Minimum Wage

What's the minimum wage objective?

Proponents of raising the minimum wage have stated their goal is to obtain a "living wage" for the lowest paid worker. That sounds truly magnanimous on the surface. Who wouldn't want a "living wage?"

Leadership in both political parties support the idea of a minimum wage. The Democratic Party even featured it in their platform for this election cycle. According to their platform statement:

"...the current minimum wage is a starvation wage and must be increased to a living wage."

They went on to define the "living wage" as:

[The worker] "...should earn at least $15 an hour and have the right to form or join a union."

The Democratic Party didn't stop there. Oh! No! We have to be all-inclusive:

[The Party believes they should] "...support creating one fair wage for all workers by ending the sub-minimum wage for tipped workers and people with disabilities."

How do we accomplish this ultraistic goal of a "living wage" for the worker? They had an answer to that dilemma as well.

[The Democratic platform believes that they should] "...support a model employer executive order or some other vehicle to leverage federal dollars to support employers who provide their workers with a living wage, good benefits, and the opportunity to form a union without reprisal."

That's it!

Yes, the government should dictate via executive orders! Take more taxes from those they propose to help so that they are able to help them. Oh...yeah...and lets also form collectivist groups to make sure this all happens.

What the heck!

If those greedy capitalists don't pay the "living wage" or fire us, then we can riot (uhh...sorry...hold strike rallies) outside of their businesses. There's a two-prong effort that will force them to part with their stashes of cash. Right?

Are the medium wage proponents reaching their objective?

Well...no.Roy Cordato, vice-president for Research, at John Locke Foundation writes:

"Historically the idea that the minimum wage will put the least fortunate among us out of work was widely recognized.""It was part of the general scheme of the progressive movement's support of eugenics to keep the "feeble minded," immigrants, and people of color out of the labor markets.""In South Africa, minimum wages were originally supported by all-white labor unions in order to keep lower skilled blacks from being hired to work in the diamond mines, that is to prevent them from competing for jobs that "belonged to white workers.""The problem is that the economic arguments that the founders of their [modern day progressives] movement understood quite well and used to promote nefarious and hateful ends still stands."

Boston College discovered in their 2013 study:

"...compelling evidence that an increase in the minimum wage displaces youth from licit employment and increases criminal activity.""...workers who are affected by a change in the minimum wage are 1.3 percentage points more likely to be idle and 7.6 percentage points less likely to be employed full time.""Regardless of overall net-employment affects, it appears minimum wage increases also increase crime."

Personal Liberty article entitled "Politicians Hate Working People" concludes:

"A minimum wage law is not an employment law. It is an unemployment law. It's the eighth plank of Communism. It is a collectivist idea that all workers are equal and should be paid the same, regardless of the task they perform. It is contrary to liberty as it prohibits two parties from entering into a mutually beneficial contract. It thereby prohibits low-skilled workers from working at all."

In summary, the proponents of $15 an hour minimum wage believe erroneously, or perhaps no so erroneously, that this will establish a "living wage" for the lowest-skilled worker that's "fair." History shows, however, that minimum wages have never worked; in fact, minimum wages were known as a method of keeping the "feeble minded" and other undesirables out of the work force. Ray Cordato, and others, have show that the fathers of the modern Progressive movement were well aware of the affects minimum wages and other government measures instituted for the "welfare" of the citizens. It could be argued that it was by design that they claim to "benefit," when actually they disenfranchise.

What does one do if in agreement with what has been written so far?

A good question.

This author believes that we have to change our mindset. We always have a choice on how we react to events. However, if we are excepting the idea that "government knows best," then we're always going to get the government (coercive) solutions. It's unclear whether it is laziness or feeble-mindedness of the voters that allowed the situation in which we find ourselves embroiled. It ultimately doesn't matter. What does matter is what we plan to do going forward.

We can accept the situation as it is and cave into the increased lack of liberty and increased dictatorial attitude of government. Or we can follow a different plan, such as:

Get government out of labor relations
Ditch the collectivist ideas
Allow the re-establishment of apprenticeships
Allow capitalism to work its magic

Let's be honest with ourselves. The only reason that government got involved in the labor issues was laziness. We weren't willing to take the time and do the work to solve the issues. In many cases, we weren't willing to walk away from the business because of what we might lose. And, that fear of loss is the ball and chain that kept us working for the "man" who was abusive.

So, we turned to the coercive power (government) that we thought would solve the issues for us. It worked in the immediate term. So, we got lazy and decided that we could depend on the government to look out for us. However, it didn't end up working out that way.

Why?

Like the rest of us, the businesses and politicians learn and adapt. Business learned that they could lobby politicians; and politicians learned that they could gain much more funding for their campaigns by working with the businesses. This resulted in governments skewing laws and regulations in favor of businesses while explaining it in terms of benefits for the worker.

Here's where a mindset shift is necessary. We need to be willing to walk away, even move away if necessary, from a business that's abusive to its employees. If the abusive business doesn't have workers, it doesn't have products or services to sell, and it goes out of business.

Understand that not all business are abusive. A business is a balancing act between selling a product or service at a price people are willing to pay and the costs of producing that product or service. Without profit there is no incentive to continue to improve that product or service, and it ceases to exist over time. Our goal at a good and thriving business shouldn't be to use government or government sponsored organizations to force business to part with their profits.

Rather, our goal should be to learn or hone the skills that will contribute to the profit of the business. A good business will reward those who are willing to put in the time and effort to improve themselves so that they can contribute to the profit of the business. If your employer isn't doing that, find another business that will. If all the employees at your business agree with your assessment, that business will cease to exist.

Collectivism in all its forms typically results in failure, whether it's unions, cities, states or federal governments.

Why? Simple.

Human nature being what it is, they all create fiefdoms that the power hungry are willing to exploit. They are able to exploit those fiefdoms because the general member is willing to allow the coercive power of that organization to solve the problems for them. Strangely, it always ends up turning against the members. It turns against the members when they begin to question "management's" tactics. After all, they need to keep the membership in line so they have the power/coercion to negotiate with the business, which has subsequently become harder to negotiate with since the arrival of the union out of self-defense.

Perhaps the worst case of collectivism gone awry was Holodomor. It seems that Stalin thought the Ukrainian farmers weren't producing as much as he thought they should. So, he came up with this great idea of organizing them into communes. The production fell off due to the more productive farmers efforts dropping off because there was no incentive to be more productive. They were only getting an equal share of the profits of their commune. Why should they be more productive than necessary?

Stalin took this as an affront to Russia and himself. The next idea was to send Russian troops into eastern Ukraine and gather everything the farmers had. They were literally left without food. Stalin thought this would motivate them. It didn't. Without food, they didn't have the energy or will to be productive, let alone more productive. It is estimated, depending on the source, that somewhere between 2.5 and 7.5 million people died from starvation in eastern Ukraine. Friends in Ukraine pretty much agree on the 6 million figure. Of course, many sources deny this happened, chief among them being Russia.

Next, Stalin sent Russians into eastern Ukraine to farm the land. The only problem was that the people sent to Ukraine weren't farmers. They ended up being less productive than the former Ukrainians farmers who had been starved. At that point, Stalin gave up and turned eastern Ukraine into industrial production. (And, now you know the reason why Putin uses the excuse of protecting the Russians for his adventures into surrounding countries.)

The collective ideas have always been used as a "reasonable" answer to make things work out better; and, they never have.

Apprenticeships have been a time-honored method for businesses to build up skilled individuals. They are few and very far between today. It's not because businesses aren't interested in setting up apprenticeships. It's because laws and regulations have made it onerous and far too expensive for business to consider. Once again, this came into play thanks to labor lobbies along with politicians and businesses adapting.

There are several business that come to mind who would gladly take on apprentices. Most apprentices would start with little or no income until they learn enough skills to contribute to the profit of the business. Those same business would then compensate them according to their skill set and willingness to improve and/or multiply their skills.

The collectivist idea that everyone should get a college degree or multiple degrees doesn't seem to be working. Most people are coming out of the universities with skills in dying fields. So, the students are graduating with degrees that they can't use and huge debts. Either they can't find work because of their studies, or it's at low wages while they apprentice in a job that has nothing to do with their degree.

The overwhelming debt leaves them susceptible to coercion by a variety of bad actors in their attempt to satisfy the debt.

There is this attitude among students as well as their parents and advisors that, if you don't have a degree, you are a nobody and have no future. It's simply not true.

Look at what Mike Rowe talks about all the time. A mechanic at Caterpillar is making $125,000+ per year, which is the same or better than many doctors, lawyers, or airline pilots at major airlines. They are paying that much because it's the only way they can attract the help they need, those who are willing to learn the skills they need. They have thousands of openings, none of which require a college degree or excessive debts.

Once again, apprenticeships lead to learning the skills that are currently in demand and to future employment.

Capitalism currently has a less than stellar reputation. But, it's not the fault of capitalism, which is the voluntary exchange of value between two people.

Is it perfect? No.

However, I don't know of a better system.

What passes for capitalism in the United States and other western countries today is crony-capitalism, not capitalism itself. Crony-capitalism is based on using your cronies in government to change the equation so that the laws and regulations favor the existing businesses and establishes huge roadblocks for small businesses or startups.

One more time, government has no business being involved in business transactions, except to act as arbitrators in a dispute. It was original intent of the founders and writers of the Constitution of the United States.

"Progressive" politicians have found ways to warp the original intentions of the Constitution in order build up government control and their fiefdoms.

Capitalism properly practiced allows businesses to find needs and wants in society and work hard to satisfy them. They are rewarded for their insight and efforts. The individual who isn't willing to put in the efforts to discover those needs and wants, as well as satisfy them, simply becomes an employee according to their willingness to learn skills needed for the job.

As stated above, those companies who abuse their employees and customers will eventually find themselves out of business. Only the companies, who are efficiently balancing the myriad of forces involved in a business, will survive and thrive.

The intent of this article was to show that minimum wage increases is a failed policies that politicians aren't willing to learn, or are purposely employing as a measure of control over their constituents. This author opts for the second scenario. We've learned that they have presented the programs they promotes as "for our benefit in an unfair world," when they are actually intended to lull us to sleep and control us.

The only way out of the mess in which we are entrenched is to go through a mindset shift. You have to be willing to suffer the consequences of stepping outside of the system, even if that means leaving the only country you've ever known. One could stay in the country and actively work against the system, with the understanding that you could spend time in jail for your efforts.

If you're even a little familiar with Jesus and his disciples, you will know that they all spent time in jail or died for what they believed. The founding fathers of the United States, most of whom were devote Christians, pledged their lives and fortunes for what they believed. If you're not willing to do the same, the "freedom and exceptionalism" of America will be a legend of the past on its home soil.

h/t Personal Liberty