A victory was scored for the workers of the New York last week as their mayor, Michael Bloomberg, vetoed a bill to give the Empire State a minimum wage raised to $7. The wage was previously set at the federal minimum of $5.15.
Not unexpectedly, the Left exploded with populist outrage. Websites such as the New York Public Interest Research Group (NYPIRG), had spent time and energy defending the untenable position.
Minimum wage legislation is possibly one of the Left's most improvident and delusional causes. They defend it simply, as evidenced by the above website, with bleeding-heart ululations that low-wage workers receive insufficient salaries. Any minimum wage increase will, they say, improve the lot of those workers.
Of course it will. A worker receiving a $.50 hourly pay raise will indeed see more money in his own paycheck. However, the victims of the legislation are not the bank accounts of the extant workers. Nor is economic windfall sufficient justification for market interference.
The advantages to the bill's veto are manifest, and are as follows.
Assuming the law were passed, the millions of unemployed in New York now would be expected to receive jobs from businesses that were now required to pay $1.85 more, per hour, to their current workers. It doesn't require much thought to recognize that this congeries of dollars would easily pay many salaries of those whose unemployment is now ossified by this economic estoppel.
Second, the legislative augmentation of wages acts contrary to the market; an activity wisely remonstrated against. If a job's market worth is $5, why should society pay $7 for it?
Third, as the very existence of the minimum wage creates the lowest level of legal employment, it makes sense for society encourage upward motion rather than indolent inertia. It makes little sense to allow a $5 job - slightly below a desirable living wage - to be unnaturally inflated to allow low-wage workers economic comfort in these jobs.
There is an option for the millions of workers who work at wages personally deemed too low. Work hard and succeed - the policy of personal improvement employed by the seven million New Yorkers who found a way out of the dredges of minimum wage. Their options are the same as the rest of society. No group, no matter how penurious, should be legally excused from the burden of responsibility and self-improvement.
The only indignity worse than living a life making $5.15 an hour is living a life working the worst possible job available. Raising the minimum wage doesn't address problems that are intrinsic to low-wage employment. Only hard work can do that.
Fourth, there are individuals who are willing to happily work at the original minimum wage rate. They include retirees, teens, and others. Their possible employment should not be sacrificed so that the Left can pander to the unskilled workers of New York.
Fifth, there is fundamental unfairness inherent to allowing certain people to make unearned money. It can be efficiently justified under certain circumstances, however, minimum wage is not one of them. A coerced limitation of capital accretion guarantees the impossibility of natural, market-oriented usage.
Sixth, as is the case with many socialist economic policies, centrally mandated private expenditures invariably inhibit many of the beneficial provisions workers desire. Not only is the capital now unavailable for new employees, it also is unavailable for employment benefits and perquisites.
What many people fail to realize is that the money used for the minimum wage increase comes out of some other use. If it not be a potential employee, it is employment benefits, lower prices, investment, or something similar.
The salient issue then becomes whether a Lilliputian increase in base salaries is a sufficient justification to burden society with these costs.
This is a justification that can never be made. Entrenching the jobless in unemployment, the employed in work without benefits, the consumers in higher costs and the lower class in the worst jobs is a poor solution to a problem that requires personal action to ameliorate.
It is impossible to imagine that a minimum wage raise will solve these problems that pull at the Left's heartstrings (and, when they get their way, at the people's pursestrings).
The arguments of NYPIRG and others are fortified with nothing but demagogy and sympathy. They tell us that these low-wage workers will make more money, which is a tautology that ignores the byproducts of the minimum wage policy. Where is the concern for the unemployed whose fate grows dim with the ever-diminishing capital of small businesses? Where is the concern for the money that is siphoned into artificially high wages rather than health insurance, vacation days, or lower prices?
Full employment should be the desideratum, and through this, businesses should be allowed to preserve capital for investment and new employment.
The above work is the opinion of the author,
and not necessarily that of the Prometheus Institute.
