How much is the real minimum wage?
Hello and welcome to Reality Check.
Hi I’m Mark Pellegrino and today I’m going to talk about THE MINIMUM WAGE.
Now this is not going to be an exhaustive study of the asserted benefits and/or detractions of the minimum wage. I’m not going to talk about its history or the putative reasons for its coming into being. Because none of that actually matters to an advocate for arbitrarily raising the price of labor.
I know this because when I ask MW advocates practical questions like: ‘if something is more expensive
do you buy more or less of it.’ Or
‘If you price someone out of the labor market and they can’t get a job because their labor isn’t worth the new price, are you hurting them?’ I’m not usually met with reasoned arguments, but with blank stares and a hurled epithet or two. [Clip:Tropic Thunder, 2004] ‘I am talking scorched earth, mother f**ker’ [Clip:Tropic Thunder, 2004] ‘I will massacre you. I will f**k you up!’ Because practical realities like economic law, and the costs and consequences of an idea to other people don’t matter when when there’s something higher in play.
Now what could possibly be higher than reality you say? Well to minimum wage advocates it’s a particular type of ethics. [Clip from The Office] ‘I want to get ethical…’ If you thought that ethics was a reality-bound code of values, and that ‘reality bound’ implied a connection to the facts of reality, you’d be wrong. I mean you’d be right, but most people would think you’re wrong. Cause most people tend to see ethical standards as reality transcendent. Meaning ethics sort of float above reality like God’s commandments or Kant’s Categorical Imperatives. When you happen to come across one you are duty bound to follow it irrespective of what
inconvenient things like reality are saying. Altruism is a perfect example of ethics as transcendent. It’s neither rooted in natural law, nor in the human condition. It floats above both by simply positing that the ‘other’
should be the beneficiary of all your labor. Now, the fundamental standard guiding altruism’s
aspirations towards transcendence, is NEED. Once a body claims a need for some good or service, altruism assumes that its satisfaction is a right to be fulfilled
by whomever does not need. [YouTube Clip] Now if you look not so carefully at our political landscape, you’ll see this ethical motif in every justification of welfare statism: need becomes a moral claim synonymous with rights that those who don’t need are then obligated to satisfy. FULL STOP. You don’t believe me? What’s the moral impetus behind the push for more socialization
of healthcare, housing, education, and debt? Need. That’s all. Well this same standard of need, and the desire to transcend practicality by ethical behaviors is now guiding the current battle over the Minimum Wage, or The Living Wage as it’s now called. You see, before ‘need’ made transcending reality a necessity to be good, a wage had an identity rooted in real phenomena. It used to be a price that people paid for labor; It used to be subject to the same economic laws as any other price: primarily the law of supply and demand, with competition putting an upward or downward pressure
on the price of any given job. The employer or employee’s personal ‘need’ mattered very little in the face of these realities. But times have changed…. even if reality hasn’t. Now the transcendent power of ‘need’ requires that the employer pay for the value of the employee’s person, not the value of his labor. [Clip from Network, 1976] ‘I’m a human being, god damn it!’ And even though this turn of events effectively makes the employee the ward of the employer, as a child is the ward of their parents, we’re told this arrangement is dignifying and non-exploitative. [Clip from Enola Holmes, 2020] ‘You are my ward! And you will do as you are told!’ Huh. I didn’t realize treating adults like children was dignifying. Always thought infantilization was sort of…I don’t know…undignified?
But what do I know. As for non exploitative I honestly have to wonder. The online dictionary definition of exploitation is: ‘the action of treating someone unfairly in order to benefit from their work’ Now it seems to me that if you are legally bound to pay someone more than their labor is worth to you, it’s you who are being treated unfairly not the person receiving more than their market value. If this were done without the force of law we would call it charity, not fairness. I know, you’ll say ‘but the person with the capital has the power and that’s unfair’. First off, reality is neither fair nor unfair. It just is. People are fair or unfair to the degree they adhere to the facts of reality and act accordingly. The fact is that if you have low skills and sit in a big pool of labor, you’re not going to get paid much. And THAT’S fair whether you like it or not. Likewise, the fact is if you have capital and are trying to hire people for work, legally commanding that your employees become your wards is unfair, even if appeals to your powerlust. So here’s the real deal. The great economist Thomas Sowell used to say that the real minimum wage was zero, but that’s not actually true. It could be negative….meaning you PAY to work. Now why would someone do that? Because the reality of their lives; their lack of connections and experience, demands it. Have you ever heard of interns, who work for free in their chosen future professions to garner experience and connections? That wage is zero. Or how about actors who pay to work in front of a casting director they don’t have the connections to audition for? That wage is negative and yet both are tremendously beneficial to each worker. And the fact that wages can be low, zero, negative, or even not what we would prefer is NOT unfair, it just is, and the sooner we acknowledge that, by pushing morality off the clouds of transcendence to make it touch the grass of terra firma, ‘fair’ and ‘unfair’ will only be words demagogues scream when reality doesn’t conform to their wishes. CHECK Check out the Ayn Rand Institute and the Ayn Rand University App for more about the philosophy of Objectivism.
