In the case of the supporters of Marvel: The Avengers, who called me on my overly general statement
about comic books, I admitted I went too far in a retraction a few days later.
But all I have to offer anyone who is opposed to a minimum
wage is scorn and contempt.
Their arguments are self-serving and typically built on
imaginary anecdotes, as imaginary as Reagan’s welfare queens driving Cadillacs
or Santorum’s poor people emotionally crippled by the worst kind of addiction,
food stamp dependency.
Let’s start with the imaginary business owner who can’t
afford to hire someone to sweep the floors at $7.25 an hour, so he does it
himself or the floors stay dirty. For years, whenever anyone proposed raising
the minimum wage, critics have painted a grim future of thousands of business
owners sweeping floors or living with filth. The floor-sweeping business owner
has taken its place as one of the classic figures of right-wing economic
mythology. The first time I heard this
metaphor used as the primary argument to oppose the minimum wage was when I was
in college making a minimum wage of $1.25 an hour from a part-time job on a
Sear’s shipping dock.
My question, then and ever since, is how valuable is the
time of the owner if he can afford to sweep the floors him/herself instead of
looking at the books, coaching employees, visiting clients or supervising the sales
floor, developing growth plans, negotiating with suppliers, serving on boards
where he can spread good will about the company in the community, or any of the
other high level jobs entailed in running any successful business? In many businesses such as mine, when a
highly ranked employee works an hour, he or she can create dozens and sometimes
hundreds of hours of work for other employees. What owner would be foolish
enough to waste time sweeping floors instead of creating this additional work? And aren’t there usually other employees who
could sweep those floors, freeing the boss to perform tasks more central to
making money?
As to the case of a potential business that depends on a lot
of employees but can only make a profit if these employees are paid $4 or $5 an
hour—maybe the owner has to take less profit or raise prices; in other words:
change the business model.
The idea behind the imaginary owner-sweeper is silly. No
well-run business hires additional employees if it hasn’t first figured out how
they will make money off of them, unless it’s a relative or a friend and the
company is doing very well.
There are many factors that determine the current market for
every position, including marketplace conditions, the presence of a union at
the company or in the industry and the imputed value of the skill base and
experience of the employee (which means that in this society, companies are
willing to pay more for senior sales executives than for entry-level welders).
All the minimum wage does is to put a floor on the minimum value of all jobs,
as a protection of individual workers.
Which brings us to the other imaginary anecdote, another
classic: the young kid struggling to get out of poverty who just needs a
chance, but can’t get it because the minimum wage prevents anyone from hiring
him. There is no doubt that there are any number of desperate people who would
work for less than the current minimum wage, including lots of illegal aliens
and teenagers. And when a recession hits, their numbers proliferate.
Yes, out of desperation, these people will work for
anything. But that doesn’t make it right. The minimum wage is society’s way of
saying that every person is entitled to a minimum amount of compensation (and
dignity) when they exchange their work for money.
Which brings us to the underlying economic theory behind
opponents of the minimum wage, including Professor Sowell, a premise so
abstract that the right-wing has yet to create an imaginary person to embody
its meaning: the minimum wage distorts the marketplace.
Damn right it does, and that’s a good thing. It’s supposed
to distort the market place. Here are some other distortions of the
marketplace:
·
Using standard weights and measures
·
Laws concerning the enforcement of contracts
·
Regulations to ensure the safety of food
products
·
State certifications before people can practice
medicine or law or teach children
In fact, every rule or custom of society distorts the
absolute free market. Some distortions are good, such as the use of standard
weights and measures. Some are obviously bad, such as prohibition of alcohol in
the first part of the 20th century.
Those who oppose something just because it distorts the
marketplace don’t really oppose marketplace distortions, just the ones that hurt
their interests or the interests of those who pay their salaries. The minimum
wage raises the wages not just of minimum-wage employees but of all others, and
so distorts by redistributing wealth from business owners to their
employees. When I look at economic
realities—for example, the fact that most of the wealthy and near wealthy run,
own or manage businesses and the fact that we have seen a widening split
between what the wealthy make and own and what everyone else makes and owns—when
I see these facts, I’m not so worried about the marketplace distortion that
occurs because of the minimum wage. Even though I own a business, I would be
delighted to see the marketplace distortion that would result if the minimum
wage were raised to $10 or even $15.
That distortion, by the way, is called economic equity.