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The Minimum-Wage Terror PDF Print E-mail
Commentary/Politics - Guest Commentaries
Wednesday, 13 August 2008 02:14

NEW YORK (CNNMoney.com), July 24, 2008 - The national minimum wage went up 70 cents on Thursday as the second of three planned increases mandated by Congress took effect. The national minimum wage will increase to $6.55 per hour as part of the Fair Minimum Wage Act of 2007.

Let's imagine that the old metaphor "climbing the ladder of success" isn't metaphorical but literal.

So there's this whopping big ladder leaning against a whopping big building, and the building has a whopping big sign pointing upward that says "Prosperity" and there's another whopping big sign pointing toward the ladder that says "Success."

So the way things work in a free libertarian society where everyone gets an opportunity is that a person seeks out one of the multitudinous Ladders of Success and starts climbing in the hopes of reaching Prosperity.

So let's say you're a young person of no particular skill but you're bright enough and motivated enough that you've landed your first job.

It's a crappy job there on that bottom rung, maybe flipping burgers or flipping bed sheets in a motel room or flipping a mop across a dirty floor, but you figure you won't be doing this forever. It's an opportunity. You'll learn something, sharpen a few skills, and use the experience to move up to that next rung on the Prosperity Ladder.

You're making $5.85 an hour and that's good enough for now.

And you also have a friend standing flatfooted on the ground who would love to hop up onto that bottom rung next to you and make $5.85 an hour, which would be $5.85 an hour more than your friend is making right now.

Then along comes Congress. As the fair, caring, sensitive, compassionate, progressive, and socially responsible Congresscrats do periodically, they decide to help poor little ol' you by ramming through the Fair, Caring, Sensitive, Compassionate, Progressive & Socially Responsible Minimum Wage Act.

So now your knees are quivering, standing there on that bottom rung, sweating out how the results of this benevolent legislation will hit you. Your boss is bound to say one of these things:

"Here's your raise, kid. Keep working."

"Here's your raise, kid. But now I can't afford to hire that friend of yours standing flatfooted on the ground, so you're gonna have to work twice as hard for your money."

"Sorry kid, I can't afford to keep you. You're gonna have to join your friend standing flatfooted on the ground, and all my other workers are gonna have to work harder to make up for it. And I'll be passing the extra labor expenses along to my customers like every other business is doing, so now you're not only unemployed but everything will cost more too."

If you were unlucky, you're standing flatfooted on the ground next to your friend looking up at that bottom rung of the ladder. Only this time the bottom rung is higher than before. Seventy cents higher.

What happens is that every minimum wage law raises the lowliest jobs on the lowest rung of the ladder higher and higher until, for some people, the poorest of the poor, the least educated and the least skilled, can't jump high enough to grab that lowest rung.

What the Congresscreeps have done, in the name of compassion and fairness, is to "raise the bar" of opportunity to a height where it can't be reached.

The fair, caring, sensitive, compassionate, progressive, and socially responsible Congresscretins have always known the results of their actions. If raising the minimum wage actually works, why stop at 70 cents? Why not go for two bucks? Or 20? Or 50?

They know it's idiotic. They raise it a few pennies because it brings in a few votes from the poor and the unskilled who don't realize it's idiotic.

They do it for show. They do it for politics.

Good luck, kids.

Garry Reed is a longtime advocate of the libertarian philosophy of non-coercion that espouses personal autonomy and individual responsibility, civil rights and economic liberty, maximum freedom and minimum government. His Web site is (http://www.freecannon.com).

 

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written by Maria Folsom, August 13, 2008
A perfect description of what's happening in my town. My friends who own small businesses are doing exactly what you say, Garry: firing the poor guy on the lowest rung, and raising the cost to their customers in order to keep their other employees.
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written by E Thomas, August 14, 2008
This whole article is oversimplification of a complex economic question in this country. Is it any wonder that all the states that exceed the federal minimum wage in this country also have the lowest unemployment rates ase well. Just keep believing the voodoo from your corporate masters.
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written by KitCarson, August 14, 2008
Hey kid, if you'll work for $3.55 an hour I'll hire you and your friend. If you'll work for $1.25 an hour I can hire you, your wife, your friend and two kids under 12. Hey its a free market!
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written by Archie1954, August 14, 2008
What a crock! Other countries also have minimum wage laws only they are at a level certainly to the north of you that is in the $8 range per hour and there are no lack of jobs going begging for someone to fill them. you really don't know what you're talking about. You're not a lobbyist for business owners are you?
steven montross
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written by daddysteve, August 16, 2008
I agree with you, Garry. You have to have plentiful jobs to create good paying jobs. It doesn't work the other way around. Price fixing for employment doesn't work any better than any other price fixing scheme in economics. However, I don't think warm and fuzzy socialists are going to be persuaded by cold, impersonal libertarian logic, correct though it may be.
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written by Dylboz, August 18, 2008
What is seen and unseen. *sigh*

Those countries or states with higher minimum wages also have permanently unemployed people who gave up looking for an in to the labor market, and instead take advantage of the huge social programs those states and countries always (necessarily) have. Those programs are paid for with higher tax rates taken from the wages based upon that higher minimum, so ultimately, the worker in those areas actually takes home less in order to subsidize the permanent underclass. That's the other side of the higher minimum wage coin.

In a free market, there is more opportunity, and no social programs to pay people to stay out of the market. You keep more money, and others have a chance to make their own money instead of living off of yours.

Socialist economics, an oxymoron if ever there was one.
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written by schqc, August 19, 2008
If Libertarianism were followed to the letter no one could afford to live. Ponzi schemes would rule the day. Those who cheated would win.

Even now the riches of slavery, exploitation, cheating, defrauding have not been wrenched out of the system. Want a libertarian government, first pay the Indians, African Americans, Illegal Immigrants, what the government owes them and what corporations who exploited their labor owes them.

Pay women back wages for their work. Pay women for raising the next generation of wage earners.

God help the aged Libertarian. "Sorry, bloke, no work, no medical care. God love ya. Need morphine? Should've saved your cash".

And by the way, that'll be twenty bucks for driving on the road that I built. $20 a mile. Good luck finding another road. Better pay the mason for sitting in the school. Good luck finding a teacher who'll charge under $100. an hour.

What most libertarians want is free market, as long as we can screw people. Corporate socialism. Better tear up the interstates and the Airports. Socialist ventures all!

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