3 votes

Minimum Wage for Dummies (ie fascists)

There are only two possible cases if you raise the minimum wage.

1) You disemploy people. (what the 'right' typically thinks)
2) You don't disemploy people. (what the 'left' typically thinks)

As with any price floor if you raise the price (hourly wage) floor above the expected benefit to the consumer (profit per hour for the employer) they will not buy the service. (you're fired!)

This is true, unless the employers as a group are reaping monopsonistic rent. A monopsony is when you raise barriers to entry of the demand side of the market. A monopoly in reverse, so to speak.

In a monopoly you make it difficult for others to sell the product you sell, thus causing prices to be bid up.

In a monopsony you make it hard for others to buy products you want, thus causing prices to be bid down, in this case wages.

If the labor market is monopsonistic it is possible that you could put a floor on wages and it will still be below the 'profit' the employer makes from employing the worker.

So how do we know what is the case?

And if it turns out the labor market is monopsonistic (and I think it largely is) does it mean we should raise the minimum wage?

Hell no!

Why not?

Because if you just end the monopsony you can drive up wages and increase employment.

If the labor market is monopsonistic the excess 'profits' (rent) gained from depressed labor wages will attract employers who see the profit potential from underpriced labor, if the market is freed.

If McDonalds really is making, who knows, say $5/hour, from employing minimum wages, and I have some cash, and a project that can use low skill labor, and am not prevented from doing so I'm going to hire them at $1 more, and 'exploit' the wage slaves and make $4/hour off of him.

In turn someone else will be happy to make $3/hour of exploiting the proletariat.

In turn someone else will be happy to make $2/hour sticking it to the working man.

If there are 'excess' profits and this is not happening it's not for lack of greedy 'capitalists'.

It's because other greedy capitalists (and their progressive dupes) got the government to enact all sorts of laws, regulations, codes, statutes, zones, and taxes that have the net effect of barring anyone who would otherwise want in on profiting on the tears of the oppressed masses.

"No one hates capitalism more than capitalists." - Steven
Horwitz

Capitalism isn't about capitalists. When capitalism is about capitalists it's progressivism, ie fascism.

Capitalism is about ensuring there is no government power to purchase.

Because if it exists, no matter how you intended that power to be used, it will be used for capitalists.

That is the iron rule of statism.

It never has been, and never will be, otherwise. The rich get richer and the poor get poorer, and it is because of the structural violence of the state. The rich decide how the poor are educated and indoctrinate them to believe that the state is there for the benefit of the poor.

It is not for the poor. It never will be. It never has been.

Capitalism is about making sure capitalists have no power to do anything but compete to offer you things you want.

If they trick you to believe just a little more state power will protect you, ever, you are walking into the wolf's jaws.

The game is rigged, and they want you to believe that rigging it some more is going to help you.



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Cyril's picture

BUMP.

BUMP.

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

Cyril's picture

Great post. Thank you.

Great post. Thank you.

What is a capitalist?

A capitalist is someone who has made profits on a market while creating wealth and who saved for future investments to generate more profits and more wealth.

Winning or losing with the induced risk is part of the game.

Because entrepreneur individuals have memory they will naturally tend to try not repeat the risk patterns that failed for them.

The last thing you want is the state to enter the game as both a referee and a player.

Because men are no angels and are easy to corrupt to tamper with or downright deny the just rules of fair competition.

Precisely the exact mess where we are at today.

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

Thank you

I hope that didn't sound like I'm against capitalists. I'm certainly not.

But give the state the power to intervene in markets, and capitalists will own that power. In fact we know it is always the capitalists that propagandize for that power in the first place.

Once it exists, then other capitalists who would prefer not to play the system have to as well, or be out of the game.

No campaign finance law or public;y funded campaign system will fix the problem. If the power to interfere with the market exists, it always exists to benefit the rich.

Competing in a free market is hard, and there's no guarantee your children will have what it takes to keep it going. Which is exactly why we have the state, to protect capital from market.

Cyril's picture

Well, I am a capitalist of sort

Well, I am a capitalist of sort. Of the victim kind, in this statists rigged game.

I try to save for the future of my family and whichever project.

I could certainly be corrupted like anybody else.

But for now I suffer the plunder from those capitalists in bed with the state, as you recalled eloquently.

And since I am not among the

leftist morons,

leftist idiots,

leftist ignorants,

leftist BEGGARS

who are asking for more plunder...

INSTEAD I appeal for a return of free markets where I know I will be better off...

without having to plunder others.

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius

Cyril's picture

...

Sadly, the left almost never learns.

"Cyril" pronounced "see real". I code stuff.

http://Laissez-Faire.Me/Liberty

"To study and not think is a waste. To think and not study is dangerous." -- Confucius