Min. WAGE Argument

When I was a young boy, a friend of mine and I wanted to go to the late night horror movies by ourselves and he suggested that I use the argument that everyone else was going on my father. Well, my father, like most of his day, reasoned his life independent of the actions of others and explained to me the problems of determining your life’s actions by what others do. You remember the saying “if everyone else jumped off the cliff, would you”, well I heard it again that afternoon as well as a thirty minute dissertation on independent thought. Believe me when I tell you it made an impression.

I never again used that as a reasoning point in any conversation with Dad again.

But some time back that didn’t bother the local paper where some years back it used the same example I did above in determining whether or not Tennessee should have a minimum wage instituted into our state system of legislation.

“If the legislation is passed, minimum wage in Tennessee would be set at $7.25 an hour. With the increase, Tennessee would join 44 other states in setting a minimum wage.”

Neither does it bother the local papers to attempt to shame our Congress and State legislators into passing the highly Marxist principle of economics.

What they don’t tell you is that we do have minimum wage legislation in Tennessee. Tennessee Code 50-7-305 states that

Pay wages not less than the higher of:

The minimum wage provided by the Fair Labor Standards Act of 1938, § 6(a)(1), without regard to any exemption; or

The applicable state or local minimum wage

Our minimum wage is based on the Federal Standard.

Milton Friedman explains the problem with price controls in Free to Choose:

“Economists may not know much. But we know one thing very well: how to produce surpluses and shortages. Do you want a surplus? Have the government legislate a minimum price that is above the price that would otherwise prevail.”

An example is the government’s minimum prices for farm products, which have the effect of producing massive surpluses of butter, wheat, etc. It’s the same in the labor market. Raise the minimum wage to $10 so people can afford higher gas prices, and the result will be a government-induced production of a surplus — a surplus of workers, i.e., higher unemployment.

That jump in unemployment, directly hitting the intended beneficiaries of the government intervention, inevitably happens because a hike in the mandated minimum wage has the direct effect of attracting more people into the labor market at exactly the same time that employers are seeking to cut their newly inflated payrolls. The result is more supply and less demand, either of which produces a surplus. Generate both of these supply and demand changes simultaneously, and it’s a double blow to employment.

Tennessee teachers with a bachelor’s degree and no teaching experience must be paid a minimum of $36,000 next school year, an increase of $1,000 under a new salary schedule approved Friday by the State Board of Education.May 31, 2019

It is the very essence of the interventionist politicians’ wisdom is to raise the price of labor either by government decree or by violent action or the threat of such action on the part of labor unions. To raise wage rates above the height at which the unhampered market would determine them is considered a postulate of the eternal laws of morality as well as indispensable from the economic point of view.

The average College Assistant Professor – English salary in Tennessee is $54,400 as of July 30, 2019, but the range typically falls between $43,800 and $74,400. The average College Assistant Professor in Accounting is $67,700 to $131,600.  Salary ranges can vary widely depending on the city and many other important factors, including education, certifications, additional skills, the number of years you have spent in your profession. But as you can see, English is valued lower than there counterpart in Accounting.

Whoever dares to challenge this ethical and economic dogma is scorned both as depraved and ignorant. Some look upon people who are foolhardy enough “to cross a picket line” as primitive tribesmen looked upon those who violated the precepts of taboo conceptions.

Millions are jubilant if such scabs receive their well-deserved punishment from the hands of the strikers while the police, the public attorneys, and the penal courts preserve a lofty neutrality or openly side with the strikers.

The advocates of minimum wage rates, whether decreed and enforced by government or by violent action, contend that they are fighting for the improvement of the conditions of the working masses.

Think this untrue or false….. then you live in a highly shielded world.

The real problem the local paper has is precisely whether there is any means for raising the standard of living of all those eager to work other than raising the marginal productivity of labor by accelerating the increase of capital as compared with population. The union doctrinaires are intent upon obscuring this primary issue. They never refer to the only point that matters, the relation between the number of workers and the quantity of capital goods available.

Is this Greek? Don’t worry, it was Greek to me many years ago too. Okay, I’ll put it simply. Wages, in a free market are not based on minimum price controls or industry subsidies,  but on market controls. The value of goods are equal the price those will pay for the goods. Therefore the value of goods minus labor minus materials and overhead minus profit equal what to market will absorb. Again Greek? It’s you the consumer that drive the price of labor…. period.

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