Again with minimum wage? Really?

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Listen To You Tell Me Texas Friday 5/29/15

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Here we go again with minimum wage. In places like Chicago, Seattle, San Francisco and Los Angeles, where liberals have absolute control over every aspect of government, laws are being passed that raise the local minimum wage to near twice or more the federal minimum wage, which stands now at $7.25 per hour.

The economic illiteracy is simply shocking.

These same liberals are fond of castigating businesses for raising prices – which they say makes essential goods and services unaffordable. But they have no problem passing laws that make labor unaffordable. The burdens attendant to such laws fall disproportionately on small, independently-owned businesses. As with any other cost, business owners make economic determinations as to whether or not the cost is worth it. With each increase, that determination is more likely to be, ‘no.’

Minimum wage laws are completely unnecessary. The market for labor will set wages much more efficiently and with much better results than a bunch of posturing liberal politicians.

Right now, according to a conversation I had recently with a local manufacturer, welders are in critically short supply. As a result, no law is necessary for this business owner to raise his wage offering. He knows that if he offers too little, he will lose in the marketplace competition for scarce employees.

Are welders worth more per hour than fast food employees? Evidently so.

Are fast food employees worth more per hour than what they are being paid? Evidently not. Because if they were, fast food restaurant owners would be in the same position as my acquaintance who can’t find welders.

The actual minimum wage is zero. It is, in fact, the default wage. That’s because every business seeks to have as few employees as possible. Only when it’s worth more to have an employee than to not have one does someone get hired. Set an arbitrary price for that employee’s work – one that is higher than what the work is worth to the employer – and the employer goes to the default rate. Zero.

A recent opinion piece in the New York Times advanced the idiotic idea that raising the minimum wage would help businesses by reducing employee turnover. Let’s take that assertion at face value. If it’s true, then once again, no minimum wage law is necessary. If employers can make more money by raising wages, they’ll do so on their own. It will not require the intervention of liberal politicians.

Jobs that are worth more than minimum wage pay more than minimum wage. Jobs that are worth less than minimum wage go unfilled.

Upon whom does this market fact fall most profoundly? Those trying to get a foothold on the lowest rungs of the employment ladder – the young, the inexperienced and disproportionately, minorities. In other words, the very people minimum wage laws are supposed to help.

Minimum wage laws were passed in the 1930s as a sop to unions. They continue to do enormous harm nearly 100 years later.

Paul Gleiser

Paul L. Gleiser is president of Gleiser Communications, LLC, licensee of radio stations KTBB 97.5 FM/AM600, 92.1 The Team FM & KYZS in Tyler-Longview, Texas.

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5 Responses

  1. My younger brother, a heavy smoker and hence now departed, was a union man in an aircraft plant. In the beginning he was critical of all the things unions do that are bad for business and works alike, but in time he came around, saying, “The union takes care of me.” I also recall him once telling me that all the world’s problems would be solved if the government imposed a $10 minimum wage. I laughed at the idea, thinking, “How could someone be so ignorance of basic economics?” Apparently liberals as a body are just as dumb as was my brother. Thanks for another to-the-point column!

  2. of course you are right once again,However another thought,If a ceo of a company gets a pay raise little does it create inflation.But if anyone below that ceo gets a raise all those tiered above him or her want theirs as well.The lower the tier the more people are wanting theirs.If minimum wage earners get a raise everyone above them on wage scales will require theirs.This results in the greatest amount of inflation.Why do unions want to constantly raise minimum wages? the answer is quite simple,They then have an argument for themselves getting a raise.Because surely they are worth more than a grunt at minimum wage.The main thing that must be learned is MINIMUM WAGE is not designed to support a family on.Adults who are stuck in a minimum wage job are in that situation for the most part because of the choices they made during their early years,be it inattention in school rebeling against authority or some other self inflicted activity.Willis Martin Tyler Tx.

  3. L Miles says:

    The solution to corrupt politicians passing laws or supporting policies that BUY votes and favor (by adding artificial costs to our Rights to conduct Free Enterprise), is to CHARGE the politician with BRIBERY, EMBEZZLEMENT, and failure to protect the value of the currency – a fiduciary responsibility. This is just one more method of the Socialists to create dependency on Big Government and subvert the meritorious society that was established by the Constitution.

    Why isn’t it shameful to be unethical to benefit yourself at the expense of another? Unethical conduct on the small scale must be ethical on the large scale if government does it – right?

  4. R. Eagleman says:

    Paul,it would be highly instructive and beneficial to all the so-called leaders of these liberal meccas to read your comments on the dynamics of minimum wage laws. You would think that to be elected into positions of leadership, a candidate should at least have an entry level education in economics 101. However, too many of these numbskulls are swept into office for their expertise as a community organizer or a race merchant, which promptly turns these thriving cities into begging bowls for assistance from fellow citizens. A cynic might say that this turmoil that we witness in so many inner cities is a desired goal for the leftist anarchists, and if you are not a cynic, you might say that is an unintended consequence of liberal policies. In either case, to paraphrase a certain liberal Democrat candidate for president who wants to nationalize these destructive local policies: “At this point, what difference does it make?”

  5. Linda E. Montrose says:

    I am 63 years old and in looking back over my lifetime, it is very clear how politicians have hoodwinked the public in buying their backward ideas. Sure it sounds good to have a min wage, but when you sit someone down and explain to them the impact on ALL citizens and what it COSTS them as well as everyone else, they are dumbfounded. They didn’t realize that for every action there is a reaction. It is very evident in the min wage scam. When all is said and done, the bump in min wage to the wage earner is in the negative colmun after all is figured in. The cost the business has to pass on to consumer, which the wage earner is as well, plus the cost in utilities and everything else it takes to live. Another scam was the DEREGULATING scam politicians put on the public. When utilities and phone service was DEREGUALTED, instead of saving money as the politiicans said it would, it has steadily INCREASED. Once these things are set in place, there is no going back. I may not be a genius, but this is just plain ole COMMON SENSE deduction!!!

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