posted on Sep, 18 2010 @ 11:04 AM
There are a handful of reasons that this is not a good idea. Here are 3 of them in order from the most economic to most ethical in nature:
1.) It's economically untenable to base someone compensation on someone else's compensation, instead of on the market value of that person's
goods/services. If boss Bob could hire someone to empty the garbage at his company for $5/hr, but is legally mandated to hire the same person to
perform the same service for $8/hr, Bob is incurring an economic loss. Now Bob has to pay more to get the same thing, and there is no reason for it
other than the law. Do you think Bob will pass his expenses onto you in the form of higher prices? Of course he will. Now you will pay more to get
the same product, and no one is any better off except the guy who is taking out Bob's trash, and that guy would have done it for $5/hr because he
needed a job.
Do you think Bob is going to be motivated to hire a new employee at a wage that is legally(artificially) inflated? Or do you think Bob is more likely
to demand more work out of his bottom guys, and if they won't put out then he will find someone who will?
Certainly, increasing minimum wages is bad for employement. Companies have limited resources are not going to buy as much of the things that cost
more. If employees cost more, they will not hire as many of them.
2) We live in a global economy. When it comes to less skilled jobs, America does not have any advantages. The higher our minimum wage, the more
likely Bob's company is to outsource. If he can get people to make widgets for 10 cents an hour in another country, he has no reason to play along
with America minimum wage laws. If there is a job that a lot of people can do or can easily be trained to do, that job will go to the people who will
do it for the least amount money. If the least amount of money in America is set by law, then any company that wants to make money will go someone
that they can pay people less to do the same thing.
The higher our minimum wage, the less jobs will be in America.
3) Do you think that what Bill Gates has done is only woth 40 times more than what the janitor at Microsoft did in the same time period? Sometimes,
people produce things which are worth a lot more than what other people produce. Isn't it right to compensate them accordingly? After all, they're
the ones who did it, and people willingly paid for it. Who is anyone else to step in and say it was undeserved?
How do you come up with 40 as the number? I ask because arbitrary limits don't work very well economically. If there's no reason to set something
at 40, then it probably shouldn't be set at 40. What's not arbitrary is market value. For example, Bill made his money from the value of Microsoft
stock. That value is set by a free market. It's worth exactly as much as someone is willing to pay for it, of their own free will. Bill owns the
stock, and the market(the people) are willing to pay billions for it. According to the OP, should we tell Bill and the market that his stock
can't be worth that much because we say so? Or should we tell Bill that he has to give the janitor a billion, just to make it fair?
Ultimately, I do think that minimum wage in the US is a good thing. However, it is a matter of fact that it is bad for jobs here. We have to balance
the benefits and the costs, and if we get carried away on a crusade to pay the lowest earners more money in order to do the exact same job, we're
going to find ourselves in trouble.