That Perennial Western Malady, the Revolt of the Individual Against the Species

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Friday, April 08, 2005

On the Minimum Wage

Minimum wage hurts poor people. I have every Nobel laureate economist on my side. This was a response to an acquaintance of mine after the expected "greedy bastard" remarks.

You are scrubbing floors for $5.15 per hour. It sucks, and it's hard work, and you do a good job. Suddenly the politicians decide they're going to do you a favor and raise your salary, because your greedy ass boss is obviously exploiting you. So they raise the minimum wage to $6. Good for you, yes? Unfortunately, the market has already determined that it is only worth $5.20 per hour to keep an employee on staff to scrub floors. Your employer is not going to pay $6 for for something worth only $5.20. He wouldn't buy candy bars at $.75 and sell them for $.50, either.

GreedSo you aren't scrubbing floors for $5.15 anymore. You're unemployed. Bad for you, yes? So you go looking for another low end job. Double-unfortunately, the minimum wage hike has also put you buddies Frank and George and Bob in the same predicament as you. (You were all janitors at EvilCorp.) The first place you go looking has already hired Frank. The second has already hired George. You land a job cleaning up horse shit for a company that offers tourists carriage rides through the city, only to find out two days later that Bob has offered to work longer hours and has no particular aversion to touching horse shit with nothing but latex gloves on. They decide to hire him instead.

Who's better off? Certainly not you; you're unemployed. Not any of your friends; they're each working a shittier (HA!) job than they used to. Not EvilCorp, it's other employees, and its customers; now their floors are vile and disgusting because it's not worth cleaning them anymore. Who's better off?

The politicians. They feel good, warm, and fuzzy. They can go into the next election season with another notch in their belts for "helping the working class," for "fighting against big money and greed." Who else is better off? Perhaps your fellow janitor Greg (He wasn't included in your group of friends; he was always working too hard.), but then again now he's pulling the weight of all four of you and getting paid only a few cents more to show for it, and it's certainly at your expense.

Now consider this happening on a grand scale. Consider the misery and pain it's caused. Those people were poor because they don't have a good job, for whatever reasons. Congratulations, it's just become that much harder to manage to get one. Congratulations, they've just lost that much hope of ever crawling out of the tight space they're in.

Take a walk through an inner city ghetto someday. If it weren't for minimum wage, those people wouldn't be dealing drugs. If it weren't for minimum wage, their average life expectancy wouldn't be stuck below 40 years. The police wouldn't be afraid to be available to help them.

You don't understand that it doesn't matter if you work fulltime or not, your time is still worth more than $5.15 an hour.

You don't understand that the value of your labor is not determined arbitrarily but by existing market forces. Any widget is always worth exactly what the market will bear, always. If anyone, a storekeeper, a monopolist, a government, attempts to artificially raise the price of the widget, its value will not increase. People will simply stop buying widgets.

This isn't theory, it's been observed empirically for hundreds of years. What the "social progressives" in this country hold to isn't theory, either. It is doctrine. It is religion. It is emotional feel-good nonsense, and it's hurting people.