Repealing the law of supply and demand

Submitted by Bill St. Clair on Sun, 30 Sep 2001 13:13:42 GMT
FROM MOUNTAIN MEDIA
FOR IMMEDIATE RELEASE DATED SEPT. 4, 2001
THE LIBERTARIAN, By Vin Suprynowicz
Repealing the law of supply and demand

The U.S. Constitution guarantees us (Article I, Section 10) that "No

State shall... pass any ... Law impairing the Obligation of Contracts. ..."

Nonetheless, the central planners -- blind to the spread of new poverty and degradation following the dismal collapse of their similar efforts around the world these past 80 years -- continue to insist they can repeal the laws of supply and demand, along with that right to private contract

which allows a prospective worker and a prospective employer to settle between themselves on the rate they consider appropriate for a given job of work.

Latest in the lineup to propose such an absurd scheme of central government planning is the Progressive Leadership Alliance of Nevada, which whines in a report released this week that precisely 57.3 percent of Nevada jobs fail to pay a "living wage" -- whatever that is -- and that the state should thus blackmail any business which "benefits from public money through tax breaks, grants, loans or government contracts" into paying some new state mandated minimum hourly rate, as yet unspecified but presumably higher than the current $5.15 federal minimum wage.

Why? Because Nevadans "can work two full-time, minimum wage jobs and still not make ends meet for your families," explained Susan Chandler, a

consultant hired by the collectivists to generate this new study.

How shall we count the ways in which this bizarre proposal is likely to backfire?

First, Ms. Chandler admits 28 percent of minimum wage earners are kids, most of whom live at home with their parents and are just getting their feet wet in the job market. A whopping 60 percent of minimum wage-earners, meantime, contribute only a second income for their households -- moms or granddads working part-time by choice.

Do we really want to ban moms with kids at home from seeking part-time

work? Did anyone forbid these younger workers from getting a higher education if they wanted to earn more? Do we really want to send the message that you needn't bother -- folks like "PLAN" will get you a big raise even if you don't get educated and learn useful skills?

What would happen if Burger King managers were actually told they now had to pay the average hamburger flipper $30 an hour, instead of $5 or $6? Given that there's some limit to what folks will pay for burgers and fries, they'd either put in more burger-flipping robots (relegating much of the current staff to the government dole) or close completely. Right?

"But that's absurd," the central planners will scoff. "We'd never mandate $30 an hour. ... Maybe eight or 10."

Sure they will, and without a word of apology. Back when the first minimum wage was instituted at less than a dollar, PLAN's predecessors would doubtless have dismissed as absurd the suggestion that they'd ever mandate a "minimum wage" of a fin, a fiver, half a sawbuck.

What happened? Just ask yourself what today's $5 bill is really worth. In 1930, five dollars would buy you a quarter of an ounce of gold. Today, it buys only one-fiftieth of an ounce of gold -- inflation having reduced the value of the fiat paper dollar by a factor of more than 12.

What causes such inflation? Things like government-mandated "minimum wages." An hour of entry-level diaper-changing or burger-flipping will never be worth more than a fiftieth of an ounce of gold. Force employers to hand over more fiat "dollar bills" for a given hour of work, and you merely inflate away the value of each such paper coupon.

Who suffers? Railroad widows on fixed pensions, to start with.

All such mandated wage hikes really do is outlaw lower-paying jobs. Many a loading dock manager might be willing to take a chance on some illiterate now cadging quarters on the street corner at $3 an hour ... but not at $5. Each such increment raises the bottom rung of the employment ladder out of reach for a few thousand more desperate souls.

Meantime, all PLAN's whining about impoverishment depends on the presumption these workers haven't already been pressed by existing redistribution schemes into earning extra, undeclared income on the side -- under-reporting their tips, perhaps?

Cities like Missoula, Mont. have already instituted such "living wage"

proposals on a local level. To keep from driving local mom-and-pop businesses bankrupt, they typically exempt businesses with "four employees or less." Guess what happens when a small local business starts to succeed and considers hiring a fifth or sixth employee? Either they reluctantly sell out to a bigger competitor (scratch another family enterprise -- lifeblood of our prosperity); the jobs in question are never created; or

the new workers are paid "under the table," turning another set of workers and employers into reluctant outlaws, outside the reach of all the wonderful "mandated workplace benefits" so cheerfully extorted by do-gooders like PLAN.

Give PLAN credit for getting one thing right, at least: Though "tax breaks" are not a government subsidy (subsidies involve handing someone taxpayer cash, not letting them keep a little more of what they earn), it is indeed true, as PLAN president Mark Nichols argues, that "We should not be subsidizing businesses that pay their workers a poverty wage."

The answer is to let businesses pay any wage to which a worker will voluntarily agree ... while eliminating all tax subsidies to American businesses, putting our free market enterprises blissfully outside the reach of meddlers like the Progressive Leadership Alliance, once and for all.


Vin Suprynowicz is assistant editorial page editor of the Las Vegas Review-Journal. To receive his longer, better stuff, subscribe to his monthly newsletter by sending $72 to Privacy Alert, 561 Keystone Ave., Suite 684, Reno, NV 89503 -- or dialing 775-348-8591 or on the website http://www.thespiritof76.com/wacokillers.html.


Vin Suprynowicz, vin@lvrj.com

"When great changes occur in history, when great principles are involved, as a rule the majority are wrong. The minority are right." -- Eugene V. Debs (1855-1926)

"The whole aim of practical politics is to keep the populace alarmed -- and thus clamorous to be led to safety -- by menacing it with an endless series of hobgoblins, all of them imaginary." -- H.L. Mencken


"They that would give up essential liberty for a little temporary safety deserve neither liberty nor safety." -- Benjamin Franklin 1759

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