June 27, 2022

On the left, there’s considerable discussion of the idea of raising the minimum wage, and creating a “living wage.” Who could disagree with such an idea, right? 

‘); googletag.cmd.push(function () { googletag.display(‘div-gpt-ad-1609268089992-0’); }); }

Actually, it’s another bad idea that looks like a good one from the far left that will do more harm than good if enacted.

Let’s start by discussing how the Living Wage movement came to be and what the laws of economics tell us about attempting to conjure out of thin air, ever higher wages decoupled from productivity. We will also talk about how socialism and communism are closely tied to this subject. Let’s begin with a definition of what a Living Wage is:

“A Living Wage is a socially acceptable level of income that is meant to provide adequate coverage for basic necessities such as food, shelter, child services, and healthcare.”

‘); googletag.cmd.push(function () { googletag.display(‘div-gpt-ad-1609270365559-0’); }); }

Investopedia states that a Living Wage for a family of four was $68,808 as of 2019. That is more than this country’s Average Median Income of $67,521 in 2020. ‘Socially Acceptable?’ Now, that describes my problem. Socially Acceptable to whom?

Consider this: The idea for a Living Wage began in the Soviet Union. Or, as Marx liked to say: “From each according to his ability, to each according to his needs.” 

The Living Wage movement is Marxist to its core, granting a higher wage than justified by a worker’s productivity, to someone who has a need and then capping wages for those with superior abilities. In a Marxist Utopia, one does not work for gain, you work for the common good. We all know how well that worked out! The U.S. national minimum wage was created by Congress under the Fair Labor Standards Act (FLSA) in 1938 under the Roosevelt administration. I am not a fan of minimum wages for exactly the reasons we see at present. Politics, rather than economics is overriding the natural market.

Allow me to share with you an economic truth:

People almost always want more “stuff” than they can afford. Seeking a way to get more “stuff” without labor by simply commanding it became the most expedient mechanism to accomplish that. It’s a twofer for liberal government. We make people in the bottom half happier because they won’t have to work harder (or work at all) while the people at the top will see their incomes reduced through government-enforced redistribution. Win, win if you are on the left side.

We are now on a grand adventure to a world of economic fantasy. Not only are we back into the business of redistribution of wealth, but we are also considering ever more egalitarian ideas like guaranteed income. Why work when you can get paid to be “creative?”  This experiment is currently being tried here and elsewhere. Early results are in. Recipients of a guaranteed monthly income love it!  However, they think it should be more generous as they hear there are still billionaires on the loose that have not paid their fair share! At its foundation, Guaranteed Income is the confiscation of other people’s wealth.