Minimal wage: Irrational fantasy
There are calls for a new minimum wage: one sufficient that anyone with a job can support themselves and their family. The fundamental concept is an irrational fantasy. The higher the minimum wage, the greater the skill and productivity of the worker required to justify the higher pay.
The minimum wage has been raised 23 times since 1938. The Bureau of Labor Statistics reports that in the year following each of these increases, nearly 1 million workers lost their jobs because the job they did couldn’t generate sufficient revenue to justify their continued employment.
Politicians that raise the minimum wage bear no consequences for doing so. They campaign as heroes to the unthinking when, in fact, they are job destroyers. Once they destroy the jobs they increase social benefits that increase the cost of doing business (either by increased social taxes or by raising the wage necessary to attract labor) that costs more jobs. It’s a self-destructive cycle proven by history.
Commerce is the only path to prosperity. Any act, regulation, mandate, or policy that impacts our ability to compete in commerce necessarily threatens jobs and pay.
Free Market Commerce is a wonderfully simple and effective process. It consists of providing a product or service that a willing buyer joyfully buys. Simple doesn’t mean universally understood.
Providers do not set selling price; consumers do. Providers can only impact the cost to provide. When interlopers create mandates, policies, or practices that add cost, especially costs that buyers don’t willingly pay for, commerce is threatened. When commerce is threatened it naturally moves (by relocation or automation) to wherever production costs permit prices consumers are willing to pay.
Too many blame Wal-Mart for imported goods when it is consumers that force prices down to the level that can be produced only outside America.
Every non-essential regulation, tax, social mandate, non-productive work rule adds cost and makes our competitors more profitable and more competitive.
Vote wisely; American jobs depend on it.
Frank D. Banta