Minimum Wage: Fools' Gold
The advocates of a higher minimum wage, a.k.a., living wage, are an example of how the roads to hell are paved with good intentions.
Raising wages creates inflationary losses for the minimum-wage earner as
- more money chases the same basket of goods and services while
- the basket producer has to pay more for bookkeeping/accounting changes if he has sufficient profit margins.
The effort would be better spent ending campaign welfare, a.k.a. wealthfare. Raising the minimum wage merely creates short-term relief with long-term losses. The basic cost of goods and services is increased by the business costs of having to raise prices to match the increase of money in the hands of the minimum-wage earner.
Even worse are broad tax cuts which create inflationary pressures throughout the economy: more money chasing the same number of goods and services. The only people who benefit from tax cuts are the people with the lowest percentage of their income going for the common goods and services which suffer inflation.
Living Wages
The numbers on paper don't raise people's standards of living. People's
standard of living is raised by it taking less time to solve the problems
of living. If the proposed solution is to give people more numbers on
paper which causes time to be diverted from solving problems, then the overall
economy has less time per person.
Cost of living
in the only thing that matters, time/lifehours, has increased.
Consider the following wage hike scenarios:
- What if you doubled everyone's wages? Would the quality of life increase? No, prices would double. Not only would the poorest 10% still be the poorest 10% but their standard of living would go down. Why a lower standard of living? A lot of time would be wasted in raising and doubling prices because money is worth half because the money supply doubled--classic inflation. This time which could go into serving the poor.
- What if you double just half the populations income. The same same would happen.
- What if you gave everyone a 10% tax cut or rebate? Same.
- What if you doubled the wages of 1% of the population for doing no more work? The same would happen. In fact, the problem with the working poor derives from this very phenomenon: wealthfare. One percent of the population getting more money without solving any more time-wasting problems. Where has this happened? In our election process. The habitual politicians have repeatedly bought re-election with wealthfare, a.k.a., campaign welfare, i.e., paying their friends more than they deserve through tax credits and supports.
The solution for the working poor and middle class is not inflationary minimum wages or union strikes. The solution is definitely not an across the board tax cut. The solution is to repeal all the tax credits the habitual politicians have piled upon that chaotic garbage dump that is called a tax code.
When we have term limits, politicians will vote what is best for their lives outside of office rather than what will get them re-elected. When we have better democracy through the internet, monthly citizen legislation to repeal tax crap will lighten the load on all working problem-solvers.
See
Bucket Economics, Minimum Wage
...
Strikes Are For Dummies