Saturday, December 7, 2013

The Minimum Wage Limits Free Market Growth

     This week there was much talk and some hysterical ranting on the Left about "income inequality." Fast food workers demanded to be handed over $15 an hour for performing unskilled tasks. Even President Obama joined the choir of the ant-capitalists who proffer such nonsense as a means of fulfilling some nebulous ideal of equality. But those who would advocate for government determining the wages of any American, show their economic ignorance, a truly dazzling display of fatuousness, and a real lack of compassion for those they say are the targets of their "help."
     Economic studies throughout the world have resulted in the knowledge that when minimum wages paid to workers is raised by a government entity, unemployment among those workers increases. Businesses that pay minimum wage are unable to have as many workers and must layoff some in order to survive financially. When the free market sets wages depending on the laws of supply and demand, everyone benefits. The business has sufficient workers to produce goods and services at a fair price to its customers, and more workers enjoy the benefit of employment and can advance themselves financially if they choose.
     If the President acted as a king, as his followers have asked him to do, and raised the minimum wage to $15 an hour with a stroke of his pen, not only would fewer workers be employed, but the ones who were could hardly afford the cost businesses would have to charge for their goods and services to meet their artificially inflated payrolls. Charity to the poor from those who participate in the private sector would also suffer because there would be less disposable income available to be distributed to charitable organizations. Money made in the free market, under the laws of supply and demand, creates untold wealth that benefits all of society. Bill Gates and Warren Buffet did not work hard to found their respective companies with the idea of being magnanimous with less fortunate people. They worked in their own self-interest in the free market and were able to voluntarily share the fruits of their success through their charitable works.
     During my life time I have worked jobs at or near minimum wage and have always felt that I was paid fairly for the unskilled tasks I performed. I never for a second entertained the thought that government should force my employer to pay me a higher wage. If the job I was doing required a higher wage, the market would force my employer to pay me more. If a business is paying too little, they will not find workers to fill the open positions they have in their company, and will have to raise their rate of pay to compete with other companies for labor.
     The so-called labor activists ignore the surveys that show that a vast majority of those working for minimum wage are college and high school students, or persons working a second job, there are very few people raising families on the income from one minimum wage job. The market works in setting wages. Illustrative of this fact is the reality that most businesses providing unskilled employment pay more than the current minimum wage. Increases in the minimum wage are advocated by the Left and Democrats because union contracts use them as an automatic trigger for an increase in union wages. Higher union wages means more union dues that is syphoned into Democrat campaign coffers. The minimum wage debate, like so many others over which the Left works themselves into a hysterical frenzy, is all about money, power, or both.


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