Congresspeople seem overly worried about the “little man” these days. They want him to have a raise in wages. But they don’t want to pay for the raise. They want you and me to pay for the raise, as usual. So Congressmen will soon vote to raise the federal minimum wage. It is a perfect solution to a non-problem. It will not cost them anything, it will attract votes because of their compassion, and the raise will do no good at all. In fact, it may harm some of the “little people,” but it will look good and that is all that counts. It is simply a matter of putting on a good show; after all Congresspeople are in show-biz of a sort all the time.
Economics is a study of supply and demand. Economists know that when the price of something rises, people will use less of it. Raise the price of labor and fewer laborers will be employed. But more people will leave school to fill those higher-priced jobs.
The real reason for raising the federal minimum wage is that it pleases labor unions. And labor unions provide a great deal of money and other support for politicians in whom they are well pleased. Labor unions use the minimum wage to boost their demands for more money for the people they represent.
In the United States for the past 200 years there has been a steady increase in wages. Was this increase due to pressure from labor unions or people in Congress establishing minimum wages? Certainly not. The increase in wages has been due to a shortage in laborers in this country. That is why the United States is a country of immigrants!
There has been a steady pressure to bring in people from other countries to fill the demand for workers, because private individuals have created millions of jobs. Government wastes, private individuals create.
It is simple economics again—if the demand for something grows, the price you pay for it will rise. Labor is no exception.
Some say people in Congress are aware of the demand curve. I say they are too busy putting on a good act and too ignorant of economics to be aware of the most simple economic facts. They are better at dropping their pants than they are at dropping the price of something. They are better at posing and being “shocked and surprised” than they are at actually doing something useful.
Congress will no doubt pass an increase in the federal minimum wage very soon. And they will feel good, despite the damage they will have caused. But Congresspeople won’t know the difference and they will congratulate each other as if they did.
And we pay these people, the ruling class, huge sums of money to wander around blindly and do really dumb things!