Raising the government-mandated minimum wage right now, or any other time, is not only not the answer to the current problem, it is not a solution at all. Not now, not in the past, not at any time. Not on a boat, nor with a goat, is minimum wage the answer. Oh wait, that's Green Eggs and Ham. But you get the point.
Supporters of solving the problem of low wages by simply saying “their ought to be a law” that raises wages prove they do not truly understand the problem, it's root causes, or how to solve the problem in a way that works and is economically sustainable. We have learned in many instances, to attempt to solve problems by having the government mandate a “solution” in an economically unnatural way usually creates chaos. One need not look any further than the current disastrous epic failure of ObamaCare to see that playing out in reality.
First, it needs to be understood how wages are set in the real work, and this will be review for many. How much one gets paid is a contract, verbal or written, between the employer and the employee. Both have economic self-interest at play in this process, the employer naturally wants to pay the least he can for employees and the employees want to earn the most they can for their services. The end result of their negotiation and coming to agreement will be somewhere between what each of them wants.
Supply and demand, at any time, are key to deciding how much anyone gets paid. If you are the only person who can do what you do, you can almost set your pay rate for the services you provide, if there is demand for what you do. The higher the demand for what you do, the higher rates you can earn for your services. If there are three others who can do what you do and are willing to take a lower rate, you will have to lower your rate to get work. If there are several hundred people who can do what you do, and the company is only going to hire one, you have a lot of competition, and it is likely the company can pay a very low rate. In that instance, there is a labor surplus for what you do, which is very good for the employer and not so good for you, the employee, because there are so many others who can also do the work that you do. That is the nature of a labor surplus, it's great for business and bad for workers, as you can see.
Right now, and in most of the time we've been alive, the United States has had a severe labor surplus. That is why we have unemployment. Even in the times when the real unemployment rate was five or six percent, that means we had that many more available employees than jobs, which means it was still a situation of having a labor surplus. Big business loves a labor surplus, because it means they can pay less. Liberal and progressive politicians love a labor surplus, politically, because it means they can buy votes with tax dollars via welfare programs and minimum wage legislation they then use to convince people they are the ones trying to solve the problem while big business and the wealthy exploit them.
To tell the working class that government-mandated minimum wage laws solve the problem, as liberal and progressive Democrats do, is the tell the people a lie and submit them to a cruel hoax. Minimum wage laws are a cruel hoax on the working class, because they neither solve the problem for the working class nor do they address the actual cause of the real problem, which is something both Democrat and Republican politicians profit from.
We have a huge labor surplus in this country, and it is not because we have a high birth rate. We have a very stable birth rate among American citizens, one that could lead to a very healthy and economically sustained prosperous economy if we allowed it to do that. Quite simply, we have a huge labor surplus because we have tens of millions more people than we have jobs for them. Some of this is due to the economic decline and failure to enact policies that would spur economic growth, but most of it is due to simply have too many beings here for what the economy can support.
If we have low birth rates among Americans, where are all these people coming from. The answer is simple: Immigration. In the forms of both illegal and legal immigration, we are adding tens of millions to our population without a corresponding growth in the economy and creation of jobs. That means, by allowing so much immigration, were are importing millions more unemployed to add to our already gigantic collection of millions of unemployed citizens. It only takes common sense to tell you that by importing so many more unemployed that this is insane public policy, especially at a time when tens of millions of American citizens are already without jobs and have no hope of finding jobs in an economy that does not create enough opportunity for our citizens.
Aside from bringing back economic growth, something that can easily be done via reducing taxes and regulations that destroy jobs, the problem is the labor surplus itself. Minimum wage laws don't change this cause of the problem, and only make the problem worse, because they force employers into higher labor costs, and by definition (this is not even debatable at all), force them to higher fewer employees at a higher pay rate than they would without minimum wage laws. So this helps the few that still have the fewer minimum wage laws, while lowering the wage to zero for those who lose their jobs as a result. Clearly that is not a solution either, which is why minimum wage laws are a cruel hoax on the working class, especially those who lose their jobs as a result.
The solution to the problem is to address the root cause of the problem. The problem we have in this country is the labor surplus, so the solution is to increase labor demand against supply, and over time work to reduce the supply. Since nearly all of the cause of the labor surplus is all this excess unemployment we're importing via immigration, that is the issue we need to address. In a generation or two, we have imported anywhere from 12 to 30 million new unemployed in the form of the illegal immigrants. They are criminals by the simple fact that they are here illegally, and as many as practically is possibly, should be deported back to their home countries, because they are here illegally. This will immediately reduce unemployment.
Then we need to address the issue of legal immigration. Right now we allow approximately one to 1.5 million new legal immigrants to come to our country every year. This is not sustainable and will cause our population to grow much faster than our economy can create enough jobs for these people. We need to have a moratorium, that would reduce that number to a very minimum, until our unemployment rate reaches a true five percent rate again. Then after that, we should have a manageable rate of legal immigration, while closing the borders and ending illegal immigration, that would perhaps be somewhere around a couple hundred thousand per year.
By ending illegal immigration and reducing legal immigration, we will eventually reach a point where we will have a slight labor shortage. A labor shortage will cause employers to have to pay more for good employees, and it will allow skilled employees to command higher pay for their services. A labor shortage raises real pay rates for employees, without causing people to lose their jobs, without minimum wage laws. A labor shortage would increase incomes of the working class and rebuild the middle class in way that is sustainable long term, and in a way that will raise the standard of living of most citizens. A raise in the minimum won't do that because it can't do that.
But big business doesn't like that, because it will force them to pay more in salaries and wages. That is why immigration is popular with Democrats and Republicans alike, the Democrats want more immigrants because they see votes, and Republicans and their allies in big business see a growing labor surplus and lots of cheap labor. And the rest of us get a lower cost of living, even with minimum wage laws and increases in the minimum wage, under that kind of system.
Passing the so-called “comprehensive immigration reform” that Democrats, RINO Republicans, and the liberal media wants only makes the real problem, the labor surplus, even worse. And making that problem worse, lowers the standard of living for all Americans except the most wealthy that are strong supporters of the Democrat/RINO coalition that wants to have more cheap labor for big business.
It should be clear now why anyone supporting raising the minimum wage and enacting amnesty (so-called immigration reform) is part of the problem and not the solution. The solution is less unemployment through less immigration and creating a growing economy through lower taxes and much less regulations that kill jobs. If you want to bring America back and have a growing middle class again, and a better standard of living for your own family, then the key is to vote for politicians who will reduce immigration, oppose amnesty, block the minimum wage raise cynically demanded by the left, and support policies that produce a labor shortage that will raise the middle class again.
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