Saturday, March 6, 2021

The minimum wage is bad and wrong for at least three big reasons

 Arizona Senator Krysten Sinema is catching flak for being a bit animated about the way she voted no on including an increase in the federal minimum wage in the coronavirus relief bill. She made a thumbs-down gesture and some feel that that was insensitive, doncha know. 

Never mind that she's willing to look at an increase as a separate issue (which disappoints me, but she is, after all, a Democrat).

In our present age, policy basics like the concept of the minimum wage are rarely argued on the basis of fundamental principles. Most debates about it start right into studies that come to various conclusions about whether it affects the economies of cities in which it's increased. That strikes me as a trip down the rabbit hole. It's much like arguing whether there's a climate crisis or not. Everybody has his or her own arsenal of charts and graphs that confirms conclusions already arrived at. 

Rather than get mired in those weeds, I'd rather revisit the three big reasons a minimum wage is bad and makes no sense. Let's just keep the discussion on the levels of morality and reason for the time being.

So here they are:

1.) A minimum wage is an erosion of freedom. It's government telling a private organization how to conduct its affairs (telling a business what to pay for particular functions it needs performed). What kind of profit the business makes and how much or how little a minimum wage would affect that is not the point. It is, or at least should be, none of government's concern what a business decides to do regarding compensating its employees.

2.) It distorts the market value of an hour's worth of labor. A company, large or small, of whatever type, hiring someone is an economic transaction, like any other. A buyer (the company) and a seller (the applicant) come to an agreement about what the good or service (in this case, the seller's labor) is worth. If a third party gets involved in coming to that agreement, no one can be really sure what the value of the labor is. 

3.) It elbows the most economically vulnerable in our society - such as minority youth - out of the labor market. An employer is not going to take on staff that is not qualified to perform the functions the employer needs performed if the employer cannot do so within what it has budgeted for those functions. This points up the fallacy of the argument that entry-level personnel in a business "deserve" a "living wage." An entry level job is not meant to enable someone to pay rent, utilities, insurance and car expenses. Such a position is where one acquires skills that can be built upon as one advances to more lucrative situations. 

How refreshing it would be to see a legislator make this argument without having the goo of faux compassion dripped all over it. 

1 comment:

  1. Still waiting to see those "charts and graphs" you mentioned...specifically on actual results, not dire "projections".

    ReplyDelete