On January
1, 2019 several states across the nation will officially begin enforcing new
minimum wage laws which were voted in last November. Most of these states will require a minimum of
$15 an hour. And the push is on to make that
the federal standard.
Wage
controls are directed at employers, but it's not employers who bear the pain. If the government makes it too expensive to
hire low-skilled workers, then employers will simply not hire them. Businesses will figure out a way do without. The real victims are the unskilled and the
low-skilled, the very bottom of the labor pool, the lowest of the low, the
poorest of the poor. So much for
"caring for the little guy."
If I want to
work for $X an hour, and some employer is willing to pay me $X an hour, I don't
see why that should be a problem. For
many, earning a low wage is preferable to earning zero wage. These are called "entry-level" jobs,
and they are an essential part of learning good work skills. But the minimum wage law rips that option away
by destroying entry-level jobs, and essentially by making it a crime to work
for low pay.
It all stems
from the crazy notion that government can magically turn a low-skilled worker
into a high-skilled worker, via an act of legislation. It's just another manifestation of the notion
that government is some kind of super-human deity. The facts are: the true value of anything in life is governed
by supply and demand. Wage control advocates
try to convince us that the laws of supply and demand don't apply to labor. But if that was the case, then why are we messing
around with a measly $15 an hour? If NO
jobs will be lost, then we could make the minimum wage any amount we want! Why not $20 an hour? Why not $100 an hour? If you say that the law has no downside, then
by golly, let's really eliminate poverty for good and make everybody wealthy!
The fallacy,
of course, is that supply and demand DO indeed apply to labor. In a free market, supply and demand will
balance each other out, as long as the price is free to rise and fall. Any time the government enacts wage and/or
price controls, it creates artificial shortages or excesses. The minimum wage law creates an excess supply
of unemployed workers at the low end of the wage scale.
So what is
the alternative? How can we help the poor
and downtrodden in our society earn better pay?
There are two aspects to the answer:
the macro or "big-picture" solution, and the micro or "small-picture"
solution.
First the
macro side: The key is a strong
economy. As the economy grows stronger,
more businesses make more profit. As
they make more profit, they need more workers, and so the demand for labor
increases, and as the demand for labor increases, wages go up. How do you make the economy stronger? Easy:
get government out of the way. Reduce
or eliminate the regulation, bureaucracy, taxes, the special favors and
"crony capitalism", and all the meddling in business at all levels of
government. Free enterprise is the
time-tested way to create wealth and raise the standard of living for all. Employers are not the bad guys, for THEY are
the ones who actually create the jobs.
Leave them alone, and provide neither help nor hindrance.
Next the micro
side: High-paying jobs are out
there. In the U.S. alone, millions upon
millions of people make big, fat, hefty paychecks. If you want to make big bucks, you can make
big bucks. But you will need two
things: you need brains, and you must be
willing and able to work hard. If you have those two things, then choose a
good high-paying career and go for it! Don't
choose some minimum-wage entry-level job for your "career" and then
go crying to the government because of your poor choice.
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