Mr Khan said:
What, then, is moral? To determine that low-wage workers are able to survive? The minimum wage is insufficient in that regard, unless we take to the idea that prices would adjust *downward* in the absence of a wage floor, but this is unrealistic. So long as inflation is the norm, a minimum wage is needed, either that or wage subsidies to those who would otherwise suffer and fail. How do we ensure quality of life for marginal workers? |
Moral? A moral wage is one that is mutually agreed upon by two interested parties. Inflation is not always the norm and is dependant on a myriad of factors and it is when those who believe they know better than the 300+ million people who take part within our economy (I'm obviously limiting this to the US) start tinkering by enforcing artificial, and often arbitrary, hikes in wages people suffer for it and indeed inflation kicks in. It is called "means-of-control" and "built-in" inflation. Where as if we didn't enforce these types of policies costs of production can go down and so can then prices etc.
Look, I make about $32 an hour so one would say why then do you care? Well let's see, I care because now my purchasing power will be affected as the things that were made or sold or services rendered by people who make $7.25 now will inevitably go up (primary consequence). So now that my purchasing power has dropped I, being a rational human being will eventually look to increase my own wage so that I can gain that lost purchaing power back. Once I have gained that wage increase (I'm a nurse and we have a tough union, we'll get it) then necessarily the cost of my services will go up as well (tertiary consequence).
Now since I am more valuable to the economy than a minimum wage earner (in terms of wage) it is obvious that my services will always cost more and in this case we would be talking about health care. Which, as we all know is already super expensive right? We'll thanks to a minimum wage hike the cost will go up further due to my wages going up and that short term gain of a higher minimum wage not only did absolutely nothing to help the minimum wage eraner better afford health care service but it also most likely resulted in he/she or someone else they worked with losing their job as employers cut out excessive labor to afford those pay hikes (another secondary consequence) and most likely causing them to lose any health care coverage they may have had through their employer.
And that scenario could even affect those who make MORE than minimum wage and work in companies that employ minimum wage workers.
This is a cycle that happens all across the economy as prices go up due to minimum wage hikes. Inflation may happen but it doesn't mean the tinkers at the central planning office need to inject more factors that cause it to happen.
