September 2013 – Another Dim-Witted Liberal Idea: The Government Should Pass “Living Wage” Legislation
By Dr. David M. Berman
With the continued un-constitutional people in Congress we can expect the old Socialist mindset to crank out the same old stale liberal ideas. The leftists (in both parties) have the people they want in office and are flexing their political muscle. They will demand that their ideas be taken seriously. You will be hearing more and more about the so-called “living wage” argument. There will be calls for “living wage” legislation, and that spells disaster. One thing we can say for the leftists: they never give up. Those of us who are sane and understand the original purpose of the Constitution must also never give up the fight against tyranny!
According to the web site of the organization known as “Universal Living Wage” the following is their stated desire:
“We must work relentlessly to preserve and promote the “American Dream.” We must ensure that every American is working. And we must ensure that every working American is paid a Fair Living Wage.”
How do they propose to ensure that every American is paid a “living wage?” You guessed it. Government mandated pay in the private sector. These people believe that laws should be made that force companies to pay what the government decides is a wage you can “live on.” This position makes some interesting assumptions.
1) The first assumption is that every job is designed to be a primary source of income for a family.
2) The second assumption is that if wages are taken out of the influence of market forces it will be beneficial to the worker.
3) The third assumption is that the federal government has a Constitutional right to dictate to a private company what they must pay those who work for them.
Let us now deal with the first false assumption, the idea that every job is designed to be a primary income source for a family is a major absurdity. There is a reason why positions are referred to as entry- level. Fast food workers for example simply are not working in a career position, unless they are planning to move into a management position. Fast food is an entry-level job in order to gain training in work ethic. These jobs are vital for young people to gain experience. These are also supplementary income jobs. Perhaps a person may need a second job to supplement their income for their needs or simply because they would like to save money for some desired purchase. The point is that we should not consider flipping burgers as a career we should aspire to in order to raise our families. The small business franchise community depends on entry-level workers to survive. It is not possible for a fast food hamburger restaurant to pay the wage that these promoters of Marxist thought desire. The following is the formula that they wish to enforce by law:
This is an example based on cost of living in Austin, Texas. This information comes right from the organization known as “Universal Living Wage.”
WORK HOURS: 40 hours/week @ 4.33 weeks/month = 173.33 work hours/month, 173.33 work hours X 12 months = 2080 hours/year. Total Gross Monthly Income of $2223.33 X 12 months = $26,680. $26,680 divided by 2080 hours/year. This = $12.83/hour
They want every area in the country to use this formula to artificially mandate every business to pay at this rate as adjusted for the area’s economic cost of living. That would mean that the same job in the above example would be mandated to pay $20.77 in Washington D.C. The idea is that this will provide every worker with the ability to live and support their family. This makes total sense to those who do not understand human nature or economic principles. However, it makes no sense to anyone who understands how a free economy functions. To those who propose this absurd idea I ask a question: Why not mandate by government law that every worker be paid 30, 50, or even 100 dollars an hour? If all that is needed to increase the standing of an individual’s economic position is a government- mandated pay raise, why not make everyone rich? According to their logic, that should be the only necessity. If mandating pay would solve the poverty problem why not do it? This is an uninformed position. You can’t solve a poverty problem by putting people out of business. It is not possible to solve a poverty problem with artificial government-mandated pay. If that were the case, Russia would have not had any poverty during its communist years. Everyone in Russia had a job, and yet there was massive poverty due to the lack of incentive to work hard. Their manipulation of the economy only created more poverty.
Let us now deal with the second false assumption. The second assumption is the idea that if wages are taken out of the influence of market forces, it will be beneficial to the worker. Here is the problem with their thinking. Like it or not, a worker is a cost of doing business. This is why jobs are referred to as a “job market.” It is a simple law that applies to everything in economics. The law is known as “supply and demand.” A worker’s pay is directly linked to the skill needed as it relates to the market’s need of the skill. A person whose skill level is at the level of cleaning rooms is simply not worth the same pay to the job market as, for example, a nuclear engineer. There are less nuclear engineers then room cleaners. When it is hard to find people to fill minimum wage jobs the companies must compete for workers. This leads them to pay more than the minimum wage. They can do this because business is good and they find it beneficial to the company to pay higher wages in that economic situation. When business is slow there may be a surplus of workers and therefore the workers are willing to work for less in order to have a job. If you artificially mandate by law that the worker gets paid a certain “living wage” the result is less hiring of workers, and less businesses to create those entry-level jobs.
First of all, if the government, as an example, mandated $15.00 per hour for a hamburger flipper, the business would go out of business. Having said that, let’s for the sake of discussion assume that everyone would be working if the minimum wage was to be raised to $15.00 per hour. What would that do to the cost of living? If labor costs go up, so do the costs to buy the product made or serviced by the worker. The price goes up and therefore so does the cost of living! This defeats the purpose and is counterproductive. History teaches us that government manipulation of markets cause problems. This may be news to those who advocate artificial manipulation of labor costs, but people go into business to make money! People invest money to make money! People do not go into business because they are interested in becoming another failed government program. It would not help workers to artificially raise their pay because that would cause a chain reaction throughout the economy that would raise the prices on everyone, including those in the upper income brackets. What this amounts to is simply inflating everything and finding yourself in the same economic position in terms of real inflation adjusted buying power. This causes inflation that then moves interest rates up, and thus slows the economy and puts workers further in economic peril. Not only would the cost of a hamburger (and everything else) go up for the upper income person, the lower income person would have to pay more for it too.
This is why the job market is just that, a market. If the government tries to manipulate it there is that old “law of unintended consequences.” Economies that are not free do not function to the best interest of workers. That is what history teaches us. This idea is simply warmed-over, failed, socialist nonsense based on false assumptions and ignorance.
Let us now deal with the third false assumption. The third assumption is the idea that the federal government has a Constitutional right to dictate to a private company what they must pay those who work for them. This is a philosophical question. Did our founding fathers desire to have the federal government mandate by law the wages of workers? There is no right given in the Constitution to the federal government to mandate such laws at all. This is another example of the federal government asserting power illegitimately. The idea that the founders would have wanted a central power to decide by mandate of law an agreement of wages for work is not in keeping with their world view. Who is the government to say that an individual does not have the freedom to decide to accept a wage of any amount in order to work? If I want to work for a dollar an hour, that is my choice and the government has no constitutional right to disallow me from making a private contract with my employer for a wage amount. This is the problem with those in powerful positions who think they know better. They seek to usurp authority over the individual choice of a citizen in matters that have nothing to do with the jurisdiction of the state. The more regulation there is, the more loss of freedom. The more loss of freedom there is, the more tyranny rises. What does the Constitution say about the federal government’s role in matters related to economics? The following is what the Constitution says:
Article I, Section 8 states that Congress shall have the power “To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes”
Article I, Section 8 states that Congress shall have the power “To coin Money, regulate the value thereof” and “To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;…” Article I, Section 10 gives Congress this power exclusively by stating that “No State shall…coin Money”
Article I, Section 8 states that Congress shall have the power “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writing and Discoveries;…”
Article I, Section 9 states that “No Bill of Attainder or ex post facto Law shall be passed…” by Congress. Article I, Section 10 states that “No state shall…pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligations of Contracts,…”
Article I, Section 9 states that “No Tax or Duty shall be laid on Articles exported from any State…”, and Article I, Section 10 states that “No State shall without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports”
Amendment V states that “No person shall…be deprived of life, liberty, or property, without due process of the law” and Amendment XIV, Section 1 states “nor shall any State deprive any person of life, liberty, or property, without due process of law”
There is no authority given in the Constitution delegated to the federal government to regulate wages. In fact, the Constitution specifically denies the federal government the authority to do ANYTHING OUTSIDE WHAT THE CONSTITUTION SPECIFICALLY GIVES IT AUTHORITY OVER! The Tenth Amendment states, “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”
It seems that no matter how often we see the failure of socialism and over-regulation, there are those who call for more of it. We should not allow envy to drive us to the point of biting the hand that feeds us. Freedom is what makes America what it is. There is no way to even out in some utopian way the wages that all people earn. You hear the advocates of “living wage” legislation point to the amount of money that a C.E.O. makes as if we have a right to tell a private sector company what they can pay their leader. This is absurd Marxist garbage. This is America and it is not only acceptable to work hard and become rich, it is also this desire that has as a side effect jobs for those who may not be as skilled. There is only one thing that drives the people who think that the government should regulate private sector incomes. That one thing is jealousy. It is the fallen way of many to believe that anyone who prospers above them must be wealthy, and if they are wealthy they should be suspect. There is a deception in many that makes them believe they have some right to that which belongs to another. This posture is acrimony, and makes it all the more difficult for the covetous one to attain what he deceived himself to believe is his right without personal sacrifice.
Some will always do better due to many factors including personal drive and investment. If you are reading this and not making a wage you can live on, ask yourself if you are doing what is necessary to improve your marketable skills. Do not expect someone else to be forced to pay you what you are not worth! That is illogical, akin to extortion, and presumptuous.
The real clash here is one of envy and lack of personal responsibility. It is the responsibility of the individual to gain a skill by hard work that is marketable. It is the responsibility of parents to instill in their children the importance of working hard and being educated. If people are irresponsible they should not then expect those who have been responsible to pay them what they have not earned in marketable skills. History teaches that free market principles are the ONLY principles that work in an economy. These principles are also applied to the job market. Instead of working to undermine freedom, the advocates of “living wage” legislation should put their energy into training workers in marketable skills so that they can earn more money with honor (This of course they will not do since they think job training is the function of government programs). When people with socialist thinking are in power this is the kind of foolish thinking that becomes law. Let us hope that America does not become what the left so diligently labors for. If it does, it will be the end of prosperity for all except the elitists. It will be a nation run by tyrannical power hungry despots. The end of Socialism is Communism. That is their real true motive.