The Minimum Wage Is Like Iron Pyrites…

Our new Secretary of Labor has now vowed to push for an increased minimum wage.  

snake_oil_salesmanSeems the old scams still work best… Let me ask: Do you believe that government should control market prices? The Communists made a big deal out of that–as have others before them, including the Franklin Roosevelt Administration in the U.S. during WWII. Unfortunately, it has never succeeded in all of history as any honest economist will explain. The free market integrates people’s wants with supply and sets a market-clearing price automatically while government bureaucrats set prices by political criteria and always…that’s ALWAYS…end with shortages and a black market. They told you in Econ 101 if you were awake that day.

Well, the minimum wage is only government price control, applied to labor, right? If you think that’s not so, kindly explain so that I can go back and shoot down my old econ professor.

If you raise the wages of workers, you automatically raise also the selling price of the products and services they supply. Even Lefty policymakers can’t get something for nothing. Proceeding with this, jacking up wages also jacks up prices and thereby, increases the cost of living so that in the long run, workers are right back where they started. There is still No Such Thing As A Free Lunch (TANSTAAFL) in the real world. However, raising the costs of production in the U.S. economy does make the U.S. less competitive than say, India or China or Brazil. So we buy more from them and less from American producers, who deal with that by opening shops in India, China or Brazil. Simple. Lots of politicians and union bosses lie about it, but there it is.

Most understand that the current union-inspired fast food strike isn’t going anywhere simply because fast food is cheap because burger flippers are cheap. They are cheap mostly because they lack the skills of educated people or are unemployable for other reasons…they are what we call: ‘marginal workers.’ Which again mostly means they’re plentiful and so, cheap. The strikers want their minimum wages doubled. Their strike is failing. Who doesn’t want their wages doubled, after all… But, if they were to suddenly be paid twice as much, someone has to provide that money, right? McBurgers wouldn’t be cheap anymore. Including especially, those the strikers might buy. The strikers are chasing an illusion.

But our new Secretary of Labor is all for it. Why not? It isn’t his money, it’s yours and you guarantee his salary. While most just salivate of the prospect of a bigger paycheck, not bothering to consider the bigger bills it will be used to pay.

And this is how politicians make their livings, using your money. Well, it starts out as yours…  The minimum wage is like iron pyrites, a mineral that looks like nice, shiny gold and used to thrill old-time prospectors, until the guy at the assay office told them it was, in spite of its appearance, only a form of cheap iron. Kind of ironic, righ?

About Jack Curtis

Suspicious of government, doubtful of economics, fond of figure skating (but the off-ice part, not so much) Couple of degrees in government, a few medals in figure skating; just reading and suspicion for economics ...
This entry was posted in Economics, Jobs, Politics, Unions and tagged , , , , , , . Bookmark the permalink.

4 Responses to The Minimum Wage Is Like Iron Pyrites…

  1. Yeah. I remember how successful Jimmy Carter’s cap on gas prices worked. I can remember it so well because I spent a lot of time thinking about it while waiting in line at the gas pump, once I found a station that had any gas.

  2. James Teague says:

    Minimum wages are for unskilled, untrained entry level jobs. People who work hard and learn well do not stay at these wages for long. In the mean time they have learned to get up in the morning, get to a job on time, deal with customers, coworkers and management. They earn respect for work rather than holding out a hand. News articles that show a worker with 2 kids at breakfast make you wonder when this person entered the work force? Did they produce two kids without income and then decide to work? Not likely.
    Minimum wages reduce entry level work positions and drive up the cost of living. They are part of the inflation engine.

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