Minimum wage — a curse not a blessing
The St. Petersburg Times recently had an article about a woman who has been collecting signatures for a ballot initiative to increase Florida’s minimum wage to $6.15 per hour, an increase of $1.
In the story, Denise Hylton said the group she represents, Association of Community Organizations for Reform Now, is a voice for those people “who struggle to survive while toiling away in low-wage jobs….”
This is an example of the type of thinking that believes the solution to economic problems is forcing employers, through government action, to increase pay and benefits to their employees.
Those who tend to believe in this also prefer a type of economic protectionism.
Whether it is in the form of opposition to free trade, calls for a higher minimum wage or increased employer-provided benefits, the subject is brought up all the time and is a rallying cry for all Democratic Party loyalists.
But, while it may all sound great, there’s a problem with the reasoning behind this movement, and it has to do with the principles of free-market economics and private property that govern our society.
Their argument goes something like this: “American workers are losing their jobs to foreign countries and are being treated badly. The government needs to do something about this.”
The suggested action is usually some form of protectionism, whether it is tariffs or laws requiring that companies provide more benefits and/or higher wages to their employees.
The problem with this is the higher prices for goods and services that result from the lack of competition and increased costs faced by employers. The tariffs make it more expensive for people to pay for goods when they have to buy the American-made version. This is because the American-based companies are forced to pay for all sorts of non-production-related items such as employee benefits and artificially high government-demanded wages. That increased expense is then passed on to the consumer.
But what about those corporations that pay low wages and outsource jobs to other countries? They are doing the same things that consumers do every day — trying to find the best deal.
Corporations are demonized for trying to save money, while we do it all the time when we buy the cheaper generic brand of some product from Wal-Mart instead of the more expensive brand name version.
Those who advocate a higher minimum wage and increased government-mandated benefits need to understand the tradeoff. They can demand higher wages and increased benefits but shouldn’t complain when that results in their company moving somewhere else to be able to compete and make money. They can demand increased tariffs, but everybody else will have to pay for it when the prices of products go up as a result.
Don’t get me wrong; I am not against employees fighting for better conditions. I have family and friends who are members of unions that have benefited them a great deal. However, labor negotiations are different than government regulation.
As I wrote last week, I, like many other college students, am in a low-wage job. I would love a pay increase, but I oppose any government action that would force my employer to do so.
It should not be the government’s place to tell private companies how much they have to pay employees and to reward them. What right does the government have to tell you how much of your money you have to spend?
In a free market economy like ours — although it isn’t as free as it should be — the amount you agree to pay someone to do something for you should be left up to you. If the person doesn’t agree with the pay, then they don’t have to work for you.
I understand that my $6.38-per-hour job is not meant for me to live on. If I want higher pay, I understand that I need to go work for another company or to increase my education and training, not start an initiative that would allow voters of the state to force my employer to pay me more.
Adam Fowler is a junior majoring in political science.