Stop the Minimum Wage Hike

cropped-bob-shapiro.jpg   By Bob Shapiro

One Law that I see validated constantly is the Law of Unintended Consequences.

Sir Isaac Newton said that for every action, there is an equal and opposite reaction, but it seems like our government leaders are not aware of this basic Law of physics.

Frederick Bastiat said almost 200 years ago in his book, The Law, that we should consider not only the seen effects, but also the unseen effects of any action.

Take the case of a vandal who throws a brick through a store window. The shop owner must pay the glazier for a new window, who now has money for groceries. The grocer now can buy shoes, and the shoemaker now can afford a new machine, and so on.

If we look only at this chain of events, we would think the vandal to be a benefactor of society. Let’s break some more windows!

In truth, the original store owner no longer can afford some other purchase, denying someone else the money for yet another item, and so on. The vandal has not caused the chain of purchases or investments. All he has done is redirected it.

The net result though, is that Society is out one window.

What makes me think of this is a video that was sent to me, originally from the White House, signed off by US Secretary of Labor, Tom Perez. It’s a slick, though empty-headed explanation of why the proposed increase in the Minimum Wage to $10.10 is a good thing. The video shows all the benefits to be reaped without considering the unintended consequences.

But, what unintended consequences could there possibly be??!!

A previous bonanza for Americans, ObamaCare (aka the Affordable Care Act) had the following unintended consequences among others:

  • Some companies cut full time employees’ hours back to part time to avoid the extra costs of ObamaCare
  • Some companies closed up shop, so their entire workforce lost all their hours
  • Some companies raised prices so consumers were hurt
  • Some companies reduced hiring so that future jobs disappeared

The unintended consequences were that, because ObamaCare raised business costs dramatically, millions of Americans were adversely affected. So now, the democrats are proposing a Minimum Wage hike to $10.10. Since it will raise business costs dramatically, it’s reasonable to expect cut hours, layoffs, price increases, and loss of future job openings.

Does anybody benefit? You betcha!

The way the Free Market works is that some employers have a choice. They can hire one union carpenter or plumber for $30 an hour (only $30?!), or he can hire 2-3 unskilled people at $7.65 (or whatever it is in your state), train them, and still come out ahead.

But, if the Minimum Wage goes to $10.10, the scales are tipped to where the single union worker is cheaper at $30 than 3 newbies at $10.10 each. So, if the Minimum Wage goes up, the unions win.

The democrats have both groups in their current constituency: unions and minimum wage earners. The unions have demanded, “Raise the Minimum Wage.” Since the democrats figure that poor people don’t have a lot of money to donate, and the democrats think the poor aren’t too bright, they say yes to the unions.

The democrats have thrown the poor under the bus!

Action Item:

  • Keep the Minimum Wage from being hiked, and work to get rid of the current Minimum Wage Law.
  • Explain during every campaign, especially in the poor neighborhoods, that the democrats have thrown the poor under the bus. The poor have brains – treat them like it.

5 thoughts on “Stop the Minimum Wage Hike

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  3. You are right, that video is quite vapid. It tries to imbue support for raising the minimum wage with a “feel good” quality. However, as much as the video completely lacks any true logic, there are very good reasons to raise the minimum wage.

    For starters if someone is working full time and that job is not paying him enough money to cover his basic needs (food, housing, healthcare), then the government has to step in to pay for them through welfare and other subsidies. If the owners and shareholders of that company are getting rich from the same company where the employees have to live off of handouts from taxpayers, then that company is actually surviving off of the government, because if the government were not stepping up and taking care of its employees, then the company would not have any workers.

    I would rather that businesses just pay enough to their employees that I, as a taxpayer, do not have to subsidize their existence. I recognize that this will mean some people are going to lose a job, but I would rather give these people their time back to look for a different revenue stream, rather than spending 40 hours a week helping someone else get rich. I am not looking to create some kind of guarantee that employees will become wealthy for working any job, just that they can get by on their own. Also, I would much rather this be handled at the state level, so, while I do not necessarily support a rise in the national minimum wage, as a regional concept, I do support the measure.

    https://mythoughtsonhowtomakethisplacebetter.wordpress.com/2015/05/28/what-is-my-stance-on-minimum-wage-laws/

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  4. Reblogged this on My Thoughts on How to Make This Place Better and commented:
    You are right, that video is quite vapid. It tries to imbue support for raising the minimum wage with a “feel good” quality. However, as much as the video completely lacks any true logic, there are very good reasons to raise the minimum wage.

    For starters if someone is working full time and that job is not paying him enough money to cover his basic needs (food, housing, healthcare), then the government has to step in to pay for them through welfare and other subsidies. If the owners and shareholders of that company are getting rich from the same company where the employees have to live off of handouts from taxpayers, then that company is actually surviving off of the government, because if the government were not stepping up and taking care of its employees, then the company would not have any workers.

    I would rather that businesses just pay enough to their employees that I, as a taxpayer, do not have to subsidize their existence. I recognize that this will mean some people are going to lose a job, but I would rather give these people their time back to look for a different revenue stream, rather than spending 40 hours a week helping someone else get rich. I am not looking to create some kind of guarantee that employees will become wealthy for working any job, just that they can get by on their own. Also, I would much rather this be handled at the state level, so, while I do not necessarily support a rise in the national minimum wage, as a regional concept, I do support the measure.

    Like

    • I understand and respect your feelings. If only the world / economics worked that way.

      Life isn’t fair. It’s an unfortunate fact of life that some people have to work long and hard to put food on their tables and clothes on their backs. Pointing to welfare as a reason to support bad policy (minimum wage) just compounds one bad policy with a second – but that’s a topic for another day.

      Like

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