My wife and I stopped Tuesday night at the local Wal-Mart to get something we needed first thing Wednesday, and discovered the new “self-service” checkout stations the store just installed were the only ones open.
There were no human cashiers working at all. Ponder that as we discuss the Nov. 8 ballot.
Along with four other initiatives, Mainers will vote on raising the minimum hourly wage of $7.50 to $9 in 2017, with annual $1 increases up to $12 in 2020, and annual cost-of-living increases thereafter. The bill would also increase hourly pay for tipped service workers “to $5 in 2017, with annual $1 increases until it reaches the adjusted minimum wage.”
This proposal is a consequence of the unfortunate fact that free-market policies are often judged by their relative failures, while statist measures are judged by their loftiest promises.
Free markets have produced prosperity unsurpassed in human history, but some people always “fall through the cracks” – though the average “poor” American lives far better than most of the rest of humanity.
Coercive policies nearly always lead to widespread hardship, or when fully applied, outright misery (just ask the starving Venezuelans), and yet are excused because “their intentions are good.”
Economist Thomas Sowell of Stanford’s Hoover Institution explains the current example in his book, “Basic Economics: A Citizen’s Guide to the Economy”:
“Unfortunately, the real minimum wage is always zero, regardless of the laws, and that is the wage that many workers receive in the wake of the creation or escalation of a government-mandated minimum wage, because they lose their jobs or fail to find jobs when they enter the labor force.”
Why? Because “Making it illegal to pay less than a given amount does not make a worker’s productivity worth that amount – and, if it is not, that worker is unlikely to be employed.”
There was a time when sensible liberals knew this, and we can pinpoint it: On Jan. 14, 1987, The New York Times published an editorial headlined, “The Right Minimum Wage: $0.00”, which noted, “Raise the legal minimum price of labor above the productivity of the least skilled workers and fewer will be hired.”
Common-sense, law-of-supply-and-demand principles taught in basic Economics 101 courses? Yes – but few appear to be learning them.
When the options are “Work hard for a basic wage to learn the skills employers want,” or “Just pass this law and everybody will have a unicorn to ride,” the steep climb up the mountain all too often gets bypassed for the gentle descent into a swamp.
The workers who don’t get hired remain invisible, while consumers who pay higher prices for products or services are encouraged to blame “greedy businesses.”
Meanwhile, the unemployed-who-could-have-had-jobs (particularly minorities and the young) get added to the welfare rolls and become dependent on the increasingly powerful government for their subsistence – which the increasingly powerful government hopes will mean more votes for the very people who actually made them unemployable.
However, telling ourselves pleasant lies lets us ignore why our current unemployment rate is officially understated (because 95 million workers have given up seeking jobs); why President Obama will be the first president never to see a 3 percent growth rate during his tenure; why 60 percent of Americans say the economy is “getting worse” (Gallup, July 26); and why we see stories such as this, in The Washington Post on July 29:
Headlined, “Why raising the minimum wage in Seattle did little to help workers, according to a new study,” reporter Max Ehernfreund wrote, “The average hourly wage for workers affected by the increase jumped from $9.96 to $11.14, but wages likely would have increased some anyway due to Seattle’s overall economy. Meanwhile, although workers were earning more, fewer of them had a job than would have without an increase. Those who did work had fewer hours than they would have without the wage hike.”
He cited Jacob Vigdor, an economist at the University of Washington and one of the authors of the study, who “speculated that technology could limit the benefits of increasing the minimum wage. If it becomes easier for employers to replace their workers with machines, they will be more likely to respond to wage hikes by making fewer hires.”
Thus, Wal-Mart stores (and many others) will fire their cashiers, because machines get no pay, earn no benefits and never take time off.
People seeking to supplement their incomes (particularly fixed-income seniors) will suffer, as will teens (many of them minorities) who once used entry-level jobs to learn how to show up on time and please a boss. They will lose the first rungs on a ladder to the better jobs that come with experience.
We can call that “Remedial Economics 101.” But do we really want to pay the tuition it will cost?
M.D. Harmon, a retired journalist and military officer, is a free-lance writer and speaker. He can be contacted at:
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