When Obama urged employers pay workers a living wage setting and attaching an arbitrary figure of $15 an hour it removed any lingering doubts I had about his general ignorance (and incoherence) about economics, business and finance. His assertion was nothing short of a man completely disconnected and unaware of market forces and concepts like supply and demand.
It was quite astounding really.
Then again, should anyone really be surprised? His entire tenure has been marked by the simpleton notion of spending to prosperity.
This article by Sheldon Richman makes too much sense. It's something progressives refuse to come to terms with for some reason.
"The low minimum wage, however, is not the cause of their problems;
it’s a sign of deeper factors holding them back. In fact, the minimum
wage distracts us from the radical changes we must make if low-income
workers are to advance. Those who fixate on the minimum wage unwittingly
do struggling workers a disservice.
What workers need is greater bargaining power, and that comes
primarily from having options. Unfortunately, the corporate state, which
people mistake for the free market, closes off options. Anything less
than removal of these obstacles is a cruel hoax on those seeking better
lives.
What’s wrong with simply doubling the minimum wage? The answer is
that wages are not arbitrarily set. Even in a corporatist economy, they
result from supply and demand. This can be seen in an extreme
hypothetical example, in which the minimum wage in the fast-food
industry is raised to $100 an hour. What would happen to employment?
It’s easy to see that it would plummet as the industry itself faded
away. Why? Because, given the price of fast food, workers can’t possibly
produce $100 worth of value for their employers in an hour."
Employers don’t hire people as a favor (or exist to subsidize lifestyles). Businesses exist to make money
for their owners. If hiring someone is to be worthwhile, that person
will have to produce more than she is paid. If she can’t, she won’t have
a job. "
Bold mine.
When I was both young (very young, actually) and foolish, I thought that everyone should make the same wage. I grew up. I realized that not making much money was actually an incentive to achieve. If the bottom of the employment pool made a "living wage", two things would happen: 1- the cost of living would almost immediately increase to the point that the living wage was insufficient and 2- people would be advocating increasing the minimum wage to some higher amount.
ReplyDeleteOf course, a 'living wage' (one of the most puerile and vague terms I've heard yet from the left) is immeasurably subjective. You can't magically set those terms arbitrarily. If you do, then you must control EVERYTHING. Hence, you're half-way to a planned economy. Alas, that fails and will always fail because humans are varied in their interests and abilities. Some are lazier than others, others are afflicted with illnesses and represent the meek of our society who deserve help, and so on. Unless they figure out a way to control the minds of humans a-la 1984, the best option is to permit a REAL FREE MARKET free of cronyism take root.
ReplyDeleteWhere people fall through those cracks there should be a base social-safety net for them. Help the people that truly need it. Currently, I'm gonna guess about half of the people who get some form of welfare don't deserve a damn penny.
Parasites are growing and we're enabling them. Entitlements is our worst enemy.