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The real minimum wage: $0.00.
Listen To You Tell Me Texas Friday 2/21/14
In a January 2008 interview with the San Francisco Chronicle, candidate Barack Obama promised that he would make it so expensive to use coal for the purpose of generating electricity that coal-fired electric plants would effectively become a thing of the past. Electricity rates would “necessarily rise,” said Obama.
Also in 2008, Steven Chu, who would go on to become Energy Secretary during President Obama’s first term, said, “Somehow, we have to figure out how to boost the price of gasoline to the levels in Europe.” The goal, of course; encourage the use of other motor fuels by discouraging the use of gasoline.
Early in the current fiscal year, the Obama administration proposed raising the federal excise tax on cigarettes by 94 cents a pack in order to further reduce smoking.
When it comes to things they oppose, Democrats well understand that when you raise the price of something you get less of it.
But then they come to the minimum wage and that understanding vanishes.
In part to shift the discussion away from Obamacare and in part to pander to their base, Democrats are now pushing to again raise the minimum wage – this time from $7.25 per hour to $10.10. As justification, they point to a Congressional Budget Office report saying that when the minimum wage goes to ten dollars, as many as 900,000 will be lifted out of poverty.
But they ignore the part of that same report that says as many as 500,000 will be put out of work. For those who would benefit from an increase in the minimum wage, I’m sure it all sounds like a good idea. But it’s not so good for those whose labor gets priced out of the market. And that cohort is comprised overwhelmingly of the young and the lesser-educated who need a way to enter the workplace to accumulate experience and employable skills.
Labor is no different than gasoline. As the price goes up, demand goes down. Work that was worth $7.25 an hour Monday doesn’t suddenly become worth 39 percent more on Tuesday just because Congress passes a law. Raise the price of labor and employers will decide that work that was getting done at the old price isn’t worth getting done at the new price – and staff their businesses accordingly.
In most cases, it won’t be the highly-skilled, well-paid and long-tenured whose positions get cut. It will be the positions previously held by entry-level workers, low-skill workers and trainees for whom the accumulation of experience is every bit as valuable – many times more so – than cash wages.
The federal minimum wage is arbitrary. But there is a real minimum wage. It’s $0.00. That’s what not having a job pays.
The federal minimum wage has never been about helping workers. It has always been about buying votes – mostly from unions.
The question becomes, ‘Bought with whose money?’ The answer is, ‘Not the employer’s.’
Those votes are being bought with the earnings and opportunities forfeited by those to whom entry into the workforce is blocked by an arbitrary cost for labor imposed upon business by vote-grubbing politicians.