With the swearing-in of the latest freshmen batch of Congresscritters, the topic of “living wage” has once again reared its ugly head. No matter how many times we prove with facts, numbers, statistics—actual effects, Government mandating a floor on wages is almost always a drag on the economy and actually harms the very people it purports to help. Usually, these are the folks who have the most difficulty entering the job market for that starter job that enables that very first, “experience” entry on a resume. Minimum wage prices many of these low skill/experience folks right out of those jobs.
This newest group of elected representatives is led by Bernie Sanders at the elder end and Alexandria Ocasio-Cortez at the kiddie end. Both, along with their followers, appear to be bereft of any understanding or experience in economics. Sanders has never held a real job, and Ocasio-Cortez’s experience doesn’t show any evidence of economic understanding.
These two and their fellow travelers fail to understand two fundamental axioms of economics:
Absent artificial interference, such as government-mandated minimum wage or mandated benefits (health insurance) in a voluntary economy, nobody gets paid any more or any less than his labor is worth. Employers hire labor in the expectation that said labor will help generate a profit.
The corollary to the above axiom—The only man morally entitled to an opinion, much less a vote, as to the value of another man’s labor, is that man, and the man paying him. Nobody else really has the moral or legal standing to render such an opinion, much less a vote on the matter…certainly not a group of politicians who have never met a payroll and who have never, ever at any point in their lives held a “buck stops here,” position.
“Living Wage” is a childish term that has no real meaning. Adults should never use it in serious discussions about economics. Those who do should be ridiculed for being the vapid twits they are.
Mike Ford is a retired Infantry Colonel who writes on Military, Foreign Affairs and occasionally dabbles in Political and Economic matters.
You can find his other Red State work here.