Sunday, November 11, 2012

Minimum Wage Doesn't Belong in the Constitution--or Law

Despite its proven economic destructiveness, the minimum wage just won't go away. In NJ, as in a few other states, the debate has been raised to the constitutional level.

On the "pro" side of the debate, Senate president Stephen Sweeney (D)--citing Colorado, Florida, Nevada, and Ohio as examples--"proposed asking voters to amend the state constitution to increase the minimum wage to $8.25 and tie it to the rate of inflation." On the opposing side is Senate minority leader Tom Kean Jr., saying that "The state constitution is not designed, nor was it ever intended, to be the place where matters of public policy that must be responsive to the times are addressed."

Kean is right that Sweeney's proposal is a "profoundly bad idea." But that's where their disagreement ends. Both agree that the state must impose minimum wages. "Just as the U.S. Constitution is famously dedicated to 'promote the general welfare,' our state constitution’s overarching goal is to ensure a basic standard and quality of life for residents," said Sweeney, distorting the meaning of the "general welfare clause." "For 65 years, the people have amended it to ensure their own security. Amending it to guarantee a livable minimum wage is part of that tradition." Kean did not dispute a word of that.

The "overarching" purpose of government is to protect individual rights, including property rights. Rights are sanctions to freedom of action--specifically, the actions necessary to pursue one's chosen values--not a guarantee to products or services that must be provided by others. The purpose of the constitution--on whatever governmental level--is to restrict the power of government to that purpose, and that purpose alone. Sweeney's interpretation turns on its head the fundamental principle upon which this nation was founded. To "guarantee a livable minimum wage," the government must necessarily violate the rights of some people to their lives, liberty, and property in order to provide that Guarantee to others. 

The reason is simple: Nature provides no guarantee to any level of material prosperity. Prosperity comes about because of individuals who meet the challenges of nature through productive work; which means to apply his reason to his labor. Every individual who does so produces on some level, and the level of his material prosperity is not determined by his needs or desires, only by his productiveness. "As a man sows, so shall he reap."

The principle is obvious in the case of a person marooned alone on an uninhabited island. That person cannot wish food, clothing, or shelter into existence. He must think and act--i.e., work--to create them. Nature does not recognize the man's wishes, only the man's ability to transform raw materials into the satisfaction of his needs. The principle is less obvious, but no less true, in an industrial economy. The difference is, an industrial economy makes it much easier to deal with nature, because of the jobs created by the most productive. Who are the most productive? Anyone who's intellectual energy and ambition exceeds his physical capacity to realize his goals, but who doesn't let his physical limitations stop him. The result; he seeks help, in the form of paying others to help him meet his goals--one or more jobs are born. You have an employer. You have an employee(s). In short, you have a business.

But the factually indisputable principle that "as a man sows, so shall he reap" still holds. One cannot repeal the laws of nature. When a business hires a worker, the worker's compensation is determined by the value of his contribution to the productive process that the business is engaged in--what he sows--not to his needs, desires, or some arbitrarily determined "livable wage." The business is neither able, willing, or morally obligated to pay his employees more than they are worth to him--i.e., what they contribute to the productive goals of the enterprise. Thanks to the market laws of supply and demand, nor can he get away for long with paying less than they are objectively worth.

The moral argument is particularly pertinent here, because the job creator's side of the minimum wage debate is rarely defended on moral grounds. But it must be said: A job is a two-way street, a trade. The business has a moral right to set the terms of employment for the job positions it creates, and the employee has a moral right to agree to the terms or go on his way to seek employment elsewhere. Just as the employer's need for help does not entitle him to anyone's labor below what the worker is willing to work for, so the employee's need for work does not entitle him to a wage higher than the business is willing to pay him.

Again, nature does not guarantee any level of material prosperity. Any attempt to impose such a "guarantee" on employers by legislative or constitutional force is theft. Therefor, minimum wage laws are theft, plain and simple, and the employee receiving compensation above and beyond what his employer would otherwise be willing to pay him is receiving stolen property. Minimum wage laws are not just economically destructive. They are immoral, unjust, and a violation of the right to freedom of association, trade, and contract;  i.e., they are tyranny. It is immoral both to force a business to pay his employees more than they are worth to him. It is equally wrong to forbid a person from agreeing to work for less than some authority demands; which means, essentially, to forbid him to work, since no job that does not cover its own cost will last for long. The greatest victims of minimum wage laws are the young, whose ability to gain "access"--to use a currently fashionable term--to the first rungs of the economic ladder is destroyed because those lower rungs have been kicked out by minimum wage laws.

"It’s easy to dismiss the minimum wage as the domain of teenage burger-flippers," Sweeney says, dismissing the young as unfit for consideration. But only 20% of minimum-wage level workers are teenagers, he disingenuously claims. How many more would there be, though, without minimum wage laws already on the books.

Jobs and the businesses that create them don't grow on trees. If someone wants to reap more, let him develop the skills and ambition that will make him a more productive individual, so he can sow more. Rather than debate how or when to impose minimum wage levels, we should get the government out of the business of dictating employment contracts.

Related Reading:

"Greed" is a Two-Way Street

End, Don't Raise, Minimum Wage Laws

Constitutional Distortions: the "General Welfare" Clause


Steve D said...

'Therefor, minimum wage laws are theft, plain and simple'
They are also a violation of the worker's right to offer his services for lower than the law allows.
The rights of both employer and employee are violated.

Mike Kevitt said...

'Therefor, minimum wage laws are theft,...; i.e., they are tyranny.'

True, except the word, law, should've been put in quotation marks. Such 'laws' aren't laws. They're criminal plans put into the position of laws by a legislative process which has been, thus, perverted.