I'm never quite sure just where a liberal's desire for government intervention starts and where it ends. On the one hand, under the protection of the invented "right to privacy" discovered in the Constitution, the government should stay out of the woman's right to choose. But then on the other hand, the government should mandate private companies to hike wages. Nancy Pelosi has made the issue one of her Party's top priorities as she takes over as Majority Leader. Raising the minimum wage has been so widely accepted as the moral thing to do, that even to suggest against it smacks of the greed and cold-heartedness so typically associated with Republicans. I will argue, as I have in the past, that the Federal government should not interfere with wage laws; such intervention is counterproductive, dangerously arbitrary, unjust and wrongheaded.
A wage is a commodity. As such, its worth ought be determined by the market and the rules of supply and demand. Demand is elastic, so when the price of a good increases, its demand will drop and vice versa; an increase in demand will bring prices down. Those who argue against raising the minimum wage have long held, and history has proved, that whenever wages are artificially hiked, via wage legislation, unemployment actually increases. This makes sense when seen within the context of the laws of supply and demand. The good in demand is a higher wage. What happens through wage legislation? The price to employers increases, resulting in a decrease in employment. As a result of the artificially inflated wages, employers will be unable to maintain the same level of work force and will thus be forced to lay off employees. Who will the employer let go right off the bat? Certainly, the lower-skilled workers, who after having been laid off, will have a much more difficult time finding employment elsewhere. Low-skilled workers are hit the hardest through wage legislation. A survey of economists, conducted by the American Economic Review in 1992, revealed that 90 percent of economists believe that increasing the minimum wage has a direct, negative effect on unemployment among low-skilled and young workers.
Advocates of minimum wage hikes typically paint a grim picture of an endless sea of desperately poor, single mothers working two jobs trying to make ends meet to support a family. Much of this is myth making at the hands of politicians, inspired by Rousseau Marx and FDR, who believe the sole purpose of government is to create the fair and equal society, from the top down. In their quest to establish equality and fairness, politicians assume the necessary powers to regulate and control. George F. Will wrote an editorial in the Washington Post the other day in which he highlighted salient, yet often ignored, facts in the minimum wage debate.
- "Most of the working poor earn more than the minimum wage, and most of the 0.6 percent of America's wage workers earning the minimum wage are not poor."
- "Only one in five workers earning the federal minimum lives in families with earnings below the poverty line. Sixty percent work part time, and their average household income is well over $40,000."
- "Of the 75.6 million paid by the hour, 1.9 million earn the federal minimum or less, and of these, more than half are under 25 and more than a quarter are between ages 16 and 19. Many are students or other part time workers."
- "Sixty percent of those earning the federal minimum or less work in restaurants and bars and earn tips- often untaxed."
-"Two-thirds of those earning the federal minimum today will, a year from now, have been promoted and be earning 10 percent more."
- "Raising the minimum wage predictably makes work more attractive relative to school for some teenagers and raises the dropout rate."
Wage hikes should occur within the context of increased productivity and subsequently, increased profits. Increasing productivity results from investing in capital and by looking for ways to make a better product more quickly. Increasing sales will increase income and result, for the worker, in better wages.
N.B. - Here is the address to a National Review symposium on the minimum wage debate; it's well worth a read.
http://article.nationalreview.com/?q=YjJhNWZiZmQ2NzM3NzM2MDZmNTNkMDM3ZGEzY2JjNDQ=
No comments:
Post a Comment