The Minimum Wage

Every person who denounces the minimum wage experiences obloquy. This is, however, something to which I am quite accustomed; as I am a regular recipient of vituperative rejoinder, and it's not entirely dissimilar to Plato's cave. The oddity here is that those individuals who argue not just in favor of a minimum wage but also in favor of an increase in the minimum wage tend to be those who advocate for political correctness and social awareness of micro-aggression. I say that this is an oddity because the minimum wage was actually created to destroy jobs for the poor and the non-white. Progressive economists such as Henry Rogers Seager, Royal Meeker, Frank Taussig and others separated people into "fit" and "unfit" workers. They referred to the unfit as "low-wage races," and "industrial residuum." Their idea was that by having a minimum wage, those individuals whose labor was worth less than that minimum would be shut out of the labor market, and that unable to provide for offspring would die out entirely. They argued that at the very least, these "unfit" would have to move to rural communities and could then be easily identified due to their wretched poverty and requirement of government subsidy, and they could then be sterilized.

If we remove the origin of the minimum wage in eugenics from the debate, nothing much changes. The minimum wage simply makes it illegal for people to sell their labor for any less than what the government determines. Because the price of labor is increased, automation becomes more attractive. If it is cheaper to use a machine for a job, a business owner will do so. If unemployment increases, the cost to support the unemployed increases, prices for goods and services increase, and the poor are the most effected. So, if one wishes to help the poor he/she should be opposed to any minimum wage.

So how would a society increase wealth for all workers? First, that society would need to reduce regulatory compliance burdens, taxes, tariffs, barriers to free foreign trade, and barriers to immigration. Then there are the parts that most people never see. Corporate welfare doesn't come simply through direct subsidy. Any license requirement is a welfare program to those who have already been established in an industry as it decreases the amount of competition. Any tax or regulation similarly acts as welfare to those established interests by raising the barrier to entry. A large established interest can afford to pay a high tax, a license fee, and comply with byzantine regulataroy burdens because they are already wealthy. A new entrant to the market cannot do so. The disruption of established corporate interests allows for competition. If it is harder for people to compete, it is harder to find work. If it is harder to find work, you have a race to the bottom in labor pricing.

Presently, governments subsidize their corporate masters in ways most people would never recognize. Corporations get away with paying very little in many circumstances because those incredibly low-wage jobs are subsidized by welfare and public transport. If low-wage earners hadn't welfare and public transport they could neither afford the necessities of life nor afford to travel to their places of employment. So, without those subsidies employers would be forced to pay more so that their workers could continue to exist. College is also a corporate subsidy. There is no need to invest a large amount of time and money in training and retaining employees because a steady stream of 22/22/22s (22 years old, willing to work 22 hours a day, for 22 thousand a year) is provided from the major colleges and universities thanks largely to government loans.

Effectively, the minimum wage hurts those that the left claims to wish to help. Other causes of the left: public transport, subsidized housing, student loan programs, welfare, food stamps, taxation, and regulation all hurt the poor. These all serve to further entrench the megacorps in our societies, further bankrupt our governments, further inflate our currencies, further depress real incomes, and further enslave the most vulnerable to the government through handouts.

There is no utopia to be reached through the use of the police power of the state. If you wish to effect change, you will need to do so by getting off of your ass. Neither tweet nor vote will do anything to help anyone.


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