Burying the Living Wage Myth

One of the more popular economic fairy tales repeatedly told by the American left is that there exists a mystical “living wage” that is simultaneously fair for everyone, especially the uneducated working class, and somehow without any economic consequence, as if their smug self righteousness alone can suspend the “laws of supply and demand“. Despite no society in the tens of thousands of years in human history working this out before, the American lefties believe they’ve got it all figured out.

While we can and should be sympathetic to the left’s benevolent urge to alleviate the suffering of poverty (it is unarguably a noble endeavor), there’s no more reason to believe that arbitrarily raising the minimum wage will elevate the poor to economic security than throwing them off of a building will teach them to fly. It’s the sort of belief that only the stupid can believe once exposed to the incontrovertible facts of economics.

Assuming that the entirety of human civilization up to this point has simply managed to miss the solution the radical socialist leftists suggest is “obvious“, we have to wonder what they actually believe the correct living wage should be. Based on their incessant and loud demonstrations, apparently the correct living wage should be precisely $15.00 an hour. Strange that it turned out exactly to be a round number.

If money is your hope for independence you will never have it. The only real security that a man will have in this world is a reserve of knowledge, experience, and ability.
– Henry Ford

It’s almost as if they pulled $15 out of some politician’s rectum while he was trying to get votes, without any consideration of opportunity costs, resource scarcity, foreign markets, or the impact on all other labor markets outside metropolitan markets, but then their proposal would be utterly arbitrary and not a product of logic and rationality that they claim to care so much about.

I mean surely these unbathed hippies who smell like they’ve been living in animal cages beside the resident animals understand that efficiency means getting the most productivity for the lowest cost of resources, and that, of course, capital (A.K.A. money) is, in fact, simply another a resource. They understand that all goods and services have monetary values and those monetary value are a fair indicator of their economic efficiency.

So, given that these ignorant leftists with their liberal arts degrees understand that monetary cost is a valuation of economic efficiency, they must also understand by mandating employers forgo more efficient (cheaper) labor options in favor of less efficient (expensive) labor options, they are essentially requiring society to abandon economical efficiency and expect no economic consequences.

It’s not the employer who pays the wages. Employers only handle the money. It’s the customer who pays the wages.
– Henry Ford

Try to explain that raising the cost of labor in the United States only makes the labor of foreign workers that much cheaper relative to American workers or that the excess money wasted on paying an uneducated working class laborer more than his labor could ever be worth cannot then be spent on expanding capacity or investing in new technology that will support the jobs of the future (or even next week), and the typical American leftist will just stare blankly.

Contrary to American politically correct norms, American aren’t any brighter than the rest of humanity, so Republicans shouldn’t feel smug either. After all, it was dim, uneducated working class voters that believed Donald Trump’s 2016 promises to bring back their uneducated working class jobs from foreign competitors with government tariffs, trade regulations, and tax rebates. Republican “red voters” no more understand market economics than do the “red” socialists.

Most people don’t understand that the main constraint on their wages isn’t greed but replacement cost, or what it would cost to train any semi-literate 14-year-old to do the jobs of most uneducated working class laborers, either here in America or abroad in India, Mexico, or China. So sorry, America, our semi-literate workers don’t deserve to be paid more than anyone else’s semi-literate workers simply because ours happen to be American.

I’m a great believer in luck, and I find the harder I work the more I have of it.
– Thomas Jefferson

Since the 1990’s, the minimum wage laws have ensured that anyone capable of providing only $5 (or less) of productivity have almost no chance of finding a job, because an employer would have to be willing to actually lose money by employing them. Meanwhile, the cost of food, housing, and utilities have continued to increase along with federally mandated increases in wage and other costly regulations.

This is uncomfortable, because it’s true. There is no such thing as a “living wage“. There is no “right” to health care, shelter, water, or food. That’s the reality. If you disagree, move to Venezuela or Cuba, and you’ll get to enjoy those “rights” at the cost of your property, your liberty, and, too often, your life. Society is, however, obligated to minimize barriers to opportunity to work, but making it more costly to take a chance on someone is exactly the opposite of that.

For more on this topic, please read about the Labor Wage Standard.

Liberty is For The Win!


2 comments on “Burying the Living Wage Myth”

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