Category: Free Markets

C’Mon Man, a National Minimum Wage?

Feel good policies like a national minimum wage are almost always misguided. They sound so good, so loving and caring, and well intentioned. After all, shouldn’t everyone make a living wage?  But the unintended consequences of these feel good policies are rarely considered.  Here are my top 5 reasons why a national minimum wage is a bad idea:

A high minimum wage is a job killer. It eliminates entry level jobs which hurts the economically disadvantaged and minority communities. These jobs are the starting point for many young workers, allowing them to learn and mature and start a career. President Reagan once said “the best social program is a job”. I agree. I probably learned more life lessons at my first job than I did in high school. Far too many young people are priced out of that first job because of a high minimum wage.

Covid-19. Food and service industries are suffering most from the lockdowns. The CBO estimates that imposing a national $15 minimum wage would cost 1.3 million jobs. Many restaurants in big cities will never reopen. One study found that 1 in 3 tipped workers would lose their job. Now is not the time to impose more government mandates on small business.

One size doesn’t fit all. Wages vary by profession, skill, location, business needs and the availability of qualified staff.  You can’t just mandate a National, or even a State level minimum wage and expect it to work.  Location matters. Cost of living matters. What makes sense for New York City doesn’t work in Beaufort. 

The Living Wage canard. According to Joe Carter of the Acton Institute, “The goal should not be to merely give people a living wage but to help them gain the ability to make a life for themselves based on the value of their labor. What the working poor need most is marketable skills and productive jobs, not more handouts disguised as wages“. If we kill entry level jobs, how will unskilled workers learn skills needed to advance?

Economic freedom still matters. Business owners and employers should be free to price products and set wages without government mandates. How can the government in Washington possibly know how much to pay someone in Beaufort? Only the business owner has all the information needed to make that choice. If you don’t pay someone enough you risk losing them to a competitor. Keep losing employees and you will soon be out of business. But if you are forced to overpay an employee, you just cut staff or reduce hours.  Rev. Gerald Zandstra of the Acton Institute sums it up best: “wages, like the price of goods and services, are not the capricious decisions of employees; they are the response of business owners to what consumers are saying that they value. To disregard this economic law is to invite economic disaster”.

Rather than pushing government regulations that are destined to fail, how about we give business owners and employees the freedom to work this out on their own? 

Additional reading here…

Why a Living Wage can hurt the poor

The Living Wage: A Moral and Economic Evaluation

Minimum wage policies do more harm than good

Minimum wage would cost 2 million jobs

This Bernie Sanders policy would hurt…

Ben Shapiro on the minimum wage…

Here’s a classic blast from the past from world renown economist Milton Friedman…

Markets and Morality

Great weekend interview in the WSJ can be found here.  William McGurn interviews co-founder and president of the Acton Institute for the Study of Religion and Liberty, the Rev. Robert A. Sirico who has another, equally demanding ministry: preaching the virtues of economic freedom.

The Acton Institute is a think-tank whose mission is to promote a free and virtuous society characterized by individual liberty and sustained by religious principles.

“The answer isn’t to head to the hills,” Father Sirico says. “The answer is a simultaneous liberality in our economy and vigor in our moral stances.”

Capitalism gets no respect…

Good commentary from Jonah Goldberg regarding NPR’s treatment of capitalism…     

Consider NPR. As a brand, it claims to be standing athwart capitalism because it’s “public.” What that means exactly is a bit unclear, since it still allows corporations to fund its programming in exchange for audio endorsements none dare call commercials and relies on the kindness of listeners to keep it afloat — listeners who, one way or another, make their money from you-know-what.

Indeed, speaking of the decade in capitalism, National Public Radio failed to mention that Joan Kroc, widow of Ray Kroc, the founder of McDonald’s, left more than $200 million to NPR in 2003. Mrs. Kroc’s generosity of spirit was her own, but the wampum is all capitalism’s, baby.

Free markets and capitalism get no respect… 

Every good thing capitalism helps produce — from singing careers to cures for diseases to staggering charity —  is credited to some other sphere of our lives. Every problem with capitalism, meanwhile, is laid at her feet. Except the problems with capitalism — greed, theft, etc. — aren’t capitalism’s fault, they’re humanity’s. Socialist countries have greedy thieves, too.

Free markets are in disrepute these days, particularly by the people running Washington. For them, government is the solution and capitalism is the problem. If they have their way over the next decade, they won’t cure what allegedly ails capitalism — people will still steal and lie — but they will impede everything that makes capitalism great. And that will be bad for everyone, even NPR.