A free society respects the individual. A free society allows for a frictionless exchange of products, services and labor.
Laws are designed to be universal and add clarity and boundries in the interaction of sovereign individuals.
Wages are paid to those who provide their time and services. Labor and time is paid in exchange for the universal medium of exchange, we call money. The creation of value is the goal in this overlapping of time, labor and tasks.
There is a gradient of value in the tasks given and the labor provided. High task and high labor creates high value. Low task and high labor may create moderate value. High task and low labor may result in an unknown. Low task and low labor usually results in low value.
The end result, we call value, or in a free market, we call market value, has a price. Prices vary depending on the end value result, emerging from the management of these input components.
Every sovereign individual should have the right to add value in a labor market, regardless of their present skillsets.
A sovereign individual or business should have the right to exchange money for labor at a price two sovereigns freely agree to. The business’ challenge is to create market value from this fusion of labor value, and task value.
The institution of a “minimum wage”, sets a minimum “value” that both the labor provider and the business must exceed before a transaction can take place. Both parties who cannot surpass this threshold are not allowed to participate in the marketplace, in the exchange of labor for money.
There are liabilities to both sides of this equation. Sovereign individuals who may not have the minimum skill sets are not able to sell their labor at a lower price, deemed by law. Small businesses seeking to add labor may not have the threshold to afford this minimum price for labor, and they are legally unable to hire lower value labor at a lower price. Businesses in this situation are forced to do without the additional labor until they can create higher value tasks.
Lower valued labor individuals are forced to stay out of the marketplace, or work underground, outside the scope of law. They cannot legally participate in the free market of labor and business until their value meets the minimum wage threshold.
The perceived morality of a minimum wage law is illusory. There is a small subgroup who may receive a higher market wage than what is natural. But there is also larger group of wage earners who will be subsidizing this artificial wage increase. And still a larger population group who won’t qualify at all to enter the wage market, until further skills are developed.
Let’s not forget the marginalized employers and businesses who are forced to pay a “legal minimum wage” or just do without. Their overlap of tasks and labor may no longer be viable in the marketplace.
The marketplace is dynamic. There is a LIVE interaction of input and output from the millions of transactions that take place daily, involving the sale of goods and services, the purchasing of goods and services, the input costs for commodities, utilities, rent, and labor. You cannot trigger one variable without affecting every other single variable in the market.
Nominal costs and prices change. The nominal value of goods and services change over time, and things eventually normalize. When you thought you moved ahead, you now realize, you’ve been walking in place. Such is the deceptive mirage of a “nominal price”…
You cannot “legislate” a living wage. Only the individual can add labor value that commands the highest price from the marketplace of employers. If nobody will pay them a wage they believe is agreeable, they can choose to pay themselves, by being an entrepreneur.
Minimum wage laws create artificial barriers to entry. It creates artificial and damaging speed bumps for businesses and for individuals with the lowest skills. It increases the dependent class, and makes it more difficult for a small business to add their first employee.
A minimum wage law is antithetical to common sense. Two people should have the right to agree on their services, regardless of anyone else’s perception of exploitation, or otherwise.
Minimum wage laws are extensions of an overreaching State, with good intentions but bad results. Value cannot be created from nowhere or from nothing. It comes from the overlap of variables that entrepreneurs and the marketplace must dynamically manage. By setting artificial barriers to entry, it hurts struggling businesses and the most vulnerable employees.
Minimum wage laws restrict the free movement of goods, services and labor. It ultimately restricts our liberty and freedom by way of government and bureaucratic intrusion. A sovereign individual should have the right to pay or get paid, what that individual agrees to. I am the owner of my labor. I am the owner of my capital. Bureaucrat need not get involved.
