Monday, November 4, 2013

NJ Voters Should Vote NO on the New Jersey Minimum Wage Increase Amendment

Tomorrow, November 5, New Jersey voters go to the polls to elect a governor. But while the governors race garners most of the attention, another issue voters will decide will have much larger and longer-term implications for the state. That issue is the New Jersey Minimum Wage Increase Amendment, Public Question 2.

The Minimum Wage Increase Amendment is one of those "feel good" issues where voters get to claim to be "doing something" to "help" others without actually doing anything for these folks themselves. In this case, they can claim to be "giving a raise" to low-wage workers who "need it." But, in fact, they're not giving anything. They're merely forcing employers whose business's they know nothing about to shoulder the price for their alleged "caring".

Voters should be honest with themselves. Those who favor legally mandated minimum wages should actually consider what their "caring" actually does to all of the people involved. Here are the three main reasons for voting NO on this amendment:

Minimum wage laws subvert the constitution by supplanting limited government with majoritarian authoritarianism.

The purpose of government is equal protection of individual rights, and the Constitution is the means of restricting the government to that purpose. This amendment and like "economic" constitutional features inverts those principles, turning the Constitution into a rights-violating, special interest tool of economic aggression, at the behest of any victorious electoral voting bloc. No one's liberties should ever be subject to a vote.

Minimum wage laws kill existing jobs and stifle job creation, as has been well-documented by economists in numerous studies and as logic dictates. This is easily proven by answering this simple question: Is price a factor in your myriad spending decisions? Yes? Well, a wage is a price, and thus a factor in any employer's decision on hiring. Too high a labor price, and the employer won't create or maintain that job, just as too high a price for the product or service the employer's business produces will make you unwilling or unable to buy it. I could rest my case on that, but I want to elaborate a little further. 

There are many factors that determine wage levels at any given time, including the laws of supply and demand. But, at bottom, a worker's labor on any level of the economic scale is ultimately priced according to his productive contribution to the business enterprise. The value of a worker's productiveness can not be raised by arbitrarily forcing employers to pay higher wages than the employee's work is worth to the employer, the whims of politicians or needs of the worker notwithstanding.  The worker whose labor is not productively worth the minimum wage is simply priced out of the market. No worker whose wages are forced above his productive contribution to the enterprise will keep his job for long.

Minimum wage laws especially hurt low-skilled, inexperienced but ambitious young people by destroying opportunities to get onto the lower rungs of the “jobs ladder.” By making entry-level jobs less economical, such laws rob them of the chance to gain the skills, experience, self-discipline, and self-esteem needed to climb that ladder.

3. Most importantly, minimum wage laws are immoral, because they violate the rights of employers and job-seekers to contract voluntarily to mutual advantage regarding employment compensation terms. Put simply, it is morally wrong to force those who create and maintain jobs to pay more than an employee is worth to them and what an employee voluntarily agrees to work for. It is wrong to forbid any job-seeker to work for a wage lower than politicians approve of. It is wrong to forcibly and artificially increase the pay of some at the expense of the forcible unemployment of others. It is simply wrong to forbid voluntary contract between employers and employees. The initiation of force by one human being against another, whether or not carried out under the false veneer of law, is always wrong.

Even in cases where a wage raise is economically justified, forcing an employer to pay more to his employee than the employee voluntarily agreed to work for is simply wrong. True, many people today are working for less than their skill levels objectively justify. But that is a consequence of a weak economy (a glut of job-seekers), which is a consequence of business-hampering government policies. But just because today's economy favors employers (a situation that a strong economy reverses) does not entitle anyone to force contract terms on another—or to demand that politicians or voters do it for them. If one party gains by force (by law) what it cannot gain by voluntary agreement, then that "contract" is in fact a tool of exploitation. 

The New Jersey Minimum Wage Increase Amendment is constitutionally, economically, and morally disastrous. NJ voters should do the right thing: Resoundingly defeat it.

Related Reading:

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

'Living Wages' Kill Jobs—Thomas Sowell

Milton Friedman on Minimum Wages

Morality and the Minimum Wage

Economics in One Lesson—Henry Hazlet

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