I Vote For A 1000% Increase In Minimum Wage

How is something so arbitrary as the minimum wage derived? Did you ever think about that? What is the minimum wage? Do you know? Well, it’s zero. Any moron ought to know that. But not so for the politician. For him, it’s an arbitrary number drawn from an entirely different science than economics; which is political science. I also know that the daily exchange of resources, which is the economy, will respond to that number in an entirely different and un-arbitrary way than the politician envisions.

But it does raise a question that deserves an answer. If politicians can arbitrary legislate what ever income they think one ought to have, why is it so low? As the mantra goes, “who can survive on minimum wage?”. So who is the real devil here? Is it the politician who legislates sub-poverty wages, or the greedy business owner who is forced to pay them?

The answer to the question depends on the perspective. Politicians survive off votes, businesses off profits. Therefore, politicians are motivated by votes, and business owners profits. If politicians, who have their own image problem, hadn’t made “profits” such a dirty word, this whole thing really wouldn’t be that difficult to understand. Still, while neither of these motivations have the worker’s best interest at heart, only one of them “profits” by fooling the moron worker into thinking that he is actually the main concern. Care you guess which one does that: the politician or the business owner?

So the bottom line is this: if high wages actually can be simply legislated, then being a man of compassion, I vote that the minimum wage be raised 1000%, and let’s be done with this poverty thing once and for all.

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12 Comments

Filed under Business, Economic Science, Economics, Equality, Government, Human Nature, Politics, Worldview

12 responses to “I Vote For A 1000% Increase In Minimum Wage

  1. Minimum wage in America was originally based on a loose idea of ‘living wages’ and an ethical responsibility to workers. I will agree that variations, especially state-by-state, may be due to political pressures, but I disagree passionately that it should be dramatically increased (which you speak to in the title but don’t really address in the post). The number one beneficiary from minimum wage laws are middle-class teens working part-time or summer jobs. Furthermore, increasing it severely merely forces employers to hire less workers, presenting the majority of those currently on minimum wage with no wages after being laid off. Alternatively, they don’t hire any American workers at all, opting instead to replace workers with machines when possible or offshoring the labor when it isn’t. Your post does less to raise real concerns over minimum wage than it does to simply demonize ‘politicians’.

    • Minimum wage laws harm teens. It’s basic economics. The more expensive a thing is, even a person’s services, the less demand there is for it.

      But if wages actually could be legislated, as minimum wage laws suggest, then perhaps demonic fits quite well for politicians willing to legislate it so low.

      BTW, like the name of your blog.

      • Actually having studied economics, it isn’t that simple. You see, if people have more wages they can spend more which in turn works out as more revenue which can lead to more wages. This is why the literature on minimum wage has found only insignificant effect on employment.

        To say minimum wages can be legislated misses the point as does saying it should be 1000%. The fact is that minimum wages can have adverse effects if raised too high, but that doesn’t mean that they are always bad. For example 1000 drinks would kill you, but that doesn’t mean a few will. Everything taken to extreme is damaging.

        • According to your analysis ” if people have more wages they can spend more which in turn works out as more revenue which can lead to more wages. This is why the literature on minimum wage has found only insignificant effect on employment” the higher the minimum wage the better for everyone. Then why not legislate a raise of 1000%?

          • Robert and I have had ongoing debtates. He like other Keynesians and leftist economists can’t answer that question. They just want to legislate a wage equally for the man living in upper west side of Manhattan in NY to the man living in the Bayous of Louisiana. This is supposed to increase the standard of living and stimulate the economy to growth. These guys are very confused….you see they are not in business. Consumption is not what creates true wealth or drives and strengthens an economy. It is production, savings and trading of products/services.

            They also can’t (or don’t want to) see labour as an ‘input cost’ for any business and incorporated into the cost of production and the cost of their product. In another discussion Robert stated that labour is “unlike any other commodity”…of course he does not acknowledge that when the price of a commodity goes up artificially, the utilization of said commodity goes down (ie resulting in more unemployment).

            In their minds increasing the wage is one part without consequences or changes in behaviour of the employer or the consumer. In their world it’s all good if you just increase it and then the labourer goes out to spend his wages (i guess frivolously, without saving and increasing his wealth).

            • Very well said. There are many other factors that impact this issue as well which involve much more than simply economics; not the least of which is the political clout this “issue” gives to politicians who seem to trot it out on their bad days.

              • Because all politicians “care”. The thing is if they truly cared and wanted a to end unemployment….they could do this the world over almost instantaneously by removing the minimum wage and setting a maximum wage!

  2. Here in the UK we have a minimum wage law. I use the services of a self-employed cleaner to clean my flat and pay her £6.50 an hour for 3 hours work a week. She has other clients who also pay the minimum wage as they are bound to do by the legislation. I feel better paying the minimum wage as I know that it ensures at least a bare minimum of survivability (if there is such a word)! I think, at bottom the minimum wage is about decency, setting a floor beyond which noone can sink. Obviously if the rate increased beyond a certain level I would either cancel my cleaner or perhaps get to clean every other week rather than once a week. I guess the danger with minimum wages, if they are set to high is that people will disregard them and employ people in the black (unregulated and untaxed) economy.

    • Can a person survive where you live making £6.50 an hour?

      No person in the US could possibly survive off of minimum wage.

      • Where I to be her only source of income then she could not survive. However she works 6 days a week and has many other customers. Having said that I understand that her and her partner share a house with a number of other people as in London she could not aford a place of her own on the money she receives. She is from Bulgaria and I know from conversations with her that the money which she receives here in the UK (albeit it only the minimum wage) is better than what she would get in Bulgaria.

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