NORMAN — Editor, The Transcript:
For every complex problem there is a solution that is simple, direct, easily articulated, and wrong. An excellent example is the mistaken idea that increasing minimum wage will reduce poverty.
A higher minimum wage might actually increase poverty. I am confident that it does not reduce poverty.
The proponents talk about just how hard and long people work. Hard work alone does not generate the money needed to pay wages. If I dig and re-fill a hole in my back yard I would work hard, but not create value and not earn money to pay myself a wage.
We never hear ‘worth of the work.’ Each job has a value. If an employer is forced to pay more than that value -- more than the job is worth -- the job will disappear; maybe not this week or this month, but it is certainly doomed. The person holding that job must either get another job with higher worth or become unemployed. Education, job training and ‘moving on up’ are the ways to reduce poverty.
It may not be the primary factor, but increasing minimum wage adds pressure to monetary inflation. Of course, inflation is yet another way to transfer buying power from lenders to debtors.
It is my hope that politicians proposing to increase minimum wage are cynically pandering for votes and transferring wealth to debtors. Otherwise, they are seriously naïve and do not understand that wealth is generated by production of value, not by government decree.
John H. Waller