Having died in 1950, George Orwell, author of such depressingly prescient science fiction classics “1984” and “Animal Farm,” probably wasn’t thinking of the current $15 minimum wage debate in SeaTac and Seattle when he uttered his immortal quote, “Some ideas are so stupid that only intellectuals believe them.”
But if he’d lived long enough to hear anyone assert that, “A higher minimum wage will stimulate the economy by putting more money in the hands of the workers,” Orwell couldn’t help but conclude his thesis had been confirmed.
Sadly, virtually everyone backing the idea of waving a magic wand and raising the minimum wage to $15 is spouting precisely that sort of nonsense, and the rhetoric is seductive to those who find themselves on the lower rungs of the economic ladder for good reason.
Minimum wage workers — whether they’re earning $8 an hour or $15 — are where they are in the job market because they lack basic qualifications that would make them more employable, not the least of which is the education or intelligence to see through the pablum they’re being fed about how economies work.
Simply put, even if it were possible for governments to goose the economy with an influx of dollars — and it isn’t — you’d still need new dollars, not old dollars confiscated from productive, qualified individuals and transferred by force to those whose contribution is valued less by the market.
It’s no trick to convince a resentful, frustrated, poorly educated worker that he’d be making more money if only his greedy employer were making less. But even if that were true and you came up with a scheme that would allow a more “equitable” split, it still wouldn’t impact the economy as a whole because it wouldn’t change the number of dollars circulating.
They’d be spent by different people and on different goods — maybe on 100 flat-screen TVs instead of one yacht — but the overall size of the economy wouldn’t grow.
In fact, it would almost certainly shrink, because employers would have less revenue to spend on research and development, equipment upgrades and promotion. Their companies would also generate smaller profits and dividends, which would discourage precisely the sort of investment needed to expand an economy.
Liberals cling to the myth that economic growth simply requires the proper combination of rules and regulations when, in fact, real growth occurs in inverse proportion to the amount of red tape with which employers must contend.
If you actually want to create jobs and wealth rather than simply pay lip service to it, the last thing you need is pointy-headed intellectuals who’ve never met a payroll in their lives substituting their opinions for the infallible logic of the free market about what is or isn’t a “fair” wage.
