lPublic PolicyAnalysis, Opinion & Ideas from Steve Harry |
|
lPublic Policy Analysis, Opinion & Ideas from Steve Harry |
|
Reports
Opinion & Ideas
|
The Liberal Mistake I’m one of those liberals who would like all workers to be paid well and treated fairly, but I’m not so stupid as to think the way to accomplish this is for government to interfere with the labor market. That is what happens when minimum wages are set by law and collective bargaining is forced on employers. No one but the employer should set wages. The worker should only have the right to take it or leave it. This may seem mean and cold-hearted, but it is not. On the contrary, it brings the maximum financial benefit to everyone. Michigan’s minimum wage is $7.40 an hour. (The federal minimum is $7.25.) There are people among Michigan’s 600,000 unemployed who are willing to work for less than $7.40 an hour, and if employers could hire them for less, they could reduce prices, sell more, and hire still more people to keep up with demand. People previously unemployed would be working rather than getting welfare, and that would reduce taxes for the rest of us. (Question: What if an employer provides health insurance to all his employees. Could the cost of that be deducted from the minimum wage? Let’s say the premium is $800 a month, which would be about $.50 an hour for 4 40-hour weeks. Shouldn’t the Michigan minimum in this case be reduced to $6.90 an hour? Apparently the people who come up with these minimums don’t put that much thought into it.) Employers negotiate with unions only because they are required to by law. They know what they have to pay to attract qualified employees; it’s called the market wage. Anything more than that is a premium. It is nice for the union, but what about the people who would have accepted less? They’d have done so only if they could do no better elsewhere, or had no prospects at all. They are hurt by being left out of consideration - left out in the cold. Where is the liberal compassion for them? (Did I mention that there are 600,000 unemployed in Michigan?) They are not the only ones hurt. That wage premium adds to the price of the product, which comes out of the pocket of the consumer. Or makes him decide not to buy, reducing the employer’s sales and his need for workers. More unemployment. Or if competition makes it impossible for the employer to increase the price, it reduces his profits – maybe even forces him into bankruptcy. And then, unless there is a $multi-billion government bailout, everybody loses their jobs. Yes, the market wage is less, but we are better off with it. The customer gets lower prices. There is less unemployment and all the costs associated with it: unemployment compensation, welfare, crime. Taxes are lower without those costs and also because government employees are paid less. Total income is higher because more people are working, therefore production is higher. So why would a liberal support collective bargaining? Ignorance is an explanation, but not an excuse. I prefer to think it is ignorance, because there are a lot of liberals out there who I believe to be well-meaning, good people. But there must also be those that know that collective bargaining causes poverty and continue to support it because they like the monetary support unions provide to Democrats. Too bad there is no God, because those folks would burn in Hell. What do you think? Let me know at steve_harry@yahoo.com. |