A lot has been written about the impact of increasing the
minimum wage on rising prices, with some apocalyptic predictions.
I'm not that concerned about rising prices with a $15 minimum
wage. Or even a $20 or $30 minimum wage.
We have a unique and seemingly miraculous economic system in this
country called “capitalism”. We know it
is the greatest system ever invented, because it has resulted in the most
prosperous and powerful nation in human history. It is a system the Left so desperately wants
to kill.
In any economy, problems arise.
Labor issues, cost of goods issues, availability issues, transportation
issues, and technology issues all work against the system. In a centrally-planned economy such as
socialism, a government run by bureaucrats will “force” a solution to these
problems based on the surface symptoms.
This usually results in unintended consequences that exacerbate the
problems. For instance, the government
artificially raises wages, which result in out of control prices. The government then institutes price controls,
which result in the populace waiting in six hour lines for a roll of toilet
paper.
Under capitalism, self-motivated problem solvers emerge, known
as “entrepreneurs”. When entrepreneurs
succeed, they are richly rewarded. If
they fail, they get hurt personally. They
bear all of the responsibility and risks on themselves, as opposed to the
unaccountability of government bureaucrats.
Thus, true solutions to problems are realized.
Rising prices due to artificially raised minimum wages is just
another problem to be solved by entrepreneurs.
However, that does not mean there will be no consequences for this
government-sponsored action.
When the minimum wage is raised, chains that employ most of the
minimum wage workers will find much heavier competition with "mom &
pop" shops, where the owners perform most of the labor. For instance,
I can now get a mediocre $5 quarter pounder from McDonald's, or I can go to my
local independent burger joint where the owners do the cooking and serving and
get a wonderful 1/3 pound Angus beef burger with bacon, jalapenos, onion straws
and great fries or cole slaw for $5. If the minimum wage is raised, more
of these types of shops will emerge, and McD's will become a dinosaur.
That is, unless McDonald’s can employ enough automation into their
process to keep them competitive.
Either way, the people who will suffer are the young, unskilled
workers. Ironically, these are the people
the Dems claim to be most concerned about and use as a justification for
meddling with the economy.
Another consequence is that the young and unskilled will now
compete for jobs with more mature, highly skilled and educated workers.
Once I retire permanently (and if no better options become available), I
might want to supplement my income by working at an entry-level job if the
price is right. With my customer service background and strong work
ethic, I should easily run circles around any Millennial with no work
experience and take one of those jobs away from him or her. I will also
bet that there are hundreds of thousands of older folks like myself who can do
the same thing, and will do it if
they are paid $15/hr.
If the Dems are successful, they may actually provide a way for
retirees with insufficient savings to have a comfortable retirement.
However, they will also increase the misery, unemployment, and income gap
of the underclass. But they have always been experts in that endeavor.
Andrew Thomas
As published in American Thinker
No comments:
Post a Comment