that only two of the four possibilities end up with said employee being retained, and the other two choices require the employer to a make a decision known to be quite contrary to good business sense.
Demographically, the cohort that suffers the most from minimum wage increases is composed of young, inexperienced people just entering the workforce. I have children, so trying not to be disparaging, let me say that my experience tells me that the typical young person just entering the work-force exhibits some or all of the following traits:
1-An inability to put their job ahead of their social life, usually due to not being married.
2-A lack of empathy for the employer's need for them to show up, on time, dressed for work.
3-First jobs for them generally end up representing a time when they learn some of life's lessons the hard way.
All experienced employers have these things in mind when they are called upon to hire a young person for their first job. The only mitigating factor is the fact that their labor can be had for a price that is commensurate with their skill level and experience; i.e. minimum wage. This being the employer's only consolation, who believes it is wise to artificially eliminate it by raising the minimum? We should oppose minimum wage increases for this reason alone. Where are the liberal mantras including the words "for the children" when we need them?
Thus we can see that an increase in the minimum wage can possibly harm precisely those who it was designed to help by eliminating their jobs, and the only alternative outcome IF THEY DO RETAIN THEIR JOBS, is increased prices on goods and services for consumers. The minimum wage hike will therefore deliver a net overall benefit to our citizens of......from somewhere between zero toward substantially negative territory.
Just to reenforce the reasoning above, let's suppose for a minute that the minimum wage is increased by law to $20 per hour. Since about three-fourths of the country makes less than that on average, almost everyone will get a raise. How wonderful that would be! No? Why not?
Is it possible that the price of everything might go up? Isn't it probable that a lot of people would be replaced by technology? Would the marvelous service component that capitalism has afforded Americans for two centruries become a bit, well, hampered? Wouldn't those industries that depended most on low-cost labor to deliver a low-priced product or service be the first to succumb? Or would those who could turn to OUTSOURCING to other countries to survive. Who would that harm?
Since the GOVERNMENT gets ALL its funding from the private sector, eventually even our government would suffer.
Who then, should be AGAINST a minimum wage hike? Well, ANYONE WHO WORKS IN THE PRIVATE SECTOR, or ANYONE WHO IS A CONSUMER OF GOODS AND SERVICES, should be against it. Why do we vote FOR it then?
I believe we vote for minimum wage hikes for two reasons. One, it makes us feel better to think we are doing something for poor poeople. The fact that as many as 9 out of 10 minimum wage earners are in households that are above the poverty level seems to have been willfully ignored. We seem to be saying, I'm a good person, so don't try to paint me otherwise with facts. The second reason we favor hikes in the minimum has to do with history. We don't seem to notice the repercussions of previous hikes do we? Why not? Answer in the next paragraph.
I am a business owner. I have ninety employees, and I am operating in one of the lowest cost-of-living areas in the country. I have NOT ONE employee currently working for less than the highest PROPOSED minimum wage let alone the current one. Is it because I'm just a nice guy? No. It is because the competition for labor and technology have combined to raise ANY able-bodied carbon unit's labor value above the minimum. If you can just SHOW UP, consistently on time, you are worth the current minimum wage. If you can SHOW UP, DRESSED TO PLAY, you will be too valuable to allow a competitor to hire you away. If you can SHOW UP, DRESSED TO PLAY, and display a willingness to accept the training we provide to enhance your value to us, then we can begin discussing the pension plan today. If you can in addition to showing up on time in proper attire, smile while you work, and stay away from personal phone calls, you will definitely be considered for management.
I would venture to say that, with unemployment approaching 4% in this country, that what I describe here is pretty much the case in most business environments, in most areas of the land.
So why OPPOSE a minimum wage hike?
I consider the capitalist economic system that we enjoy to be two things: it is first and foremost THE PROVERBIAL GOOSE THAT LAYED THE GOLDEN EGG. The second thing I know about capitalism is that its benefits SEEM to flow from our labor, instead of our system, and this MISCONCEPTION puts capitalism in perpetual danger of being willingly discarded. Capitalism has been, is, and will therefore ALWAYS BE VERY FRAGILE.
Another reason to oppose federal minimum wage hikes is that it is NOT A FEDERAL ISSUE. I am perfectly happy to see STATES pass minimum wage hikes. If the right to legislate wages remains the dominion of STATES, then the consequences will be noticed over a short period of time, and will be obvious to all. Businesses will react by relocating or outsourcing for cheap labor, those that can, and that will be enough to awaken voters.
Question for those who favor minimum wage hikes: IF IT IS WITHIN THE POWER OF STATES TO PASS THESE INCREASES, HOW IS IT ALSO WITHIN THE PURVIEW OF THE FEDERAL GOVERNMENT? Doesn't our constitution ENUMERATE these powers?
Almost all of the repercussions of a minimum wage hike described above will happen. The problem is that they will happen so imperceptibly for most of us, we won't even notice. The principal problem then, with a minimum wage hike is not the harm it will do to the economy or those of us who participate in it. The principal harms will be done to our freedom to enter into unencumbered contracts with each other, to our CONSTITUTIONAL form of government, and TO OUR FAITH IN CAPITALISM.
A minimum wage hike represents the first drip in the drip, drip, drip that is our trek toward KILLING THE GOOSE. And it always has been. It seems so innocuous, and, historically speaking, proves to be so.....to the economy. Soon we will begin bashing our employers, entrepreneurs, and investors through tax policy(I know, I know). That's the second drip, isn't it? The third drip is when we begin to see more value in turning over our lives to government than we see in retaining our right to provide for ourselves.
Drip, drip, drip. The slope is getting more slippery with each drop.
We are all willing to sacrifice a little property for that which we perceive to be of help to others, but should we be willing to sacrifice our freedom, our method of economic organization, and our revered Constitutional government in the process?
posted by corndog at 8:38 AM
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