No unmotivated worker left behind
By Paul Moomjean 09/26/2013
California is not the greatest example on how to run a state. Currently, the Golden State’s unemployment rate (8.7 percent) is way higher than the national average (7.4 percent), according to the United States Department of Labor; and according to one study by the National Assessment of Educational Progress, California ranks 47 in the nation in school test scores, with only 22 percent of eighth graders proficient in science. Those numbers, by the way, are a strong indicator of only the worse is yet to come. Obviously, higher unemployment and a state on the decline educationally will only lead to more economic problems and less-qualified candidates. But don’t worry, California, Gov. Jerry Brown is going to try to make it all better by raising the minimum wage to $10 an hour over the next three years. If you can’t get people to earn their own raises, thank God the government will do that for them.
California Assembly Bill AB10 was sent to the state Senate and approved on a party-line 26-11 vote, with Democrats leading the charge. The Democrats are arguing that the bill will stimulate the economy.
“If you give people a couple more dollars an hour … to spend in their communities, spend it they will. They’re not going to put it into a hedge fund,” said Sen. Marty Block, D-San Diego, according to The Associated Press. “Nothing will make small businesses happier. This will stimulate the economy as well as helping people’s lives.”
I can understand why Block believes giving people “more dollars” would stimulate the economy, but he misses the bigger point. Those dollars are being taken from the business owners who pay the “people” he’s talking about.
Let’s play a game of logic for one second. If giving people “more money” will stimulate the economy, then taking away money from business owners must, in theory, not stimulate more jobs, because jobs cost employers money.
So if the employers are losing money, then they can’t hire more people, which means that, in reality, we will lose more spenders. Right? What am I missing here?
In fact, the California Chamber of Commerce agrees with me. “We have it tagged as a job killer, given the increased costs businesses will be faced with,” Jennifer Barrera, a spokeswoman for the California Chamber of Commerce, argued right before the bill went to vote.
What Barrera understands is that when you take money away from mom-and-pop stores and small franchises, then they will have to hire fewer people and/or increase costs. You cannot have your minimum wage and eat it, too.
Thomas Sowell, perhaps the brightest economist in the world today, argues against the minimum wage as well:
“It would be comforting to believe that the government can simply decree higher pay for low-wage workers, without having to worry about unfortunate repercussions, but the preponderance of evidence indicates that labor is not exempt from the basic economic principle that artificially high prices cause surpluses. In the case of the surplus of human beings, that can be a special tragedy when they are already from low-income, unskilled or minority backgrounds and urgently need to get on the job ladder if they are ever to move up the ladder by acquiring experience and skills.”
Sowell understands the other repercussion, which is that raising the minimum wage will decrease motivation in urban and poor areas. Why go to school? Why acquire new skills? Why work harder? If the government is going to make sure I make more money, despite my lack of effort to obtain it, then I can just sit around waiting for my next raise.
Obviously, the war for higher wages has been a major issue lately. A few weeks ago I wrote about the fast food workers striking to make more without offering to add to the business in the areas of innovation or, heck, just working harder. They believed their very existence required a raise.
Sadly, much of this stems from our failing school system not preparing our kids for higher-wage jobs to begin with. Mix that with apathetic workers and you have a recipe for disaster.
What Brown really should call this bill is No Unmotivated Worker Left Behind.