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First, it is neither an employer’s fiduciary responsibility nor the government’s Constitutional responsibility to “rebuild wages.” Wages are set by supply and demand. In fact, if an employer is able to produce a high-quality, high-demand product at a market-based price and produce that product with absolutely no employees, it will do so. Businesses are concerned with productivity not employment. To the extent that employees can provide a function that can be done more economically than by a machine, they will be employed. This is demonstrated by the history of manufacturing in the United States since 1940.
Second, the author correctly asserts artificially raising wages does keep employees employed and provides them with more money to spend in the economy – at least for a time. However because they are adding no additional value to the product or service they are providing, within a short period of time the increase in wage is subsumed into the ongoing cost of business, increasing the price of the product to the consumer. The employee may be better off, the consumer is not. The consumer’s increased price for a hamburger represents dollars that are no longer available to be spent on other innovative, productivity enhancing products or services like personal education. In fact, minimum wage only increases the inefficiency of the marketplace, making overall business less competitive. This is the lesson we have learned and will continue to learn from India and China.
Last, Ms. Sklar points out that minimum-wage workers have only $15,080 to pay for the basic necessities of life, but she fails to mention that these workers qualify for a plethora of government programs that subsidize their basic income, including food stamps, housing allowances, back to work programs, et cetera. These benefits are part of government “entitlements” that in total represent about 70% of our annual federal budget, which the guys in the “Penthouse” make possible through the jobs they do provide.
Fundamentally, conservatives and progressives have two diametrically opposed views of the way the world works. A conservative believes that one creates wealth through one’s labor, first saving for future investment, and then taking a risk to start a business that meets a real demand. Progressives believe that wealth is created by the government through printing paper money, distributing it to those who are dependent upon the government, who save none of it, and who seek some fictitious future that never materializes. If a conservative fails, the business’s capital – which was created by the owner – is redeployed to alternative economic uses. If a progressive fails, the government simply prints more money.
So, if one is concerned about low-wage workers well-being, perhaps he or she should donate through their church or a local charity. Raising minimum wage is an ineffective, inefficient way to accomplish this objective, as proven by the fact that almost half of all citizens receive some form of government subsidy. Instead, we have created is a large, centralized progressive government that threatens to destroy liberty and freedom for everyone.
