danielpalos
Diamond Member
- Banned
- #221
it is a cost of living adjustment.The Federally (or State) mandated "minimum wage" itself, regardless of its price point, is an economic abomination. It is a supervening force setting the price for a commodity without regard for the actual economic value of that commodity.
Every reputable economist in the world recognizes this principle; even the current Leftist Whore Paul Krugman acknowledged this economic fact in his original Econ text book - before he started whoring for the Left.
Every price mandate creates a class of winners and a class of losers. Leftist politicians continually try to conceal who the losers in their policy initiatives are, or simply deny their existence. With the Minimum Wage, the Winners are obvious - if you can actually find them: they are the people who have their rate of compensation increased and do not suffer job loss or loss of hours. Hooray for them!
The Losers - much more numerous - are the employers who have to pay the higher wages, the employees who lose their jobs or have their hours cut, the customers who have to pay a higher price, and the would-be employees who will not be hired because their unskilled work is not worth the new Minimum Wage.
Lost in the discussion is the fact that there is an informal and natural minimum wage in all places and at all times. The natural minimum wage is the lowest price (wage) that an employer can pay and still get people to work for him/her. In my suburban area, no one will work for less than $9/hr. That's what all the fast food joints pay here, as well as other small business who employ people at MW.
Leftists like to highlight stories of how the local MW was raised in some high cost of living area, and there were NO JOB LOSSES! Hooray! But that's because the natural minimum wage in that area was not exceeded. If you make the same increase in MW universal, then it WILL cause job and hour losses in the areas where the natural minimum wage is lower than the new mandate.
Any time the price of some commodity is increased above the economic value of that commodity, three things happen: (1) the consumers of that commodity use less of it, (2) the consumers seek out alternatives, and (3) if the difference between the mandated price and the economic value is great enough, a "black market" will be created.
Imagine a state tax of $50 on single-serving packs of potato chips (proportionate taxes on larger size bags). (1) people will eat less potato chips, (2) they will seek out alternative salty snacks, and (3) some people will begin making potato chips in their basement and selling them out of the trunks of their cars.
Raise the national MW to $15, effective immediately, and (1) headcount and hours will be cut, (2) automation will be implemented wherever technically possible, and (3) there will be millions of people around the country either working illegally, or getting paid under the table.
It ain't rocket science.