Minimum Wage Discussion
At the heart of any discussion regarding minimum wage is where a person's sensibilities lie with respect to socialism and capitalism. For those people making minimum wage it seems an easy position to take. "Pay me more money." For the employer, the conundrum of self-preservation ensues. Consider for a moment a small business owner who genuinely cares for the well-being of other people. He hires the number of people he needs to run his business efficiently and effectively. He enters into a contract with each person to pay them a certain amount for their efforts. The employee can either choose to accept the offer, negotiate for a better offer, or simply turn the offer down and seek other options. The great thing about capitalism is the contractual nature in which employers and employees enter into. Either can break the contract at anytime when they feel they are not getting their money's worth for the labor that is provided. As long as the employer can get quality applicants at a certain wage rate, there is no need for them to pay more.
Minimum wage jobs are no different. Most people have held a minimum wage job at some point in their lives. Society views many of these jobs as stepping stones for future jobs with greater responsibility and subsequently, greater pay. Generally speaking, they require little skill and little education. They simply are not the kind of jobs you will support a family on. They certainly weren't designed that way. It is disingenuous to agree to work somewhere for a certain wage and then fain outrage about the amount of money you are being paid! If someone doesn't like the money they are making, they have the right to seek a better paying job elsewhere.
Of course there are always those who claim there are no other jobs and they are forced to work for minimum wage. This can hardly be verified and in fact can largely be disputed. It is true that you will be hard pressed to find job at a convenience store, fast food chain, or at a car wash that will pay you $60,000 a year. If you are wanting to make that kind if money, you need to develop a skill, a trade, or even better, start your own business. Are there any guarantees you will make $60,000 as a business owner? Absolutely not. I can absolutely guarantee that if you don't try, you won't make anything.
You see, success for the vast majority of Americans was predicated on risk. Its a risky proposition to fork over $70,000 or more on an education in hopes you will one day have a career that will pay you a salary that will support you and a family as well as leave you a bit left over to enjoy life's tertiary pleasures. But guess what, there are no guarantees. There are no promises of guarantees in the Constitution. If you want guarantees, move to Greece. The entitlement programs of that country make it almost not worth having a job. It's a nanny state providing the necessities and comforts of life from cradle to grave. The entitlements have been so exorbitant, they are now facing serious repercussions. Not long ago, Sweden was headed for imminent doom but after some soul searching and very pragmatic leadership, they now have a fighting chance to remain solvent. But I digress.
Many people earning minimum wage are also recipients of redistributed wealth. Due to the extremely progressive nature of the U.S. income tax system, nearly half of all eligible tax payers pay nothing in income tax and often receive returns larger than what was deducted from their checks throughout the year. These returns result in their effective tax rate being negative and increases their overall annual salary. This is not by accident and not always a bad thing. The goal, of course, is to lift people out of poverty. Proportional tax rates (flat tax) sound like the perfect solution on the surface. Everyone pays the same tax rate regardless of income level. And although this is truly the fairest way to apply tax laws to the citizenry, it can also be quite punishing to lower-income people. A flat tax of say...10% impacts people much differently. Imagine two tax payers, one makes $200,000 a year and the other $20,000. A 10% tax impacts the individual making $20k much more than the individual making $200k, even though the higher earner has a tax bill as high as the lower earner's entire annual salary. But, I digress again. Look for future article on taxes.
Now that Seattle has increased their minimum wage to $15 p/hr, there are so many positions on whether the impact has been harmful or whether the increase was totally absorbed by the economy without blemish to employment or inflation. After a year in, it may be too early to really say either way. However, what may not be an apocalyptic fiscal tragedy today, will become a nightmare tomorrow if common sense does not prevail. At some point, forced wage increases WILL negatively impact overall employment and if not employment, inflation. Either way, the result is the same, increased numbers of unemployed and reduced purchasing power for everyone else.
Don't be fooled my friends. We are all part of a great socio-political experiment where politicians establish policy and see how the people respond. Likes rats in a cage, we, our families, the market, are being measured and assessed to determine how we react to stressors. Politicians are pushing the envelope of the rate-revenue curve in order to determine just how much tampering the free market will tolerate before it breaks down. Concept Conservative believes the free market can and will determine fair wages commiserate to the jobs being performed, and each person, both employed and employer can enter into and exit out of contracts according to the dictates of their conscience and personal ambitions. An economic environment that creates equal opportunity, not equal outcome, is in direct agreement with the tenets of the U.S. Constitution.
Now that Seattle has increased their minimum wage to $15 p/hr, there are so many positions on whether the impact has been harmful or whether the increase was totally absorbed by the economy without blemish to employment or inflation. After a year in, it may be too early to really say either way. However, what may not be an apocalyptic fiscal tragedy today, will become a nightmare tomorrow if common sense does not prevail. At some point, forced wage increases WILL negatively impact overall employment and if not employment, inflation. Either way, the result is the same, increased numbers of unemployed and reduced purchasing power for everyone else.
Don't be fooled my friends. We are all part of a great socio-political experiment where politicians establish policy and see how the people respond. Likes rats in a cage, we, our families, the market, are being measured and assessed to determine how we react to stressors. Politicians are pushing the envelope of the rate-revenue curve in order to determine just how much tampering the free market will tolerate before it breaks down. Concept Conservative believes the free market can and will determine fair wages commiserate to the jobs being performed, and each person, both employed and employer can enter into and exit out of contracts according to the dictates of their conscience and personal ambitions. An economic environment that creates equal opportunity, not equal outcome, is in direct agreement with the tenets of the U.S. Constitution.
