Money For Nothing
Ho-hum – Monday thru Thursday the same old routine with nothing to get excited about. Go to work, robotically perform your tasks and at the end of the day go home and eat, sleep, then start all over again. However, Friday is here and yipeeee, its payday, the weekend begins and so does the fun. But the promise of fun is short-lived, as the shout of joy is subdued by the amount of the paycheck you just received. You worked hard all week and this is the thanks you get? Somehow this wrong must be corrected. I’ve got it! How about an increase in the minimum wage? That should solve the problem, right?
Lately, and this is not the first time, we hear the constant refrain to the same old song titled “No one can live on (insert a $ amount here) per hour” or “People working are entitled to a living wage.” All together now: “Why is it, these corporations with all this money won’t share it with the ‘workers’ who actually do the work? The CEO and his banker friends on Wall St. make one-hundred times what ‘workers’ on the floor make. Such examples of income inequality should not be allowed to take place in America. The government must do something.”
The matter of government deciding the price of labor in the private marketplace is not a prescribed duty of theirs per the Constitution, and second, to do so is a bad idea at best. Deciding what is, a ‘fair wage’, must be left to the employer and those seeking employment. Who is best to determine what is fair for you than you? Advocates for a government mandated minimum wage focus primarily on the emotion of higher pay, with economics as a by-product of the law and related regulations. Opponents of a mandated law cite the economics as priority and emotion as the reason not to compel a business decision. The debate can be resolved with relative ease when the question is asked and answered in simple terms.
Question one is, “Why did the business owner open the business?” Answer, “To make money doing something he enjoys while filling a void in the marketplace.” He did not open the business to provide jobs, insurance and other benefits to the public. Those are the by-products of business. A number of costs are associated with any business and labor is but one of these costs. He decides what costs are reasonable and fit into his plans for the venture to succeed. Costs such as materials for production, packaging, general operations and sales are determined by suppliers (other business people), and taken into account in the daily management of the company. But if arbitrary costs are placed on the business by an outside force, such as mandated wages by government, the business cannot remain profitable enough to survive, with failure as the outcome.
Question two is what happens my wages go up? What is the problem? Answer – so will the price of everything associated with your employer’s business – supplies, utilities, etc.,- as other companies must also raise wages. While the dollar amount of your check may increase, so will your taxes and the price of items you purchase, leaving you in the same situation from which you started.
Common sense will direct you to the reasonable and correct solution to the wage issue. The employer/employee relationship via the marketplace will set the fair rate to be paid. Should an employer try to skirt the laws of economics in this matter, his competitors will make short order of his business malpractices.