Tuesday, August 07, 2007

Minimum Idealism

Firstly and unrelated, interesting answers on street gangs via Freakonomics.

Minimum wage has bothered me for a long time. I've had a good amount of cognitive dissonance on the topic. Dissonance be gone! I have my answer, until somebody forces me to reconsider with errors in my logic, or better logic.

I've felt for many years that increases in the minimum wage were generally a good thing... not increasing minimum wage to $20/hr or anything like that, but at least keeping minimum wage in proper adjustment with inflation. I would like people in general to have better standard of living, and I feel sensible minimum wage increases can provide that. There's always been the republican friend counter argument that "if you are working for min. wage, you're time or abilities are only worth that (or less)." This clash is just fighting insanity with insanity.

More recently I discovered the economic arguments against raising or even having a minimum wage; as with most market issues, when the government gets involved it's just not a good thing for the market. Yet, I believed then, that people living on minimum wage didn't have good lives especially when compared to their top level employers. Next, I had an internship in a factory and saw that incentive programs are fantastic... people who wouldn't be making much can make good money if they work hard. Then I started a business, and had to consider how quickly my small business would be broke if I had to pay people minimum wage. Later, I came to Brazil, where the minimum wage is less than $150 a MONTH (less than $1 an hour)! That's after the giant raises.

Here's the answer: We should not have a minimum wage. This can only happen with good standard of living if the market determines that the vast majority's time is worth more than minimum wage. Once again, it goes back to the government ensuring that everybody can do great things. The government must ensure that opportunities are available; handouts are never good for the majority in the long run (increases in minimum wage, reparations for slavery, welfare.... .what about social security?). In regards to education, the opportunity must be provided for all, and for those that choose not to take that opportunity, the government should feel no need to support those people beyond their value to society. How does free education differ from a handout... in the same way that giving somebody an apple seed is different from giving them an apple. One require initiative and work for betterment, the other requires only that the recipient use and deplete the resources given.

There are arguments that handouts can be invested, but if you are actually using that argument you haven't looked at trends in disparity of wealth, or read anything on the topic... it can happen, but the government's money would be better spent distributing lottery tickets to the lower class; we've all heard the adage that "the lottery is a tax for people who are bad at math." Well the government giving handouts only proves they are bad at math (or trying to win the votes of the lower class).

In a perfect world, a minimum wage wouldn't be necessary, those willing to work harder would enjoy the best quality of life. In a perfect world, the market will be flooded with graduate degrees and we'll find a shortage of cooks, and trash men (in which case their wages go up). Their wages won't be equal... but they would be proportionate to the blood sweat and tears one invests in their own life.

Ron Paul has said in the GOP debates that we have to rid ourselves of the idea that the government should take care of us from cradle to grave. He's couldn't be more correct.

What am I saying? If shit was done correctly, we would not need and should not have a minimum wage. In the real world, I'll strongly support ideas that empower people opportunity;, and I'll continue considering approving moderate increases to the minimum wage. That is, until I can be sure the raise would help more lazy people than unfortunate people (a question that might be answerable today, but not before lunch).

EDIT: And I notice headlines today of Hilary calling for 1 billion to help people pay their mortgages... I'm all about cutting off abusive practices, but I'll let you decided if that 1 billion is a handout or something else.


Blogger charlie said...

What if someone foregoes education and reaps minimum wage as a reward, then has kids who want to pursue an expensive education? No money from mom and dad, no handouts from uncle sam. De facto stratification followed by revolutionary war being fought by poor people on one side and rich people's robot gardeners on the other.

3:57 PM  
Blogger Brady said...

maybe I should have stated explicitly I'm all about everybody being able to go to college. Granted, the kid of whom you speak would get Pell grants from FAFSA. Regardless, I think that kid should have the opportunity to go to college, and I think upper education needs a complete overhaul anyway. but that's another topic.

4:57 PM  

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