Birthday thoughts on minimum wage

Today is my birthday. I treated myself to a column on National Review's site by Kevin Williamson this morning over coffee in my extended stay hotel room. Many of the points I will make below come from his piece on the minimum wage. I had a minimum wage job on more than one occasion. My solution to low wages was to obtain skills that were more valuable, not demand my government force my employer to pay me more to wash cars or bag groceries.

Public education fails to teach Americans the most basic idea of how ALL economies work. Here is a basic truth. Everything in the economy is continuously priced relative to everything else…..period. Anyone who believes the government can change the value of anything including unskilled labor or even more absurdly, the underlying hierarchy of values; say between a year’s worth of labor at a car wash, a year’s worth of cardiac surgery, or a year of tuition at NMSU is kidding themselves.

Still when your public education system has been failing for decades, you find yourself enduring the most absurd debates ever. These are the ones regarding whether government should raise the legal minimum wage to $15 an hour.

The real legal minimum wage will ALWAYS be $0.00 an hour. This is the amount all unemployed people earn. Not hiring people at all will ALWAYS be part of the overall wage structure.

Market pricing is NOT arbitrary. Market pricing tells us how real people use their money to actually value certain goods and services in the real world. Using the blind force of government to arbitrarily change the amount one has to pay to obtain unskilled labor does not alter the real value of unskilled labor. And the markets will ALWAYS adapt to any penalties or subsidies created by government manipulation.

The problem for all of the Democrats who like to see themselves as deep thinkers, is they think they know better than real people how to value various goods and services. And the first step towards getting an economy to flounder is to teach each generation that free markets are irrational and deep thinkers should be allowed to confiscate resources for reallocation and arbitrarily set prices. Wherever this is done, you get failure.

The road to hell is paved with good intentions. People like Barack Obama and Hillary Clinton argue that they can ensure that resources are directed toward their best use BETTER than letting markets price goods and services. Unfortunately, history teaches us that politically forced pricing models have eventually, if left unchecked, led to property confiscation, black markets, gulags, concentration camps, firing squads, and political purges.

Markets adapt to all changes including politically imposed pricing mechanisms. The hierarchy of values that distinguishes between an hour’s worth of asset management, an hour’s worth of composing poetry, an hour’s worth of cardiac surgery, and an hour’s worth of playing the banjo will NEVER change because the majority of politicians want it to. What will happen is the markets will simply find locales where the service is more accurately priced versus its true value. This is not my opinion. This is how the real world actually works.

The biggest mistake America has made is to allow itself to be conned into thinking we can use government to narrow the value gap between a burger flipper’s labors and those of heart surgeons simply by passing a law.  

One of the many corrosive effects of having the lawmaker population dominated by lawyers is lawyers have no problem at all with making asinine arguments about the nature of reality. This is why so many bogus ideas are becoming ruling principles. Lawyers like Hillary Clinton and Barack Obama operate in a world in which bogus opinions are mistaken for reality. We all know that if a lawyer can con a naive jury to believe that their bogus position is the correct one, they win. This is exactly what happened in the O.J. Simpson trial. However, the fact that O.J. slashed the throats of Ron Goldman and Nicole Brown-Simpson remains TRUE, regardless of what the jury said in its verdict. Those murdered people were still dead. The fact that Galileo went to jail for suggesting the earth orbited the sun did not change that basic fact simply because lawyers at that time convinced the judges that the opposite was true.

What is true about the minimum wage debate is pretty simple. The minimum wage will always be $0.00 regardless of what government demands. Efforts to change this reality will result in perverted economic results and more failure.