The Assembly last week voted to boost the state’s minimum wage from the federal floor of $7.25 an hour to $8.50, and to link future increases to the rate of inflation. If the state Senate follows suit and votes along party lines, as the Assembly did, the bill will move to Gov. Chris Christie’s desk.
As of mid September, the bill was stalled. I left the following comments:
It is simply immoral to force any person to pay another person more than he judges their services to be worth. The employer who created the job has a fundamental right to think and act on their own rational judgment, and no one has any moral right to institute laws that interfere in that judgment. If a businessman has no right to determine what to pay his employees, then what right does anyone else have to impose their judgment as to what should be paid?
Likewise, job seekers have a fundamental right to take a job on mutually agreed-upon compensation terms. By what right do government officials, whose solemn duty is to protect our rights equally and at all times, interfere in voluntary employment agreements?
Of course, the immoral is also the impractical. It simply defies logic, economic theory, and history to presume that minimum wage laws do not destroy jobs and—more importantly--prevent new jobs from coming into existence. Profitable business enterprises generate jobs, and no business can be profitable by paying more than its employees contribute to the enterprise. Minimum wage laws, to the extent that some workers actually “benefit” from them, are nothing more than a forced redistribution of wealth. This means that the extra money in the worker’s pocket does not represent value—i.e., wealth—created, but a forced handout from the employer. It represents not new production and thus new demand, but merely a transfer of demand from the person who produced it to the person who didn’t. To claim that minimum wage laws foster economic growth is to fall into the same fallacious trap that drives government “stimulus” policies; the Keynesian fallacy that “demand” or consumption, rather than savings and production, drives the economy. Of course, Keynesianism is merely a cover for statism, not rational economic theory.
Minimum wage laws are morally and economically destructive, and should be repealed.
Another correspondent took issue:
"It is simply immoral to force any person to pay another person more than he judges their services to be worth. The employer who created the job has a fundamental right to think and act on their own rational judgment, and no one has any moral right to institute laws that interfere in that judgment. If a businessman has no right to determine what to pay his employees, then what right does anyone else have to impose their judgment as to what should be paid?"
Fine-to use your logic, I find it equally, if not more so, morally objectionalbe that tax dollars are handed out to corporations for the supposed reason of keeping jobs here. Like the 5 mile Prudential move. or Xanadu-seen lots of those jobs lately?
I find it amazing that so many of you think that $7.25 an hour is just fine. Try it for a while and let me know how it's working for you. And please tell me one company that hasn't raised prices for its goods and services for the same years that $7.25 has been the minimum wage. Maybe the oil conpanies or the food industry?
For the record, I second Mtown_Quaker’s position. I oppose all subsidies, loan guarantees, grants, and other forms of corporate welfare to private business. Yes, it is most certainly immoral to use tax money in such fashion.
As to your final point, low wage jobs are not “just fine” for most people, which is why most people acquire skills that raises the economic value of their labor. The fact that some people don’t is no justification for violating the rights of others. As to rising prices of goods and services—which include wages and salaries across the income scale--that is a consequence of inflation, a deliberate government created phenomenon.
Those who truly want to improve opportunities for the young and/or the poor should recognize that killing off the sub-minimum wage job market freezes many people out of the economy. Minimum wage laws along with other government intrusions like occupational licensure laws kick out the lower rungs of the economic ladder, making upward mobility harder or impossible. Politicians create such laws because they seek the votes of the select people who benefit from such market intrusions and to hell with the people who stay unemployed due to the jobs not created and don’t know they are being screwed.