Employers, Not Government, Should Set Minimum Wage

The Massachusetts state senate recently voted to raise the minimum wage from $8 an hour to $11 an hour by 2016. The measure probably will pass the state house of representatives and the liberal governor probably will sign it.

So… good deal for low-income people, right?

Wrong. Always remember the Golden Rule – socialism produces the opposite result of what it promises. For instance Obamacare is supposed to magically give health coverage to tens of millions of poor people but that may not even happen. And if it does it will only happen as Obamacare takes health care away from tens of millions of self-reliant people who are paying their own way, which already is happening.

Or how about the fact that government handout programs actually have vastly increased the number of poor and dependent Americans by making them comfortable on the dole and giving them no incentive to improve themselves.

In short, socialism is either a zero-sum game or an outright loser. It gives to one group by taking from another group; or it takes from one group and then leaves that group high and dry, particularly if you are a hard-working person. And this increase in the minimum wage is going to do the same things.

The extremist Democrat US senator from Massachusetts Elizabeth Warren, who lives in a $1.7 million townhouse with her rich husband, recently presented “research” that the minimum wage should be… $22 an hour! This, of course, was selective research performed by a radical college professor using cooked figures.

So why not pay workers a minimum wage of at least $11 an hour?

Well, if you come to Massachusetts these days you see businesses closing every day. The state is in a slow economic collapse. It is frightening and it is a result of the overall policies of the anti-business Democrats who run the state, people who think like Warren. So if businesses cannot stay open or are barely staying afloat at $8 an hour for the minimum wage, how are they going to stay open at $11 an hour? Or, heaven forbid, $22 an hour? Aren’t all of the employees of those businesses going to lose their jobs if the businesses close? And how does that “help” people?

This legislation will simply force many businesses out, which is why socialist states and nations always have bad economies. Because the socialist politicians and theoreticians, many of them wealthy – Warren herself was a Harvard professor earning more than $400,000 a year before being elected to the Senate – who promote this type of legislation rarely own or operate businesses or meet payrolls. So they impose this stuff without regard for the real-world effects.

Why shouldn’t we pay a minimum wage of $11 an hour? Isn’t that good for people at the low end?

Yes, of course, it would be a good idea… if it didn’t have such malicious side effects, that is. Those effects are these:

First, of course, you could ask the liberals who own businesses in Massachusetts – and there are lots of them – what they pay. They have been free to pay their workers $11 an hour minimum, or $22 an hour minimum. But virtually none do. Why not?

Answer: Because liberals are hypocrites. And they have one set of rules for themselves and one for everyone else. Liberals never lead by personal example.

So what happens when you raise the minimum wage to $11 an hour from $8, or a whopping 37% increase?

First, you get cuts in working hours or outright job losses. Many businesses close, or they simply fire the people on the minimum wage or cut their hours or never hire them. This is a significant way in which this type of minimum wage increase hurts low-income people and working people, not helps them. How is it good for a teenager not to have a job sweeping the floor and stocking the shelves because the cost is too high to the employer? Isn’t the teenager better off having a job at $8 an hour than no job at $11 an hour?

Of course. Because raising the minimum wage, particularly by a big percentage, always leads to minimum-wage job losses. It is an established historic fact.

Second, many businesses will simply raise their prices to account for the higher minimum wage. So the higher minimum wage actually will be paid for by consumers many of whom are poor or low-income or who have very modest incomes to begin with. Thus the minimum wage spike ends up in some cases being simply a transfer of wealth from one group to another. This is classic socialism.

Third, the Democrats may “buy off” business owners by allowing them to take tax deductions for the higher minimum wage. This will simply shift the higher cost of the minimum wage increase to taxpayers. This is a standard Democrat tactic.

Fourth, there is an economic ripple effect that hurts businesses, i.e., anyone who was making, say, $10 an hour when the minimum was $8 an hour will want to make at least $13 an hour when the minimum goes up to $11. Because he/she thinks that he/she is worth $2 more an hour than the minimum wage.

That is another reason why liberals always seek to increase the minimum wage – because it sets up a domino effect that puts upward pressure on wages for all workers, which drains private business of capital. It also creates strife in the workplace (“I want more money, I am worth more than that person” etc.). This is exactly what labor unions have been doing for decades – killing American businesses and millions of jobs by sucking the capital out, and creating strife in the workplace. The minimum wage increase is just another way to do it in the name of “helping” the workers at the low end.

Meanwhile the minimum wage affects only a small number of workers. It never is intended as a “living wage” because it usually applies only to teenagers or others just entering the workforce. But liberals treat it like it is a “living wage” so that they can push it up and force the ripple effect on wages up the line.

(By the way, the average private-sector wage in America today is $23 an hour. To compare, the average public school teacher makes $40 an hour and the liberals are constantly caterwauling that teachers don’t make enough money.)

OK now, who else is going to pay for a higher minimum wage?

You guessed it – other people who work for the company. Imagine that the minimum is $8 an hour and that you are making $20 an hour working for the same company in a higher position. If the minimum goes up to $11 an hour the owner has to pay those minimum wage workers more. He may do that by denying raises to other employees like you at $20. He could even cut your salary.

Don’t think so? Think again. It is your employer’s prerogative to do whatever he wants and today many employers are stressed to the breaking point.  So what does this do, to deny raises or to cut higher salaries in order to pay an increased minimum wage?

Answer: Ultimately it makes everyone the same.

Sound familiar?

Yes, indeed. It is how all of socialism works. Everyone is the same, but at a lower and lower level, which is why communist nations are always poor and decrepit. It is why people in the “utopian” Soviet Union were waiting in line to buy scarce bread back in the 1960s while Americans were thriving and buying big houses and going on European vacations. It is classic left-wing demagoguery. It is like taxing the middle class heavily to give the money to poor people, i.e., it slowly brings down the middle class through more and more taxation while it elevates the poor. Eventually the two groups meet at a much lower level than the middle class had before.

What is the Nikitas3.com solution on the minimum wage?

It is to allow private employers to set all wage rates for their workers including the minimum wage. This will actually lead to more jobs, more prosperity, higher wages and higher employment levels for most workers.

Because remember again the Golden Rule: Everything that liberals say is the opposite of the truth, i.e., socialism produces the opposite of all of the wonderful things that liberals promise, while capitalism produces the opposite of the negative things that liberals say about capitalism. Therefore when liberals say that a capitalist policy is bad – like letting employers and not the government set the minimum wage – that must mean that it is a great idea. Because the Golden Rule says so.

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