Wednesday, August 02, 2006

The minimum wage

In a 230-180 vote, the House of Representatives voted to increase the minimum wage, a type of law that any reputable economist will tell you does nothing more than condemn people to unemployment. The minimum-wage bill (H.R. 5970) will go before the Senate on Friday.

After all, look at the logic. No employer is required to hire anyone. It's his business. He could go out-of-business if he wants. The law simply says that if he does, he is required to pay that employee the minimum wage or above. If that employer wants to hire an employee, the employer is going to hire someone who he believes will be worth more to him than it costs to hire that person. Thus, if the law requires someone to pay $7.25 an hour, no employer is going to hire anyone whose labor he values at less than $7.25/hour.

On the other hand, that employee is free to leave his employer if another employer offers a job with better benefits (better pay, better hours, better working conditions, etc.). It is simply supply-and-demand.

So what happens to all the workers whose labor is valued in the marketplace at less than $7.25/hour? They're locked out of the labor market by a $7.25/hour minimum-wage law. So, how do they survive? Through burglaries, robberies, muggings, or taxpayer-provided welfare.

Yet, the congressmen who voted in favor of the minimum-wage increase would undoubtedly cry, "We did it to help the poor!" Do you see the dilemma?

With reasoning like this, why are the American people so willing to entrust their lives, fortune, and well-being, as well as that of their children, to these people?


UPDATE: The Senate didn't have the 60 votes to override the filibuster on this bill. It made a majority, but not the 3/5 needed for passage (56Y-42N). Now, why don't we eliminate the minimum wage altogether, and let the employer and the employee voluntary determine the price. Then, only the bureaucrats at the unemployment line will be out of a job.

2 Comments:

At 8:07 PM, Blogger Big Daddy 2x4 said...

They banned private businesses from allowing people to choose if they wanted to permit smoking in their establishments (in many states, anyways), why think a law requiring businesses to hire people worth less than the minimum wage is too far off?

I'm just sayin'...

 
At 8:37 PM, Blogger Thomas Bell said...

You are right. In ANY voluntary working relationship (wage, smoking, etc.), it is between the employee and the employer, that's it. The government should stay out of the picture.

 

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