“Don’t Hike Minimum Wage; Lower Taxes”

Published in the Wyoming Tribune Eagle on April 18, 2014

"The politician ... attempts to remedy the evil by increasing and perpetuating the very thing that caused the evil in the first place: legal plunder." - Frederic Bastiat, "The Law," 1850 -

Last week, while discussing locally-generated echoes of the national minimum-wage-raise debate, I made the points that:

- Contrary to collectivist claims that local businesses and business owners are a "social resource" to be plundered and exploited at government whim, they exist and function in order to foster their own profit and happiness.

- That any discussion of the economic consequences of raising the minimum wage that ignores or evades the above ethical controversy is flawed. That is because it fails to challenge the root point of the debate, thereby lending credence to the arguments of one's enemies.

There are economic reasons to be opposed to such a Wyoming minimum wage hike, however - and, once the ideas of "social resources" and "wage policy" as a "proper" function of government are blasted out of the way, they certainly merit discussion.

Take the position of one of our home-grown collectivists, for instance. State Rep. James Byrd, D-Cheyenne, asserts that Wyoming needs a "living wage" of at least $9 per hour.

Economically, the question arises: From just where is that extra money going to come from?

A rational grasp of economic principles would dictate it is going to be one of two places, or as a combination:

- Increased unemployment as the jobs that don't merit such salary increases are either scaled back or eliminated.

- Increased prices as employers seek to cover their increased costs of production.

In either case, who will be hit hardest by those results? The people who can least afford it - poor people on the low end of the wage scale.

But wait! Isn't it the "poor people" that Mr. Byrd gets so much political yardage out of posturing as an advocate of?

Imagine that. Once again, it is precisely the supposed beneficiaries of collectivist economic policy who will actually suffer the most under it. Gee, who would've thunk that?

That such proposed wage hikes ignore economic reality should be obvious. I mean, after all, if simply jacking up the minimum wage to $9 per hour were a true solution, why stop there? Why not make it $15 per hour instead? Or $25? Or $50? No answer.

Brushing aside such reasoning, however, Mr. Byrd merely continues to pawn himself off as a proponent of the poor:

"He says the minimum wage must be raised soon because it is crucial for low-income families to support themselves and to break away from dependence on social services." ("Is minimum wage hike right move for city?", WTE, April 6.)

Well, there's certainly no doubt that the low end of the wage scale isn't enough to pay the bills. But shouldn't we be asking ourselves just why that is the case?

Back in 1950, with a median household income of $5,000 yearly, the number of families in the United States able to successfully live on a single income stood at 70 percent.

Come 2012, though, with a yearly median income of $51,000, that percentage had plummeted to an astounding 18 percent instead.

And the difference? Taxes and inflation, which is really just a hidden tax.

As evidence, consider that in 1900, "Tax Freedom Day" stood at Jan. 22. But by 2012, that date had moved out to April 13.

And that's just income taxes, folks. That doesn't even count taxes on property, gasoline, state sales, Social Security, courts, recreation, alcohol, utilities or inheritances, just to name a few. All of which have gone up tremendously.

Beginning en masse in the 1970s, and worsening ever since, more and more households have had to have the second parent work as well, just to meet the tax and inflation bills. Both of which are creations of government.

Hey, somebody has to pay for the "welfare" state - and who is paying for it is any producer who dares to make above-average income.

Meanwhile, the poor people who are the most impacted by this destruction of the productive elements of our economy are thrown some "welfare" crumbs by the plundering politicians, all of whom claim to be "helping" them solve a problem they themselves have created.

"Living wages" have never been a problem in even a relatively free economy. To the contrary, such issues only arise in the context of an over-bloated, over-taxed and over-regulated "welfare" state.

Anyone truly interested in "helping the poor," therefore, should be seeking to dismantle it as soon as possible, instead of advocating a "minimum wage" hike guaranteed to only make the problem worse.