Thoughts on Living WagesPosted: September 15, 2013
There is a wage issue in the U.S. Whether this issue is of too little pay or too high costs is important. Just looking up ThinkProgress.org and reading the large amount of rhetorical articles on a “living wage” will bring in the view that wages are too low. As well they are too low because we let owners pay too little. Thus we apply a price floor and raise it when needed to allow workers to earn a “living wage”.
The argument against minimum wage is extremely dry for many economists. It has been settled before it started. Before minimum wage was introduced no well-known economist (there are exceptions, but not all well-known economists are good ones) would even do a double take and support minimum wage. Price controls are bad and in labor they can be extremely detrimental.
But you’ll tell yourself what about the living wage? Don’t people need to be on a living wage? First what is a living wage? Wages is price for labor, is there a living bread price, and is there a living housing price. These excuses for “living” or humanitarian prices are grounded in absolute falsehoods. In the 80s people wanted cheaper loans to get housing. That was provided and from that the greatest mal-investment in housing popped, afterwards these “living wage” supporters starting crying about predatory lending. Basically they loved it before they forgot about it only here of it again and cry to the world, capitalist pigs ruined me.
Elizabeth Warren said that living wages should be $22 an hour. She cries that the productivity is sky rocketing and wages are unchanged since 1960-70s.However she ignores periods of poor Federal Reserve policy, low rate loans, welfare programs with poor incentives, a welfare state of administration, and poor government discretion in areas of assistance. For the last 100 years there have been countless others that have passed legislation similar to Warren’s views and none of them worked. They perpetuated the issues and ignored the real cause. If workers have no incentive for higher wages why would wages skyrocket? You also have to take into effect an education system where bad teachers stay and children have to go to school in bad neighborhoods. The issue of a living wage is distracting at best. The issue is not raising family at those wages; rather it is the distortions that create fallout between prices of goods and labor. And the issue is not unionization, if anything unions have hurt employment, especially mandated unions. Also one must examine the repeated monetary contractions and expansions that cause prices and employment to be disrupted, but of course you won’t hear about that on ThinkProgress.org. Sen. Warren however, would rather use stories of single mothers with children who work 2 jobs and only make $12 an hour. She ignores the cyclical pattern of government intervention. Like poverty this cycle just expands.