The Purpose of This Bl;og

By and large, liberals are very decent, kind, and compassionate people who genuinely want what is best. This should be kept in mind as we explore the Law of Unintended Negative Consequences near invariably resulting from Leftist big-hearted solutions to societal problems.

Tuesday, January 7, 2014

Minimum Wage - Restricted Freedom

For a variety of reasons, markets are typically designed to function, and function best, when exchange between buyers and sellers, or demand and supply, is voluntary.

Experience suggest that we are more likely to buy and sell things that fit our own personal preferences than when subjected to the preferences of other people.

As puzzling as it may seem to older generations, young people may get more value from listening to rap music than classical music, and will be more inclined on their own to purchase rap albums than Mozart and Beethoven, and may even feel averse to being forced to buy tickets to the symphony.

I suspect that for most of us, one of the reasons we want to grow up and get out on our own, is because we want the freedom to make our own choices and do what makes us personally happy and not be forced to do what our parents wanted, and this no more so than with consumer and business decisions..

Yet, in some respects, minimum wage laws do exactly the opposite. They restrict the freedom of certain employers and laborers to decide for themselves whether to employ or work at a wage level that they each think is worth it at the time, and instead have forced upon them the wishes of a parental government. In a way, it is like moving back home to live with mom and dad and according to their house rules.

In fact, the first two times that minimum wage laws were brought before the Supreme Court (once regarding state laws, and the other regarding the federal law), they were struck down as unconstitutional. (See HERE)

Now, some people may argue that some infringement on freedom is worth the alleged benefit of unskilled laborers finally being able to make more of a living wage. And, while in future posts I will demonstrate in several respects that the supposed benefits of minimum wage tend to be outweighed by the costs to unskilled laborers and the economy as a whole (ironically, laws enforcing minimum wage often negatively impact most the people it was designed to help most), one Leftist LUNC of minimum wage laws is a parental/child-like restriction of freedom.

Contrast this with how the free market is designed to work. If employers and workers are at liberty to exchange labor value equal to wage value, and if labor and wage values aren't sufficient for the employees to make a decent living, then instead of the government arbitrarily compelling increased wage levels, laborers may naturally increase their wages by increasing their value to the market--i.e. by increasing skills and productivity, etc.

In other words, the solution to low or non-subsistence wages for the poor isn't through restricting freedom by way of minimum wage laws, but through enhanced freedom through increased employee value. This way all parties are benefited rather than made worse off (as will be shown to happen with minimum wage laws).

For an explanation as to why these Leftist LUNCs may occur, please see: Gov: Wrong Tool for the Right Job - Introduction and Cold Nanny as well as The Politics of Compassion, Emotions, Ignorance, Denial, Blame-Shifting, and Victimization

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