I’m just gonna float this on out. Haven’t heard it out
there in that Matrix-like level of reality known as the Mainstream Media. Or
any media, for that matter. If it’s been addressed or proposed somewhere by
someone else some time ago and it’s flown straight by me, forgive my lapse of
attention.
Anyway, I was thinking about all this “raise-the-minimum-wage-to-$15-an-hour”
nonsense and came up with an idea. Now, please don’t get offended, but it seems
to me that logical, rational thinking people can understand that when costs go
up, demand goes down. The more expensive something is, the fewer people will want
to pay for it. Labor is a cost to business. When government mandates a minimum
cost and then raises it, businesses will look for other means to fulfill the
demand they once had for that labor when that labor was at a lower cost. Such as
automation, as we’re seeing some fast food restaurants experiment with.
Common sense. Or, better yet, self-interest. It has
nothing to do with “fairness”, if one defines “fairness” as equality of
results. A market of buyers and sellers all looking out for their own
self-interests yields an efficient marketplace. “Efficiency” as defined as
equality of opportunity. Yet a third of the general public out there won’t
understand that line of reasoning and another third will actively endorse and promote
contrary ideas. So, thus, we have the government interfering in the marketplace
in the holy name of Fairness.
Now, if – and it’s a huuuuuuuge if – IF government
absolutely must get involved in the private sector by mandating a minimum wage,
a minimum cost of labor, fine and good. Continue as planned, amateur
Keynesians, and keep marching toward utopia and try not to get too many people
unemployed, or at least blame business for acting in their own self-interest for
increased-minimum-wage-related unemployment.
But I have two young daughters. One will be looking
for work in two or three years. Part-time, first-time, summer job type work. In
order to have her find a job (mostly for the experience), since no employer
will pay an inexperienced teen $15/hour, why not create a new category of
employee: the starter worker, with a starter worker wage.
We can even capitalize the words in the title. The
Starter Worker, with the Starter Worker Wage. We can also super-complicate it, over-define
and over-regulate it as government is wont to do. We can set limits, such as:
the Starter Worker must be currently attending a secondary school full-time. Or
the Starter Worker must not work more than 500 hours a year. Or the Starter
Worker must be under the age of 18 by December 31st of the current year. You
know, give businesses a lot of tracking busywork to do since government is
generously allowing them to hire an inexperienced kid living with mom and dad at
$8 an hour.
The Starter Worker Wage.
Has it been proposed, and I missed it? If it hasn’t,
why not?
Signed,
Hopper
Armchair Economist
5 comments:
Yes! Great idea, Hopper! Common Sense 101...
And smart businesses that want to stay in business will hire more Starter Workers than you can shake a stick at thereby raising unemployment even more on the Non-Starter Workers. But, but, but, that's just not fair!!! Economics is still about supply and DEMAND. Read about Dudley Dough Pizzeria.
Thus the implied incentive to improve yourself with marketable education, skills and experience. Which should be taught in schools from sixth grade on up, but usually isn't.
But it's those with non-marketable skills who can't or won't improve their lot in life that's spurring on the drive for govt interference in the market. Not sure what the correct answer would be, other than that perhaps govt should direct its $ and efforts to helping non-Starters make themselves more valuable to more employers.
.... instead of inflating the cost of labor
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