Thursday, February 28, 2019

The Case for Minimum Wage Laws

Since this blog has recently gotten into the habit of defending liberals - you are practically an SJW just for reading here - it may be the right time to address another domain where they occasionally (and inadvertently) get it right.

Minimum wage advocacy is a partisan issue. Liberals normally support it, and conservatives normally do not. The best argument in favor of minimum wage laws is the destructive influence of extreme wealth inequality on a nation. Most rich people actually support a degree of welfare because it stabilizes a social system from which they greatly benefit. Many in the white community - currently plagued by opioid addictions, suicide, and rabid liberalism - are probably noticing this as well. In a materialistic society with lots of visible wealth, many workers can only eek out a few bucks an hour doing unpleasant work. They are humiliated by their position, engage in self loathing, and ultimately seek out dangerous habits or radical ideologies as escape mechanisms. Extreme wealth inequality is actually a problem which conservatives must address, as it is the primary fuel for socialist movements.

The best argument against minimum wage laws is basic economics. They amount to price controls, and history shows that price controls normally cause side effects worse than the problem they were meant to solve. We understand that the major flaw of communism (besides its inevitable authoritarianism) is the destruction of pricing mechanisms. Central governments, no matter how powerful and capable they may be, cannot manage the national economy without real-world pricing feedback. The direct outcomes of minimum-wage laws are that (1) those with low-value marketable skills are forbidden from the labor pool, or (2) employers are forced to pay higher than the market rate for labor. The indirect outcomes of the laws are that (1) it drives inflation which cancels out the desired benefits in the long-run, and (2) it rewards increasing automation which tends to raise the minimum IQ at which an worker is viable to contribute to the economy. Rewarding automation means the higher IQ engineers and technicians become even more economically value, and the menial labor less so.

It seems that the minimum wage laws probably cause more harm than good, overall. Besides the lack of evidence that they are beneficial, they are illegal at the federal level. It should be quite clear that there is nothing in the US Constitution to permit the central government to dictate how much workers should be paid. But, the lower governments are free to do so, as long as their relevant state constitutions and city charters permit it. There is a case to be made in favor of minimum wage laws, at a local level.

One idea repeated here from time to time is that you get the community you pay for. Thus, you should prefer local businesses that hire high-quality, high-wage employees because those are the kinds of people you want to be living in your community. You pay more, but you get more. A negative example of this from my area is Branson, Missouri. There's a line from Breaking Bad where the latino gang leader ridicules Walt by saying, "This isn't Branson Missouri!" He means to juxtapose the brutal, cutthroat world of Hispanic drug trafficking with a hokey tourist trap oriented towards white retirees. The funny thing is, all the major Latin gangs have a presence in Branson, because the third-rate tourist town hire lots of low-wage service workers, so there is lots of demand for drugs and other shady business.

You don't actually want to live in a town dominated by low-wage workers. Half the reason we have such problems with illegal immigration is that well-to-do types want cheap labor. They're giving away their grandchildren's country so they can get the lawn mowed cheap today. It's what you get from hyper materialism. When I have to hire help, I seek out the kinds of people who are honest, dedicated to their craft, and won't tip off their buddies that there are things in the house worth stealing (a fairly common problem). You probably wish everyone in your community thought the same way. Local minimum wage laws can be a way to force the issue. If your area mandates a high minimum wage, then there is no point in hiring low-lifes for low-wage. If people are forced to pay high-wages, then they will demand high-quality labor. Keep in mind that this works only if minimum wage laws are local, at the city and perhaps state levels. If your area has high minimum wage laws, then low skill workers will move to other areas where they can find work.

This is a similar mechanism to people intentionally seeking out high-rent neighborhoods. The want to live around people of means, who are less likely to engage in petty crimes and the like. Statistics indicate that liberals are actually more likely to engage in this behavior. The most segregated cities are also the most Democratic. But, what they do is to live in their exclusive, often gated neighborhoods, while ensuring that other neighborhoods are poor by providing low-paying jobs. City and state minimum wage laws could actually reduce economically segregated cities, while improving overall quality by discouraging undesirable types from moving in. My first home was in a low-rent neighborhood in my town. I observed that the trashiest of my neighbors were often recent out-of-state transplants looking for work. Setting a high minimum wage for the city might be an indirect way of saying, "We don't take kindly to your type around here."

Minimum wages are a thorny subject, because it is easy to see both sides of the debate. However, there are other ways to go about solving the wealth inequality problem. For one, it is astounding that liberals are so adamant about raising the federal minimum wage at the same time that the federal government taxes labor at about twice the rate of capital. It just goes to show you how subservient they are to their corporate masters. Our duty is always to implement working solutions to problems that we face, otherwise the left will have cover to implement their solutions that only make things worse.

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