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Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Counterproductive Minimum Wage Mandates

Economics / Economic Theory Oct 10, 2012 - 06:34 AM GMT

By: BATR

Economics Best Financial Markets Analysis Article

Working for wages has never been the path for significant wealth. Most people are not equipped nor do they have the inclination to be engaged in business endeavors that will earn them a viable living. The reluctance that most workers bring to their occupation stems from their inability or unwillingness of properly understanding the related components that are essential in creating wealth. While many view work as a curse, the indispensable reconciliation for a practical and tolerable acceptance of universal plight is that no one is owed a living.


In a world of Totalitarian Collectivism, the powers that control international economies, seek to pacify the laboring hordes with crumbs from substandard minimum wage mandates. The foolishness that guarantees minimal scale for hourly toil can and will never produce a prosperous society. The entire economic interdependent scheme to destroy the last vestiges of a bona fide "free market" economy is at the heart of minimum wage mandates.

Corporatists love higher minimum wage increases because small business is least equipped to absorb added costs in their operations. Corporatists are in the business of monopoly formation. Competition is a cardinal sin to the globalists. Any governmental imposition that creates added strain on the very viability of potential contenders, eagerly sought by crony capitalism, is destructive to labor.

Wall Street conglomerates intentionally hire few people, when compared to the total work force. The trend to slot part time positions with modest or no benefits or contract employees is the new model. This framework offers little opportunity for the unskilled or first time job seeker.

BalancePolitics.org offers reasons pro and con about minimum wage.

The motivation to impose minimum wage conditions for employment is to control the workforce. Helping the downtrodden is a myth or an outright lie. Functioning businesses must be able to balance their books to survive. Employing productive labor translates into paying a scale that benefits both the business and the worker. In the age of systemic social welfare, it is insulting to claim that minimum wage laws grow the economy or increases labor opportunities.

Talk Of Liberty, in Abolish Minimum Wage makes the point:

"If you make minimum wage, most likely you are on government housing, food stamps, Medicaid, fuel assistance and all the other government goodies. My point is if this is the group you are worried about, you shouldn’t. That is the point of this countries welfare system. This is where the Liberals want to have their cake and eat it to. Get rid of welfare and its massive costs if you want higher wage laws, get rid of welfare."

The proper way to hasten a true domestic economic revival is to adopt a "right to work" policy that allows independent businesses to hire people based upon the free exchange and responsibilities of agreed remunerations. Without profitable incentives and relief that small business can secure, taking the risk of employing additional "hired help" is purely academic.

Thomas Rustici, in his scholarly Cato paper, A PUBLIC CHOICE VIEW OF THE MINIMUM WAGE, identifies the nature of the impasse to achieving free markets.

"Before one can hope for the abolition of the minimum wage, the influence of the well-organized, special-interest groups that receive the bulk of the benefits from it must be reduced. There is, however, little chance that such groups as Northern unions and businesses, or interest groups in general, could be barred from the political process in the near future."

The problem with any acceptance of government imposition of compulsory wage scales into private employment negotiations destroys opportunities for employees. A job presupposes that a business has a reason to hire added help and can afford the costs of a day’s pay for a day’s work.

A socialized economy inevitably ensures a stagnate workforce. People need to be encouraged to learn the skills that small business demands as the basis for injecting worth and value in order to earn a paycheck.

The answer to the Corporatists/State oppressive economic stranglehold is a workable free market of exchange, barter and consensual business relationships. Liberate your thinking before you can fatten your pocketbook.

James Hall – October 10, 2012

Source : http://www.batr.org/negotium/101012.html

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Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


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