Friday, December 6, 2013

This? Again?

So Liberals, fresh off the stunning success of ObamaCare, are now agitating for an increase in the minimum wage to "fix" the economy.

Any Conservative can spout off the talking points:

  • The REAL Minimum Wage is Zero!
  • Raising the Minimum Wage increases unemployment!
  • Raising the Minimum Wage leads to inflation!

And so forth.

But let's get past the talking points for a moment, and actually think about *why* raising the minimum wage is a bad idea.  Sure, the real minimum wage really is zero.  Sure, it really does increas unemployment (or, at least, slows hiring).  Sure, it really does lead to inflation (through increased costs, rather than through increased money supply).

But one of those is a tautology, and the other two are effects.  Instead, let's consider some foundational ideas.  Those things are true, but so (at least on the surface) are the liberal's talking points.  So let's look at the real world.

That is, let's look again at what "money" and "wages" really are.

First off- money.  I've pointed out before that those ones and zeros in your bank account are not money.  Neither are those dollars or coins in your pocket.  The latter is "currency" which is merely an abstraction of money.  The former is an abstraction even of currency.

Money, at its base, is the representation of the value of capital.  Sometimes that capital is "real" (that is- stuff or land), sometimes it is "labor" (that is- a person actually doing something).  Nevertheless, "money" is essentially an abstraction of "I'd like to trade this half-pound of apples for that loaf of bread."

Wages, then, is money- that abstraction- given in exchange for labor.  That means- however much currency is exchanged, you are only giving someone the value of their labor.  Now, market distortions (such as a "minimum wage") can mess with that to some extent and for a time.  Ultimately, however, money is like water- it will find its level.

So let's consider what "raising the minimum wage" really does.  It states, arbitrarily, that the currency representation of the value of the labor of the fry-guy at QuickyBurger is now $10.00/hr.  Will that make the fry-guy at QuickyBurger able to buy more stuff?  Over the short-term, it will.  Over the long term, the value of a fry-guy is the value of a fry-guy, and that value is not enough to be a bread-winning career.  So the Economy (that gigantic, chaotic abstraction) will eventually find it's equilibrium, and the fry-guy at QuickyBurger will be in the same place he was before.  Sure, gas will cost $15/gal, and the "value menu" will be the "$5.00 value menu," but ultimately he'll be where he was before- needing roommates to have an apartment and not being able to afford most of the "finer things" in life.

Now, how do I know this to be true?  Because I've lived it.  Most of us have.  When I was a kid, minimum wage was $5.15/hr.  Someone working a minimum wage job could just about afford a cheap car payment, gas, and some minor bills (say, a credit card).  That was about it.  Today, someone making $7.50/hr can afford... a cheap car payment, gas, and some minor bills.  That's about it.  So if we raise the minimum wage to $10.00/hr, then in a couple of years, someone making $10.00/hr will be able to afford a cheap car payment, gas, and some minor bills.

On the other hand, when I was a kid, someone making $7.50 an hour could afford a cheap car payment, gas, some minor bills, and could go in with one or two other people and afford a decent apartment.  Now, someone making $10.00/hr can afford a cheap car payment, gas, some minor bills, and can go in with one or two other people and afford a decent apartment.

Now, even cold-hearted capitalists like me will admit that someone making minimum wage can't support themselves, let alone a family.  The difference is that capitalists (cold-hearted or otherwise) also recognize that the kind of work for which you get paid minimum wage is not the kind of work you should be doing for a career.  It doesn't have the value of a job that you could have for a career.

My first job was a minimum wage, part-time job at a pizza joint while I was in high school.  My second job (starting right as I got out of high school) paid slightly better (about $6.50/hr, IIRC) as a bank teller.  Obviously, "bank teller" provided more value than "pizza joint bus boy."  My next job was making $10.00/hr.  And, with a few exceptions due to Life Happening, that has been my progression.  Now as a 30-something with a wife, two kids, two cars, two dogs, and a mortgage, I'm making enough money that my wife works only because she wants to (and part-time, at that).  It took effort, it took hustle, and it took gumption, but I did it.

I couldn't have done it without those early jobs.  They taught me things- from showing up on time (and even early), to how to deal with coworkers I didn't like, to how to argue with a boss and win.

So rather than focusing on the wage which won't change however we represent it in currency, let's focus on the actual problem- people holding entry-level jobs who are trying to make them be careers.  That is something we can fix, and we don't need legislation to do it.  All that we need to fix that is education, and I'm not even talking about public schools here.

But, of course, that won't happen.  It won't happen because the Democrats can't let it.  One of the biggest weapons in their arsenal is that they supposedly care for "the poor" more than Republicans.  If they admitted that Republicans have been right this entire time and that raising the minimum wage doesn't actually help (and really harms) lower income workers, they'd lose that weapon.  And Democrats don't care about the poor.  The only care about how the poor vote.

Consider it this way- if you really cared for the poor, wouldn't you do everything you could to raise them up and make them better- so that they could support themselves without your help?  So what do you call it when you're doing everything you can to make them believe that they're incapable of taking care of themselves and that you're the only one who can protect them?


  1. Found the link to this from Ace of Spades.

    Good post.

  2. Has it ever occured to those idjits that some work ain't worth eleventy-gazillion dollars an hour?