Sunday, October 22, 2006

Society for Economic Anachronism: Proposition 202

Something to chew on before we begin, an appetizer of sorts: A minimum wage is a law forbidding one from selling one's labor below a given price and thus forbidding somebody whose labor may not be worth the minimum from selling it at all.

Arizona Republic columnist Robert Robb knocked this one out of the park:

There is no greater economic superstition held by the American people than that government can suspend the laws of supply and demand when it comes to wages...the minimum-wage argument has become largely irrelevant. The American labor market has passed it by.

Robb is right: With fewer than 1% of full-time and 6% of part-time workers being paid minimum wage, it's clear that market mechanisms are in fact at work in the labor market. The AFL-CIO, aka the Society for Economic Anachronism, however, feels that somehow these market wages aren't honest. Just how an honest wage can be calculated other than by bargaining and agreement between labor seller and buyer they don't explain. The old canard about being able to support a family has been brought out, but, again, just why one ought to be able to support a family of some arbitrary size no matter what one's employment situation is isn't explained, either.

Usually when the terms of an economic exchange are coerced by a third party, we call it "extortion". How the minimum wage doesn't fall into this category is lost on me. Perhaps, however, I should have more faith in the AFL-CIO in this matter as they are the nation's experts on worker exploitation, collecting mandatory dues from workers in agency-shop states and then using them to feed the lumpen ideologues in its leadership and lobby against its members' individual interests. They ought know it when they see it!

That it is a hike in the minimum wage is alone enough reason to oppose Proposition 202. If you need any more, consider that it's a trojan horse giving government agents and even complete strangers--including labor unions--sweeping access to private empolyment records and raising paperwork requirements for small businesses, making it even harder for them to compete with big-box stores having the advantage of economy of scale.

This is going to hurt consumers and small business owners and it isn't even going to help the poor. As the minimum wage increases it'll become more economical for businesses to computerize, mechanize, or hire fewer but more experienced and productive workers. Teenagers, those coming off the welfare rolls, and those in transition between occupationss--none of whom are represented in the AFL/CIO--will be hurt most of all, albeit in a manner invisible to all but the professional economist.

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