Tag: living wage

The Libertarian Case for a Minimum Wage Hike

Nate Galt | United States

The federal minimum wage has been a controversial issue ever since it was introduced by President Roosevelt in 1938. Proponents of raising it say that it will help job growth and reduce poverty. However, opponents believe that raising the federal minimum wage will lead to layoffs and closures of small businesses. In all, the current federal minimum wage of seven dollars and twenty-five cents per hour is not a wage that someone can afford basic necessities with. People who are paid the federal minimum wage should be able to afford things such as clothes, food, and a roof over their head.  Raising the minimum wage has been an issue adopted by “progressive” Democrats and the Green Party. 

Taxpayers are paying for the minimum wage, just indirectly. They subsidize programs such as Food Stamps while large corporations save money by not paying their workers a living wage. This is extreme inequality because that money should go to workers employed by these corporations, not into the pockets of billionaires who try to cut corners by paying their workers very low wages. 

Raising the minimum wage would help the economy. According to the Economic Policy Institute, a minimum wage increase to $10.10 an hour would make $22.1 billion flow into the economy and would create about 85,000 new jobs in three years. Further, economists from the Federal Reserve Bank of Chicago made a prediction that if the minimum wage were to rise by $1.75, household spending would increase by $48 billion in the next year.  While these are merely predictions and are imperfect, they show that household spending increases as the minimum wage is raised. This boosts the gross domestic product and spurs job growth. For example, in Snohomish County in Washington State, there were no local minimum wages higher than the state minimum of $9.47. The state then raised the minimum wage to eleven dollars per hour. The full weight of the $1.53 increase, or over 16%, was assumed by employers. Subsequently, sixteen thousand jobs were created in Snohomish County. 

Some people say that raising the minimum wage hurts small businesses. According to Think Progress, two-thirds of “low‐wage workers are not employed by small businesses, but rather by large corporations…” Also, the three largest employers of minimum wage workers are Walmart, Yum! Brands (Pizza Hut, Taco Bell, and KFC), and McDonald’s. A hike in the minimum wage will not make large corporations like Walmart shut their doors, and its workers will benefit from it. 

Another reason the minimum wage should be raised is that it is impossible to afford rent in every state if one is paid $7.25. The state with the lowest “living wage” is South Dakota at just over 14 dollars, which is nearly double the current federal minimum wage. The definition of “living wage” is the bare minimum salary one needs to be able to afford rent, basic clothing, and groceries without skipping meals or receiving aid from the federal government. People who work full-time and are paid the minimum wage cannot provide basic necessities for themselves and their family, let alone afford to pay rent. Right now, this is the case, and millions of Americans are in a dire financial situation because they live on around only fifteen thousand dollars per year if they work full time. These people receive benefits which are subsidized by taxpayers because their employers do not pay them an adequate wage. As a result, businesses are saving money while taxpayers have to pick up the burden. If people get a living wage, they do not need to rely on taxpayer-funded public assistance. Better pay would let the government cut a lot of taxpayers’ funding of the money that it currently spends on programs to help counter poverty.

Others say that if the current minimum wage were increased, the price of items would increase. However, researchers at Purdue University found that increasing the wages of fast food workers to $15 an hour would only result in a price increase of around 4 percent. 4 percent of the cost of a Big Mac is around 23 cents, which is not a significant amount of money. The workers will have their wages doubled and will be able to make ends meet. Despite the negligible increase in prices, workers would end up with more money in their pockets and would be affected positively by this positively.

Increasing the minimum wage to 15 dollars would benefit the economy. It helps boost the GDP and job growth, and it alleviates taxpayers’ burden of paying for welfare. $15 per hour will allow minimum wage workers to make ends meet and to afford housing, clothing, and food without having to rely on government programs such as food stamps. It would reduce the number of Americans living in poverty as well. All of the above benefits have no significant drawbacks, so the only logical thing to do is to support raising the minimum wage to $15 per hour to help workers, the economy, and your tax rate. Should businesses get so-called “corporate welfare” while taxpayers have to foot the bill? Even though raising the minimum wage seems like a leftist, Bernie Sanders-type policy, all libertarians should support it. Taxes, welfare, and other benefits would be cut, leaving more money in Americans’ pockets. 


Get awesome merchandise. Help 71 Republic end the media oligarchy. Donate today to our Patreon, which you can find here. Thank you very much for your support!

Featured Image Source

Advertisements

Labor Unions Destroyed the Sanctity of the Worker

By Dylan Anders | @realdylananders

In a society abundant with lies, War is Peace, Freedom is Slavery, Ignorance is Strength, what makes us ‘free’ is what keeps us in chains. This goes for many facets of society; we believe we are strengthened by numbers, and as such, we collectivize each other. We are placed in a group from birth, depending on class, among others. Society fails to realize that the smallest minority in the world is in fact the individual. We orient ourselves to think in a way as to how legislation will affect a group based upon the supposed traits that may or may not be true.

This disposition is also found in labor unions that follow a range of circumstances where workers are put into a collectivist pool that does not care of the troubles of each and every individual. There is a financial struggle placed on the common worker and the inability to escape it that leads to their demise in the work field. In current iterations of labor unions, the laborer will, more times than not, find greater destruction of his or her economic freedom than benefits.

Labor Unions and the Free Market

Some creations from years and years ago may now be obsolete; 8 track tapes, payphones, and Congress are all cases of this. Labor unions are another such example. A free market, with only voluntary unions (not involved in government), in the current economy with superb job mobility may provide what labor unions had originally promised. The labor movement of many years ago, as put by History.com,  “…grew out of the need to protect the common interest of workers. For those in the industrial sector, organized labor unions fought for better wages, reasonable hours and safer working conditions.” 

Coercion and Freedom

The vision in this is a concept of individual worker rights through voluntary bargaining. Simply put, these goals of worker freedom are not present today, as were before. The key contrast from then and now is worker choice. Randall G. Holcombe illustrated the difference between coercive association and voluntarism in labor unions. He emphasized that the hand of “labor law has given unions the power to dictate to employees collective bargaining conditions, and has deprived employees of the right to bargain for themselves regarding their conditions of employment.”

The lack of voluntarism in unions clearly should be counter-intuitive, but this has been the reality for a very long time. Sanctions are given for failure to comply with obligatory rules of labor laws regarding unions. In current, modern forms of unions, the worker simply is not satisfied and is disregarded in his or her rights of freedom of association in their compulsory activities with such unions.

The financial goals of early unions dealt with the idea of “livable wages,” a phrase often heard even to this day. The workers of the Industrial Revolution faced the hardships of more than humble pay, which was not enough to support a family. This time period, in the absence of unions, is often used to counter the argument against such unions, due to the severity of the time of industrialization. The push to fix this turned into a monster after economists realized the detrimental effects to the economy by way of minimum wage increases.

A Forced Living Wage Hurts Consumers

James Sherk of the Heritage Foundation recognized that if employers must raise wages for the sake of the law, they compensate for a profit loss when they “…pass on those higher wages to consumers through higher prices, and often they also earn lower profits. Economic research finds that unions… hurt consumers generally, and especially workers who are denied job opportunities.” The blow an economy of a certain market takes in this does not come unnoticed.

Consumers (which include the common worker as well) pay more for their goods. This is only a part of the equation; once employers are involuntarily forced to pay their employees more, they are left to fire workers, thus increasing unemployment. Increased wages will undoubtedly seem like a positive to all, but, throughout the last few decades, as Mises explained, “wherever and whenever the unions succeeded in raising wage rates above the potential market rate, i.e., above the amount the workers would have earned without union interference, ‘institutional’ unemployment developed as a lasting phenomenon.”

Many Left in the Dark

Sure, unions have raised wages, but these institutions are giving a smaller percentage of workers these wages, leaving plenty of unemployed union workers to starve. Evidently, labor unions fail their members financially, leaving the average laborer in a worse position financially with higher market prices and reduced employment rates.

Many wonderful concepts from brilliant minds may be useless in practice, where its flaws become ever so clear. Labor unions, institutions promising to help the worker, disappoint rather than support. In fact, unions have hit the polar opposite of the mark. Research findings regarding union worker satisfaction show “…when it comes to job satisfaction, the economic advantages of union jobs are not sufficient to compensate for job content and work environment factors.

It comes as no surprise to the job satisfaction researcher that job content — the nature of the tasks people are given to do — weighs heavily in overall job satisfaction scores.” Union workers find themselves trapped in a coercive group that causes unemployment and increased prices of goods, all due to the push for increased wages. Serious reform to the current system must occur before labor unions are considered to be a viable benefit to the worker.

A Never-Ending Game of Failure

The workers of America go to work everyday, in constant hopes of success. They wonder if it may be a never-ending game they are forced to play, with no real end, only a struggle. Workers may look for the escape from their troubles they cannot fight, though they try. It is sometimes a saddening spectacle to observe.

Even the strongest of us humans may fall victim to those in power. A god among men, Sisyphus, of Greek mythology was forced to push a boulder up a mountain perpetually, but “at the very end of his long effort measured by skyless space and time without depth, the purpose is achieved. Then Sisyphus watches the stone rush down in a few moments toward that lower world whence he will have to push it up again toward the summit.” The common man and women face this same dilemma. He or she may look, as any would, to escape what enslaves them. The labor force, unionized, is what will leave them in chains. And they may never know it.


To support 71 Republic, please donate to our Patreon, which you can find here.

Featured Image Source