NYC, MCDONALD’S, MINIMUM WAGE & RENT CONTROL Pres. O has called for raising the minimum wage to $9/hr. But that’s way wrong; the solution is more jobs (caused by growing the private economy), not a government-imposed price control that will kill jobs & cause inflation. Unionizing and privately negotiating with an employer over wages is fine—like many McD’s employees are doing. But the gov’t coming in and mandating the terms of a contract and micro-managing business with a price control (minimum wage law) violates the right to contract (US Constitution, Art. I, Section 10 states “no state shall impair the obligation of contract”) and hurts the very people it is intended to help. Prices controls like minimum wage laws, family wage laws, suck because they block “price communication.” When prices fluctuate (go up and down), that tells society information. If prices go up, prices are telling us “this good is popular and in demand, maybe we should produce more.” If prices go down, prices are telling us “this good is cheaper, maybe now I should buy some of it while the price is low.” Without this communication, our economy is ignorant, and thus inefficient, and thus, has a shrinking overall economic pie. Which would you rather have in society, 1 job at $15/hr or 2 jobs at $7.50/hr? In times of unemployment like now, I’d say the latter. A minimum wage makes hiring more expensive. And economics teaches us that when something becomes more expensive, you get less of it. The problem of low wages is one of low skills. A minimum wage only knocks out the lowest rung on the ladder of opportunity. And if the economy were better, the minimum wage would be a non issue as market wage rates would be going higher. The solution is to make the dollars low wage workers make go farther. That is, make it cheaper to live where they live. New York City is hugely expensive because of big gov’t. Rent control makes housing expensive, NYC has high taxes on everything, and lots of regulations that make every little thing you buy cost more. The liberal always want to ADD MORE gov’t regs or laws (here, a minimum wage) to offset the deleterious effects of prior laws and regs, rather than REPEAL laws. We need to repeal laws that make it too expense for $7.50/hr workers to live in NYC. End Rent Control Rent control, like the minimum wage is a price control. It is a “price cap;” a max that landlord’s can charge. Whereas the minimum wage is a “price floor;” a minimum employers must pay employees. Both distort the free market and the natural flow of the economy. Rent controls make it so fewer landlords will invest and build more housing, because there’s less profit in it now; “if by law, I can’t charge what the market will bear, I won’t go there.” Rent control causes shortages in housing. Building more housing makes housing less expensive, because there’s more of it. Lower taxes Lower taxes so individuals working at Wendy’s & WalMart could keep more of their money, and would make everything they buy cheaper. Federal Reserve Bank caused inflation This is huge. The Federal Reserve Bank pumps/prints/electronically transfers dollars out of thin air into the economy all the time. To banksters, mostly. This causes inflation that people on the low end of the wage scale get hurt the most by; they don’t have savings (which keeps up with inflation), just a wage stream. End the Fed and its price controls on money and inflation causing “quantitative easing.” The Fed is what controls interest rates keeping them artificially low. This a price control on the “price” of money. The “price of money” is the interest rate. With less inflation, the buying power of $7.50/hr goes farther. Inflation is a brutal, hidden tax that hits the poor and non-investment classes (80% of us don’t invest in stocks, etc) the most. Repeal regulations on business Starting a business in NYC is hugely bureaucratic and time consuming. This adds to the expense of starting a business. Repeal employer mandates From equal pay laws, to family and sick leave, to Obamacare, to minimum wages, all these mandates make an employee “more expensive.” This kills jobs. Make college education cheaper Because the feds subsidize so much of college tuition, it has raised the price of college. Make food & gas cheaper See lowering taxes & regs, above. To help with income inequality and low wage jobs, we shouldn’t add more regs like minimum wages, but repeal laws so the cost of living is less. That’s the libertarian, free market solution, as opposed to the regulate-on-top-of-regulations approach liberals usually take. ihateeconomics/2010/07/how-minimum-wage-causes-unemployment.html
Posted on: Tue, 30 Jul 2013 22:37:59 +0000