Exploitation by the masses?

Since one of the comments touched on this, I figured I ought to address this aspect of the minimum wage.

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The minimum wage issue can also be seen in terms of power transfers between individuals, businesses, and the government. (** Warning** I intend to refer to the Founding Fathers in the next paragraph, so if you think they’re just a bunch of out of touch old guys, stop reading now.)

Our Founding Fathers realized the danger inherent in concentrated power having lived under the thumb of the British crown. They built safeguards into our constitution to prevent any one branch of government from having too much power over the others. However, they didn’t stop there. They also built in safeguards, especially in the Bill of Rights, limiting the power of government itself.

The Founding Fathers knew that man was dangerous when he had too much power over others. One of the most shameful examples of this in our history was slavery. Through government, the slave owners were able to dictate economic terms to the slaves, creating a captive labor pool.

In contrast to slavery, in a free market system, all interactions are consentual. Employees provide their service as labor, and employers compensate them. Since there are multiple laborers and multiple employers, individuals can shop around for the most advantageous deal. This limits both the power that businesses have over individuals and the power that individuals have over business.

However, the tables are continuing to turn. Now, the low wage earners and their willing accomplices in government use the minimum wage to dictate economic turms to business. This creates a captive employment pool who must pay whatever wage or healthcare benefit the government sees fit. Once again, government has become a tool of one class, and business becomes the tool of government to satisfy that class. Those in government, knowing that owners of business are far outnumbered by those who work for business know where their votes are coming from and acquiesce.

** Disclaimer: (only necessary since offense became a crime) In the above, I’m in no way trying to equate slavery and the minimum wage. I am using both to demonstrate an economic principle. I deeply regret that that statement was necessary.

The Fourth option

As Bang Your Head asserts, the “minimum wage” is a complex issue. I intend to analyze it in terms of power flows between individuals, government, and business in a future post.

However, now, I think we need to carefully examine the economic calculus that goes into a “minimum wage” increase. As outlined by BYH, when faced with a “minimum wage” increase employers can

Take a cut in profits or go into debt.
Pass costs on to the consumer.
Make do with fewer employees and fewer new jobs.

These are the standard options offered. However, in the U.S. in this century, there is a real and often ignored 4th option.

4. Hire more illegal workers.

Every economic decision involves a risk-benefit analysis. A “minimum wage” hike makes hiring legal workers less attractive. However, illegal workers aren’t bound by these criteria. The “minimum wage” is not a true minimum since there are so many in the work force willing and able to work for less. Consequently, a “minimum wage” increase could force jobs from legal Americans into the hands of the over 10 million illegals already here and provide incentive for more to come. This incentive is enhanced by the fact that lawmakers continue to talk of amnesty and pathways to legal citizenship. So, an illegal knows that if they tolerate these poor wages for a while, they may someday get access to the juicy, elevated “minimum” wage.

The question then becomes, is this 4th option an intended or unintended consequence of the proposed changes. One could argue that coupled with our immigration policy and proposed paths to citizenship, those on the left are indirectly throwing jobs at illegals now with the implied offer of much more to come once pathways to citizenship open up. Alternatively, without seeking to fix immigration policy, a minimum wage increase could be a sign to business that it continues to be acceptable to hire illegals in droves.

Regardless of the intent, the effect is real. We must consider the 4th option in assessing changes to the minimum wage.

Between a Rock and Minimum Wage

I happen to be on this mailing list for Congress.org (always intriguing to see the lack of work those people can get away with and still give themselves pay raises) and came across a topic concerning minimum wage & whether it should be increased every four years. It wasn't until I started thinking about minimum wage that I realized what an interesting quagmire it presents. On one hand it is obvious that health care and energy costs have skyrocketed over the last few years, with even some increases in basic consumer goods and services, albeit not as substantial. These increases in turn make it harder for the lower wage earners to get by. However, it is common sense that when one raises the operating cost of a business, especially a small business, the employer must shift these costs on to the consumer in their prices. A rise in the prices of consumer goods and services is the basis of inflation, which one could debate that this country is on the verge of. Furthermore, many small businesses operate on a tight budget such that a minimum wage hike of 30-40% (I believe this is the proposed increase) could devastate many businesses.
How does one handle the issue of minimum wage? To grapple with this issue, the facts about who work minimum wage jobs need to be known, i.e. who and how many represent these minimum wage earners? Is it the neighbor’s kid who is just working after school and during summer to make a few extra bucks? Is it the single mom riding on the bus to her second job of the day in order to provide for her three children? I would be hard pressed to go against a minimum wage increase in the latter example as opposed to the former, in which the kid is receiving free rent and healthcare through their parents. However, if this example doesn’t characterize the majority than it would seem a minimum wage hike could hurt many at the expense of the few. I am also a firm believer that when it comes to opportunities in life, the lowest level attainable should not be worth hovering around. This drives people to go beyond complacency and to achieve goals otherwise not worth driving for. As we said on the fist day this blog was started, we hope to generate discourse and new ideas. The minimum wage fiasco is one of many topics that we would love to hear more feedback on.

What's with John Kerry

I happened to catch John Kerry on one of the Sunday talking point shows, and I couldn't help think, "Does this guy really know how irrelavent he is?" I mean, does he think he's going to make a successful run at the presidency? I know there's history of Nixon's eventual success, but really . . . Honestly, it must be tough to come so close and miss.
I feel a little sorry for the guy. It's kind of sad how he drops in from time to time from his parallel universe--a universe of would-have-beens. He just arrives, as if from outer space, and tells us how he's solved the latest crisis in his world whether it is our dependence on foreign oil or a conflict in the Middle East.
When I watch him, I honestly don't know what to think--and that's rare.

Trump cards

To me, “trump cards” are those phrases or ideas that people of any political orientation throw out when they’re at a loss for where to go next in a discussion. The trump card effectively shelves all debate. Usually, they give the moral high ground to the one using the trump card, and often, they leave the other frustrated.

A common trump card I’ve witnessed is, “You can’t judge that because you aren’t an X, born in Y location, with relationship status Z, working as a V. This string of qualifiers extends one beyond what the other agent in the argument could actually agree to. Let’s give an example:

Trumper: You can’t assume that he knew that setting fire to that stack of newspapers near the gasoline tanks was dangerous.

Other: yes, I can.

Trumper: But you can’t understand what it’s like to be a male from South Jersey.

Other: I actually am a male from south Jersey.

Trumper: Well, you can’t know what it is like to be a single, ex-postal worker, male from south Jersey like he was.

Other: I am, actually.

Trumper: But you’re not a Methopresbatarian are you?

Other: No.

Trumper: See. You just can’t understand where he was coming from.


Another trump card I have noticed is this one. It seems that “market forces” are the answer to just about any problem. Let’s see how this works:

O: But what about fixing public schools.

T: Well, we need vouchers to allow Market forces to take effect.

O: Oil prices?

T: Market forces will take care of that. It’s a matter of supply and demand after all.

O: The rising cost of health care, global warming, and the Detroit Lion’s chances at a Superbowl?

T: Market forces, market forces, and, surprisingly enough, market forces will solve each of those too.

Define Hypocrisy

Hypocrisy is defined as the practice of professing beliefs, feelings, or virtues that one does not hold or possess. In a world with increasingly disparate ideas, one must be more vigilant than ever to ensure that they do not circumvent the line of hypocrisy and genuineness. Can one be against the liberation of an oppressed, dictatorship country in the Middle East while advocating the alleviation of suffering in Africa? Can one be a proponent of human rights while supporting abortion? If I had a nickel for every time I heard somebody complain about Republican polices leading to global warming and then see said person hop in their vehicle and drive a mile away, I would be able to buy a plethora of gum balls. To have an opinion and be able to express it freely is a tremendous virtue that the people of this great country have a right to. A majority of the six billion people on this planet do not have such a right, let alone many others that we take for granted. Is it too much to ask somebody to have an opinion, but also to practice it in real life?

Welcome