What if the Minimum Wage Increase Is a Fraud?

What if the Minimum Wage Increase Is a Fraud?

The Damaging Minimum Wage

What if the latest craze among the big-government crowd in both major political parties is to use the power of government to force employers to pay some of their employees more than their services are worth to the employers?

What if this represents an intrusion by government into the employer-employee relationship? What if this consists of the government’s effectively saying that it knows the financial worth of employees’ services better than the employers and the employees do?

What if the minimum wage, now on the verge of being raised to $15 per hour everywhere in the land, is really the government’s using threats of ruin and force to transfer wealth? What if the $15-per-hour figure is based on a political compromise rather than on free market forces or economic realities?

What if these wealth transfers will have profound unintended economic consequences and will negatively affect everyone?

What if one of the politically intended consequences is that the employees whose salaries will rise will show gratitude not to their employers, who will be paying them more than they earn, by working better but to the politicians who will have forced the employers to pay them more by voting for those politicians?

What if the right of an employee to sell labor by going to work and the right of an employer to purchase that labor by paying a salary are part of the natural right to exchange goods and services, which the Constitution was written to protect? What if during America’s most prosperous periods, that right was protected by the courts?

What if there are clauses in the Constitution that protect that right but the modern courts have ignored them? What if the Constitution prohibits the government from interfering with freely entered-into contracts but the government does so anyway? What if the courts have approved this?

What if the Constitution prohibits the government from taking property from people without charging them with wrongdoing and proving the charge to a jury but the government does so anyway? What if the courts have declined to interfere with all this theft?

What if it is none of the government’s business how an employer and an employee decide on salary? What if the employer and the employee know far more about the worth of the employee’s services and the needs of the employer than the politicians in the government do?

What if the government has fundamental misunderstandings of the way businesses earn money, create wealth and pay salaries? What if the government’s mindset is stuck on the governmental economic model? What if that model has no competition, guaranteed revenue and no creation of wealth?

What if that governmental mindset is one of control and central planning rather than appealing to the needs of consumers by providing goods and services better, faster and more cheaply than the competition? What if the government has no need to be better, faster and cheaper because taxpayers are forced to pay it for services they often don’t use and the government has no competition?

What if forcing employers to pay employees more than their services are worth results in higher prices for the goods and services the employers produce? What if the effect of the minimum wage rise is to transfer wealth not from employers to employees but from consumers to employees? What if the rising prices of goods and services, caused by the forced increase in wages, put some of those goods and services beyond the reach of some folks who rely upon them?

What if the folks who can no longer afford some goods and services on which they have come to rely are the very same people whom the politicians have boasted they are helping by the increase in the minimum wage? What if the politicians who have done this do not know what they are talking about? What if they believe they can use minimum wage increases to bribe the poor for votes — just as they bribe the wealthy with bailouts and the middle class with tax cuts?

What if there are other unintended consequences to the governmental imposition of a minimum wage? What if, rather than pay employees more than they are worth, employers stop employing some of them? What if this results in higher unemployment? What if the rise in the minimum wage has the unintended consequence of harming the folks it is supposed to help?

What if the poor are better off being gainfully employed and earning less than $15 an hour, with an opportunity for advancement, than not working, earning nothing and relying on welfare? What if that welfare burden adds to already overtaxed state budgets?

What if states raise taxes to care for the newly unemployed? What if the newly unemployed lose the self-esteem they once enjoyed when they were gainfully employed?

What if all this came about not because of market forces, such as supply and demand, and not because people worked harder and produced more but because of lawless, greedy politicians — heedless of basic economics — who think they can write any law, regulate any behavior and tax any event without adverse consequences?

What if the politicians who caused this did so just to win the votes of those they promised to help? What if these politicians only helped themselves? What if the minimum wage increase is a fraud? What do we do about it?

By Andrew P. Napolitano