The Wage War

by: the Common Constitutionalist

Last week some flaming liberals in the House of Representatives suggested that the national minimum wage be raised from $7.50 to $10 an hour. (Probably part of the 78-81 communists in the party).

Why stop there? Let’s make it $12, $15 or maybe $25 an hour? Why not? Who wouldn’t want to be paid more.

As I’ve just demonstrated, the $10 figure is purely arbitrary, but according to the Hill Online, representative Jesse Jackson Jr. of Illinois and about two dozen other liberal Democrats endorsed legislation to raise the federal minimum wage immediately, thinking that this will be a hot election-year issue.

What a great idea! Once again Congress shows how out of touch they are with the business community. Of course the business community is not whom they wish to curry favor. Remember, they are for the working class, supposedly.

The Democrat leadership, however, has been a little less enthusiastic. It’s not that they don’t wish to raise the minimum wage. It’s that they wish to do it slowly, incrementally, so, like the frog, we don’t realize were being boiled alive.

The Politburo, or Democrat leadership if you like, would be more inclined to sign on to a proposal by Sen. Tom (dung heap) Harkin of Iowa. He proposes to gradually raise the rate to $9.80 over three years, but even this proposal has received scant attention from the leadership.

If you recall our beloved president issued a proclamation shortly after his 2008 victory that the minimum wage would be hiked to $9.50 an hour by 2011, but of course the compliant press would never dare call him on it.

Even the idiot consumer advocate Ralph Nader has weighed in on the subject. He said, “you get a conservative voter making eight bucks an hour at Walmart, here she is not going to say, I don’t want $10 and hour because I’m a conservative”.

No Ralph. I would hope that the people at Walmart and every person working would realize that these companies can’t just magically raise wages across the board. I would hope that the employee would say, “Hey, I’d rather make eight dollars an hour and be employed then the promise of $10 an hour and be laid off so the company could afford to pay the $10 an hour to all the other employees by using my paycheck”.

I know these are rhetorical questions, but do these dopes in Congress not understand anything about business? Have they never had to make a payroll? Have they never had to compete for business, maintain a minimum gross margin, had to lay someone off due to a down turn? Silly me. Of course not. When you can print money and deficit spend until after the cows come home, how could you know, or care.

These politicians don’t give a damn about the little guy. The little guy is who employs most Americans. The “Walmarts” of the world would be adversely affected, yes, but it really hurts the small business.

Issues that they never take into consideration are the difference between what an employee takes home in pay compared to his total compensation. Employers must pay for legally required worker benefits that include Social Security, Medicare, unemployment insurance, workers’ compensation, health and disability insurance benefits, and whatever paid leave benefits they offer, such as vacations, holidays and sick leave. It’s tempting to think of higher minimum wages as an anti-poverty weapon, but such an idea is ridiculous on it’s face. After all, if higher minimum wages could cure poverty, we could easily end worldwide poverty simply by telling poor nations to legislate higher minimum wages.

Poor people are not poor because of low wages. For the most part, they’re poor because of low productivity, and wages are connected to productivity. The effect of minimum wages is that of causing unemployment among low-skilled workers. If an employer must pay $10 an hour, plus mandates that might bring the employment cost of a worker to $14 or $15 an hour, does it pay him to hire a person who has the skills that permit him to produce only $8 worth of value per hour? Most employers would view hiring such a person as a losing economic proposition.

But, you say; are you heartless? Don’t these workers deserve a “Living Wage”? I could ask the same to those minimum wage advocates. Don’t you care about the workers?

The facts are that most studies of minimum wage laws in countries around the world show that fewer people are employed at artificially higher wage rates. Moreover, unemployment falls disproportionately on lower skilled workers, younger and inexperienced workers, and workers from minority groups. In other words, raise the wage rate & create greater unemployment.

A Cato Institute study cited data showing consistent job losses in places where local or regional “living wage” laws have been imposed. This should not be the least bit surprising. Making anything more expensive almost invariably leads to fewer purchases. That includes labor.

As imposed wage rates rise, so do job qualifications, so that less skilled or less experienced workers become “unemployable.” Think about it. Every one of us would be “unemployable” if our pay rates were raised high enough.

Attribution: Walter E Williams

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About thecommonconstitutionalist

Brent is not a scholar. He’s not an author or speaker (yet). He hasn’t published a book nor does he write articles for magazines (yet). He has no advanced literary degree or pedigree (never will). He is just an American who writes and shares what interests him. He cares about the salvation of this country and a return to its Constitutional roots. He believes in God, country and family.
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